An analysis of Total Quality Management implementation in Mexican large industry

At the beginning of the 1980s Mexico's Federal Government decided to end the imports-substituting policy to join the General Agreement on Trade and Tariffs (GATT). As a result of the fast changes of the last decade in terms of international trade, Mexico's new policy rapidly evolve to one leading the country to a totally open economy. This situation moved Mexican companies towards the need to improve their competitiveness for survival. Because of the previous success of Japan in achieving an outstanding improvement on the quality of its products, most Mexican large industrial organisations have introduced TQM into their management systems. Since there was no previous knowledge on how to do that in Mexican organisations, they have had to follow the strategies used in other countries for this purpose. However, because some companies have reported some trouble in this endeavor, the initial objective of this thesis was to investigate if TQM has been useful, in terms of improving the satisfaction of stakeholders and company's profitability, for Mexican large industrial organisations. To probe the effectiveness of TQM in Mexican industry, a study was conducted on 82 large industrial organisations;7 1 (86.6%) of them reported the implementation of TQM on their management system. Initially, the degree of penetration of TQM was measured. For this purpose,a conceptual business management system as developed, incorporating in it the more popular quality management concepts or techniques, grouped in 7 sub-systems. Then the degree of TQM implementation as measured for each company and correlated to stakeholders' satisfaction and financial profitability. A good degree of correlation, given the sample size, was found between stakeholders' satisfaction and TQM (0.45), but not between this variable and the financial profitability reported by the companies investigated (0.04). However, the research found a significant correlation between the degree of implementation of some of the subsystems of the conceptual system and the profitability of certain sub-sectors of the industrial sector. For this reason, it was decided to analyse in a greater detail the strategies followed by organisations that showed a reasonable financial performance during the last four years. This analysis considered the influence of other internal and external non-TQM variables to succeed, financial speaking, in TQM implementation. As a result of the investigation, the thesis proposes a procedure for the design of a TQM system. This proposal is expected to increase the possibilities of a Mexican industrial organisation to improve its financial performance by an adequate in corporation of TQM into its management system