TQM is relevant for PQR Ltd because TQM is designed to achieve customer satisfaction. The key to TQM is for everyone to have well defined customers - an extension of the word, beyond the customers of the company, to anyone to whom an individual provides a service.
Quality has to be managed in TQM, it will not just happen on its own. TQM aims at getting quality right the first time.
Staff recruitment - especially additional personnel may be needed to meet the requirements of TQM.
Training and development is also part and parcel of TQM, which requires that employees and suppliers be trained to know what is expected of them. Management should also encourage education and self-improvement at every level.
Implementing TQM
There is no one best way to implement TQM; each organization has to implement it in the manner that suits it the most.
Many firms start with an awareness program to educate both managers and other employees on what TQM means and how it will affect their jobs. This involves encouraging managers to attend seminar and discussions on TQM, read about TQM and visit other firm already practicing TQM.
The next step is a customer survey to find out their expectations about the firm and identify areas where these expectations aren’t being met.
The results of the survey will form the starting point of implementing a quality program.
Implementation will be done step-by-step beginning with departments of greatest weakness.
The process of TQM
1. Analysis of customers’ needs. They may need quality products efficient services etc.
Needs assessment may be carried out through a market survey using interviews and the questionnaire.
2. Assessment of the degree to which these needs are being met.
3. Establishment of the gap between the current state and the desired.
4. Establishment of quality standards capable of satisfying customers’ needs.
5. Putting in place programmes necessary to meet the standards. These programmes may include training and development, incorporating quality objectives into strategic plans, forming quality teams (quality circles) and rewards for quality improvement.
Elements of companies that follow TQM
- There is absolute commitment by the chief executive and all senior managers to doing what is needed to change the culture. Alongside this is total commitment to the program at every level.
- Quality is everybody’s responsibility and it is customer driven not organization driven.
- There is customer satisfaction.
- There is real commitment to a continuous improvement of all processes.
- Communication is excellent and multi-way.
- Attention is focused first on the process and second on results.
- There is an absence of strict control systems.
Kavungya answered the question on April 24, 2021 at 07:56
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Karim plc and Roshan plc are quoted companies. The following figures are from their current balance sheets:
Both companies earn an annual profit, before charging debenture interest of Sh.500,000 which is expected to
remain constant for the indefinite future. The profits of both companies, before charging debenture interest,
are generally regarded as being subject to identical levels of risk. It is the policy of both companies to
distribute all available profits as dividends at the end of each year.
The current market value of Karim Ltd.‟s ordinary shares is Sh.3.00 per share cum div. An
annual dividend is due to be paid in the very near future.
Roshan Ltd. has just made annual dividend and interest payments both on its ordinary shares and on its
debentures. The current market value of the ordinary shares is Sh.1.40 per share and of the debentures,
Sh.50.00 percent.
Mr. Hashim owns 50,000 ordinary shares in Roshan Ltd. He is wondering whether he could increase his
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ordinary shares of Karim Ltd. Mr. Hashim is able to borrow money at an annual compound rate of interest
of 12%.
You are required:
(a) to estimate the cost of ordinary share capital and the weighted average cost of capital of Karim Ltd
and Roshan Ltd;
(b) to explain briefly why both the cost of ordinary share capital and weighted average cost of capital of
Karim Ltd differ from those of Roshan Ltd;
(d) to prepare calculations to demonstrate to Mr. Hashim how he might improve his position in the way
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Date posted: April 23, 2021. Answers (1)
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Phase 3 consists of changing over one current production line to produce the new design. This would cost
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while if the economy is weak the net value would be Ksh.1.5 million. Both net values occur during Year 3,
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Required:
(a) Construct a decision tree and determine the project's expected NPV assuming that the project has average risk.
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Date posted: April 23, 2021. Answers (1)
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VAR(R2) = 0.05, and COV(R1 R2) = -0.01.
Assuming that the two securities above are the only investment vehicles available:
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investments in diverse industries. The correlation between the returns of the individual components of these
investments is believed to be negligible.
The managers of Rodfin are not sure of how to estimate the risk of these portfolios, as it has been
suggested to them that either portfolio theory or the capital asset pricing model (CAPM) will give the same
measure of risk. The market return is estimated to be 12.5% and the risk free rate 5.5%.
Required:
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Required:
Using the assumptions of Modigliani and Miller explain and demonstrate how this change in capital
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now 31.12.X1 and the capital structure is optimal.
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One of these, a recently rejected application involving an outlay of equipment of Sh.900,000, is produced below.
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Evaluation of profitability of proposed project
NT17 (all values in currency year prices)
You discover the following further details:
1. Linton's policy was to finance both working capital and fixed investment by a bank
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2. A 25% writing down allowance (WDA) on a reducing balance basis is offered for new investments.
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having been rejected. The total bill for all this research has also been paid.
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Required:
(a) Identify the mistakes made in Linton's evaluation.
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Required:
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The following data have been provided with respect to three shares traded on the Nairobi
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Share A Share B Share C
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Required:
(i) What is the beta coefficient?
(ii) Interpret the beta coefficient of shares A, B and C.
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Required:
Discuss the above statement.
Date posted: April 23, 2021. Answers (1)
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Required:
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Required:
(a) Calculate the project‟s net investment.
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(c) Suppose in addition to the information given above you are provided with the following cash
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Year 0: 1.00
Year 1: 0.90
Year 2: 0.80
Year 3: 0.60
Year 4: 0.50
Year 5: 0.40
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