Business and Quality Management Institutionalization of TQM in Georgia

Nino Maghradze* – Author, Freelance Researcher
20, Tsagarelist; 0194, Tbilisi, Georgia
nimaghradze@gmail.com
*MSc in Management, University of Sheffield

Abstract
According to the academic and practical literature ISO implementation is a complex process and it needs all organizational forces to be involved in the adoption process. The adopters should take into consideration company and country profile as well. The purpose of this study was to address the survey objectives while institutionalization of international managerial aspects, obstacles and benefits of TQM approaches (ISO 9000) execution process in Georgia. For the survey reasons the research was held in Georgian SMEs, those had already implemented ISO quality standards.

Key words: ISO Standards, Implementation, Georgia, SMEs, Mimetic Process.
Research Aim

The need of the following study developed from the requirement of understanding the current quality systems in the Republic of Georgia. Adoption process obstacles, positive or negative results and primarily the implementation motivators of TQM approaches (in this case ISO standards) and the difference between late and early adopters.

Overview of the Research Methodology

The study on the same subject never was held in Georgia, so this paper refers as the Exploratory Research. For the exploratory reasons qualitative research strategy was chosen, as being the only appropriate way to collect information in this specific research topic, which cannot be quantified. In this concern, a typical qualitative method was chosen, namely as semi-structured, face to face interviews.
The data was collected in Georgian six SMEs, operating in manufacturing and commerce. There were interviewed at least one top, one middle and one first line manager/worker. Companies and managers were approached in advance through snowballing sampling technique.
After the data collection process, the results were analyzed and summarized.All gathered information. In the end, conclusion and discussion was depended on the information approached through the direct research, practical and academic literature.

Literature Review and Discussion over the Findings

According to the literature review, international management aspects are sets of practices implemented within an organization in order to control a business entity, its operations and outcomes [10]. As the modern business environment experiences high level of competition and continuous process of changing, the company leaderships are under the pressure to implement quality systems in order to reduce production process errors and gain maximum levels of profit and customer satisfaction. Especially, in SMEs it has a great impact on the production lines. But as the literature accepted the main reason, why organizations adopt ISO standards is a mimetic process. Business entities do not feel safe while competing with rivals or industry leaders when they do not improve or confirm competitive advantages.
Institutionalization process of TQM approaches is not easy and it needs a lot of afford from the leadership, management and lower organizational levels. But, on the other hand, business formation is different in western and CEE countries. According to the academic literature, Anglo-Saxon organizations involve working forces in decision making process or in organizational changes, while companies operating in CEE countries try to avoid it [11] cited in [4].
Limitations which occurred in the literature review section reflect to the lack of academic and practical papers about the implementation process of ISO standards in Central and Eastern European countries, furthermore in the Republic of Georgia.
According to the research findings it concluded that the ISO implementation process is a mimetic approach and companies operating in Georgia apply for ISO standards for the various reasons: to gain competitive advantages, to improve product/service quality and to approach potential partnerships and markets. ISO adoption procedure can specify internal and external motivational factors. The process is followed by the final benefits, which are also internal and external [9]. According to the interviews, in Georgian SMEs respondents could not state clear remunerations, especially the early adopters. This is also one of the main determinants that the ISO adoption process in Georgian SMEs is a mimetic approach and organizations have no clear perception about the quality philosophy. Logically, if business entities do not consider the attitude properly, they cannot be the result oriented. Furthermore, the simplifications regarding the main research topic occurred while the survey process, the leadership forces of business entities accepted that the process is mimetic. According to the interviews, all organizations operating in Georgian market implemented ISO systems through trainings, and they had no application process obstacles, which is in contradiction to the literature, as usually organizations find it difficult to involve employee forces in changing process. But according to the interviews, leadership forces accepted that they had no implementation problems, as the staff members in Georgia are afraid to lose their jobs and get dismissed because of resistance to change. Meanwhile, international managerial aspects encourage staff rotation and changing positions. So, it is natural, that some of the employees would be against of ISO standards, but they did not express themselves. On the other hand, resistance to change can be depended on organizational culture and structure and country profile. As it was stated in the literature, CEE countries still experience difficulties in business formation, and the country profiles are bureaucratic, which on the other hand, influences a company outline and implementation process of ISO standards in bureaucratic environment is usually suspicious. [8]; [3].
According to the second research topic important similarities and dissimilarities were found out. But, on the other hand, the research objectives were achieved.
As stated [1] leadership and employee forces should be involved in ISO implementation process equally, at the same time for the successful quality systems adoption process it is necessary that the organization was customer and quality oriented. But on the other hand, Georgian SMEs approved, that entirely, leadership forces were not involved in the quality systems implementation process. Middle managers were responsible for the ongoing processes and the other organizational levels provided technical support. This is in contradiction with the literature, according to the [5] cited in [6] the vital tool for successful ISO implementation is top leadership, as they should provide at least basic knowledge about ISO philosophies and motivate employees. Leadership forces should be totally involved in the ISO implementation process, they provide examples and commitments that changes are important and that quality system provide vital tools for organizational development.
According to the survey, leadership forces in Georgia, are in charge of the changes, but they do not show commitment in the process. Usually, implementation progression is held by the middle management forces and the leadership is only involved in reports. There were found some dissimilarity in communication process while implementation procedures, as the communication progression should be held between workers, management and leadership as well. It should be face to face or through intranet, but endless and permitted between all organizational levels. On the other hand, in Georgian SMEs, first line workers usually contact with middle management forces and they are not able to have free communication facilities with the leadership. So, middle management provides a communicator’s role in the process as well.
According to [2] ISO implementation process requires trainings and employee forces’ educational development, as trainings simultaneously support to develop communication skills and commitment to the changes. Companies taking participation in the survey accepted that educational development is a vital tool for the successful ISO adoption process, as well as for the continuous quality improvement. But on the other hand, some of the business entities are not fond on trainings, as they provide additional costs for an organization. Or, usually they apply for the internal trainings.
As it was supposed in the beginning of the research, early adopters had more marketing and sales interest while quality systems implementation process, this is in contrast with the literature, majority of business entities implement ISO tools for marketing tools, do not considering the depth of continuous quality development and TQM philosophy ([7] cited [9]). Alternatively, late adopters were interested in quality systems philosophy and they showed commitment to the process. For late adopters it helps to approach new partnerships, for early adopters, they are not aware of it. As the survey found out in early ISO standard adopter companies, they even were not aware about quality systems philosophy and importance, management and leadership forces had no clear knowledge and usage of ISO standards. Early adopters do not see ISO standards as the protector, late adopters accepted that they had changed the quality paradigm within an organization, but they did not identify any changes on sales and market share, which could be impacted positively by ISO standards.
It should be mentioned that, the study was pioneer in the Republic of Georgia. As the same phenomena was not investigated before. Consequently several gaps within the practical and academic literature did not provide possibilities to compare the findings with the studies done before and to extend and develop the survey results.
It can be stated, that:
• TQM implementation process in Georgia is a mimetic process
• in most cases leadership forces have not realized their role and commitment in ISO adoption process
• Trainings have the importance before ISO adoption process, but they are not applied after institutionalization procedures
• Early adopters do not consider ISO systems seriously
• Late adopters consider ISO systems as the real quality tools
All the information and results provided in this paper approved that ISO implementation process in the Republic of Georgia is a mimetic process, so the main research objective was achieved.

Summary

As the interviews confirmed, ISO certification in most of the companies is implemented for mimetic reasons. Organizations feel secure, while they have documented ISO standards, but on the other hand, as the interviews asserted majority of Georgian companies adopt quality systems, but do not follow the ISO trends. They reject annual internal and external audits.
According to the interviews held in all six above mentioned SMEs overall, the following issues were clarified: as the motivational factor of implementing international management aspects was identified quality, marketing tools, potential partnerships (locally and globally), international and government regulations (export goods in EU countries). Meanwhile, some of the company representatives could not state clear answers regarding the quality systems adoption factors. In most cases, it was clear, that the implementation process was the responsibility of the middle management; usually, leadership forces were not able to state the key processes regarding the obstacles, the final results or the implementation process itself. Also, first line workers had general information about the ISO quality systems, but they had not got deep knowledge about the TQM philosophy itself.
Survey participant business entities declined, that they experienced any kind of adoption obstacles. Leadership forces, middle managers and even first line workers stated that adoption process was held in due date period, without any additional excesses. At the same time, none of the above mentioned companies faced resistance to change. Employees were involved in the ISO implementation process, first line workers provided technical support, and middle managers were executives of the implementation process, while the leadership forces were involved in the process superficially. As the interviews confirmed, communication process was free between first line workers and middle managers. Leadership forces, in every survey participant company designated, that communication is held without borders between all level staff members, and the process is constant.
According to the interviews post ISO implementation process encouraged to improve overall product quality and to reduce errors while production process. But company representatives were neutral about the increased sales or market share. Business entities, which implemented quality systems, apply for audit procedures. Most of them are internal, but some companies confirmed, that they do not appeal for audits, neither internal not external. The initial issues after ISO implementation process are regarding to the increased number of internal documentation and equipment.

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