Introduction
In a competitive business environment, quality is an essential factor that contributes significantly to an organization’s success. In businesses, managers usually advocate for and facilitate Total Quality Management (TQM) to enhance the overall quality of services, processes, and products offered by the entity. TQM mainly focuses on meeting customers’ expectations by involving the company’s workforce in the improvement processes.
Entities that do not adopt TQM practices experience reduced operational efficiency, leading to client dissatisfaction. Based on the provided case study of Sindibad Hotel Group (SHG), issues such as quality, ethics, and social responsibility are common, highlighting the limitations of TQM. Therefore, for SHG management to restore the hotels’ glory, they must adopt TQM approaches to enhance customer satisfaction, build a strong reputation, improve efficiency, and promote sustainable business success.
Types of Quality
Generally, business management must consider various TQM approaches to ensure customer satisfaction and employee productivity. Based on the SHG case study, there is a reverse quality. Based on TQM, reverse quality encompasses the value of service evaluated in terms of cost.
Given SHG’s situation, the rooms smelled bad, and clients reported seeing cockroaches. All these aspects imply that the hotel’s overall quality is poor and unsuitable for serving customers. In addition, paying about AED50 to book tables or AED100 to access a supervisor within the restaurant indicates poor management practices that the organization can improve to enhance its performance.
In addition, the provided case scenario includes an aspect of expected quality. In TQM, expected quality is the value clients expect to find when they choose to use or acquire a service. For instance, customers do not expect to see cockroaches in the hotel but anticipate staying in cool rooms. They believe the rooms should be suitable for their intended use. Furthermore, in hotels, clients cannot think of paying to see or speak with any member of the management team. Generally, leaders find ways to talk to customers and lure them to hotel restaurants.
Quality Cost
Generally, TQM entails various costs that a business must consider to ensure its services and products effectively satisfy customers. The company must identify potential costs to minimize production charges. The four main costs in TQM are Appraisal, prevention, internal failure, and external failure costs. Each mentioned outlay significantly ensures that the respective entity achieves and maintains quality.
Appraisal Costs
Appraisal costs are essential charges in TQM that facilitate the assessment of products and services to ensure they meet the required standards. In most cases, appraisal outlays are incurred by the business organization when undertaking inspections, quality control, testing, and even audits to verify the conformity of services with the stated requirements. In the hotel industry, the costs apply to food quality testing. In this regard, management tests whether the meals served meet the established quality standards.
To address this, management regularly checks small portions of the food to verify issues such as taste, ingredient quality, and hygiene. In addition, the appraisal cost includes a room inspection to identify potential cleanliness issues before clients are checked in. Some of the charges involved in the process include training and personnel.
Prevention Costs
In TQM, preventive costs are charges that businesses incur to prevent potential quality issues and defects. In restaurants, the type of cost is fundamental since it ensures customers receive quality services. In most cases, hotels invest in preventive measures to reduce the likelihood of problems. Key areas where costs are incurred include maintaining available equipment—for instance, ensuring it is well-maintained to avoid breakdowns that can inconvenience clients.
Another critical application is employee education and training to equip them with relevant skills and knowledge to handle clients accordingly. When staff members are properly trained, their ability to provide effective services increases, thereby raising the quality of service delivery within the entity.
Internal Failure Costs
In TQM, Internal failure costs are charges associated mainly with rectifying quality issues identified before delivering services to the client. In other words, they are laying out a hotel’s costs when it fails to meet quality expectations. When shortfalls arise, management usually requires immediate correction to ensure the product reaches customers when it is of high value. For instance, a restaurant may incur rework costs if meals need to be prepared again. In addition, downtime charges entail closing the whole restaurant due to the inability to meet health expectations.
External Failure Costs
Generally, external failure costs are usually incurred by a business organization when it does not meet the quality standards required by the consumers. In most cases, dissatisfied clients leave negative reviews and file complaints with the proper authorities. Such situations can potentially damage the entity’s image, affecting the business’s overall performance in the industry.
Moreover, failure to meet the client’s expectations can prompt the client to seek legal action, placing the company at risk of legal charges. Based on TQM, external failure costs include lost sales charges. This facet entails the outlays a business incurs when sales decline after providing poor-quality goods and services to consumers.
Furthermore, a business may incur a goodwill impairment loss. In most cases, when a business’s reputation is damaged, it becomes difficult for clients to remain loyal and continue doing business with the company. In addition, such clients cannot refer their friends to the same organization to acquire goods or services. This scenario is common, especially when customers leave negative reviews of the hotel’s services.
Importance of Competing Globally
Globalization has made most businesses operate across borders. It is an emerging trend that companies find viable, given its positive impact on overall business growth and expansion. By venturing into global markets, the SHG business organization will gain access to new markets, increase sales, and earn more income (Rana et al., 2021). Generally, when an entity establishes its operations in a new market, it increases its customer base, which is essential for generating more revenue.
Similarly, competing globally will enable SHG to reduce its competition in the local market. In most cases, businesses face competition from peers in their local market for the same customers. This aspect may cause the organization to earn less income if it is not well managed (Prasanna et al., 2019). Therefore, by opening other branches in foreign countries, the entity will reduce the impact of competition from the home market.
In addition, global competition is essential in enabling the business organization to diversify possible risks. Usually, if a business depends on only one market, and the region is affected and consumers cannot purchase its services, the company will incur significant losses. However, when other branches operate in different locations, the impact of one country might not affect the activities in the other zone (McMaster et al., 2020). This aspect allows the firm to reduce risks and remain profitable despite the hazards it encounters.
Furthermore, engaging in global competition enables a business organization to become more innovative by borrowing new ideas from competitors in the global industry. Generally, when a business establishes its operations in different countries, the likelihood of adopting new activities is high, making them more competitive in unique ways (Tavoletti et al., 2022). In addition, the exposure can allow the entity to access new technologies that can be applied to improve overall operations. Therefore, a business must join a global platform to acquire emerging knowledge and productive ideas.
Moreover, participating in global competition can enable SHG to build its brand in various nations. Companies that operate in foreign nations are well-known and attract customers. Therefore, taking SHG to the international level will enhance its reputation and make it a priority for visitors to other countries. In the modern world, brand equity plays a significant role in shaping a business’s overall growth and market performance (Chi et al., 2020). The global operation will ensure the hotel is well-known for the quality of services it offers to clients.
In the contemporary world, culture has become a sensitive factor that influences the performance of businesses in the market. According to Prasanna et al. (2019), social capital is a key driver of global competition. This aspect is essential for enabling the business workforce to learn new values and beliefs needed to serve customers accordingly. Generally, hotels receive customers from diverse social backgrounds, and thus require management and employees to be well-versed in other people’s customs to enable effective service delivery. By starting operations in foreign countries, managers can easily foster positive relations, thereby attracting clients from different parts of the world.
Another important aspect of competing globally is accessing cheap resources for business operations. Generally, labor, raw materials, and other factors of production, including rents, vary across countries (Nuruzzaman et al., 2020). When SHG undertakes its business activities at low costs, it will achieve significant returns. In other words, operating in foreign nations with easy access to resources allows the company to reduce operational costs following a decline in general business expenses. However, before venturing into a foreign market, it is vital to assess market prices and the cost of obtaining raw materials to make an effective, reliable decision on whether to establish or relocate.
Ethics and Responsibility
Generally, TQM focuses on improving the customer experience based on the services offered. To ensure clients are comfortable with the products and the organization, several ethical issues must be considered accordingly. First, SHG must treat employees effectively to promote their involvement in hotel services (Fan et al., 2021). TQM advocates for the workers to have a safe working environment and access new opportunities through training programs. In addition, the staff members must be respected regardless of their level in the company.
Second, in most cases, hotels collect customer data to help management identify market preferences and trends. The information gathered must be used strictly to improve the restaurant’s performance. In other words, the customers’ details should not be disclosed to another party under any circumstances (Felicetti et al., 2022). The management needs to notify clients about data usage and obtain their approval before accessing the information.
Lastly, TQM requires hotel management to ensure customer satisfaction and provide services and products of high quality (Nguyen & Nagase, 2019). In addition, the manager must address all client concerns effectively. To enhance customers’ experiences, the restaurant should provide accurate details about its services to eliminate dissatisfaction clients may encounter during their stay.
Leadership and Change Management
Generally, leadership must be appropriate to ensure customers are satisfied with the services offered by the organization, and for the firm to gain proper profit. Implementing the facets of TQM may be challenging, and managers must be ready to tackle any obstacles that come with it. Management may face key issues, including resistance to change (Lozano, 2022). In most cases, TQM may require the organization to adopt new operations to improve the services offered; however, workers may be unwilling to shift to the emerging trend and thus remain resistant. To avoid such scenarios, leaders must ensure that all employees are involved in the change process to facilitate a smooth, efficient transition from old approaches to new techniques.
In addition, effective communication is vital for enhancing TQM. To ensure that all stakeholders are well-versed in TQM principles, the manager must clearly outline the philosophies to staff members to avoid confusion (Puthanveettil et al., 2021). This facet will enable each person to correctly understand the goal a company is pursuing. At the same time, a leader must listen keenly to the employees’ opinions and feedback. The approach will enable the manager to detect core areas that require immediate improvement to facilitate the TQM processes with the SHG.
Lastly, management must provide the necessary training and development to staff members. Workers lacking adequate skills and competencies might not perfect their performance. Therefore, to address potential problems, TQM requires employees to be well-equipped to facilitate its implementation.
Importance of Customer Satisfaction
In the hotel industry, customer satisfaction is crucial and significantly impacts the business’s overall performance. First, the facet has the prospect of building the company’s reputation. When customers are happy with the services they receive from the hotel, they are more likely to talk positively about the restaurant and its services (Islam et al., 2021). This situation can help the hotel attract more clients and achieve the best market performance. In addition, satisfied clients can easily influence employee morale in the firm. Generally, when staff members realize that their services positively affect customers, they can improve their dedication and deliver elegant services to the clients.
Furthermore, when customers are satisfied with the services, they will return to enjoy the experience again. This aspect promotes loyalty to the business organization, which is vital in a competitive environment. Increased customer loyalty enables the organization to secure more referrals from existing customers, thereby expanding its client base (Islam et al., 2021). Loyal clients tend to leave positive reviews, thereby enhancing ratings and increasing revenue. Therefore, the business must ensure clients are pleased with the restaurant’s products and services.
In addition, by tracking client satisfaction, the hotel can easily identify critical areas that require adjustment for effective performance. TQM entails improvement, and with customer feedback, the company can make relevant changes to enhance the overall customer experience in the market (Park et al., 2019). The approach further has the potential to give an organization a competitive advantage in the industry (Pei et al., 2020). In the hotel sector, satisfaction is valued and distinguishes players. By continuously improving and facilitating client fulfillment, the firm will remain proactive in the market.
Lastly, most customers are rational and prefer spending more money for a better experience. Therefore, the hotel needs to improve the quality of its goods and services (Ali et al., 2020). This aspect will influence customers to visit frequently, book room services, enjoy meals, and even have meetings. These factors will help the company achieve higher revenue, a sign of effective performance in the industry.
Conclusion
Customer satisfaction is an essential aspect of TQM. Hotel management should focus on improving service quality to enhance the business’s market performance. Furthermore, the company should consider expanding its global presence to increase brand awareness. This approach will enable SHG to access a larger market and obtain cheaper production resources.
Since TQM requires stakeholder involvement, hotel managers should consider ethical issues, such as privacy, to ensure customer confidence. When clients are satisfied with the services they receive from the restaurant, they are more likely to remain loyal and even refer their friends to the hotel to experience similar facilities. Therefore, business leaders need to implement relevant TQM practices to improve the entity’s market performance.
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