Chapter 1

INTRODUCTION TO TOTAL QUALITY MANAGEMENT IN HOSPITALITY AND TOURISM

INDUSTRY

Learning Objectives:
At the end of this chapter, the student must be able to:
1. Define and explain what Total Quality Management (TQM) is;
2. Define hospitality and tourism;
3. Understand the different components of Hospitality Industry;
4. Describe the Organization Structure in Hospitality Industry Firms; and
5. Identify the several characteristics of tourism.

Companies' ability to sustain its competitive lead is vital for the stability of
the business in today's highly competitive market, and quality is one of the
important factors for keeping the company in a competitive advantage. It is the
extent of how well a service provider can meet or exceed its customers' needs and
expectations.

In the free market competition tends to be high to achieve customer

satisfaction which is very important because of the following reasons:

 The offered products or services are similar if not identical;

 Prices are not easy to change; and
 the cost to change to another service is measured as low;
Due to the above; we can say that Quality Management and continuous
improvement are closely associated concepts, so customer satisfaction and
recalling loyalty are very important to any hospitality organization because of the
strong market competition within this industry.

Total Quality Management (TQM) in general

Total quality management (TQM) is the continual process of detecting and

reducing or eliminating errors in manufacturing, streamlining supply chain
management, improving the customer experience, and ensuring that employees are
up to speed with training. Total quality management aims to hold all parties
involved in the production process accountable for the overall quality of the final
product or service.

TQM was developed by William Deming, a management consultant whose work had
a great impact on Japanese manufacturing. While TQM shares much in common
with the Six Sigma improvement process, it is not the same as Six Sigma. TQM
focuses on ensuring that internal guidelines and process standards reduce errors,
while Six Sigma looks to reduce defects.
o Total quality management (TQM) is an ongoing process of detecting and
reducing or eliminating errors.
o It is used to manufacture to streamline supply chain management, improve
customer service, and ensure that employees are trained.
o The focus is to improve the quality of an organization's outputs, including
goods and services, through continual improvement of internal practices.
 o Total quality management aims to hold all parties involved in the production
process accountable for the overall quality of the final product or service.

A core definition of total quality management (QM) describes a management

approach to long-term success through customer satisfaction. In a TQM effort, all
members of an organization participate in improving processes, products, services,
and the culture in which they work.

PRIMARY ELEMENTS OF TQM

TQM can be summarized as a management system for a customer-focused

organization that involves all employees in continual improvement. It uses strategy,
data, and effective communications to integrate the quality discipline into the
culture and activities of the organization. Many of these concepts are present in
modern quality management systems, the successor to TQM. Here are the 8
principles of total quality management:
1. Customer-focused: The customer ultimately determines the level of quality.
No matter what an organization does to foster quality improvement-training
employees, integrating quality into the design process, or upgrading
computers or software-the customer determines whether the efforts were
worthwhile.
2. Total employee involvement: All employees participate in working toward
common goals.
Total employee commitment can only be obtained after fear has been driven
from the workplace, when empowerment has occurred, and when
management has provided the proper environment. High-performance work
systems integrate continuous improvement efforts with normal business
operations. Self-managed work teams are one form of empowerment.
3. Process-centered: A fundamental part of TQM is a focus on process thinking.
A process is a series of steps that take inputs from suppliers (internal or
external) and transforms them into outputs that are delivered to customers
(internal or external). The steps required to carry out the process are defined,
and performance measures are continuously monitored in order to detect
unexpected variation.
4. Integrated system: Although an organization may consist of many different
functional specialties often organized into vertically structured departments,
it is the horizontal processes interconnecting these functions that are the
focus of TQM.
• Micro-processes add up to larger processes, and all processes aggregate
into the business processes required for defining and implementing strategy.
Everyone must understand the vision, mission, and guiding principles as well
as the quality policies, objectives, and critical processes of the organization.
Business performance must be monitored and communicated continuously.
• An integrated business system may be modeled after the Baldrige Award
criteria and/or incorporate the ISO 9000 standards. Every organization has a
unique work culture, and it is virtually impossible to achieve excellence in its
products and services unless a good quality culture has been fostered. Thus,
an integrated system connects business improvement elements in an
attempt to continually improve and exceed the expectations of customers,
employees, and other stakeholders.
 5. Strategic and systematic approach: A critical part of the management of
quality is the strategic and systematic approach to achieving an
organization's vision, mission, and goals.
This process, called strategic planning or strategic management, includes the
formulation of a strategic plan that integrates quality as a core component.
6. Continual improvement: A large aspect of TQM is continual process
improvement.
Continual improvement drives an organization to be both analytical and
creative in finding ways to become more competitive and more effective at
meeting stakeholder expectations.
7. Fact-based decision making: In order to know how well an organization is
performing, data on performance measures are necessary. TQM requires that
an organization continually collect and analyze data in order to improve
decision making accuracy, achieve consensus, and allow prediction based on
past history.
8. Communications: During times of organizational change, as well as part of
day-to-day operation, effective communications plays a large part in
maintaining morale and in motivating employees at all levels.
Communications involve strategies, method, and timeliness.

Introduction to Hospitality Industry

Most of people define hospitality as restaurants and hotels services which are
honestly a narrow definition of Hospitality. It doesn't only mean the provided
services, but it goes far beyond this. Hospitality means the reception and
entertainment of visitors, guests, or even strangers with liberality and good will.
Hospitality business is either profits making such as commercial hotels, or nonprofit
making as cafeterias, and canteens.

There are some characteristics of Hospitality in most of Hospitality places like

working hours. It is open 24hours a day. Also, those who are at senior level work 10
- 12 hours per day including evenings and weekends. This makes us aware that we
are enjoying while others are working and serving us. Furthermore, Hospitality is
considered as the largest and fastest growing industry. The whole effort of
Hospitality concentrates on service, and guest satisfaction.

And the product of Hospitality is perishable and intangible. Not everyone is

able to work in the hospitality sector. Work in this sector can entail lots of guest
communication and interaction, long hours, the ability to think, make a decision and
solve a problem very quickly.

Actually, Hospitality has experienced a huge growth in recent years. And the
numbers of goals that the Hospitality Managers seek to achieve became widely
different goals. But basically, a successful manager in the hospitality sector should
exhibit different skills and specialized knowledge all directed toward accomplishing
these managerial goals. The First goal and the most important one is making the
guests and visitors feel really welcome. This requires both a friendly manner toward
the guests and an atmosphere of good will among the people who are with you in
the same workplace. As we know this often translates in which workers get along
well with each other, so all this will lead to the satisfaction of both guests and
workers.
Secondly, making things work for the visitors and guests. Everything needs to be
ready and clean before the guests' step foot on the place. A hospitality system
requires much efforts and the manager should ensure that the work is done
properly and maintained at all times. Thirdly, making sure the process continues to
provide the best service and make a high profit. The key and the best way to
achieve this lies in achieving a controlled profitable operation. Simply stated, these
objectives direct the managers to be able to relate success fully and strongly to
employees and guests, direct the work in an effective way, and achieve operating
objectives within a budget. The activities which a manager needs to perform are
many such as scheduling, taking inventory, social interaction, solving guest issues,
and seeking to make the stay more.

There are many trends which affecting the Future of the Hospitality such as
globalization, increasing competition, changes in management and marketing made
possible by technology, emphasis on service, and many others.
Hospitality Industry has different components as following:

Hospitality is very important in today's economy. The economy of any

country is affected by the food served in both eating establishments of the country
and homes. It is the main responsibility of the hospitality sector to serve food for
people of different cultures and ages, at all times, and in every situation. Hospitality
management should not only identify the people's needs, but should also make sure
that guests get the necessary services and supplies required.

Job is another importance added to the hospitality. Wide jobs are created in
the hospitality sector. There are different and many places that create the
hospitality industry. These numerous sectors are restaurants, Fast food shops,
hotels, take away shops, outdoor catering, and many others. These various places
provide many job opportunities in the areas of administrative staff, security
personnel, managers, maintenance staff etc. And this of course will develop the
overall economy.

Moreover, Hospitality has contributed to the improvement of the tourism

industry which includes traveling and staying in hotels and other hospitality outfits,
because it works as a driving force by providing drinks, foods and sleeping
accommodation to both foreigners and residents.

Hospitality makes people strongly feel they belong. It makes people feel
valuable, special, and warmly welcomed. Hospitality workers deal with strangers
like they are from their families, and communicate through well words and actions.
The ability to reply to guest requests immediately is important to maintain a great
level of hospitality.

Hospitality directly affects a customer satisfaction and so will affect a

business. A customer usually doesn't frequent a hotel which gives poor and slow
services. A good hotel management can also affect a country's image as it tells the
quality of a service of a country. It can also improve tourism. So, we can see that
Hospitality affects the levels of customer satisfaction.
Better services with high quality, more satisfied and happy the customer feels.

An excellent hospitality management can also reflect a country's image

because it tells the quality and value of a service in a country. Hospitality introduces
wide business and services, because this sector includes cooperative relationships
with different organizations. For example, hotels are allied with car rental agencies,
airlines, other hotels, restaurants, and suppliers. In order that, every country needs
to share globally best programs and practices for training and retention, and make
Hospitality industry sponsored more readily available educational programs to
employees at different organizational levels to raise awareness and knowledge.

In addition, Hospitality enables effective communication. It is like a tool that

allows communication with people of different ages all over the world. Hospitality
needs employees who have excellent organizational skills, interpersonal skills, and
communication skills. Hospitality plays a big role in encouraging resident
satisfaction. Excellent hospitality makes the resident feel comfortable and
important. Hospitality employees try to ask their guests questions in order to
understand them and make suggestions.

Organization Structure in Hospitality Industry Firms

This section will describe the optimal way of structuring Hospitality industry
firm and in specific Hotels. Organizational objectives require the organization to
structure the human functions and physical resources through breaking down the
tasks into roles; each role has to be placed under a specific department, and each
department has to have identified roles. This way will ease achieving the
organizational objectives.

A good practice in structuring hotels is classifying the department in

accordance to its contact with customers (in this case is the guest is the customer),
so will end with a two main categories; front departments and back departments,
where front departments perform the activities with direct contact to the guest, and
back departments perform other supporting tasks.

In the figures shown below (Figure 1.2) and (Figure 1.3) we can see a typical
structure of both limited and full services hotel types, while the number of
employees of 500 is the boundary line between the two types.
Introduction to Tourism Industry

Tourism has a number of different definitions. It is very difficult to pinpoint a

definition that would give a meaningful and adequate explanation of tourism,
because the concept is fragmented, wide-ranging, and multidimensional.
Historically, the concept of tourism was first developed in the period between the
two world wars. Tourism was defined as a sum of relations and phenomena
resulting from the travel and stay of non-residents, in so far as [travel] does not
lead to permanent residence and is not connected with any permanent or
temporary earning activity. Since 1942, the concept of tourism has been broadened
by including various forms of business and pleasure travel.

Several characteristics of tourism may be identified based on the analyzed

definitions:
1. Two main elements: (a) movement, which refers to the journey (travel) to
and from a destination (the dynamic element of tourism); and (b) the
overnight stay outside the permanent residence in various destinations (the
static element of tourism) ;
2. Movement to and from the destination is temporary (temporary change of
residence), short-term, with intention to return ;
3. Destinations are visited for purposes other than taking up permanent
residence or employment;
4. The activities tourists engage in during their journey, and the stay outside the
normal place of residence and work, are distinct from those of the local
residents and working populations of the places visited.

Tourism is the most wide-ranging industry, in the sense that it demands

products from many sectors of the economy and employs millions of people in
different sectors. For example, airplanes and buses must be manufactured to
transport tourists; computers must be produced to make hotel booking and airline
reservations; steel, concrete, and glass are needed to build hotels and restaurants;
fabrics are needed to make clothes; meat, wheat, and vegetables must be grown to
feed visitors. No other industry has so many linkages and interactions with so many
sectors of the economy, and delivers so many different kinds of products and
services to its consumers.

Tourism is multidimensional. Mcintosh, Goeldner, and Ritchie (1995) noted

that tourism embraces virtually all aspects of human life and society. Tourism is a
major economic activity of the travel, lodging, retail, entertainment subsector, and
many other subsectors that supply tourist needs. It is a major sociocultural activity
that provides different tourist markets with cultural experiences. Tourism involves
production, marketing, and consumption of numerous products such as car rentals,
hotel rooms, meals, etc. It requires researching, planning, managing, and
controlling tourist enterprises. It is about the location of tourist areas, their physical
planning, and changes that tourism development brings to the landscape and
community. The industry depends on various intermediaries and organizations that
performtourism activities. Tourism also involves a historical analysis of tourism
activities and various institutions.

It is difficult to apply the concept of an industry to tourism in view of the

special nature and complexity of the potential contributors to the tourism product.
Tourism is about activities and services. It is about the buying, selling, managing,
and marketing of numerous activities and services, which range from renting hotel
rooms, selling souvenirs, and managing an airline, to marketing special events.
However, since these activities and services represent the supply in the market
(tourists constitute the demand) and are part of the economy, they might be
described as the tourism "industry."
TQM in Hospitality & Tourism Industry

In the industry of hospitality, total quality management (TQM) is a sharing

process that authorizes employees in different levels to work in groups in order to
start guest service prospects and determine the most suitable approach to meet or
exceed these prospects. And in order to have those groups formed an organization
needs to employ a leader who creates the required motivation to incorporate guests
and employees in the process of setting goals and objectives. Implementing TQM
inhospitality organizations in particular will improve customer satisfaction,
competition condition and cost effectiveness as well.

People have diverse wants and needs in term of preferences which makes it
tougher to control quality in hospitality organizations. Quality problems in
hospitality firms are having direct impact instantly on the organization operation via
customer complaints. In order to end up with a successful TQM implementation in
hospitality firms, they have to incorporate the quality management within the whole
business strategy and to direct the goals toward quality within the organization
among all levels. Implementing quality in general in any hospitality organization
enables the organization to increase their market share and price advantage.