AVIATION MANAGEMENT (BAE501)

MODULE-01
LEADERSHIP
1. DEFINITION OF LEADERSHIP:
There is no universal definition of leadership and indeed many books have been devoted to
the topic of leadership. In his book Leadership, James MacGregor Burns describes a leader as one
who instills purposes, not one who controls by brute force. A leader strengthens and inspires the
followers to accomplish shared goals. Leaders shape the organization’s values, promote the
organization’s values, protect the organization’s values and exemplify the organization’s values.
Ultimately, Burns says, “Leaders and followers raise one another to higher levels of motivation and
morality . . . leadership becomes moral in that it raises the level of human conduct and ethical
aspiration of both the leader and the led, and thus has a transforming effect on both.”1 Similarly,
Daimler Chrysler’s CEO Bob Eaton defines a leader as “someone who can take a group of people
to a place they don’t think they can go.” “Leadership is we, not me; mission, not my show; vision,
not division; and commnity, not domicile.”2 As the above illustrates, leadership is difficult to define
in anything other than lofty.
According to Narayana Murthy, Chairman and Chief Mentor of Infosys “A great leader is
one who is not only good in creating vision, creating the big picture, but also ensuring that he goes
into the nittygritty, into the details of making sure that his vision is actually translated into reality
through excellence of execution. In other words, great leaders have great vision, great imagination,
great ideas but they also implement these ideas through hard work, commitment and flawless
execution. In doing so, they motivate thousands of people.”3 The criteria of Ramkrishna Bajaj
National Quality Award (RBNQA) are based on Malcolm Baldrige Award. These are built upon the
following set of interrelated core values and concepts:
• visionary leadership
• customer-driven excellence
• organizational and personal learning
• valuing employees and partners
• agility
• focus on the future
• managing for innovation
• management by fact
• social responsibility
• focus on results and creating value
• systems perspective
 These values and concepts are embedded beliefs and behaviors found in high-performing
organizations. They are the foundation for integrating key business requirements within a result-
oriented framework.

2. CHARACTERISTICS OF QUALITY LEADERS:

There are 12 behaviors or characteristics that successful quality leaders demonstrate.
1. They give priority attention to external and internal customers and their needs. Leaders
place themselves in the customers’ shoes and service their needs from that perspective. They
continually evaluate the customers’ changing requirements.
2. They empower, rather than control, subordinates. Leaders have trust and confidence in the
performance of their subordinates. They provide the resources, training, and work environment to
help subordinates do their jobs. However, the decision to accept responsibility lies with the
individual.
3. They emphasize improvement rather than maintenance. Leaders use the phrase “If it isn’t perfect,
improve it” rather than “If it ain’t broke, don’t fix it.” There is always room for improvement, even
if the improvement is small. Major breakthroughs sometimes happen, but it’s the little ones that
keep the continuous process improvement on a positive track.
4. They emphasize prevention. “An ounce of prevention is worth a pound of cure” is certainly
true. It is also true that perfection can be the enemy of creativity. We can’t always wait until we have
created the perfect process or product. There must be a balance between preventing problems and
developing better, but not perfect, processes.
5. They encourage collaboration rather than competition. When functional areas, departments,
or work groups are in competition, they may find subtle ways of working against each other or
withholding information. Instead, there must be collaboration among and within units.
6. They train and coach, rather than direct and supervise. Leaders know that the development
of the human resource is a necessity. As coaches, they help their subordinates learn to do a better
job.
7. They learn from problems. When a problem exists, it is treated as an opportunity rather than
something to be minimized or covered up. “What caused it?” and “How can we prevent it in the
future?” are the questions quality leaders ask.
8. They continually try to improve communications. Leaders continually disseminate
information about the TQM effort. They make it evident that TQM is not just a slogan.
Communication is two ways—ideas will be generated by people when leaders encourage them and
act upon them. For example, on the eve of Desert Storm, General Colin Powell solicited enlisted
men and women for advice on winning the war. Communication is the glue that holds a TQM
organization together.
9. They continually demonstrate their commitment to quality. Leaders walk their talk—their
actions, rather than their words, communicate their level of commitment. They let the quality
statements be their decision-making guide.
10. They choose suppliers on the basis of quality, not price. Suppliers are encouraged to
participate on project teams and become involved. Leaders know that quality begins with quality
materials and the true measure is the life-cycle cost.
11. They establish organizational systems to support the quality effort. At the senior
management level a quality council is provided, and at the first-line supervisor level, work groups
and project teams are organized to improve the process.
12. They encourage and recognize team effort. They encourage, provide recognition, and reward
individuals and teams. Leaders know that people like to know that their contributions are
appreciated and important. This action is one of the leader’s most powerful tools.

3. LEADERSHIP CONCEPTS
In order to become successful, leadership requires an intuitive understanding of human nature—
the basic needs, wants, and abilities of people. To be effective, a leader understands that:
1. People, paradoxically, need security and independence at the same time.
2. People are sensitive to external rewards and punishments and yet are also strongly self-motivated.
3. People like to hear a kind word of praise. Catch people doing something right, so you can pat
them on the back.
4. People can process only a few facts at a time; thus, a leader needs to keep things simple.
5. People trust their gut reaction more than statistical data.
6. People distrust a leader’s rhetoric if the words are inconsistent with the leader’s actions.
Leaders need to give their employees independence and yet provide a secure working
environment—one that encourages and rewards successes. A working environment must be
provided that fosters employee creativity and risk-taking by not penalizing mistakes. A leader will
focus on a few key values and objectives. Focusing on a few values or objectives gives the
employees the ability to discern on a daily basis what is important and what is not. Employees, upon
understanding the objectives, must be given personal control over the task in order to make the task
their own and, thereby, something to which they can commit. A leader, by giving the employee a
measure of control over an important task, will tap into the employee’s inner drive. Employees, led
by the manager can become excited participants in the organization.
Having a worthwhile cause such as total quality management is not always enough to get
employees to participate. People, (and, in turn, employees) follow a leader, not a cause. Indeed,
when people like the leader but not the vision, they will try to change the vision or reconcile their
vision to the leader’s vision. If the leader is liked, people will not look for another leader. This is
especially evident in politics. If the leader is trusted and liked, then the employees will participate
in the total quality management cause. Therefore, it is particularly important that a leader’s character
and competence, which is developed by good habits and ethics, be above reproach. Effective
leadership begins on the inside and moves out.
4. THE 7 HABITS OF HIGHLY EFFECTIVE PEOPLE:
Stephen R. Covey emphasizes the importance of the character ethic qualities like integrity
and humility over the personality ethic, such as communication skills and positive thinking. He
argues that who we are matters more than what we say or do. A paradigm is how we perceive the
world, and true change comes through paradigm shifts, like scientific breakthroughs. Covey
defines habits as the combination of knowledge, skill, and desire, with his 7 Habits guiding
individuals from dependence to independence and finally to interdependence. The "P/PC Balance"
refers to maintaining the balance between producing results (P) and maintaining the capacity to do
so (PC), applicable to physical, financial, and human assets.

Habit 1: Be Proactive
1. Take responsibility for your life and consciously choose how to respond based on values.
2. Proactive behavior is guided by principles, while reactive behavior is driven by circumstances.
3. Your response, not external events, determines your happiness and success.

Habit 2: Begin with the End in Mind

1. Have a clear vision of your life goals and what truly matters to you.
2. Everything is created twice: first mentally (through planning), then physically (through
execution).
3. Leadership is about doing the right things, while management focuses on doing things right.

Habit 3: Put First Things First

1. Prioritize tasks based on importance, aligning them with your goals and values.
2. Focus on Quadrant II activities (important but not urgent) to reduce crises and stress.
3. Effective time management requires balancing roles, objectives, and daily activities.

Habit 4: Think Win-Win

1. Aim for mutual benefit in all interactions, where both parties succeed.
2. Win-Win is built on integrity, maturity, and an abundance mentality.
3. Strong relationships and supportive systems are essential for Win-Win outcomes.

Habit 5: Seek First to Understand, Then to Be Understood

1. Listen empathetically to truly understand others before expressing your own viewpoint.
2. Empathic listening builds trust and connection, creating effective communication.
3. Effective communication requires ethos (credibility), pathos (empathy), and logos (logic).
Habit 6: Synergy
1. Collaboration leads to better solutions than working alone, producing results greater than
individual efforts.
2. Synergy fosters creative problem-solving by embracing different perspectives.
3. Genuine understanding and cooperation can achieve breakthroughs and innovation.
4.
Habit 7: Sharpen the Saw (Renewal)
1. Regularly renew your physical, spiritual, mental, and emotional dimensions.
2. Self-care and growth ensure long-term effectiveness and balance in life.
3. Renewal activities, such as exercise and learning, help maintain personal capacity and resilience

5. ETHICS:

Ethics Definition: Ethics refers to principles or standards of human conduct that guide the
behaviour of individuals and organizations. It helps determine what is right or wrong.

1. Learning Ethics: Ethics are learned through upbringing or formal training programs, such as those
provided by organizations.
2. Cultural Differences: Ethics can vary across different cultures, requiring organizations to develop
a standardized code of ethics for consistency.
3. Ethical Companies: Indian companies like Tata Steel, Infosys, Wipro, and HDFC are well-known
for their ethical leadership and practices.
4. Satyam Computers Scandal: Satyam, once a fast-growing software company, collapsed after its
CEO, Ramlingum Raju, confessed to falsifying profits and siphoning funds, highlighting unethical
practices.

5.1 ROOT CAUSES OF UNETHICAL BEHAVIOR:

1. Favoring Self-Interest: Organizations prioritize their own interests over the well-being of
customers, employees, or the public.
2. Rewarding Unethical Behavior: Unethical actions, such as false advertising to increase sales, are
rewarded.
3. Double Standards: Organizations promote different standards at work than at home, encouraging
secrecy and deceit instead of honesty.
4. Abuse of Power: Individuals misuse their position for personal gain, such as taking excessive
compensation.
5. Pressure to Cut Corners: Managerial values undermine integrity by pressuring employees to cover
up mistakes or take shortcuts.
6. Short-Term Focus: Organizations prioritize short-term gains at the expense of long-term
consequences, focusing on immediate utility.
7. Overconfidence in Knowledge: Overestimating their infallibility, managers take high risks, such
as investing in volatile financial options.

5.2 ETHICS MANAGEMENT PROGRAM:

Ethics Management Program: Addressing Pressure, Opportunity, and Attitude

1. Appraisal (Analysis of Costs)

The first step in managing ethical behavior is to analyze the costs associated with unethical
behavior, categorized into pressure, opportunity, and attitude
- Costs from Pressure: These arise from well-intended but unethical decisions made under
pressure, leading to errors, waste, rework, lost customers, and warranty issues.
- Costs from Opportunity: These are costs from intentional misconduct, such as theft,
overstated expenses, excessive compensation, and nepotism.
- Costs from Attitude: These occur due to mistaken beliefs justifying unethical behavior,
causing errors, waste, rework, lost customers, and healthcare issues.

2. Prevention (Minimizing Costs)

The second step is the development of policies to reduce ethical costs. This can proceed alongside
the appraisal step.
- *Pressure: Addressed by involving employees in setting goals and values, creating policies
that allow for diversity, dissent, and input in decision-making.
- Opportunity: Minimized by implementing policies that support whistleblowers, establish
ombudsmen, and solve ethical problems internally in a confidential manner.
- Attitude: Addressed by mandatory ethics training, recognizing ethical conduct,
incorporating ethics into performance appraisals, and encouraging open discussions about ethical
concerns.

3. Promotion (Developing an Ethical Culture)

The third step involves continuously promoting ethical behavior to build a positive, ethical
organizational culture.
- Clarity: The ethics philosophy should be clearly written with input from all employees and
prominently posted. Standardized training should focus on helping employees clarify ethical issues,
gather facts, consider consequences, and test actions by asking: Is it legal? Is it right? Is it beneficial
for all? How would I feel if it were publicized?
- Positivity: The culture should emphasize doing the right thing, encouraging principled
dissent, and rewarding ethical behavior.
- Effectiveness: The ethical philosophy must be endorsed and practiced by senior
management, with consistent behavior and no exceptions. Senior leaders should model ethical
behavior.

6. THE DEMING PHILOSOPHY:

Deming’s philosophy is given in his 14 points. Most of these points were given in a seminar for
21 Presidents of leading Japanese industry in 1950. The rest were developed and the original ones
modified over a period of three decades.
1. Create and Publish the Aims and Purposes of the Organization:
Management must demonstrate constantly their commitment to this statement. It must include
investors, customers, suppliers, employees, the community, and a quality philosophy. The statement
is a forever changing document that requires input from everyone. Organizations must develop a
long-term view of at least ten years and plan to stay in business by setting long-range goals.
Resources must be allocated for research, training, and continuing education to achieve the goals.
Innovation is promoted to ensure that the product or service does not become obsolete. A family
organizational philosophy is developed to send the message that everyone is part of the organization.
2. Learn the New Philosophy
Top management and everyone must learn the new philosophy. Organizations must seek never-
ending improvement and refuse to accept nonconformance. Customer satisfaction is the number one
priority, because dissatisfied customers will not continue to purchase nonconforming products and
services. The organization must concentrate on defect prevention rather than defect detection. By
improving the process, the quality and productivity will improve. Everyone in the organization,
including the union, must be involved in the quality journey and change his or her attitude about
quality. The supplier must be helped to improve quality by requiring statistical evidence of
conformance and shared information relative to customer expectations.
3. Understand the Purpose of Inspection
Management must understand that the purpose of inspection is to improve the process and
reduce its cost. For the most part, mass inspection is costly and unreliable. Where appropriate, it
should be replaced by never ending improvement using statistical techniques. Statistical evidence
is required of self and supplier. Every effort should be made to reduce and then eliminate acceptance
sampling. Mass inspection is managing for failure and defect prevention is managing for success.
4. Stop Awarding Business Based on Price Alone
 The organization must stop awarding business based on the low bid, because price has no
meaning without quality. The goal is to have single suppliers for each item to develop a long-term
relationship of loyalty and trust, thereby providing improved products and services. Purchasing
agents must be trained in statistical process control and require it from suppliers. They must follow
the materials throughout the entire life cycle in order to examine how customer expectations are
affected and provide feedback to the supplier regarding the quality.
5. Improve Constantly and Forever the System
Management must take more responsibility for problems by actively finding and correcting
problems so that quality and productivity are continually and permanently improved and costs are
reduced. The focus is on preventing problems before they happen. Variation is expected, but there
must be a continual striving for its reduction using control charts. Responsibilities are assigned to
teams to remove the causes of problems and continually improve the process.
6. Institute Training
Each employee must be oriented to the organization’s philosophy of commitment to never-
ending improvements. Management must allocate resources to train employees to perform their jobs
in the best manner possible. Everyone should be trained in statistical methods, and these methods
should be used to monitor the need for further training.
7. Teach and Institute Leadership
Improving supervision is management’s responsibility. They must provide supervisors with training
in statistical methods and these 14 points so the new philosophy can be implemented. Instead of
focusing on a negative, fault-finding atmosphere, supervisors should create a positive, supportive
one where pride in workmanship can flourish. All communication must be clear from top
management to supervisors to operators.
8. Drive Out Fear, Create Trust, and Create a Climate for Innovation
Management must encourage open, effective communication and teamwork. Fear is caused by
a general feeling of being powerless to control important aspects of one’s life. It is caused by a lack
of job security, possible physical harm, performance appraisals, ignorance of organization goals,
poor supervision, and not knowing the job. Driving fear out of the workplace involves managing
for success. Management can begin by providing workers with adequate training, good supervision,
and proper tools to do the job, as well as removing physical dangers. When people are treated with
dignity, fear can be eliminated and people will work for the general good of the organization. In this
climate, they will provide ideas for improvement.
9. Optimize the Efforts of Teams, Groups, and Staff Areas
To optimize team efforts and achieve organizational goals, management must address internal
and external barriers caused by poor communication, lack of mission awareness, competition, fear,
and personal conflicts. These barriers exist between management levels, departments, shifts, and
with external stakeholders like customers and suppliers. A long-term approach is needed to break
these barriers by promoting collaboration, changing attitudes, improving communication, forming
project teams, and providing teamwork training. Multifunctional teams, such as those in concurrent
engineering, are effective in fostering this cooperation.
10. Eliminate Exhortations for the Work Force
Exhortations that ask for increased productivity without providing specific improvement
methods can handicap an organization. They do nothing but express management’s desires. They
do not produce a better product or service, because the workers are limited by the system. Goals
should be set that are achievable and are committed to the long-term success of the organization.
Improvements in the process cannot be made unless the tools and methods are available.
11. (A)Eliminate Numerical Quotas for the Work Force
Instead of quotas, management must learn and institute methods for improvement. Quotas and
work standards focus on quantity rather than quality. They encourage poor workmanship in order to
meet their quotas. Quotas should be replaced with statistical methods of process control.
Management must provide and implement a strategy for never-ending improvements and work with
the work force to reflect the new policies.
11.(B) Eliminate Management by Objective
Instead of management by objective, management must learn the capabilities of the processes and
how to improve them. Internal goals set by management, without a method, are a burlesque.
Management by numerical goal is an attempt to manage without knowledge of what to do. An
excellent analysis supporting this point is given by Castellano and Roehm.
12. Remove Barriers That Rob People of Pride of Workmanship
Loss of pride in workmanship exists throughout organizations because
(1) workers do not know how to relate to the organization’s mission,
(2) they are being blamed for system problems,
(3) poor designs lead to the production of “junk,”
(4) inadequate training is provided,
(5) punitive supervision exists, and
(6) inadequate or ineffective equipment is provided for performing the required work.
Restoring pride will require a long-term commitment by management. When workers are proud
of their work, they will grow to the fullest extent of their job. Management must give employees
operational job descriptions, provide the proper tools and materials, and stress the workers’
understanding of their role in the total process. By restoring pride, everyone in the organization will
be working for the common good. A barrier for people on salary is the annual rating of performance.
13. Encourage Education and Self-Improvement for Everyone
What an organization needs are people who are improving with education. A long-term
commitment to continuously train and educate people must be made by management. Deming’s 14
points and the organization’s mission should be the foundation of the education program. Everyone
should be retrained as the organization requirements change to meet the changing environment.
14. Take Action to Accomplish the Transformation
 Management has to accept the primary responsibility for the never-ending improvement of the
process. It has to create a corporate structure to implement the philosophy. A cultural change is
required from the previous “business as usual” attitude. Management must be committed, involved,
and accessible if the organization is to succeed in implementing the new philosophy. Hillerich &
Bradsby Co., the makers of the Louisville Slugger baseball bat, have used Deming’s 14 points since
1985 and now have 70% of the professional baseball bat market.

7. ROLE OF TQM LEADERS:

1. Responsibility for Quality: Everyone is responsible for quality, especially senior management
and the CEO, with the latter providing the leadership system to achieve results.
2. Leadership System: Jack Welch, CEO of General Electric in the 1980s, developed leadership
training at all levels, focusing on leadership approaches, problem-solving, and quality control in
various departments.
3. Management by Wandering Around (MBWA): Senior management should visit customers,
suppliers, and internal departments to gain firsthand knowledge, reducing paperwork and fostering
communication.
4. Employee Empowerment: Senior management should delegate decision-making to teams,
ensuring alignment with quality goals while pushing problem-solving to the lowest appropriate
level.
5. Continuous Learning: Senior managers should stay informed on quality improvement by
reading, attending seminars, and discussing with other TQM leaders, setting an example for
subordinates.
6. Resource Provision: Senior managers must ensure the provision of necessary training, tools, and
equipment to help employees with TQM tools, job-specific requirements, and safety.
7. Celebrating Success: Senior managers should participate in award ceremonies, recognize
employee efforts, and promote TQM through personal interactions like phone calls or handshakes.
8. Incentives for Quality: Senior management’s incentive compensation must include quality
improvement performance, with a reward system for teams and creative individuals.
9. Active Engagement: Senior managers should spend about one-third of their time on quality
initiatives, serving on teams, coaching, teaching seminars, and leading by example.
10. Listening to Stakeholders: Senior managers should gather feedback from internal and external
customers and suppliers through visits, focus groups, and surveys to drive process improvements.
11. Communication: Senior management must communicate the importance of TQM internally
and externally, using various channels to raise awareness and ensure employees support the
initiative.
12. Cultural Change: By following these practices, senior managers can reduce fear, break down
barriers, remove roadblocks, and change the organization’s culture to ensure TQM success.
8. IMPLEMENTATION:
1. Commitment to TQM: The TQM implementation process begins with senior management and,
most importantly, the CEO’s commitment.
2. Importance of Leadership: Senior management's role is critical during every phase of
implementation, particularly at the start. Indifference and lack of involvement are often cited as
primary reasons for the failure of quality improvement efforts.
3. Involvement Over Delegation: Delegation and rhetoric are insufficient; active involvement is
required from senior management.
4. Education in TQM Concepts: Senior management must be educated in TQM concepts through
formal education, visiting successful TQM organizations, reading relevant articles and books, and
attending seminars and conferences.
5. Development of Implementation Plan: Senior management should develop an implementation
plan, taking into account the timing and readiness of the organization for the total quality journey.
6. Identifying Foreseeable Problems: Potential problems such as reorganization, changes in senior
management personnel, interpersonal conflicts, crises, or time-consuming activities should be
assessed as they may delay implementation.
7. Formation of the Quality Council: Establishing a quality council is a crucial part of TQM
implementation, focusing on developing core values, vision statements, mission statements, and
quality policy statements with input from all personnel.
8. Involvement of Middle Management: Active involvement of middle managers and first-line
supervisors is essential for the success of TQM as they link senior management with front-line
workers.
9. Ownership in TQM Effort: Senior management should ensure that managers at all levels
develop ownership in the TQM effort and acquire the necessary insight and skills to become leaders.
10. TQM Retreats: Organizing retreats focused on TQM training, leadership skills, and developing
organizational statements can facilitate ownership and commitment.
11. Engaging Union Representatives: If applicable, early discussions with union representatives
about TQM are essential. Managers should involve union leaders by sharing implementation plans
and working together on quality improvement activities.
12. Communication of TQM: Effective communication of TQM throughout the organization is
crucial for creating awareness, interest, desire, and action among all employees.
13. Training in Quality Awareness: Everyone needs to be trained in quality awareness and
problemsolving when they are placed on project teams or work groups.
14. Conducting Surveys: Customer, employee, and supplier surveys should be conducted to
benchmark attitudes, providing ideas for quality improvement projects.
15. Role of the Quality Council: The quality council determines quality improvement projects,
establishes project teams and work groups, and monitors their progress.
16. Patience in Implementation: The organization must be patient and avoid rushing teams for
solutions that don’t address root causes; rushing can lead to ineffective results.
17. Example of TECSTAR: TECSTAR achieved savings of over $3 million in the first year of its
TQM program, illustrating the potential for early success.
18. Example of Karlee: Karlee, a Malcolm Baldrige National Quality Award winner, did not see
results until the third year, but then experienced more than a 300% increase in its bottom line,
highlighting the long-term benefits of TQM.

9. CORE VALUES, CONCEPTS, AND FRAMEWORK

Unity of purpose is key to a leadership system. Core values and concepts provide that unity
of purpose. The core values and concepts enable a framework for leaders throughout the
organization to make right decisions. They foster TQM behavior and define the culture. Each
organization will need to develop its own values. Given here are the core values, concepts, and
framework for the Malcolm Baldrige National Quality Award. They can be used as a starting point
for any organization as it develops its own.
1) Visionary Leadership
An organization’s senior leaders need to set directions and create a customer orientation, clear and
visible quality values, and high expectations. Values, directions, and expectations need to address
all stakeholders. The leaders need to ensure the creation of strategies, systems, and methods for
achieving excellence. Strategies and values should help guide all activities and decisions of the
organization. The senior leaders must commit to the development of the entire workforce and should
encourage participation, learning, innovation, and creativity by all employees. Through their
personal roles in planning, communications, review or organization performance, and employee
recognition, the senior leaders serve as role models, reinforcing the values and expectations, and
building leadership and initiative throughout the organization.

2) Customer-Driven Excellence

- Quality is judged by customers and encompasses all product and service characteristics that
contribute to their satisfaction, preference, and retention.
- An organization’s management system should focus on customer-driven excellence, which
includes understanding current customer desires as well as future innovations in the marketplace.
- Customer value and satisfaction can be influenced by various factors during the entire
purchase, ownership, and service experience, including the organization’s relationship with
customers.
- Building trust, confidence, and loyalty is fundamental to establishing quality relationships
with customers.
- The concept of quality not only includes characteristics that meet basic requirements but
also features that differentiate products and services from competitors.
- Differentiation can arise from new or modified offerings, combinations of products and
services, customization, rapid response, or special relationships.
- Customer-driven quality is a strategic approach aimed at enhancing customer retention,
gaining market share, and fostering growth.
- Organizations must be constantly sensitive to changing customer and market requirements,
including technological developments and competitors’ offerings.
- Success in quality management demands rapid and flexible responses to customer needs and
market conditions.
- Achieving quality requires more than just defect and error reduction; it involves actively
meeting specifications and minimizing complaints.
- Defect and error reduction, while important, are only part of customer-driven quality;
organizations must also focus on their ability to recover from defects and make things right for
customers.
- Effective recovery from issues plays a crucial role in building strong customer relationships
and ensuring customer retention.

3) Organizational and Personal Learning

Achieving the highest levels of performance requires a well-executed approach to organizational
and personal learning. Organizational learning refers to both continuous improvement of existing
approaches and adaptation to change, leading to new goals and approaches.
Learning needs to be embedded in the way the organization functions. Learning must be,
(a) a required part of the daily work;
(b) practiced at personal and organizational levels;
(c) directed at solving problems;
(d) focused on sharing knowledge throughout the organization; and
(e) driven by opportunities to effect significant change and to do better.
Sources for learning include employees’ ideas, research and development (R & D), customers’ input,
best practice sharing, and benchmarking. Organizational learning can result in
(a) enhancing value to customers through new and improved products and services;
(b) developing new opportunities;
(c) reducing errors, defects, waste, and related costs;
(d) improving responsiveness and cycle time performance;
(e) increasing productivity and effectiveness in the use of all resources; and
(f) enhancing your organization’s performance in fulfilling its public responsibilities and service as
a good citizen.
4) Valuing Employees and Partners
An organization’s success depends increasingly upon the skills, knowledge, creativity, and
motivation of its employees and partners. Valuing employees means committing to their satisfaction,
development, and wellbeing. Increasingly, this involves more flexible, high-performance work
practices tailored to employees with diverse workplace and home life needs. Major challenges in
the area of valuing employees include
(1) demonstrating your leaders’ commitment to your employees’ success,
(2) recognition that goes beyond the regular compensation system,
(3) development and progression within your organization,
(4) sharing your organization’s knowledge so your employees can better serve your customers and
contribute to achieving your strategic objectives, and
(5) creating an environment that encourages risk-taking. For example, Southwest Airlines always
puts customers second, and employees first. Southwest lives up to its promises to employees, so
there is no sense of betrayal to keep people from enthusiastically contributing. It refuses to lay
off employees even when airline workers are laid off industry wide. Southwest has the most
productive workforce servicing twice the number of passengers per employee of any other
airline.
Organizations need to build internal and external partnerships to better accomplish overall goals.
Internal partnerships might involve creating network relationships among your work units to
improve flexibility, responsiveness, and knowledge sharing. External partnerships might be with
customers, suppliers, and education organizations.
Strategic partnerships or alliances are increasingly important. Such partnerships might offer entry
into new markets or a basis for new products or services. Also, partnerships might permit the
blending of your organization’s core competencies or leadership capabilities with the
complementary strengths and capabilities of partners.
For instance, because of Southwest Airlines’ spirit of cooperation with co-workers, they requested
three advertising companies to work together to develop Southwest’s marketing campaign.
Successful internal and external partnerships develop longer-term objectives, thereby creating a
basis for mutual investments and respect. Partners should address the key requirements for success,
means for regular communication, approaches to evaluating progress, and means for adapting to
changing conditions. In some cases, joint education and training could offer a cost-effective method
for employee development.

5) Agility
Success in global markets demands agility. All aspects of e-commerce require and enable more
rapid, flexible, and customized responses. Organizations face ever-shorter cycles for the
introduction of new and improved products and services, as well as for faster and more flexible
response to customers. Major improvements in response time often require simplification of work
units and processes and the ability for rapid changeover from one process to another.
 Cross-trained and empowered employees are vital assets in such a demanding environment. A
major success factor in meeting competitive challenges is the design-to-introduction cycle time. To
meet the demands of rapidly changing markets, organizations need to carry out stage-to-stage
integration, such as concurrent engineering of activities, from the research concept to
commercialization. All aspects of time performance are critical, and cycle time has become a key
process measure.
Time improvements often drive simultaneous improvements in organization, quality, cost, and
productivity. For example, Southwest Airlines reduced each plane’s time at the terminal to ten
minutes after a court ruling forced Southwest to sell one of its four planes. The ten-minute turn
allowed Southwest to continue its four-plane schedule with only three planes and also helped the
company achieve the best on-time performance in the airline industry. One less plane translates into
a 25% reduction in operating expenses.

6) Focus on the Future

Focus on the future requires understanding the short- and long-term factors that affect an
organization and the marketplace. Pursuit of sustainable growth and market leadership requires a
strong future orientation and a willingness to make long-term commitments to key stakeholders. An
organization’s planning should anticipate many factors, such as customers’ expectations, new
business and partnering opportunities, the increasingly global marketplace, technological
developments, the evolving e-commerce environment, new customer and market segments,
evolving regulatory requirements, societal expectations, and strategic moves by competitors.
Strategic objectives and resource allocations need to accommodate these influences. A focus on the
future includes developing employees and suppliers, creating opportunities for innovation, and
anticipating public responsibilities.

7) Managing for Innovation

Innovation means making meaningful change to improve an organization’s products, services,
and processes and to create new value for the organization’s stakeholders. Innovation should lead
an organization to new dimensions of performance. Innovation is no longer strictly the purview of
research and development departments; innovation is important for all aspects of your business and
all processes. Organizations should be led and managed so that innovation becomes part of the
culture and is integrated into daily work.

8) Management by Fact
Organizations depend on the measurement and analysis of performance. Such measurements should
derive from business needs and strategy, and they should provide critical data and information about
key processes, outputs, and results. Many types of data and information are needed for performance
management. Performance measurement should include customer, product, and service
performance; comparisons of operational, market, and competitive performance; and supplier,
employee, and cost and financial performance.
Analysis refers to extracting larger meaning from data and information to support evaluation,
decision making, and operational improvement. Analysis entails using data to determine trends,
projections, and cause and effect relationships that might not otherwise be evident. Analysis
supports a variety of purposes, such as planning, reviewing overall performance, improving
operations, change management, and comparing your performance with competitors’ or with “best
practices” benchmarks.
A major consideration in performance improvement and change management involves the selection
and use of performance measures or indicators. A comprehensive set of measures or indicators tied
to customer and/or organizational performance requirements represents a clear basis for aligning all
activities with your organization’s goals. Through the analysis of data, measures or indicators
themselves may be evaluated and changed to better support an organization’s goals.

9) Public Responsibility and Citizenship

Leaders in an organization should prioritize good citizenship by upholding business ethics and
ensuring the protection of public health, safety, and the environment throughout all operations and
product life cycles. This includes emphasizing resource conservation and waste reduction at the
source while planning for potential adverse impacts from production, distribution, and disposal
processes. Effective planning not only aims to prevent problems but also ensures a transparent
response if issues arise, providing necessary information to maintain public awareness and safety.
The product design stage is particularly crucial, as organizations should adopt strategies that address
growing environmental concerns and go beyond mere compliance with laws and regulations.
Practicing good citizenship also involves leadership that supports important public causes and
influences other organizations within the industry to recognize their community responsibilities.

10) Focus on Results and Creating Value

An organization’s performance measurements must concentrate on key results that create and
balance value for key stakeholders, including customers, employees, stockholders, suppliers,
partners, the public, and the community. By focusing on stakeholder value, organizations foster
loyalty and contribute to economic growth. To address the often conflicting and evolving needs of
these stakeholders, organizational strategy should clearly incorporate their requirements, ensuring
that actions and plans align with diverse needs and minimize negative impacts. Utilizing a balanced
mix of leading and lagging performance measures is crucial for effectively communicating short-
and long-term priorities, monitoring actual performance, and providing a solid foundation for
continuous improvement.

11) Systems Perspective

Criteria for various business excellence awards, such as the Malcolm Baldrige National Quality
Award (MBNQA), the Rajiv Gandhi National Quality Award (RGNQA), and the Ramon V. del
Rosario, Sr. Business Excellence Award (RBNQA), offer valuable insights into managing
organizations for performance excellence. The Core Values serve as foundational elements and
integrative mechanisms within these frameworks.
Achieving overall performance excellence necessitates a tailored approach that emphasizes
organization specific synthesis and alignment. Synthesis involves viewing the organization
holistically and building upon essential business requirements, including strategic objectives and
action plans. Alignment entails leveraging the connections among the key requirements outlined in
the Baldrige Categories, particularly through measures and indicators.
Effective alignment requires senior leaders to concentrate on strategic directions and customer
focus, continuously monitoring and managing performance based on business outcomes. This
includes utilizing measures to link key strategies with critical processes, aligning resources
effectively to enhance overall performance, and ensuring customer satisfaction. Ultimately, a
systems perspective encompasses managing both the organization as a whole and its individual
components to achieve sustained success.

10. STRATEGIC PLANNING

Many organizations are finding that strategic quality plans and business plans are inseparable.
For instance, at Corning, the 1995 Malcolm Baldrige National Quality Award winner, if you ask
them to show you their quality strategy, they will show you their business strategy; if you ask
them to show you their quality plans, they will show you their business plans. In fact, the term
quality is not used too much. The time horizon for strategic planning is for three to ten years, and
short-term planning is for one year or less. Goals and Objectives

- Goals and objectives are often used interchangeably but can be differentiated: **goals** are
associated with long-term planning, while **objectives** are linked to short-term planning (e.g.,
winning the war vs. capturing the bridge).
- Concrete goals are essential for providing focus, such as improving customer satisfaction,
employee satisfaction, and processes.
- Goals can drive a shift in leadership style from reward and punishment to identifying and
improving systemic issues.
- Goals must be based on statistical evidence; relying on slogans or hard work alone is insufficient
for meaningful change.
- Goals should be definitive, specific, and understandable, focusing on concrete results rather than
behaviors or attitudes.
- The most critical feature of goals is that they are measurable, allowing for evaluation of progress.
- Each goal should have a clear plan or method, along with the necessary resources for achievement;
a valid goal must show a cause-and-effect relationship with its method.
- Goals should include a specific timeframe or deadline for accomplishment.
- Goals must be challenging yet achievable, with involvement from individuals or groups affected
by them during their development.
- Stretch goals are acceptable if based on benchmark data.
- Objectives share the same characteristics as goals but represent operational approaches to
achieving those goals.

10.1 SEVEN STEPS TO STRATEGIC PLANNING:

There are seven basic steps to strategic quality planning. The process starts with the principle that
quality and customer satisfaction are the center of an organization’s future. It brings together all the
key stakeholders.
1. Customer Needs. The first step is to discover the future needs of the customers. Who will they
be? Will your customer base change? What will they want? How will the organization meet and
exceed expectations?
2. Customer Positioning. Next, the planners determine where the organization wants to be in
relation to the customers. Do they want to retain, reduce, or expand the customer base? Products or
services with poor quality performance should be targeted for breakthrough or eliminated. The
organization needs to concentrate its efforts on areas of excellence.
3. Predict the Future. Next, the planners must look into their crystal balls to predict future
conditions that will affect their product or service. Demographics, economic forecasts, and technical
assessments or projections are tools that help predict the future. More than one organization’s
product or service has become obsolete because it failed to foresee the changing technology. Note
that the rate of change is continually increasing.
4. Gap Analysis. This step requires the planners to identify the gaps between the current state and
the future state of the organization. An analysis of the core values and concepts, given earlier in the
chapter, is an excellent technique for pinpointing gaps.
5. Closing the Gap. The plan can now be developed to close the gap by establishing goals and
responsibilities. All stakeholders should be included in the development of the plan.
6. Alignment. As the plan is developed, it must be aligned with the mission, vision, and core values
and concepts of the organization. Without this alignment, the plan will have little chance of success.
7. Implementation. This last step is frequently the most difficult. Resources must be allocated to
collecting data, designing changes, and overcoming resistance to change. Also, part of this step is
the monitoring activity to ensure that progress is being made. The planning group should meet at
least once a year to assess progress and take any corrective action

10.2 Annual Quality Improvement Program

- An annual program is created alongside a long-term strategic plan, with some strategic items
becoming part of the annual plan, incorporating new short-term initiatives.
- The program aims to foster a sense of responsibility among managers, specialists, and operating
personnel for active participation in making improvements.
- It focuses on developing the skills necessary for making improvements and establishing a habit of
continuous annual improvements, ensuring that quality significantly enhances each year.
- Operating personnel should be involved in setting objectives, with management providing support
through training, projects, and resources.
- Employees should be encouraged to suggest what they need to enhance their processes.
- Due to limited resources, prioritize quality objectives that present the greatest opportunities for
improvement.
- Many objectives will necessitate the formation of multifunctional project teams to achieve success.
- Organizations with structured annual quality improvement programs have an advantage, while
those without rely on the initiative of managers and specialists, who must exert considerable effort
to secure results without the support of an official program designed by the quality council.

11. COMMUNICATIONS:

Organizations communicate with employees to convey values, expectations, directions, corporate

developments, and facilitate feedback across all levels.

- Effective communication requires a two-way flow of information, allowing feedback from

employees to management and vice versa.
- Communication barriers should be removed, and managers should encourage open dialogue by
being approachable and facilitating feedback.
- A formal system for addressing employee concerns can improve communication and enhance
quality improvement efforts.
- Organizations must clearly define the message they wish to communicate, along with its goals and
consequences, to avoid information overload.
- Effective communication should not only deliver information but also change attitudes and
behaviors, requiring evaluation to ensure understanding.
- Regular surveys can assess whether key messages are being comprehended and supported by
employees.
- Consistency in messaging is essential; mixed or contradictory messages lead to confusion within
the organization.
- Clear, focused, and repetitive messages should be communicated from top management to all
levels of staff.
- The aim of communication is to influence attitudes and behaviors to achieve organizational goals
and objectives.
- Different communication methods suit various needs, and the choice of method should motivate
action while preserving the human element of direct communication.
- There are two primary communication techniques:

 interactive
 formal.

11.1 INTERACTIVE

- Effective communication fosters discussions between employees and their immediate supervisors,
allowing for a two-way exchange of information.
- Immediate supervisors are ideally positioned to initiate conversations about improvements,
addressing how and why changes need to be made.
- Employees often prefer their immediate supervisor as a source of information, making face-to-
face communication a key tool for organizations like Xerox, The Ritz-Carlton, IBM, and Texas
Instruments.
- Companies like Motorola leverage immediate managers to convey company goals, as they
understand their daily impact on employees and can effectively address questions and concerns.
- GTE Directories Corporation’s executives spent significant time on the road to facilitate face-to-
face interactions with employees regarding company priorities and goals.
- Not all supervisors are equally effective communicators; successful communication generally
relies on honesty, clarity, and inclusivity.
- Communications training programs can enhance supervisors' effectiveness.
- Communication can occur in one-on-one or group settings, with group discussions often held at
the beginning of shifts to cover essential topics like quality and productivity.
- Quarterly meetings for all employees allow executives to share the company's status and answer
employee questions, potentially requiring offsite venues for larger organizations.
- Team meetings, such as informal breakfasts or lunches, encourage open dialogue and the free flow
of questions and answers.
- Interactive communication methods, including instant messaging and video conferencing,
facilitate electronic engagement among team members.

11.2 FORMAL

- While face-to-face interaction is vital, it should be supplemented with other communication

methods to reinforce messages.
- Formal communications can include printed materials like emails and newsletters, which allow for
periodic updates and can be enhanced with graphics such as charts and diagrams.
- These publications can reach employees simultaneously and be tailored for specific groups,
particularly in multinational organizations where cultural and language differences must be
considered.
- The Internet serves as a valuable tool for external communications, while intranets facilitate
internal information sharing, providing employees with on-demand access to necessary
information.
- Large, multi-site organizations can effectively use satellite television for communication,
incorporating interactivity by allowing questions via telephone or fax during presentations.
- Presentations should be concise, professionally produced, and can be videotaped for later viewing
to accommodate employees' schedules.
- Video communication is increasingly important, as visual messages are impactful. Organizations
can produce their own videos or purchase commercial tapes on relevant topics like quality.
- When creating videos, professional production is essential, as a poorly made video can undermine
the intended message.
- A well-prepared script ensures clarity and completeness of information in video presentations.
- Ultimately, effective communication is achieved when employees are as informed about the
organization as its CEO, fostering transparency and engagement.

12. QUALITY COUNCIL

In order to build quality into the culture, a quality council is established to provide overall direction.
It is the driver for the TQM engine. In a typical organization the council is composed of the chief
executive officer (CEO); the senior managers of the functional areas, such as design, marketing,
finance, production, and quality; and a coordinator or con sultant. If there is a union, consideration
should be given to having a representative on the council. Some organizations, such as Friendly Ice
Cream of Wilbaham, MA, include front-line representatives from every area. A coordinator is
necessary to assume some of the added duties that a quality improvement activity requires. The
individual selected for the coordinator’s position should be a bright young person with execu tive
potential. That person will report to the CEO.
In smaller organizations where managers may be responsible for more than one functional area, the
number of members will be smaller. Also, a consultant would most likely be employed rather than
a coordinator.

12.1 THE DUTIES OF THE QUALITY COUNCIL ARE TO:

1. Develop, with input from all personnel, the core values, vision statement, mission statement, and
qual ity policy statement.
2. Develop the strategic long-term plan with goals and the annual quality improvement program
with objectives.
3. Create the total education and training plan.
4. Determine and continually monitor the cost of poor quality.
5. Determine the performance measures for the organization, approve those for the functional areas,
and monitor them.
6. Continually determine those projects that improve the processes, particularly those that affect
external and internal customer satisfaction.
7. Establish multifunctional project and departmental or work group teams and monitor their
progress.
8. Establish or revise the recognition and reward system to account for the new way of doing
business.

13. DECISION MAKING:

Making poor decisions is one of the deadliest threats to the success of the organization and to one’s
career. When they act haphazardly without regard to the values and goals of an organization, people
fail. In order to make correct decisions, it is best to use the problem-solving method.