In the 21st century, the role of total quality management (TQM) has significantly grown, since it helps companies to facilitate strategic execution and gain competitive advantage in the market place. In the global economy, TQM is a pivotal part of every successful organization. It can be explained by the fact that each company wishes to have an edge over its rivals, producing products and services of a high quality. It means that quality is a tactical plan how to attract new customers and demonstrate business excellence.
Undoubtedly, competition plays a vital role in the determining winners and losers in the market. Competition helps to analyze appropriateness of company’s new policies, culture, and methods of implementation. According to a definition, competitive strategy is a long industry perspective plan that helps to identify a favorable position for a company against its rivals. Well-built competitive strategy can be a tool to discredit the rivals’ products and services by gaining favorability to own company. Scientists claim that competitive strategy helps to compete in the market full of the same products. Michael E. Porter identified five primary forces that are determining for a company to develop its own competitive strategy. These include the increasing power of purchasers, plunging power of suppliers, competition between other companies, the treat of substitution, and new entrants. Consequently, every company has to take into consideration the above mentioned forces and define its weak points in order to be the first in the market and to avoid bankruptcy.
Undoubtedly, each company must develop its own strategic planning in order to succeed in the modern market. The following strategic planning process consists of five fundamental steps, such as:
1. Be ready. It means that the company must gather vital information about the market and rivals. Moreover, this step requires creation of organizational profile and a planning committee.
2. Create company’s mission and vision. This will help the employees and customers to see where company is going.
3. Evaluate the situation. It means that the company must clearly see the current needs of the customer and compare them with its possibilities to satisfy those needs.
4. Develop strategies and objectives. This step will help to identify the main means of achieving company’s fundamental goals. Also, at this stage, it is vital to identify what sources will be helpful in gaining the main aims.
5. Identify alternatives. Undoubtedly, even the best well-built plan may have many drawbacks. Thus, each company must develop a contingency plan in order to quicker address the issue.
TQM is a generic management tool that helps the organization to improve the quality of its products, services. Moreover, TGM always improves knowledge of workers, since they must follow modern trends in the market place. Generally speaking, TQM has three main objectives: be always the first, do appropriate things, and be always the best. TQM significantly improves strategic execution, since it incorporates the prime goal to reach the main plan with high quality and within short period of time. TQM is defined as a continuous improvement that helps the company to utilize specific incorporation in strategic planning process. For example, TQM may help the company to reach the highest competitive edge (differentiation) while implementing strategic planning.
All in all, TQM highly influences the vision, mission, and means of achievements in an organization. The correlation between TQM and a strategic planning process is clearly seen when the company wants to achieve its goals that is absolutely impossible without creation of a culture of high quality. Also, TQM is a worthwhile tool that helps the company to implement its strategy carefully regarding all necessary steps that TQM requires.
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