Etisalat and Total Quality Management (TQM)
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Etisalat is one of the world's largest telecommunication companies. It is the largest service provider of mobile facilities in United Arab Emirates. Etisalat claims to have almost a 100 million customers. The company is providing service in UAE, in Africa and now also in Asia.
Etisalat has a profit of almost 8 billion dollars.
Etisalat has also diverged into being on of United Arab Emirates largest internet providers. It is not only providing internet accessibility to customers but also to other companies who are in the same business. It is United Arab Emirates' largest voice carrier and it is also Africa's largest voice carrier. Etisalat has roaming facilities in at least 186 countries around the world. Etisalat was founded in 1976. In 1983 , 60% of the share was bought over by the United Arab Emirates government and 40% share was sold in the open market.
In 1991 it got the permission to provide wired and unwired telecommunication services within United Arab Emirates and also in other countries. During this time itself, the company got the license to produce, import or export tele-communication equipments. This step made Etisalat the monopoly over tele communication business in the United Arab Emirates. This not only started fetching the government huge revenues but it also developed the mobile sector of tele-communication and other tele-communication sectors in United Arab Emirates. It was a major achievement in this sector for the country.
The company's profit grew to more than 80% and almost 700000 phone lines in the country are now owned by Etisalat.
In 2001 Etisalat opened up its international ventures and it started business in Islamabad.
Etisalat is the 6th largest company of United Arab Emirates and is the world's 40th largest enterprise. It is United Arab Emirates largest revenue earner after the oil and gas industry.
TOTAL QUALITY MANAGEMENT- AN INTRODUCTION:
W. Edwards Deming was the person who invented the TOTAL QUALITY MANAGEMENT concept. Total quality management refers to maximising customer satisfaction by minimising the errors. It involves optimal utilisation of resources. It involves training of employees to the maximum possible level. The most important aspect of Total Quality management is that it involves that the errors in production are removed completely. It involves giving the best to the customer. To give the best to the customer everything should be perfect in an organisation. The organisation's functioning should be 100% so that the customer can as an end result get 100%. TQM is basically a set of functions which if performed shall ensure that all the customers' expectations are exceeded or met.
ETISALAT AND TOTAL QUALITY MANAGEMENT APPROACH:
Total quality management approach has become very important in today's world. All customers want better than the best for their money. Today's customer is not easily satisfied. Etisalat has been wise enough to recognise this new emerging trend. Etisalat believes that quality is the key to overcome competition in today's modern market. More and more organisations all around the world are looking up to quality production for overcoming competition. The total quality management field is a new field. It is still developing. Etisalat has developed its own ways of quality measurement with passage of time. Etisalat believes that quality improvement is a continuous process. You can never stop improving the quality of the product or service that you are providing. Quality is the essence of any product or service. Total quality management has become very important for Etisalat over the past few years. There has to be a continuous flow of improvements in the services being provided if proper benefits of total quality management are to be realised. Although it must be noted here that Etisalat does not depend on total quality management for satisfying the needs of its customers and for achieving its target. Total quality management does not solve any managerial issues. (hashmi) Total quality management only seems to cater to the problem of customer satisfaction. Etisalat has customised its total quality management approach in such a way that it gives a purpose to the company to move ahead and develop its product more not only for the satisfaction of the customer but also for the overall development of the company including the increase in profits agenda. Although at the beginning Etisalat had some problems in adopting this new total quality management approach but then it realised that the economic conditions everywhere are changing and sooner or later the company had to make itself more customer oriented. Etisalat's internet providing services were the first to adopt the total quality management approach. Soon the company started seeing positive changes. The actual number of new connections also got increased. After realising the positive affect of Total quality management the same was applied to the mobile service providing sector also. Etisalat also realised that one way to successfully apply the total quality management approach was to improve the quality of equipments being used to provide the services. Earlier the marketing agenda of the company was that it was providing services at the lowest possible cost. Now the agenda is providing the best quality at the lowest price. And this approach has shown tremendous positive results. Moreover the problems should be sorted out as soon as they are found. One should not wait for meetings and discussions to get over them get over the problems as soon as they are found. This is also a relatively new concept which has emerged from total quality management. (hashmi)
Proper training of employees is the essence of the total quality management approach. The best possible training needs to be given to the employees for the best possible results. Training enhances the capacity to work. It allows the employees to work on a level which is higher than what they can work on. (stark) The training should be given with regards to the requirements of the job that the employee has to do. Etisalat is using the latest technology available in the market to provide to the market the mobile services. Although it increases the capital requirements and cost of the company, but the customers get the best possible services and moreover running cost or cost of providing services is reduced substantially. Etisalat has picked up a new theory from total quality management, this theory involves that the company shouldn't function on the basis of increasing the number of customers, it should work on improving the quality of the services it is providing, and the customers will be attracted on their own if the services being provided are of the best quality. The company should hire only the best educated for properly applying the total quality method. Moreover the company in return should arrange for proper education facilities to the community. This will ultimately help the company itself in the long run. The truth is that Total quality management does not create the quality but it creates the process. Total quality management involves a complete change in the working culture of the people. (stark) It emphasises only and only on quality. The employees at Etisalat had some problem in adopting this new method of working, but as soon as they realised that this was the correct way ahead and it would be giving great rewards in the future they readily accepted it. Etisalat's management decided that not only the basic product should be of quality the extra add-ons should also be of the best possible quality. Etisalat's management decided that total quality management should be so well adopted by the company that there should be no margin for error at all. Whatever the company is giving to its customers it should be of the best quality, no one else in the market should be giving something or anything better than what Etisalat could provide for.
PROBLEMS OF TOTAL QUALITY MANAGEMENT APPROACH:
Since total quality management is comparatively a new approach people are still working on it. All the firms who are trying to adopt this approach face problems while applying this approach. (stark) Each and every firm tries to explore with this new approach. The management at Etisalat has also introduced its own variations in this approach. One of the major problems which were faced by the mangers at Etisalat was the problem of measurement. There is no proper way which has been developed as of now that can measure the change in quality. It has been hard to measure the proper affects of change due to quality. Managers found it hard to measure whether the changes made in the working of the firm due to the total quality management approach were bringing positive or negative results; they ultimately had to refer to the number game to find the effects of total quality approach. Total quality approach on the other hand emphasises the attention of people away from the numbers to quality. Total quality management is next to useless if it cannot be measured. The change in results must be measured if total quality management approach has to become successful. Moreover it was being realised that it was easier for the middle management and lower working class employees to adjust to the total quality management approach but the upper management at Etisalat found it hard to do so. This was so because upper management was used to working with numbers. It was hard for the top managers and the owners of the company to shift the very approach towards business. They had to change their very beliefs in business. Although total quality management is supposed to decrease costs, but in reality the management at Etisalat found that implementing this approach had infact increased the cost of providing services. Moreover it was found that businesses who are well established like Etisalat and they do not want to innovate a lot also face problems in applying the total quality approach method. Total quality management approach also increased the company's capital expenditure as it involved getting the best in line equipments. This involves investing huge amounts of money and maybe some smaller companies may not be able to do so. Moreover after applying the total quality management approach the company had to spend hugely on advertisement to let the world know of its change in approach towards business. The cost of the final service provided was also increased after applying the total quality management approach. The management tried very hard to avoid increase in price but as we all know that the best comes at a price so this increase in price was unavoidable for the people at Etisalat, and many customers did not approve of the change in costs.
RESULTS AND METHOD OF IMPLEMENTING TOTAL QUALITY MANAGEMENT BY ETISALAT:
Etisalat was able to identify a lot of things after implementing total quality management approach. It realised that the approach like all other approaches had both positive and negative effects on the functioning of the company, and also it had double effects on the final figures of the company, although surprisingly this approach had many more positive effects than it had negative ones. It was found that this approach affected everyone who worked for the company. Total quality management approach was completely based on team work. Team work was the essence of total quality management. It was although hard to implement because in such a large corporation as Etisalat it was hard to make everyone co-operate with everyone else. Moreover the management realised that it was actually hard for them to remove their attention from the number game and completely focus it on quality management. It was hard to find on the basis of quality that the firm was underperforming or was doing better than before. It was later found out after a few months of application if total quality management approach that there was a significant increase in the actual numbers of customers. Also there was less number of complaints now. Application of total quality management approach is a hard job; moreover it challenges the very foundation of principles of management of business. Business success before and up till very recently was completely based on numbers, the higher the numbers the better it was. The quality hardly mattered. Whatever sold was considered to be of the best quality. With the application of total quality management everything changed. It did not matter anymore to the management at Etisalat whether the numbers increased or decreased they had to concentrate completely on the quality of services that they were employed to provide. This quality had to be the best. It was a heavy task as it had two aspects attached to it. The first was to actually start providing the best services to the people. This included changing various technological equipments, it involved changing the basic equipments used as raw materials, everything every equipment that the company used should be of the best quality, until and unless this happens it would be hard to give the best possible end result. Secondly the customers needed to be informed in the change of policies of the company. This in itself was a humungous task. The management at Etisalat was unsure that whether the customers would take this approach in a positive manner or not. It had to be conveyed to the public that there was a major change which would take place in the way the company functioned. This was very hard because Etisalat has almost 1 billion customers all around the world. But the top management of Etisalat was able to carry out this task properly. Company is now successfully providing the best possible services to its 1 billion customers whether in the tele-communication sector or in the internet service providing sector.
Total quality management is more of a discipline than anything else. It is concluded that quality is the end product of all the activities undertaken in the total quality management approach. It involves a complete change in the outlook of producers and service providers. It changes their emphasis from mass selling to quality selling. Followers of total quality management believe that providing quality product or service will automatically lead to increased sales. It is important to understand here that providing quality products should not mean that the price of such product can be sky high, the approach should be such that the best quality product should be provided at the best possible price. The pricing should be correct because even if the product is the best in the market but it is overpriced it will not sell. Therefore this involves the working of financial analysts with total quality management approach experts. A balance between the two approaches must be struck. Etisalat has understood the importance of total quality management approach. The management of Etisalat are working more and more towards this approach now. They are also trying to communicate this change in their policies in the best possible ways to their customers. The customers have become very demanding all over the world these days and total quality management approach seems to be the only possible way to satisfy the needs of the modern customer.
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