Formalization and Centralization A business environment tends to be informally operational when it takes TQM as another form of “Management by Control”. It is also considered that a TQM-based business operation is decentralized in nature. This process of decentralization is defined as the workforce has enough power and space to make certain job-related decisions, indulge in cross-evaluation talks with peers and others (pest analysis hotel industry), so that an attitude that diminishes work-related problems can be built to bring forth better quality of work.
However, in contrast, TQM studies tend to focus more on how to shrink threads of operation into a streamlined operation by consulting to the on going statistical data: statistical process control or SPC. It is where formalization comes into play and is very much evident in the entire model of ISO9000 (Jabnoun, 1999). Enhanced management, structure of an organization, managerial tactics all are streamlined by this process of the development of formalization. Researchers now tag Quality Assurance (QA) which was previously referred to as quality organization.
A TQM business operation is distinguishable by its adherence to three major areas: i) inner and outer managerial operations focusing of customer satisfaction; ii) on-going enhancement; iii) active part taken by the workforce. As such QA has been positioned on the higher level of operational processes of both formalization and centralization than TQM (Dale et al. , 1990). However, an analysis such as above (providing a 2 by 2 grid) reminds us of the time when IT was yet to make its presence felt in the business operations.
Moreover, the high-low dichotomies of formalization, centralization, and decentralization are not static state by which a business entity operates. Both sides of the dichotomy are operational as per requirement of the time and this tells us why a TQM business entity is operation at both formal and informal levels being either centralized or decentralized. In substance, a TQM business body has ability to bend, to adapt to business circumstances which is high demand of a TQM-based business organization.
To rightly examine the 2-fold nature of business operation (centralization and decentralization), one example is the high-rise of the telecommunication and networking technology in today’s market. For example, the client-server systems enable the knowledge workforce to take decisions which aptly meet the customers’ satisfaction level. It is being done by making use of huge data bases which are integral to the basic system of TQM structure, as such, the entire system operates under a decentralized working environment.
At the same time Executive Information Systems (EIS) enable the crown hierarchy managers to approach the system to put a check upon what is going on. Here EIS reduces the huge data-bank into a checkable bulk of only the data that can be appropriately handled by top management (key operations regarding reports, facts and figure, current information, and so forth). As such the officials on crown hierarchy level can come into play to make decisions under particular circumstances which also portrays a centralized version of the business operation (Whitten et al. , 2001). Complexity
