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The Two Key Principles Behind Effective TQM Programs
Author(s) -
Wruck Karen Hopper,
Jensen Michael C.
Publication year - 1998
Publication title -
european financial management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.311
H-Index - 64
eISSN - 1468-036X
pISSN - 1354-7798
DOI - 10.1111/1468-036x.00073
Subject(s) - total quality management , productivity , key (lock) , perspective (graphical) , business , quality (philosophy) , knowledge management , process management , punishment (psychology) , computer science , marketing , economics , psychology , social psychology , philosophy , computer security , epistemology , artificial intelligence , macroeconomics , service (business)
We analyse Total Quality Management (TQM) from an economic and organisational perspective. We find that TQM is a new organising technology that is science‐based, non‐hierarchical and non‐market‐oriented. It improves productivity by encouraging the use of science in decision‐making and discouraging counter‐productive defensive behaviour. It also encourages effective creation and use of specific knowledge throughout the organisation. Effective implementation of TQM generally requires major changes in all three components of the organisational rules of the game, namely systems for allocating decision rights, performance measurement systems, and reward and punishment systems.