Foundational Philosophies of Management Paper

Foundational Philosophies of Management

University of Phoenix

Foundational Philosophies of Management

The purpose of this paper is to identify foundational management philosopher and detailing the differences perceived between the management philosophy espoused by the foundational philosopher. The foundation management philosopher choose is William E. Deming.

William E. Deming

The principles of management developed by Deming was that organization can be able to improve the quality and reduce cost through minimizing waste, staff attrition and improving consumer’s loyalty (Deming, 1994). Providing was necessary for the organization to continuously reviewed and enhanced the manufacturing as a system. In his philosophy, Deming (1994) argues that organizations that only focusses on quality, their quality results are improved, and the cost is reduced. However, organizations that only concentrates on cost results, the results include cost increasing and decrease quality (Figure 1).

For manager or leaders to be effective, Deming provides that managers and leader’s needs: to have a knowledge of their organization system, can be able to understand the factors that lead the difference in quality, and the most outstanding managers and leaders need to understand the staff behavior (Deming, 1986). In this philosophy, it is essential that a manager identifies that employees are different and their performance is determined by the system and environment they work in. The philosophy provides that organizational structure is important in increasing output quality since components in a system determine final output (Deming, 1994).

Deming offers fourteen principles, which are essential to achieving Total Quality Management (TQM). The first principle requires an organization to establish constant improvement in products or services. It encourages an organization to adopt a new philosophy and implement modern methods of supervision and training (Deming, 1994). The philosophy also requires an organization to minimize barriers between departments and develop an effective plan to educate and empower members. It requires an organization to stop work standards that advocate numerical quotas (Avery, 2010). Employees should be allowed, and members of the organization should work towards attaining the transformation and should also have a structure that ensures the company continues to follow the principles.

Moreover, Deming (1994) provides that output increases as variations decreases and also states that statistical measures can be used to improve quality. Deming (1994) has a rule referred to like 85 – 15 that states that 85% of things that go wrong is as a result of a system failure while 15% is as a consequence of an individual or thing (Deming, 1994). Furthermore, Deming (1994) provides that an organization should know its customers and that there are external and internal customers. The external customer is termed as the final consumer of the product while an internal customer is the work unit that receives the result from another work unit in the same organization. It is, therefore, important for each department to understand how its work is used by another department and their interactions.

Deming’s philosophy requires that organization need to change its corporate culture and must, therefore, be implemented from the top. Every person in the organization is responsible for quality, but more so on top management, since it sets organizational policies. When an organization has policies that fail to motivate staff members, implements quotas, instills fear and promote competition is likely to inhibit quality.

Edward de Bono and Robert Heller

Edward and Heller’s reinterpretation of Pareto’s law differs from Deming’s philosophy in that it advocates different measures to achieve improved quality. An organization’s management faces the dilemma on whether to concentrate on 20% of customers comprising 80% of sales or 20% components that result in 80% cost (Edwards & Heller, 1992). The reinterpretation provides that simplifying processes and systems results in improved organizational performance. Edward’s and Heller’s philosophy differs from Deming’s in that it encourages any additional processes or stages in production thus the costs incurred will reduce, and margin will increase (Edward & Heller, 1992). Moreover, Deming’s philosophy requires that organization use adequate management principles to improve quality and decrease cost. Edward and Heller’s reinterpretation requires a manager that is highly focused and has high energy thus they can implement and make sure that an organization eliminates unnecessary costs and improve profitability (Edward & Heller, 1992). Deming requires a manager to have a knowledge of organizational systems, variations, the theory of knowledge and psychology to improve quality and overall organizational performance.

Edward and Heller provide that when managers eliminate unnecessary costs, it will lead to a reduction in cost while Deming argues that when an organization implements continuous quality improvement, it will eventually result in reduction in cost. These two philosophies have different approaches to reducing organizational cost and also on skills required by a competent manager.

Edward and Heller provide that TQM should focus on revenues, costs, and quality while Deming emphasizes only on quality. The reinterpretation stipulates that managers should focus on increasing revenues, decreasing costs and improving quality. Edward and Heller’s management philosophy focuses on organizational processes to identify those that can be eliminated to reduce cost while Deming’s knowledge based philosophy focuses on processes and staff members to identify variations that can be reduced to improve quality.

Deming’s philosophy mainly focuses on internal processes to improve organizational processes to improve performance while Edward’s and Heller’s reinterpretation of Pareto’s law also requires an organization to concentrate on the external environment. It requires an organization to identify its customers, establish what their needs are and how the organization can attract them.

Nihon HR Ky Okai

Nihon’s Improvement Engine Philosophy (IEP) provides to the organization the necessary tools to how grow as individual and how became a learning organization, which gains knowledge from the experience (Nihon, 1990). Nihon’s philosophy indicates that improvement and development mind are gradual. Furthermore, Nihon’s philosophy indicates that change is standardized and overtime compound productivity is achieved. When an organization learns from its past experiences, it can improve their performance.

However, Nihon’s philosophy addresses TQM by emphasizing that an organization should learn from experience. The differences from Deming’s philosophy, is that Nikon’s IEP focuses on past experiences, while Deming focuses on evaluating current processes to identify the variations. Developing IEP provides continuous improvement and growth through the learning from experience, while Deming’s philosophy stipulates that TQM can be achieved through continuous quality improvement.

The two philosophies also differ in that IEP requires all members of the organization from managers to lower employees to learn from experiences to improve their performance (Nihon, 1990). Deming’s knowledge philosophy puts more emphasizes on top management since they have the capability to implement desired policies. The IEP only provides that managers and staff together should learn from their past experiences while Deming offers principles that an organization should follow to ensure they improve on quality.

Research Trail

According to his biography, William E. Deming was a significant contributor to the concept of total quality management. During his life, he was credited with improving quality in Japanese and United States industries (Greisler, 1999). Deming’s philosophy was essential in improving quality and performance (Greisler, 1999). Many organizations are implementing the philosophy to remain competitive in the global market. The first step in identifying a foundational management philosopher was to determine the innovators of modern quality thinking. Deming, like other philosophers such as Shewhart and Juran, has made an enormous contribution to the quality management and was chosen as foundational management philosopher because of how his philosophy has worked in many organizations.

Moreover, his books were selected for more information related to its philosophy. The books The New Economics and Out of the Crisis, Deming provides information on a system of profound knowledge and fourteen principles that can be used in an organization. The philosopher stipulates that when an organization improves quality, it decreases costs which result in greater productivity and improved market share.

Beckford (2002) also provides information regarding Deming and refers to him as the founding father of the quality movement. In his article, Beckford (2002) recommends the book Out of the Crisis since it provides Deming’s approach to both management and quality in a coherent form.

However, Avery (2010) analyzes Deming’s theory of profound knowledge and terms his system of management as a complete theory of management which offers business people a course of action that will generate sound long-term plans in a particular economic environment. Anderson and Rungtusanatham (1994) provide that Deming’s management method is popular because various case studies attribute organizational turn around to the influence of Deming management method.

Figure 1. The figure represents how Deming’s Management Method is combined with the TQM managers and leader’s needs: to have a knowledge of their organization system, can be able to understand the factors that lead the difference in quality, and the most outstanding managers and leaders need to understand the staff behavior (Deming, 1986)

Table 1

Comparing Managers Philosophers

References

Anderson, J. C., & Rungtusanatham, M. (1994, July 1994). A Theory of Quality Management Underlying the Deming Management Method. Academy of Management Review, 19 (3), 472-509. http://dx.doi.org/10.2307/258936

Avery, L. (2010, January 2010). A New House with a 1950s Foundation: The complex adaptive system theory of the organization related to Dr. W. Edwards Deming’s Theory of Profound Knowledge. Proceedings of the Northeast Business & Economics Association, 480-484. http://dx.doi.org/56100898

Beckford, J. (2002). Total Quality Management. In Quality (2nd ed. (pp. 65-83). London: Routledge.

Deming, W. E. (1986). Out of Crisis. Cambridge: Massachusetts: MIT Press.

Deming, W. E. (1994). The New Economics: For industry, government, and Education (2nd ed.). Cambridge: Massachusetts: MIT Press.

Edwards, P., & Heller, H. (1992). Policy and Power in Education: The rise and fall of the LEA. London: Routledge.

Greisler, D. S. (1999). William Edwards Deming: The man. Journal of Management History, 5 (8), 434.

Nihon, H. K. (1990). The Improvement Engine: Creating & innovation through employee involvement. Tokyo: Nikkan Kogyo Shimbun, Ltd.