Cases > Case 15

CASE 15 !dition, ications,

Eighth

RogerPageand Alan Peacock

This casedescribesthe implementation of a quality improvement process in an international organisation and in particular considers the links between the organisations'sproduct base,culture and managementstyle at the British-basedorganisation Pall Europe and relatestheseto the philosophy of total quality improvement. It reinforcesthe need to consider quality improvement as the responsibility of everyonein the organisationand how this needsto be related closely to the needsof people both inside and outside the organisation. A central feature of the application of quality improvement within Pall Europe is the perception of senior managersthat systemsand procedures introduced must fit the culture of the organisation and match the needsof the organisationwith the needsof employees.Four leading principles have been identified which senior managersbelieve are central to the successful implementation of the process,all of which focus on aspectsof organisational behaviour and reinforce the theme that quality improvement dependson the quality and commitment of people.

BACKGROUND The Pall Corporation is an international organisation with approximately 6,250employees worldwide, operating from three centres located in the US, UK and Japan.The US base trades with America, Canada and Brazil. The Japanesebasetrades with countries around the Pacific rim and the UK basedealswith Europe,Africa, Australia and New Zealand. The company was formed in 1946 in the US by Dr Pall who was an entrepreneurial scientist and inventor. The original product was a porous stainlesssteel product which filtered out impurities in fluids. In the 1950s Dr Pall developed a new generation of disposablefilters that facilitate the processof fluid clarification. Fluid clarification can be a complex process but simply describedmeansthat impurities, particulates and debris can be filtered out of liquids and gases.Complete removal of bacteria from pharmaceuticalproducts and air is an exampleof this.

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164 Casesin OrganisatiQnalBehaviour

Pall Europe Pall Europe was formed 1964under directionthe of UK Maurice British engineer. Mauriceinmanaged andthe integrated and Hardy~ ~

organisations using the corporate values outlined above and was larly successfulin implementing organisationalstructuresand systems took due accountor cUltural dlff~r~i1ces.TIle cerlti"eof Europc~ ~ctivity

Quality improvement in Pall Europe 165

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basedin England but with organisations based in France,Germany, Italy, Spain and Switzerland. Eachof theseorganisationsis managedby a director who is a national of that country and a board member of Pall Europe. Pall Europe currently employs approximately 2,250employeeswith some 1,450basedin the UK. Abe Krasnoff has recently retired from his executive position and Maurice Hardy has taken on Abe's worldwide responsibilities. Two senior directors are now responsible for managing Pall Europe. One is Derek Williams, a charismatic leader, who is a good organiser and communicator with highly developed interpersonal skills and the ability to motivate staff. The other is Don Nichols who has demonstratedexceptional skills as a market strategist and given a considerableimpetus to sales.Pall Europehas now achieveda sizeequal to that of the US business. All Pall employeesenjoy good conditions of serviceand the company is moving towards single status conditions for manual workers and staff. Statisticsindicate a pattern of a loyal, stable workforce, with long service, low labour turnover and a perception by staff of organisational growth matched to reward patterns and resultant careeropportunity. Middle and senior managersare largely long-serving employeeswho have progressed with the company. This is seento promote what has been described by a senior manager as a 'horizontal managementstructure' where experienced long-serving managersknow the organisation well and require less direction from their line managersthan new staff.

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THE SITUATION

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In appraising their future businessstrategy Maurice Hardy together with his senior executivesat Pall consideredpossibleinitiatives that would reinforce the organisation'scorporatevalues and determined that it was time to introduce a quality improvement programme that would:

:\arket room to be anisa-

. Improve existing levelsof profitability in the difficult economicclimate.

. Relate to customer needs more closely by ensuring that good quality products are delivered on time.

. Reducetime spent on corrective action (estimatedas 25 per cent of time spent at work). . Ensure conformity to existing product liability requirementsand to promote product reliability beyond theselevels. Relateclosely to the nature of businessand cost structure.

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Having agreedin principle to the idea of quality improvement,senior managerswere chargedwith looking at possibleways of introducing the concept to all Pall organisations.Consultantswere required who could demonstrate:

. A proven track record of successfullyintroducing quality improvement programmesinto multinational organisations.

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A good international reputation as consultants. . That the suggestedprogramme would fit the culture of Pall Presentations were obtained from various interested consultants and a decision reached to appoint Crosby Associates(now Proudfoot Crosby). They provided the framework and support for nominated Pall Corporation staff who received extensive training in the total quality philosophy and framework which was developed and customised to suit the culture and value systemof Pall and the structure of eachwork location. The secondphaseof training involved all employeesin Pall Corporation. Management consultants provided three months intensive training to a designated manager who then trained master instructors. Together they trained senior executives who received intensive training in two or three day periods, middle managersreceived training one day per week for six months and shop-floor workers were trained for half an hour to an hour a week for six months. This exercisewas introduced somesix months later in Pall Europe. The basic philosophy of quality improvement promoted is that all policies procedures and practices of the organisation can be improved, and every employee can contribute towards that improvement. Improvements should be consideredas positive experiencesand no blame should be allocatedto past performance. Four leading principles have been identified with this processof quality improvement:

. Quality meansconformanceto requirements.

. Prevention and removal of root causeis the true sign of quality - a quiCk 'fix' is not sufficient. The standard for quality is zero defects. . Quality should be measured by the price of non-conformance (PONC) and quantified in financial terms even if this is estimated. (The cost of not doing it right the first time.)

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In order to implement the systemof quality improvement an organisational structure was designed and implemented. The structure adopted was that quality work groups would consider quality improvements relating to their role in the organisation.Figure 15.1is a simplified illustration of the structure adopted for the Total Quality Performance Process (TQPP) at the Portsmouth site; it follows the samepattern and complementsthe structure of the existing management hierarchical structure. Quality work groups appoint leadersto report to designatedline managerswho form corrective action sub-committeesreporting to a quality improvement team and then on to the quality improvement co-ordinating committee. At eachlevel in the structure eachteam and committee is encouragedto considerthe four principles outlined previoUsly.

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Managers are expected to recognise the need to integrate the quality improvement process into everyday business activities and to demonstrate this by their own behaviour. The following guidelines issued to managers indicate this philosophy: 1. Develop a sharedsensewith all employeesof what your respectiveorganisations are trying to do, where eachis going and how it fits into the goals and objectivesof the corporation. 2. Put moreemphasison recognisingindividual performancethat meetsor exceeds expectationsrather than focusingon the negatives.However,poor performance needsto be correctedand canonly besuccessfulif it is doneconstructively. 3. Provide employees with structure and collaborate with them to establish goals and targets critical to successand, when appropriate, be directive in assigningwork.

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4. Don't steal the glory from your subordinates and co-workers by hugging

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or giving long-winded presentations. 5. centre Learn stage to be less insistent upon always getting your own way and try to give greatercredenceto the opinions and solutionsof co-workers. 6. Lead by examplethrough your own dedication and work ethic and set high standards and work hard toresponsibility meetcommitments. 7. personal Ensurethat all employees have both and accountabilityfor their actions and objectives. Assign ownership. 8. Treat others with mutual respect. Important to maintain quality working rela-

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Quality improvementin PallEurope 169

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quality improvement process. The pricefor non-conformance () beenquantified and estimatedat a saving of some£2,000per year. At the other end of the PONC scale,improvement programmesin manufacturing areashave examined ways of reducing scrap during production and at a conservativeestimatesave£250,000per year. PROCESSMODEL WORKSHEET

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Pall have recently extended the processto undertake improvement programmeswith their customersand suppliers. Thesehave not only resulted in financial benefits to the parties involved but also createdbetter service, removed unnecessary paperwork and strengthened trust between customers and suppliers. Staff are not rewarded financially for their personalcontribution to quality improvement but recognition is given by senior managerswho attend meetings and who are therefore aware of individual contributions and actively praise and encouragestaff. Public recognition is given on quality notice boards. In the UK there is a view that public recognition is somewhatembarrassing, but in the US an award of 'Quality Employee of the Month' provides public recognition by offering a reservedcar parking spaceto the employee near to their workplace and also by publicising the award in internal newssheetsand notice boards. For many years an employeesuggestionscheme has operated successfully in Pall Europe and employees are rewarded financially for ideas adopted under this separateprocess.This system is still running alongsidethe quality improvement programme. ACTIVITY BRIEF

1 Identify the predominant culture and management style prevailing in Pall Europe and demonstrate by citing examplesfrom the casehow these factors have affected the implementation of the quality improvement process. 2 What factors wi/I influence the motivation of staff towards continued quality improvement, and how can senior managers use this information to realise organisational goals?

3 Usethe processmodel worksheetshown in Figure 15.1to considerpossible quality improvementsto a processthat organisationsencounter regularly (e.g. a routine administrativeprocess)and demonstratea suitable way of quantifying the PONC. RECOMMENDED READING

Child, J. (1984). Organisations: A Guide to Problems and Practice, Second Edition, London: Paul Chapman. Mullins, L. J. (1993). ManagementofOrganisational Behaviour,Parts 6 & 7, London: Pitman. Oakland, S. O. (1993).Total Quality Management,Oxford: Butterworth-Heinemann. Woodward, J. (1980). Industrial Organisation: Theory and Practice, Second Edition, Oxford: Oxford University Press. Quality of Working Life and Total Quality Management,November 1991.ACAS Work ResearchUnit Occasional Paper, No. SO.