Participative management
technique within the framework of a companywide quality system in which small
teams of (usually 6 to 12) employees voluntarily form to define and solve a quality
or performance related problem. In Japan (where this practice originated)
quality circles are an integral part of enterprise management and are called
quality control circles.
A quality circle is a participatory management technique that
enlists the help of employees in solving problems related to their own jobs.
Circles are formed of employees working together in an operation who meet at
intervals to discuss problems of quality and to devise solutions for
improvements. Quality circles have an autonomous character, are usually small,
and are led by a supervisor or a senior worker. Employees who participate in
quality circles usually receive training in formal problem-solving methods—such
as brain-storming, pareto analysis, and cause-and-effect diagrams—and are then
encouraged to apply these methods either to specific or general company
problems. After completing an analysis, they often present their findings to
management and then handle implementation of approved solutions. Pareto
analysis, by the way, is named after the Italian economist, Vilfredo Pareto,
who observed that 20 percent of Italians received 80 percent of the income—thus
the principle that most results are determined by a few causes.
The interest of U.S. manufacturers in quality circles was
sparked by dramatic improvements in the quality and economic competitiveness of
Japanese goods in the post-World War II years. The emphasis of Japanese quality
circles was on preventing defects from arising in the first place rather than
through culling during post-production inspection. Japanese quality circles
also attempted to minimize the scrap and downtime that resulted from part and
product defects. In the United States, the quality circle movement evolved to
encompass the broader goals of cost reduction, productivity improvement,
employee involvement, and problem-solving activities.
The quality circle movement, along with total quality
control, while embraced in a major way in the 1980s, has largely disappeared or
undergone significant transformations for reasons discussed below.
BACKGROUND
Quality circles were originally associated with Japanese
management and manufacturing techniques. The introduction of quality circles in
Japan in the postwar years was inspired by the lectures of W. Edwards Deming
(1900—1993), a statistician for the U.S. government. Deming based his proposals
on the experience of U.S. firms operating under wartime industrial standards.
Noting that American management had typically given line managers and engineers
about 85 percent of the responsibility for quality control and line workers
only about 15 percent, Deming argued that these shares should be reversed. He
suggested redesigning production processes to account more fully for quality
control, and continuously educating all employees in a firm—from the top
down—in quality control techniques and statistical control technologies.
Quality circles were the means by which this continuous education was to take
place for production workers.
Deming predicted that if Japanese firms adopted the
system of quality controls he advocated, nations around the world would be
imposing import quotas on Japanese products within five years. His prediction
was vindicated. Deming's ideas became very influential in Japan, and he
received several prestigious awards for his contributions to the Japanese
economy.
The principles of Deming's quality circles simply moved
quality control to an earlier position in the production process. Rather than
relying upon post-production inspections to catch errors and defects, quality
circles attempted to prevent defects from occurring in the first place. As an
added bonus, machine downtime and scrap materials that formerly occurred due to
product defects were minimized. Deming's idea that improving quality could increase
productivity led to the development in Japan of the Total Quality Control (TQC)
concept, in which quality and productivity are viewed as two sides of a coin.
TQC also required that a manufacturer's suppliers make use of quality circles.
Quality circles in Japan were part of a system of
relatively cooperative labor-management relations, involving company unions and
lifetime employment guarantees for many full-time permanent employees.
Consistent with this decentralized, enterprise-oriented system, quality circles
provided a means by which production workers were encouraged to participate in
company matters and by which management could benefit from production workers'
intimate knowledge of the production process. In 1980 alone, changes resulting
from employee suggestions resulted in savings of $10 billion for Japanese firms
and bonuses of $4 billion for Japanese employees.
Active American interest in Japanese quality control
began in the early 1970s, when the U.S. aerospace manufacturer Lockheed organized
a tour of Japanese industrial plants. This trip marked a turning point in the
previously established pattern, in which Japanese managers had made educational
tours of industrial plants in the United States. Thereafter quality circles
spread rapidly here; by 1980, more than one-half of firms in the Fortune 500
had implemented or were planning to implement quality circles. To be sure,
these were not installed uniformly everywhere but introduced for experimental
purposes and later selectively expanded—and also terminated.
In the early 1990s, the U.S. National Labor Relations
Board (NLRB) made several important rulings regarding the legality of certain
forms of quality circles. These rulings were based on the 1935 Wagner Act,
which prohibited company unions and management-dominated labor organizations.
One NLRB ruling found quality programs unlawful that were established by the
firm, that featured agendas dominated by the firm, and addressed the conditions
of employment within the firm. Another ruling held that a company's
labor-management committees were in effect labor organizations used to bypass
negotiations with a labor union. As a result of these rulings, a number of
employer representatives expressed their concern that quality circles, as well
as other kinds of labor-management cooperation programs, would be hindered.
However, the NLRB stated that these rulings were not general indictments
against quality circles and labor-management cooperation programs, but were
aimed specifically at the practices of the companies in question.
REQUIREMENTS FOR
SUCCESS
The problems of adaptation, which have caused quality circles
to be abandoned, are made plain by a look at the conditions two experts think
are necessary for the success of quality circles. Ron Basu and J. Nevan Wright,
in their book Quality Beyond Six Sigma (another quality management technique) specified seven
conditions for successful implementation of quality circles. These are
summarized below:
- Quality circles must be staffed entirely by volunteers.
- Each participant should be representative of a different functional activity.
- The problem to be addressed by the QC should be chosen by the circle, not by management, and the choice honored even if it does not visibly lead to a management goal.
- Management must be supportive of the circle and fund it appropriately even when requests are trivial and the expenditure is difficult to envision as helping toward real solutions.
- Circle members must receive appropriate training in problem solving.
- The circle must choose its own leader from within its own members.
- Management should appoint a manager as the mentor of the team, charged with helping members of the circle achieve their objectives; but this person must not manage the QC.
"Quality circles have been tried in the USA and
Europe, often with poor results," Basu and Wright say. "From our
combined first-hand experience of quality circles in Australasia, the UK and
Europe, South America, Africa, Asia and India, we believe that quality circles
will work if [these] rules are applied."
Any experienced manager, contemplating the rules shown
above and the typical management environments in which he or she works or has
worked in the past will be able to discern quite readily why QC has not taken a
firm hold in the U.S. environment. As for the small business owner, he or she
may actually be in a very good position to try this approach if it feels
natural. An obviously important element of success, confirmed by Basu and
Wright, is that QC must be practiced in an environment of trust and empowerment
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