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Case 3-3A Classic: Motorolas Quest for Quality

1. REVIEW OF THE CASE

A. Problems/opportunities

Problems

Impact of increasingly intense Japanese economic competition since the 1970s: Our quality levels really stink, according to the manager of Motorolas best-performing division.

Historical mindset of Corporate America since the late 1940s: Quality was not a pressing issue to most American corporations in the post-World War II period (Aguayo,

1990, pp. 45).

Self-content to belittle foreign brands: Made in Japan used to mean cheap and shoddy in old days. Like other American companies, Motorola remained reactive to the ever-changing competitive business world in which Japan eventually emerged as an

economic superpower in the 1980s.

Opportunities

Room for improvement of Motorola products: Its products could be shown to hold up to Japanese scrutiny.

Total Quality Management (TQM) espoused by the Japanese: The focus on improving quality could give Motorola a chance to squarely compete with Japanese products.

Ironclad Japanese market closed to foreign products: The issue of fair trade could function as an ideological weapon to change macroeconomic policies of the federal

government and open the Japanese market.

American mass media engaging in Japan bashing: They could be useful tools to direct public opinion toward pro-American sentiments (Made in U.S.A.).

B. Target publics

Government and politicians

Business leaders

Investors

Employees

Customer and prospect firms

Suppliers

C. Strategic planning

Goals

To act as a model for American corporations and businesses by spearheading the competition with Japan: a major campaign called Meeting Japans Challenge.

To improve the quality of products: the Six Sigma program. Objectives

To dispel the common American notion of the Japanese as supermen and promote the idea that America could compete with Japan if the two countries could compete on the

level-playing field.

To reduce the defective rate to less than .0003 percent of the time. Strategies

Extensive media publicity.

Pressure on U.S. policymakers.

Involvement of suppliers in Motorolas quality movement.

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Worker involvement in decision making.

Education of workers. Tactics

(advertising, public relations, government relations, internal communications, and Japanese

business development)

External: 1. Delivering messages catered to cultivate the U.S. national pride: a series of 22

advertisements run in leading U.S. business magazines and newspapers, and editorial

briefings and interviews.

2. Promoting discussions on productivity, quality, and other relevant topics: background papers (Viewpoints), forum discussions, merchandising of vest-pocket speech reprints, and news fillers to weekly newspapers.

3. Placing U.S.-Japan trade issues high on the agenda of policy makers: domestic lobbying, testimony in Congress and for Senate committees, personal visits to other

corporations executives, and direct lobbying in Japan. 4. Requiring suppliers to pledge to apply for the Malcolm Baldrige National Quality

Award within five years: Motorola University (the companys internal education and training center) and a supplier certification program.

5. Publicizing the award: a Quality Day in 89 locations around the world, invitation of politicians and foreign dignitaries, Baldrige Award flags, brochures, videos,

speeches, pennants, and mugs.

Internal: 1. Educating employees and getting them excited: a film on Meeting Japans

Challenge shown at all U.S. plants, a booklet with reprints of the ad series distributed, feature stories in factory publications, campaign banners, buttons, T-

shirts and hats. Also, videotapes, posters, and a course on Understanding Six Sigma for the Six Sigma program.

2. Offering incentives: performance reviews and bonuses tied to Six Sigma. 3. Directly involving employees in the quality campaign: each department required to

establish some quantitative measures to demonstrate its achievements, and Total

Customer Satisfaction teams that competed for gold and silver medals in annual

quality championships.

D. Ultimate outcomes

Motorola became a high-profile company identified as a major spokesperson on the trade issue.

Journalists associated Motorola with quality more than any other attribute.

Motorola employees developed pride and confidence in their employer.

Motorola saved millions of dollars and increased net profits.

Motorola won one of the first U.S. Commerce Departments Malcolm Baldridge National Quality Awards in 1988 (an equivalent of the Japanese Deming Award).

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2. QUALITY

A. What is quality?

What is quality? Quality is pride of workmanship (Aguayo, 1990, p. xi).

Where is quality made? Quality is made in the boardroom (Aguayo, 1990, p. 17).

B. TQM

TQM means near-zero defects in every task performed in the production and delivery of products and services, with quality improvement, total customer satisfaction and

employee empowerment as its core goals. This concept has been applied in various

industries and institutions. TQM is not outcome-oriented, but process-oriented. Total quality management (TQM) focuses on improving the quality of an organizations products and services and stresses that all of an organizations functional activities should be directed toward this goal. Conceived as an organizationwide management program,

TQM requires the cooperation of managers in every function of an organization if it is to

succeed (Jones, George, & Hill, 2000, p. 651).

Systems theory: Some characteristics of open systems include interdependence, permeability, holism, and negative entropy (Miller, 1999).

C. Dr. W. Edwards Deming (1900-1993)

American industrial-efficiency expert. Educated in mathematics and physics, he worked with Bell Labs Walter Shewhart during the 1930s. He developed quality-control theories that emphasized uniform results in the production process rather than through inspection

at the end of the process. During World War II Deming successfully applied his approach

to the making of airplane parts. Ignored and angered by postwar American industry,

Deming took his gospel to Japan in 1950, where it was embraced. His ideas finally took

root in the United States in the 1980s, when the Detroit auto industry asked for his help in

competing with the very Japanese firms he had inspired (Died, W. Edwards Deming,

1994, p. 29).

Standard company vs. Deming company. The latter espouses a set of values and beliefs that are completely different from traditional management thinking. Quality leads to lower costs. Inspection is too late. Process [can] never [be] optimized; it can always be improved. Elimination of all work standards and quotas is necessary. Fear leads to disaster. People should be made to feel secure in their jobs. Most variation is caused by the system. Buy from vendors committed to quality. Work with suppliers. Profits are generated by loyal customers. (Aguayo, 1990, pp. 1718).

Dr. Demings 14 Points for the Transformation of Management (Aguayo, 1990, pp. 124125). 1. Continuously improve the quality of product and service. 2. Management must learn their responsibilities and take on leadership for change. 3. Eliminate mass inspection by building quality into the product in the first place. 4. Buy from and work with suppliers committed to quality on a long-term basis. 5. Become process-oriented and examine the system of production and service. 6. Institute training on the job. 7. Institute leadership to empower employees to do a better job. 8. Drive out fear. 9. Break down inter-departmental barriers and work as a team. 10. Eliminate slogans, exhortations, and targets for the work force. 11. Eliminate work standards (quotas) and MBO.

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12. Abolish the annual review/merit rating and focus on peoples right to pride of workmanship.

13. Institute education and self-improvement programs. 14. Everybody must participate in the transformation of management.

The 10th point is contrary to what American corporations, including Motorola, have been doing. The 12th point attempts to dissuade management from tying the quality movement

with compensations and bonuses. Deming emphasizes the importance of employee pride

and joy in their jobs (Aguayo, 1990, p. 44).

D. KAIZEN

KAIZEN [a Japanese word: continuous improvement] means ongoing improvement that involves everyone, including both managers and workers. The KAIZEN philosophy

assumes that our way of lifebe it our working life, our social life, or our home lifedeserves to be constantly improved (cited in Grunig, 1992, p. 243). KAIZEN places an emphasis on improvement in processes rather than development of new processes.

While the term innovation connotes a drastic improvement by making a large investment in new technology and/or equipment, KAIZEN means small improvements

via ongoing efforts.

Furthermore, implementation of KAIZEN presupposes a change in corporate culture from competition to cooperation. KAIZEN programs use quality circles and informal

leaders among workers, bring social life into the workplace, make the workplace the

place where workers can achieve life goals, and train supervisors to enhance their skills

in communication with employees.

E. 10 steps for successful implementation of TQM (Jones, George, & Hill, 2001, pp. 655658)

1. Build organizational commitment to quality: All employees must be involved, which in turn, requires a change in an organizations culture. The involvement of company CEOs (as communicators) is critical to keeping the TQM program and its momentum going

(Bovet, 1994, p. 21). In addition, quality circles, team projects, and empowering employees require dramatic changes in many company cultures (Kathawala, Elmuti, & Toepp, 1991, p. 27).

2. Focus on the customer: One definition of quality is anything that enhances the product from the viewpoint of the customer (Aguayo, 1990, p. 35). In short, the customer defines what quality is. The gap (quality gap) between what customers want and what

they actually get must be identified and closed.

3. Find ways to measure quality: Managers must devise appropriate measures. Examples include cycle time reduction (minimization of time spent on a task and elimination of

redundant and non-essential activities that do not add value), benchmarking (comparing

ones own efforts against those of the best), and zero defects (elimination of errors). 4. Set goals and create incentives: This practice contradicts Demings admonition. He is

opposed to the application of MBO as a reward-and-punishment strategy. See Demings 11th point of the transformation of management.

5. Solicit input from employees: Quality circles (groups of employees who meet regularly to discuss ways to increase quality) and self-managed teams are established to further

quality-improvement efforts.

6. Identify defects and trace them to their source: After identifying defects and tracing them to their source, managers must find out why they occurred and fix the problem. Analysis

of a process (a sequence of steps that describe an activity from beginning to completion) must be conducted. Pre-statistical techniques include fishbone (Ishikawa)

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diagram (cause-effect relationships) and process-flow diagram (identification of

unnecessary steps), and statistical process-control techniques include the Pareto chart, the

X chart and the p chart (Berenson & Levine, 1992, chap. 19). 7. Introduce just-in-time inventory systems: When an organization has a just-in-time

inventory system, parts or supplies arrive at the organization when they are needed, not

before. A small inventory makes it easier to identify defective parts and fix the problem

before more defective parts are produced.

8. Work closely with suppliers: By reducing the number of suppliers and forming cooperative long-term relationships with them, companies can enhance the quality of

their products. A major cause of poor-quality finished goods is poor-quality component

parts. See Demings fourth point of the transformation of management (Aguayo, 1990, p. 124).

9. Design for ease of manufacture: The less the number of necessary parts, the less the number of opportunities to make a mistake, which leads to fewer defects, quality

improvement and cost reduction.

10. Break down barriers between functions: More and more business schools have realized the importance of teaching teamwork, because it is the way of life in organization

(Bruzzese, 1991, p. 31). See Demings ninth point of the transformation of management (Aguayo, 1990, p. 124).

F. Malcolm Baldrige National Quality Award

The award is not so much a mere recognition program for winners as promotion of quality and a guideline for outstanding quality systems that will improve both

productivity and efficiency to compete domestically and internationally. The winners are

allowed to publicize their awards only if they agree to share their successful quality

strategies with others in the United States (Henkoff, 1989, p. 168). Six criteria of the

award and their corresponding weights are: leadership (15 percent), planning (15

percent), human resource utilization (15 percent), results from quality assurance of

products and services (10 percent), and customer satisfaction (30 percent) (Kathawala,

Elmuti, & Toepp, 1991, p. 27).

The 1988 winners included Motorola Inc., Globe Metallurgical, and the Commercial Nuclear Fuel Division of Westinghouse Electric (Kathawala, Elmuti, & Toepp, 1991, p.

28).

G. Motorolas Six Sigma initiative

Developed in 1987, Six Sigma quality is a statistical measure expressing the rate of defects introduced by a process or built into a product. Six Sigma equates to 99.9997%

perfect or 3.4 defects per million opportunities (Motorola, 1999). While re-engineering programs often recommend breaking down an organization and rebuilding from scratch, the Six-Sigma program starts with the existing organization, builds on

current successes and modifies current processes (Erwin & Douglas, 2000, p. 10).

It seems that engineering this high quality into a product is cost-prohibitive. Not if you make things right the first time, says Galvin [former Motorola chairman], echoing a

conviction increasingly preached by Americas best manufacturers. Superior quality, he says, is actually the lowest-cost way of doing things (Henkoff, 1989, p. 164).

A list of Six Sigma principles called Six Steps to Six Sigma was developed to introduce TQM to all employees.

1. Identify the product you create or the service you provide. In other words, answer the question, What is my mission?

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2. Identify the person who actually pays for the products and services that the company produces.

3. Identify what you need in order to provide a product and service that satisfies the customer.

4. Identify the process for doing your work. In other words, break down operations into steps and tasks, chart the flow of work from supplier to customer, spot tasks that are

prone to error, and measure the defect rate and cycle time.

5. Redefine the process so that it is mistake-proof and so that wasted effort is eliminated. If a task adds no value, throw it out.

6. Ensure continuous improvement by measuring, analyzing, and controlling the process.

The Six Sigma Black Belt program is intended to bring together a group of broadly experienced individuals to champion the use of statistics and other Six Sigma quality

improvement tools and drive continuous improvement toward Total Customer

Satisfaction (Motorola, 1999). Those Black Belts serve as change agents, internal consultants, mentors and coaches within their organizations. Motorola University (MU)

has been offering quality-improvement courses, workshops, etc. to various organizations

in the world (Erwin & Douglas, 2000; Motorola, 2001b).

The Motorola Total Customer Satisfaction (TCS) Teams were started in 1990, which aimed to become world-class producers by forming cross-functional empowered teams (Motorola, 1999). The TCS teams solve quality and process problems to achieve the

organizational goal of total customer satisfaction.

There are a series of success stories about Motorolas operations in Japan. For example, on March 26, 2001, Motorola was awarded a $40 million contract from the Japanese

cellular operator TU-KA group (Motorola, 2001a).

The Six-Sigma methodology can be applied to safety issues to eliminate common causes for plant injuries (Horst, 1999, p. 14).

H. Is TQM dead?

Surveys show that up to two-thirds of American managers think TQM has failed in their companies (Jacob, 1993, p. 66). Adoption of TQM in cookie-cutter fashion does not work, and TQM is no panacea. Some say that those quality movements have not led to

stock market success: I could genetically engineer a Six Sigma goat, but if a rodeo is the marketplace, people are still going to buy a Four Sigma horse (Clifford, 2001, p. 140). According to Tom Peters, author of Thriving on Chaos, People got the Deming technique but they didnt get the Deming philosophy (Romano, 1994, p. 23).

One of the myths about TQM: The practices that lead to quality are Japanese concepts that are uniquely suited to the Japanese culture. They will never work in other

companies (Koger, 1991, p. 33). Simply wrong. U.S. engineers, such as W. Edwards Deming, Joseph M. Juran and Armand V. Feigenbaum, taught the Japanese about the

concept of quality and TQM.

Although some nave laypersons tend to infer from the current Japanese economic turmoil that TQM is already a moot subject, most analysts ascribe the Japanese economic

downturn to (1) the failure of Japans banking system and (2) a lack of strategic marketing vision. Those reasons can never nullify the validity of TQM. American and European manufacturers have made incredible strides, but ask any of their engineers who

is the best in the world, and youll get the answer very quicklythe Japanese. And they did it though [sic] an almost fanatical dedication to TQM (Sedam, 2001, p. 150).

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I. Implications of TQM for public relations

To successfully implement new management concepts such as TQM, communications expertise should be involved up-front and participate in the decision making process in

order to be able to develop an effective communications strategy and plan (Grates, 1994, p. 42). Also, quality should not be seen only as an internal procedure or goal. Communications specialists must be able to effectively market quality achievements to external audiences, using customer-centered expressions such as customers gain this . . . faster delivery results from . . . or customer returns approach zero through new methods

. . . (Vella, 1994, pp. 22, 24).

When there are some symptoms of a stalled drive for the TQM movement within an organization that show gaps between employee/management expectations of quality and

subsequent realities, the objective of communication specialists is to influence behavior, through communication, that [sic] closes those gaps, and aligns management behavior

with the quality messages and with employee perceptions (Koger, 1991, p. 34). Of course, research and analysis (e.g., employee surveys, quality audits) are the first step of

this communication process.

3. IDEOLOGY

A. What is ideology?

A set of beliefs and values that a social group or culture espouses.

Selling a war to the nation has been tremendously successful in the past by using the us vs. them framework (Stauber & Rampton, 1995, chap. 10). Similarly, to be effective, PR campaign messages must have a certain degree of ideological resonance with the target

publics. Motorolas publicity effort and political maneuver represent this tactical move.

B. Behind the political game

Instead of meeting the Japanese specifications of cellular-phone frequencies, Motorola chose to pressure Washington (via monetary contributions to Republican candidates) to

force Japan to accept its demands. However, while this was widely portrayed as a U.S.-Japan clash, the telephones that Motorola was selling in Japan were actually

manufactured not in the U.S. but in Malaysia (Bovard, 1991, p. 242).

Motorola implemented the Bandit program that adopted Japanese-style production techniques. Not many managers refer to themselves as banditsat least not publicly. At Motorola, though, the term is an accolade. How does Motorola outhustle the Japanese on

quality and price? It borrows from them. It takes the best legally available Japanese manufacturing methods, refines them, and uses them to make distinctly American

products (Henkoff, 1989, p. 157).

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