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UNIVERSITI PUTRA MALAYSIA
CRITICAL SUCCESS FACTORS IN THE IMPLEMENTATION OF QUALITY SYSTEMS IN THE DISTRIBUTION SECTOR
OF THE OIL INDUSTRY IN MALAYSIA
MOHO YUSOF BIN OMAR
FEM 1998 1
CRITICAL SUCCESS FACTORS IN THE IMPLEMENTATION OF QUALITY SYSTEMS IN THE DISTRIBUTION SECTOR
OF THE OIL INDUSTRY IN MALAYSIA
MOHO YUSOF BIN OMAR
DOCTOR OF PHILOSOPHY UNIVERSITI PUTRA MALAYSIA
1998
CRITICAL SUCCESS FACTORS IN THE IMPLEMENTATION OF QUALITY SYSTEMS IN THE DISTRIBUTION SECTOR
OF THE OIL INDUSTRY IN MALAYSIA
By
MOHO YUSOF BIN OMAR
Dissertation Submitted in Fulfilment of the Requirements for the degree of Doctor of Philosophy in the
Faculty of Economics and Management Universiti Putra Malaysia.
August 1998
ACKNOWLEDGEMENTS
In the name of God, Most Gracious, Most Merciful
Praise and Glory to Prophet Muhammad Peace be Upon Him.
Blessings are from Allah for guiding me throughout the period of my enquiry
for knowledge. This work is dedicated to my daughter Azza bte Mohd Yusof who
was born at 1146hrs, May 2nd 1989. My initial hand-written proposal was
temporarily misplaced in her cno, No. 263, at Pantai Hospital that day.
I would like to thank UPM for giving me the opportunity to complete my
school work. I would also like to thank my loved ones who have supported me
throughout the duration of my school work. Special mention must be made of my
supeIVisor, Associate Professor Dr. Zainal Abidin Mohammed and En. Ahmad Shokri
Othman who have spent precious moments with me. Also I would like to express
my sincere appreciation to Professor Dr. Mohd Ismail Ahmad, Professor Dr. V.
Anantaraman and Associate Professor Dr. Rushami Zien Yusoff for all their
guidance and encouragement.
Finally this work is also dedicated to my beloved parents whose sense of
discipline and hard work have been an example for me.
1hls work has been made possible with the help of numerous individuals. I
cannot possibly thank all of them, but true to the proverb ''what you owe in gold can
be paid, but what you owe in kind can only be paid with feelings of gratitude"
(tlHutang emas boleh dibayar hutang budi di bawa ke akhir hayat"). In the end as
in the beginning, there has always been with all participants in this work, the help
and support from god, to whom is due all praise and gratitude for any good that
people do - "Alhamdulillah".
ii
TABLE OF CONTENTS
Pages
ACKNOWLEDGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i i LIST OF TABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi LIST OF FIGURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii i LIST OF ABBREVIATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix ABSTRACT .......................... . .............................................................. x ABSTRAK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xii
CHAPTER
INTRODUCTION AND DEFINITION OF RESEARCH . .. 1 Introduction . .. ........................................... .................. .... 1 Research Focus .................. .. .............. . ..................... ...... 2
Critical Success Factors .... ................... ... .......... ...... 3 Implementation ... . ........... ....... . . ................. ................ 3 Quality Systems . ........................................ ............. 4 Distribution Section of the Oil Industry ..... . . . . . . . . . . . . . . . 4 Malaysia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..................... .. ... 5 Exploratory and Conclusive Study ........ ....... ...... ...... 5
Objectives of the Research ................................. .......... 6 Justification for the Research ........ . ...... . . .... .............. . ..... 7 Layout of the Thesis ...... ................... ..... ..................... .... 8 Limitations of the Study ......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . 9
II REVIEW OF RELATED LITERATURE .. ......... ............... 1 0 Introduction ..... . . ,. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 State of Affairs of Quality Management and Quality Assurance in Malaysia .................. ................................ .. 1 0 Literature Review on Strategic Management and Implementation Models ......... .............. ............. ......... ...... 12
Preliminary Preparation . .. . ... . . . ...................... ............ . 1 2 The Dimensions in Strategic Management Models ... 18 The Dimensions in the Twenty-eight Implementation Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1
Literature Review on Research Methodology ... .... .......... 65 The Data Collection/Survey Method .............. . ... ...... . 65 Advantages of the Observation Method .. ...... .... ....... 70 D isadvantages of the Observation Method .. ........ ..... 70 Observation Techniques Classified ... ....... ... ............. 71
Constructs .. . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Constructive Defin ition of Construct . ............... .. ...... 74 Operational Definition of Construct .......... . . . . .. . ........ 75
Validity of CSFs ....... .. . . . ............ ..... .. . . ............ ... . ............ 75 Conclusion .... ....... ................................. .... ...................... 76
iii
III RESEARCH METHODOLOGY AND DESIGN . . . . . . . . . . . . . . . 79 Introduction . . . . . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 The Overall Research Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 The F irst Phase of the Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Population and Sample . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Application of Leadership Qualities . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Reliability of Critical Success Factors (CSFs) . . . . . . . . . 83 Validity of CSFs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 Method of Data Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 Method of Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
The Second Phase of Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 Population and Sampling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 Reliability of Measurements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Construct Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 Method of Data Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 Method of Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
IV ANALYSIS OF DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 03 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 03 The First Phase AnalysiS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 03 The Second Phase Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 3
S ite Analysis of Tanjung Gelang Installation . . . . . . . . . . . . 1 14 Baseline Assessment of Tanjung Gelang Installation against CSFs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 14 Correlation Among Attribute Ratings . . . . . . . . . . . . . . . . . . . . . . . 1 1 8 Principal Component Analysis -Tanjung Gelang Installation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120 Factor Analysis - Tanjung Gelang Installation . . . . . . . . . 1 21 Baseline Assessment on Leadership Qualities . . . . . . . 123
Gap Analysis on Tanjung Gelang Installation . . . . . . . . . . . . . . . 1 24 Gap Analysis on the CSFs . . . .... . ... . . . . .... . . . . .... . . . . . . . . . . . 124 Gap Analysis on Leadership Qualities . . . . . . . . . . . . . . . . . . . . 128
Summary ....................................................................... 1 29
V FINDINGS AND CONCLUSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 30 Research Objective Revisited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 30
First Phase Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 31 Second Phase Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 31
The Summary of Means of Observed Manifestation of Staff Responses to the CSFs by Distribution Worksites. . 1 32 The Summary of Means of Observed Manifestation of Worksite Managers' Responses to the Leadership Qualities Adapted from Jameson and Soule (1 991 ) . . . . . . . . 1 34
iv
Grouping of CSFs and Leadership Qualities ... ............... 1 37 The CSFs ... .. . ........................................................... 1 37 Leadership Qualities ..... ...... .......... .......................... 1 42 Reliability of CSF s .. . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 Validity of CSFs ......... ..... . . . . ............................... .. .. . 1 49 Other Findings ....................................... ............. .. . .. 15 1
Conclusion ..................................................................... 1 52
BIBLIOGRAPHy . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 58
APPENDIX
A B C D E F G
Site Analysis of Kuching Installation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Site Analysis of Sandakan Installation . . . . . . . . . . . . . . . . . . . . . . . . . . . Site Analysis of Bagan Luar Installation . . . . . . . . . . . . . . . . . . . . . . . . .
Site Analysis of Sibu Depot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Site Analysis of Bintulu Depot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Site Analysis of Batu Undan Installation . . . . . . . . . . . . . . . . . . . . . . . . . .
Site Analysis of Brickfields Depot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
v
1 76 1 91 207 224 238 254 271
LIST OF TABLES
Table
2 .1 Summary of D imensions of Strategic
Pages
Management ModelS .......... . . . . . ......... ................... ............ 1 3
2.2 Summary of Dimensions of Implementation Models ........ 1 4
3. 1 A Summary of Observed CSFs Patterns and the Supporting Literature References Utilised in the Identification Process of the CSFs ........................ . . ......... 86
3.2 Table of D istribution Worksites and the Number of Staff Employed Therein ............ ...... .............................. 93
3.3 Baseline Assessment of Staff Reaction Against Identified CSFs ............................................................... 96
3.4 Baseline Assessment of Distribution Worksite Managers' Reaction Against Leadership Qualities Needed During Implementation ........ .... ................ ........... 97
3.5 Schedule of Observation Days at Eight D istribution Worksites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... ....... 97
4. 1 Summary of Observed CSFs Patterns and the Supporting Literature References Utilised in the Identification Process of the CSFs ............... ......... . . . ........ 1 04
4.2 Baseline Assessment (observed data) for Tanjung Gelang Installation .......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 0
4.3 Frequency of Scores - Tanjung Gelang Installation 1 16
4.4 Correlation Among Attribute Ratings for Tanjung Gelang Installation ...... ...................................... . ............. 1 1 9
4.5 Variance Explained by Each Factor - Tanjung Gelang Installation . .. . . . . . . . ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 20
4.6 Factor Pattern - Tanjung Gelang Installation . . . . . . . . . . . . . . . . . . . 121
vi
4.7
5. 1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
Basel ine Assessment of Distribution Worksite Manager's Reaction Against Leadership Qualities Needed During Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Summary of Means of Staff Responses from the Baseline Assessment Against the CSFs by Distribution Worksites . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Baseline Assessment of Leadership Qualities Most Desired During Implementation as Exhibited by the Worksite Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Correlation Among Attribute (CSFs) Ratings for All Installations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Variance Explained by Each Factor for All Distribution Worksites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Factor Pattern For All Distribution Worksites . . . . . . . . . . . . . . . . . . .
Correlation Among Attribute Ratings (Leadership Qualities) for Worksite Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Variance Explained by Each Factor For Worksite Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Factor Pattern of Leadership Qualities for Worksite Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mean Scores for Leadership Qualities and Factors Retained by Proportion Criterion by Site and the Number of Corrective Actions Taken Prior to Awarding of Certifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
vii
1 23
1 33
1 36
1 37
1 39
1 40
1 43
1 45
1 46
1 50
LIST OF FIGURES
Figure Pages
1 Whole Brain Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
2 The Piper Vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3 Hewlett-Packard's Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4 Schein's Three Levels of Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
5 The Ashridge Mission Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1
6 The Seven 'S' Diagram . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7 The 7 'S' Model Rearranged in the format of the Model of Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8 The Model for Superior Team Development and Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
9 Case Study Method Jnvolving Multiple Cases . . . . . . . . . . . . . . . . . . 67
1 0 Mind Map on Understanding the Dimensions of Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
1 1 Conceptual Profile of the Research Design . . . . . . . . . . . . . . . . . . . . . 80
1 2 The Human Elements that Facilitate Implementation of Quality Systems in the Distribution Sector of the Oil Industry in Malaysia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 55
viii
AN OVA
CSF
ISO
PCA
PROC GLM -
SAS
SIRIM
LIST OF ABBREVIATIONS
Analysis of Variance
Critical Success Factors
International Organisation for Standardisation
Principal Component Analysis
Procedure General Linear Model
Statistical Analysis System
Standards and Industrial Research Institute of Malaysia
ix
Abstract of dissertation presented to the Senate of Universiti Putra Malaysia in fulfilment of the requirements for the degree of Doctor of Philosophy.
CRITICAL SUCCESS FACTORS IN THE IMPLEMENTATION OF QUALITY SYSTEMS IN THE DISTRIBUTION SECTOR OF
THE OIL INDUSTRY IN MALAYSIA
By
MOHO YUSOF BIN OMAR
August 1998
Chairman: Associate Professor Dr. Zainal Abidin bin Mohamed, Ph.D.
Faculty: Economics and Management
The distribution sector of the oil industry in Malaysia, encompassing a
sample of nine distribution worksites, was studied to investigate what the
Critical Success Factors (CSFs) in the implementation of quality systems to
ISO 9000 were. The data sought would be the CSFs and the leadership
qualities that consistently determine the success of the implementation.
One hundred and nine-three staff at n ine locations were observed.
The study was carried out in two phases. The first phase was spent
identifying the CSFs in the implementation of quality systems through
readings and observation. The second phase was spent validating and
testing the reliability of the hypothesis at eight distribution worksites.
Results of the baseline assessment were statistically analysed
utilising the SAS software. Descriptive statistics were derived from the
x
observed data. The multivariate statistical procedures of principal
component analysis (PCA) and factor analysis were adopted.
Through the PCA the identified seventeen leadership qualities
[adapted from Jameson and Soule ('91 )] were reduced to twelve. They
were: ability to organise, resolution of complaints, leadership among peers,
helpfulness, written ability, open-mindedness, respect/consideration for
others, diplomacy and tact, s ituation handling, positive influence on others,
respect from co-workers and dealing with issues.
The PCA also reduced the ten identified CSFs to five. They were:
sense of urgency, sense of co-operation, team work, cohesiveness and
participation consciousness.
Only factors with positive eigenvalues were considered because that
would explain one hundred percent of the total variance in the data.
To recapitulate, the hypothesis for the research is that the successful
implementation of quality systems is a function of the degree of existence of
these CSFs and of the leadership qualities of the worksite managers. The
CSFs and leadership qualities were, therefore, valid because certification
was awarded to each d istribution worksite each time identified gaps from the
baseline assessments at each site (against the CSFs and leadership
qualities) were remedied.
xi
Abstrak disertasi yang dikemukakan kepada Senat Universiti Putra Malaysia sebagai memenuhi keperluan untuk Ijazah Doktor Falsafah.
FAKTOR KEJAYAAN KRITIKAL 01 OALAM MELAKSANAKAN SISTEM KUALITI 01 SEKTOR PENGEOARAN
INDUSTRI MINYAK 01 MALAYSIA
Oleh
MOHO YUSOF BIN OMAR
Ogos 1998
Pengerusi: Profesor Madya Dr Zainal Abidin bin Mohamed, Ph.D.
Fakulti : Ekonomi dan Pengurusan
Sektor pengedaran industri minyak di Malaysia, yang merangkumi
sembilan kawasan pengedaran contoh telah dikaji bagi menyel ideki apakah
faktor kejayaan kritikal (CSF) di dalam melaksanakan sistem kualiti ISO
9000. Data yang d icari ialah CSF dan kualiti kepimpinan yang secara
konsisten menentukan kejayaan perlaksanaan. Pemerhatian telah dibuat ke
atas seratus sembilan puluh tiga kakitangan di sembilan buah lokasi.
Kajian d ijalankan dalam dua fasa. Fasa yang pertama melibatkan
kerja mengenalpasti CSF di dalam melaksanakan sistem kualiti menerusi
catatan dan pemerhatian. Fasa kedua melibatkan kerja mengesah dan
menguji keboleh harapan h ipotesis tersebut di lapan logi pengedaran.
Satu penganalisisan statistik telah d ijalankan terhadap keputusan
taksiran asas dengan mengikuti perisian SAS. Statistik perihalan telah
diperloehi daripada data yang diperhatikan. Prosedur statistik
xii
Penganalisisan Komponen Utama (PCA) yang bersifat multivariat dan
penganalisisan faktor telah d igunakan. Menerusi PCA tujuh belas kualiti
kepimpinan yang di kenai pasti [diadaptasi dari Jameson dan Soule (91 )]
telah dikurangkan menjadi dua belas. la terdiri daripada: keupayaan
mengelola, menyelesaikan aduan, kepimpinan di kalangan rakan sekerja,
sikap tolong menolong, keupayaan menulis, sikap fikiran terbuka, sikap
menghormati/pertimbangan terhadap orang lain, sikap d iplomasi dan
bijaksana menyelesaikan masalah tanpa meyinggung, bijaksana
mengendalikan situasi , mempengaruhi orang lain secara positif, dihormati
dan disegani oleh rakan sekerja dan bijaksana mengedalikan sebarang isu.
PCA juga telah mengurangkan sepuluh CSF yang d ikenalpasti
menjadi lima, iaitu: meyedari hakikat segera, mengamalkan sikap
bekerjasama, bekerja dalam kumpulan/pasukandan meyedari betapa
pentingnya perpaduan dan penglibatan.
Hanya faktor-faktor yang mempunyai n ilai eigen yang positif telah
dipertimbangkan kerana ia akan menerangkan seratus peratus data yang
terkandung.
Sebagai rumusan, h ipotesis bagi penyelidikan menunjukkan bahawa
kejayaan perJaksanaan sistem kualiti adaJah fungsi darjah kewujudan segaJa
CSF dan Kualiti Kepimpinan pengurus-pengurus kawasan. OJeh itu, CSF
dan kualiti kepimpinan adalah faktor yang sah kerana pensijilan telah
diberikan kepada setiap kawasan pengedaran setiap kal i pembetulan
dilakukan terhadap sebarang jurang perbezaan yang dikenalpasti
berdasarkan taksiran asas di setiap kawasan (berbanding dengan CSF dan
Kualiti Kepimpinan).
xiii
CHAPTER I
INTRODUCTION AND DEFINITION OF RESEARCH
Introduction
The research intends to study the implementation of quality
management systems based on the ISO 9000 Quality Management Series
(International Organisation for Standardisation, 1994).
Setting up a quality system is one way of streamlining the business
process (Oakland, 1989). Embedded within a quality system is the concept
of continuous improvement (Juran, 1988). To continually improve the
business is a race without a finishing line (Schmidt, 1992).
"You need to investigate when you have no idea to what is going on. The mind can see only what it is prepared to see."
(de Bono, 1991)
The need to investigate as stated in the quotation means there is a
need for an in-depth look at how to make things happen (Warren, 1966) or
how to get things implemented. This can be done through l iterature
reviews, reading and/or observations.
This research intends to look at the implementation of ISO 9000
Quality Systems through an in-depth study of the distribution sector of the
oil industry in Malaysia.
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The ISO 9000 Quality Assurance Systems and the Sistem
Akredatasi Makmal Malaysia were initiated in the Shell Malaysia Oil
Products sector in October 1 989 and a masterplan was prepared. The term
of reference of the ISO 9000 Masterplan was to obtained ISO 9002 and the
Sistem Akreditasi Makmal Malaysia certification for the core downstream
business - distribution worksites, refineries, testing laboratories, petrol
stations and selected head office departments.
Research on corporate planning in industrialised countries has been
widely documented. However, research on corporate planning in developing
countries is l imited, especially research on Malaysia. Corporate planning in
Malaysia is, therefore, " insubstantial" and "unknown" in the sense that there
is an absence of documented proof of its practice (Mohammed, 1 988).
It is this lack of documentation and the requirement to execute the
masterplan (and in the process trying to get things done in a simple, fast
and implementable manner) that prompted this research.
Research Focus
The title of the research is "CRITICAL SUCCESS FACTORS IN THE
IMPLEMENTATION OF QUALITY SYSTEMS IN THE DISTRIBUTION
SECTOR OF THE OIL INDUSTRY IN MALAYSIA". The underlined words
indicate the focus of the research. These are briefly described below, and
detailed discussions will be carried out in the appropriate and subsequent
chapters in the text.
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Critical Success Factors
This research is intended to specifically find out the high value
patterns or Critical Success Factors that could lead to the smooth
implementation of a Quality System (based on the ISO 9000 series) which
is, in fact, the design of a management system that will enable a business
to efficiently provide its product to its customers - its raison d'etre (Simon,
1 985).
The process of identifying the Critical Success Factors (CSFs)
utilises the concept of finding the strategic window - the ability to decide
where to concentrate scarce resources in the present for future gain. This
concept is akin to Euclid's complexity compression. Chester Bernard
arrived at a very similar conclusion that, no matter how complex a
managerial problem, it is usually possible to identify a small number of
strategic variables which determine the essential shape of the solution
(Ansoff, 1 979).
However, according to Pankaj Ghemawat of the Harvard Business
School, commitment is the solitary contributor and sustainer of actions. "The
success factors approach lacks generality because it implicitly assumes that
success factors are under- valued". (Ghemawat, 1 99 1 )
Implementation
As far as this research is concerned, the term "implementation" is
part of Strategic Quality Management (Steiner, 1 982). This is an area of
management that was developed in the early sixties. In the late eighties and
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early nineties, "quality" was added to it (Quinn, 1 988). The research,
however, is confined only to the systems and process aspects of Strategic
Quality Management.
Success in the implementation of qual ity systems will be measured by
the Standards and Industrial Research Institute of Malaysia (SIRIM)
awarding a company the quality system certification.
Quality systems
As defined in the International Standards Quality Management and
Quality Assurance Vocabulary (ISO 8402).
"Quality Systems are organizational structure responsibil ities, procedures, processes and resources needed to implement quality management. Quality management is all activities of the overall management function that determine the quality policy, objectives and responsibi l ities and implement them by means such as quality planning, quality control and quality improvement within the quality system".
Distribution Sector of the Oil Industry
The distribution sector of the oil industry baSically consists of storage
facilities for refined hydrocarbons, such as d iesel and motor gasoline. The
key processes in the distribution sector of the oil industry consists of
receiving refined hydrocarbons from the oil refineries, storing and selling
them to customers.
This sector falls in the category of mature industries, and both its
products and its technology are deemed more stable. Innovations are more
likely to centre around cost savings and improving performance thus,
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encouraging creative effort in manufacturing efficiencies and work methods
(Moss Kanter, 1 985). Commitment to new people, environmentally sensitive
plant designs and modification of older facilities is a norm, and cost savings
through innovation in manufacturing is a part of its competitive advantage.
Because of this, the setting up of quality systems in this sector of the
economy shall assist in providing a structured framework for continuous
improvement. The rationale for the selection is explained in Chapter Three.
Malaysia
There is a ful l chapter on Malaysia vis-a-vis quality assurance and
government objectives as well as the role of the Standards and Industrial
Research Institute of Malaysia (SIRIM) in the practice and "promotion" of
Quality Standards and Assurance Systems. Malaysia is also actively
pursuing and rapidly approaching industrialisation. The concept of Quality
- doing it right the first time, understanding customers' requirements and
commitment towards work and family - is being placed in the forefront.
Exploratory and Conclusive Study
This details the methodology of the research. While more explanation
will be offered on the research methodology, such a technique is felt to be
the most appropriate for an area of study that is still unclear and under
reported and documented (Kinnear, 1 991 ). Nevertheless, it is an area of
study that is recognised as important in the business world.
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The study will also take a look at the reaction of employees who have
to implement a new management system over and above the demands of
their normal work environment.
Objectives of the Research
The overall objective of the research is to investigate what the critical
success factors (CSFs) are in the implementation of quality systems in the
distribution sector of the oil industry in Malaysia.
The human element is the prime mover in the successful
implementation of the quality system. According to Schein (1980), the
human element is the Achilles Heel of strategy formulation and
implementation. Henceforth the identification of the human element or
"CSFs" will be the focus of the research.
The area of interest in the research will be in determining how much
human resistance will be encountered, and why and how it will be
overcome. This interest will be looked at from the concept of defensive
routine. Defensive routines are defined as actions that are designed to
reduce the individual or organisational pain. When used effectively, these
actions prevent correcting the causes of pain. Defensive routines also
reduce pain and simultaneously inhibit learning. They block out the process
of meaningful change (Argyris, 1993).
The research will attempt to identify and rank the CSFs in
accordance to its contribution to facilitating the process of implementing the
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ISO 9000 Quality Systems. The research will also attempt to find the gaps
that exist and hinder the successful implementation of quality systems, and
take the appropriate corrective action to facilitate such an implementation
(Lawrence, 1967).
Justification of the Research
Findings from the parameters of the research will add to the
knowledge and understanding of the subject, especially with regard to its
application in Malaysia. As Malaysia actively pursues an industrialisation
programme, producing quality, made-in-Malaysia goods is one of the many
goals the government has set for itself.
At this vital stage of the country's development, there is a need to find
the best possible means to set in place quality systems in the
manufacturing and service environment that will enable Malaysia to remain
a cost-effective and innovative competitor in the world.
The findings of this research should be valuable to :
a) Quality systems or management practitioners who are trying to apply
such tools in their respective organisations as the literature indicates
that there are several components that need to be looked into;
b) Managerial staff in general as the study will provide information in
relation to its application and this will enable the appreciation of
problems that are being faced by management;
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C) Senior managers as the research will provide a variation in the usual
management practice as there is no single right way of implementing
the quality systems;
d) Academicians and students especially in Malaysia as it wil l add a
new source of local reference on the local situation;
e) Multinationals as a way of understanding of such practices by
Malaysians. The study may be advantageous to them when running
operations in the country; and
1) Government administrators and politicians since the study will
highlight some of the factors that could smoothen the implementation
process in deal ing with parallel or similar activities within the
government structure.
Layout of the Thesis
The thesis is made up of a total of five chapters as listed below.
Chapter 1 describes the background and sets the foundation for the
research undertaking.
Chapter 2 reviews the related l iterature on the state of affairs of
quality assurance in Malaysia, the strategic management process and
implementation models.
Chapter 3 describes the research methodology and design. The
research will be conducted in two phases.
a) The first phase of the research will be exploratory.
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b) The second phase of the research will be spent validating and testing
the reliability of the data that will be collected and recorded on the
observation forms.
Chapter 4 will describe the first and second phase findings.
Chapter 5 will describe the findings and conclusion of the research.
Limitations of the Study
The study is l imited to nine distribution worksites and 1 93 staff. It is
also limited by the strategic and implementation models being considered.
Therefore, the critical success factors identified, if needed to be applied in
other situations, have to be viewed cautiously as the organisational
environments differ.
CHAPTER II
REVIEW OF RELATED LITERATURE
Introduction
This chapter is divided into three sections. Section one describes the
status of quality management in Malaysia. Section two describes the
literature review on the strategic management process and implementation
models. Section three describes the literature review on the research
methodology.
State of Affairs of Quality Management and Quality Assurance in Malaysia
The aim here is to understand government initiatives in industrial
standardisation and total quality management, and the level of
understanding of quality management and quality assurance in the country.
Recognising the advantages of promoting quality consciousness in the
country, the Malaysian Cabinet had, in October 1 991 , approved a paper
entitled "Strategies to Improve Quality through Standards and Certified
Products", as part of its efforts to lead the nation towards industrial isation,
in l ine with its Vision 2020 policy.
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