QUALITY AND CONTINUOUS IMPROVEMENT INTERVENTION PROGRAMS INPRODUCTIVITY MANAGMENT: A SOCIAL SOUNDNESS ANALYSIS

By Petros C. Christofi and Seleshi Sisaye, Duquesne University, Pittsburgh, PA 15282

Though the term quality has been around for many years, its meaning and applications havechanged and evolved over time. In the early twentieth century, quality management meantinspecting products to ensure that they met pre-set specifications. During World War II (WWII),quality became more statistical in nature. Statistical sampling techniques were used to evaluatequality in products, and quality control charts were used to monitor the production process toimprove accuracy and timeliness in the delivery of goods and services. During the post-war era,quality took an even broader meaning to be viewed as encompassing the entire organization, andnot only the production process. Learning from the WWII applications and successes, andthrough the efforts of the "quality gurus," quality is now viewed as a concept that affects and isaffected by the entire organization [1]. As a result, the term used now days to capture the conceptof quality is Total Quality Management (TQM), a proactive approach trying to build quality intothe product and process design. Based on its principles, TQM is concerned with the technicalaspects of quality as well as the involvement of people, such as employees, customers, andsuppliers, constantly striving for customer satisfaction and elimination of waste, throughteamwork and data-based decision making.

Since the 1970s, competition based on quality has grown in importance and has generatedtremendous interest, concern, and enthusiasm. Quality is now a strategic issue and successfulcompanies understand that quality provides a competitive advantage. In many industries, qualityexcellence has become a standard for doing business. This is manifested by the fact that certaincompanies have won the national quality awards or quality certifications more than once.

While the meaning of quality for businesses changed dramatically, and while many companieshad to make major changes in their quality programs either by themselves or through the help ofconsultants, the majority of such programs had emphasized and achieved product quality,reduction in quality costs, improvement in factory layout, labor productivity, and organization'ssuccess in its competitive goals. In other words, the focus of quality applications has been on theeconomic benefits of quality programs. To this effect, most studies in the 1990's that examinedTQM and business process reengineering (BPR) focused on the economic success and failures ofthese programs in improving overall organizational programs [2]. While there are relatively a fewstudies that examined the impact on human capital, they have focused rather on the laborrequirements and effects of these planned change programs, for example, retraining,reassignment, turnover, displacement, as well as organizational restructuring and the overalleffects on labor force [3]. A 1993 research study found that 84 per cent of the firms studiedemployed a training program to improve quality, and 86 per cent of these carried out this trainingwith the collaboration of a sort of consultancy firm [4]. While “the results indicate that employeemotivation for quality was the most popular aspect in the training programs, the ‘social measures’implemented by firms in the framework of TQM program were very scarce. The measures mostfrequently employed by these firms—creation of a quality control department, design andimplementation of a quality manual, quality diagnosis, external audits, SPC and qualitylaboratory—indicate that the predominant focus of the programs was on the technical aspects ofquality management. Our interpretation of this contrasts that the majority of managers in thesesmall and medium-sized firms have relied on the external training program itself to motivate theirpersonnel. This would not be surprising if we consider that training employees within theframework of a quality program is normally planned to embrace not only the improvement ofskills but also the involvement of employees in the objectives of the firm” [4, p. 9].

While the contributing fathers of TQM, Deming, Juran, Feigenbaum, Crosby, and Ishikawa,suggest that continuous training and education, at all levels of the organization, and employeeempowerment are among the single most important factors in improving quality, oncecommitment to do so is present, very few firms rely on participative management. Drucker, onthe other hand, suggests that as employees are trained for quality, they are more capable ofexercising “responsible autonomy” over their own jobs [5]. Consequently, “responsibleautonomy” can mean less supervision is needed and this is how TQM allows many companies toreduce the number of levels in the management hierarchy [6]. This tendency of organizations tobe leaner and flatter, as a consequence, with a more innovative character, presents another clue tosuccess [7]. This relationship between training and participation has also been pointed out byMintzberg, indicating that when the organization has a coherent structure with a high level oftraining, the decision-making systems will be highly decentralized [8]. However, the relationshipbetween training, participation, and benefit remains unexplored by most TQM, BPR, andBenchmarking studies, in general. But, as we shall see below, the fusion of these three principlesconstitutes the Social Soundness Analysis (SSA) of Improvement Intervention Programs (IIP),applied by behavioral social scientists to study the results of Development and ConservationProjects throughout the world.

SSA is a general framework used by social servants to assess the management of developmentprograms and its social impact on stakeholders--employees, customers, organizations as well ascommunities. The underlying framework of SSA takes on participation and full involvement ofstakeholders, on the planning and implementation of projects and services. SSA is based onprinciples of continuous improvement of projects so that the information is disseminated andbecomes part of the operating activities of those organizations that sponsored the projects.

SSA, which sometimes has been referred to as social assessment (SA) or social impactassessment (SIA), has been applied to assess the design and delivery of programs with social andcultural consequences. The United States Agency for International Development (USAID), statesthat the Agency's SSA policy is “to assure the wide and significant participation of the poor (thetargeted population) in the development process.” By involvement or participation they mean"not only sharing the economic benefits and contribution of resources but also involvement in theprocesses of problem identification and solution, sub-activity selection and design,implementation and evaluation” [9]. The Agency's SSA is composed of three distinct but relatedaspects: (1) the compatibility of the activity with the socio-cultural environment in which is to beintroduced; (2) the likelihood that the new practices or institutions introduced among the initialactivity target population will be diffused among other groups; and (3) the social impact ordistribution of benefits and burdens among different groups, both within the initial activitypopulation and beyond [9, p. 1].

The SA of World Bank (WB) examined the impact of WB-supported economic operations on 42social assessments. Their reports addressed beneficiary assessment, including the identificationand design of development activities, feedback on interventions, and constraints on projectimplementation of the targeted client population, particularly the poor. WB-SA looked at theeconomic livelihood of the people and the institutional arrangements that provided them service,as well as the effect that the project had on gender and diversity. SAS not only provided a“framework for information dissemination, consultation and participation,” but it also allowed thebank to use SAS “as a vehicle for graining stakeholders’ commitment, and for improvingsustainability of development interventions” [10, p. 2]. It focused on how the WB-supportedeconomic projects can incorporate “social soundness, quality, and sustainability of bankoperations” as reflected in the bank’s SA guidelines. The objective of SAS is to commitresources for recruiting and hiring, as well as the training of technical specialists in SA

objectives, so that the experts are able to carry out the bank’s objectives through systematicconsultation with stakeholders, local business leaders, and government officials. The technicalexperts used SA’s report to redesign bank operations so that the objectives of the project addressthe needs of the stakeholders. Government provided data, fundraising, and institutional supportto disseminate the results of the project. Since SA’s objectives were communicated, governmentagencies, at both the local and central levels, supported the project and were able to minimizebottlenecks that would hamper the success of the projects.

The U. S. National Marine Fisheries Service (USNMFS), defines SIA as “a method of gaugingthe social and cultural consequences of alternative fishery management actions or policies” [11].The organization uses SIA to determine the social and cultural conditions in areas where humanpopulation are more likely to be affected by the projects. USNMFS uses SIA to estimate socialand cultural impacts that the fishery projects have at local, regional, and national scales. Socialimpacts have been defined as “consequence to human populations of any public or private actionsthat alter the ways in which people live, work, and play, relate to one another, organize to meettheir needs, and generally cope as members of society.” The term also includes cultural impactsinvolving “changes to the norms, values, and beliefs that guide and rationalize their cognition ofthemselves and their society” [11, p. 1].The objective of SIA is to assist the organization toprepare an assessment report before the project is initiated, i.e., at the planning stage, so thatimprovements can be made to address the required social and cultural issues that would interferein the successful implementation of the project. Since 1994, the USNMFS has prepared SIAreports for projects that it had either sponsored or authorized. The SIA has been used as anavenue to involve stakeholders in the design and delivery of government sponsored projects.Accordingly, the USNMFS has applied ten steps in the social impact assessment process:1) Develop plans to involve stakeholders; 2) Identify any alternative if there are proposedchanges or plans; 3) Describe the relevant environment/area of influence; 4) Prepare a technicalreport that is comprehensive and addresses the concerns or issues of stakeholders; 5) Investigatethe impact of the proposed project; 6) Determine how the affected people will respond to theproject; 7) Estimate the long term impacts of the project; 8) Develop guidelines that addresschanges in alternatives when they arise; 9) Develop plans that can mitigate the adverse impactsof these projects; and 10) Develop a monitoring program that can identify actions whenunanticipated problems arise [11, pp. 11-17].

Building on the notion of CII, an essential ingredient of TQM, DiBella reports that manypractitioners had been focusing on creating learning organizations over the past 10-15 years [12].He suggests that “if all learning is inherently social, as suggested by the Institute for Research onLearning, then quality practitioners must involve staff directly in learning interventions becauseof the potential contributions of each and every individual, and the collective effort of allindividuals working in groups. Guided by a facilitator, the key is to let the group’s ownknowledge about the potentialities and leverage points for change guide their action planningprocess. Instead of imposing a solution for developing learning capability, a facilitator wouldprompt the group to come up with its own problem definition and its solution. In this way, theoutcome will be a set of interventions that has group ownership and builds upon the group’s ownknowledge.” Shapiro in one of her studies on the effects of change intervention on employeeattitudes, found out that participation in a TQM intervention can enhance the development ofemployees’ orientation to continuous improvement. In another, she suggests that employee-perceived fairness of profit sharing and perceived ability to contribute to the profitability of a siteare significantly associated with continuous improvement intervention programs [13]. Indeed,this is the heart of the SSA where CI is achieved no longer through some external,expert-generated model of organizational learning, but instead through the involvement andparticipation of the affected (targeted) population in the process of problem identification and

solution, sub-activity selection and design, implementation and evaluation. As firms andorganizations adopt and adapt to TQM and its CI environment for improvement, they create theneed of staff training in organizational learning while concurrently emphasizing staffparticipation.

In the 1980s, the deficit-operated provincial Community Memorial Hospital of Canada, promptedthe Ministry of Health to request for proposals designed to improve quality and reduce program -specific costs through a program management intervention program. The two major results of theprogram included better resource utilization by the staff, as well as staff heightened awareness ofwhat quality meant in clinical care [14]. In its CII, Textron Aerostructure revitalized itssuggestion program geared toward people issues and operational issues and achieved improvedoperations, educated employees, and a spirit of continuous improvement behavior throughout theorganization. Suggestion-programs offer a simple, practical, low cost method for achieving manyof the same objectives of the more complex interventions [15]. A Canadian research studyreports that when Frank McKenna was elected as the premier of New Brunswick (1987-94), heimplemented many intervention programs to improve his constituents quality of life with regardto education and employment. Through literacy training and extensive skill training, people withhigh dependence on government assistance programs were able to exit income assistancepermanently [16]. Leadership is one of the most important categories in the adoption,implementation, and success of any TQM program. Its role is paramount in fostering andrewarding commitment to continuous improvement, and it is highly recognized in winning any ofthe National or International Quality Awards.

Due to technological breakthroughs in communication and electronic commerce, competitivepressures for better quality and higher productivity, time-based competition in faster developingand delivering of new products, international trade agreements, and financial upheavalsassociated with certain regions of the world, organizations must always think in terms of a globalmarketplace in order to compete effectively. As a result, the world has grown more complex andprobably less comprehensible to some local communities where the business conditions aredeemed competitive for some industries to set up their operations.

In today’s global markets, companies must always think in wider strategic terms to incorporatestrategies that include social, political, and ecological elements besides the economic ones,especially when such companies operate in international markets [17]. Countries demand thatlarge corporations contribute to local, regional, and national development in such a way that theirresources are exchanged for a significant increase in their citizens’ quality of life.The subsidiaries of international companies influence the salary structures and workingconditions in the host countries, invest in developing countries, boosts the exports of suchcountries, and serve as an instrument to introduce new management and production techniques.Under these conditions, one may conclude that the main purpose of the actions of thosecompanies is to provide the means to satisfy the needs of the countries where they operate [18].While such international companies develop strategies that include social, political, andecological elements besides the economic ones, there are too many occasions in which society,faced with certain events that may damage its welfare, has to intervene and call for socialresponsibility on the part of the companies. Sometimes outsiders expect local people to give upmany of their customary economic and cultural activities without clear substitutes, alternatives, orincentives. The most effective conservation strategies pay attention to the needs and wishes of thepeople living in the target area. Conservation depends on local cooperation and participation.Well-meaning conservation efforts can be as insensitive as development schemes that promoteradical changes without the involvement of local people in the planning and carrying out thepolicies that will affect them [19].

There are many occasions where international companies have taken their time in recognizingthat relationships with their environment must be managed as conscientiously as the traditionalresources and functions [20]. Some difficulties stem from the fact that companies find it difficultto determine what is considered socially desirable in each country where they operate, and also ininterpreting what social well-being means, since they operate in many different countries, andwhere the meaning of the term differs. The subsidiaries of international companies are becomingincreasingly important as they evolve and grow, to the point where they become a source ofcompetitive advantage to the parent organization. Eventually these subsidiaries will possess theresources and abilities of the parent company, and are required to develop the capability torespond to its stakeholders, i.e., the groups or individuals that affect, or are affected by theiractions. Donaldson [21], states that international companies have to increase the wealth ofconsumers and employees, respect citizens’ rights, and minimize the damage or adverse effects incountries where they operate. Frederick [22], also states that among the ethical principles to befollowed by international subsidiaries are: (1) Safety and hygiene standards at work, (2) advisingthe employees of the risks associated with their work, (3) respect towards employees rights tolife, liberty, security, and privacy, and (4) reduce (air and water) pollution.

As we have seen above, if a SSA approach for improving the welfare of the community is notfollowed, the local ethno-ecologies are being challenged, transformed, and replaced.Industrialization introduces migration, media, pollution, values, and technologies that conflictwith those of the region. To maximize the likelihood of success, the project's social design forchange need to consider and rely on local cooperation and participation. Like development plansin general, the most effective projects have been conservation planned strategies that payparticular attention to the needs and wishes of the people living in the target area [6].

In this study, we are arguing that quality improvement programs need to be supplemented by SSAin order to have a comprehensive understanding of the effects of these programs, not only on theorganization and its resources (labor and capital, and competitive markets), but also on the socialand political aspects, including the society at large. A SSA takes a proactive approach inevaluating both the economic and the social consequences of quality programs, including TQMand BPR. As we witnessed, the SSA approach has been applied by behavioral social scientists toevaluate the effectiveness of planned intervention programs on the targeted population. SSAprovides a balanced approach--a socio-political, economic based approach--to analyze anyproposed program when that program is planned and implemented with the objective of betteringand improving a given population. We propose to extend the SSA approach to evaluate theeffectiveness of quality improvement programs in production--manufacturing and service--organizations. Our contribution to the quality and productivity literature lies in the application ofthe SSA to augment these studies and thereby provide alternative frameworks to evaluate themand suggest ways in which those unintended consequences of planned intervention programscould be minimized.

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