TQM and Organization of the Firm: Theoretical and Empirical Perspectives

Thirty companies that either applied for the Malcolm Baldrige National Quality Award or were known to actively practice total quality management (TQM) were surveyed by telephone and telefax. Data were obtained regarding their employees' revenues, supervision, incentive systems, relationships with suppliers and other organizations, number of problem-solving teams, and participation in the strategic planning process. These data were obtained for the period of time prior to their initiation of TQM efforts and for their current status. The findings were that adoption of TQM led to (1) flatter organizations and larger spans of control in supervision; (2) an increase in organizational liaison devices in the form of cross-functional problem-solving teams; (3) a decease in size measured by number of employees with an increase in output measured by revenues; (4) an incentive systems shift in emphasis from individual to group reward; (5) more frequent involvement in the planning process by lower-level employees; and (6) more-permeable organizational boundaries.Despite limitations on the data, it was felt that the findings were useful both for benchmarking and policy purposes.