DEVELOPMENT OF TOTAL QUALITY MANAGEMENT MODEL FOR SMALL AND MEDIUM SCALE CONSTRUCTION FIRMS IN SOUTH-EAST NIGERIA

1.1Background of Study

Total Quality Management (TQM) is considered as an approach of continuous improvement in all quality aspects of the whole processes, goods, services and employees within the firm, and it aims at adding value to the delivered products to customers through continuous development of firms’ processes and systems (Hill, 2008). It is a philosophy of continuous organizational development through the employment of customer satisfaction and by basing it on the permanent workers’ contributions in order to improve goods, services and processes (AL-Asiri, 2004). Prajogo (2005), asserted that TQM is a process to enhance flexibility, effectiveness, and firm competitiveness to meet customers’ needs and expectations. If correctly applied, it will assist a construction company in improving its performance

Quality has been an important issue for organizations for many years. The early focus on quality evolved from inspection to quality control and later to quality assurance, according to Dale (1999, cited by Soltan, 2006), during the 1990s, TQM evolved as a common term among organizations in different parts of the world. TQM has developed in many countries into a holistic framework (e.g. National quality or internationally recognized awards such as the Deming award, Malcolm Baldrige National Quality Award-MBNQA and European Foundation for Quality Management EFQM) aimed at helping organizations achieve excellent performance particularly in customer and business results. TQM is one of the most important management innovations of the 20th century, and it has probably had more influence on contemporary management practices than any other management movement. In fact, the principles of TQM is

related to competitiveness of enterprises gained and main purpose is high efficiency, product and market differentiation, high quality, low cost and achieve the high competitiveness power (Yatkin, 2004).

Since Nigeria attained independence in 1960, considerable efforts have been directed towards industrial development. The initial efforts were government-led through the vehicle of large industry, but lately, emphasis has shifted to Small and Medium Scale Enterprises (SMEs) following the lessons learnt from the success of SMEs in the economic growth of Asian countries (Ojo, 2003). The importance of SMEs in a developing economy like Nigeria can be enormous because Nigeria‘s economy is dominated by SMEs in agricultural, construction, manufacturing, commerce and industry, services, trading. They play a significant role in both developed and developing economies. Statistics has shown that SMEs contribute over 55% of Gross Domestic Product (GDP) and over 65% of total employment in developed economies and it also play a significant role by contributing 60% of GDP and over 70% of total employment in developing economies (Small and Medium Scale Enterprises Development Agency of Nigeria, 2012, Moriam, Mukaila and Hameedat 2015). It is against this background that one needs to emphasize the desirability of doing all that is possible to enhance the orderly growth and development of SMEs in Nigeria. Small and medium scale construction firms (SMCFs) are not left as they are also part of the SMEs sector.

There is no generally accepted definition of small or medium businesses because the classification of businesses into large, medium or small scale is a subjective and premised on different value judgement (Ekpenyong, 1997). The definition aims at setting some limits (lower and upper) that will assist in achieving the set purpose. Such limits can be in terms of level of

capitalization, sales volume, and number of employees. Abdullah, Bilau, Enegbuma, Ajagbe, Ali and Bustani, (2012) highlighted that over time in Nigeria, the government has used various definitions and criteria in identifying what is referred to as Small and medium firms. At certain point in time, it used investment in machinery and equipment and working capital at another time, the capital cost and turnover were also used (Umar, 2008). The National Association of Small and Medium Scale Enterprise (NASME) defines a small sized firm as an organization with less than 100 employees and an annual turnover of N500 million. The Central Bank of Nigeria

defines SMCFs as an enterprise with an asset base of N200 million excluding land and working

capital with staff employed by the firm not less than 10 and not more than 300 ( Kelly, 2006). The definition of MSMEs in Nigeria as contained in the National Policy on Micro, Small and Medium Enterprises (SMEDAN, 2007) is adopted in this study which states that Micro enterprises has less  than 10 employees or Less than N5 million assets excluding land and

buildings, small enterprises has between 10 to 49 employees or 5 to less than N50 million assets

excluding land and buildings, that Medium enterprises 50 to 199 employees or N50 to N500

million assets excluding land and buildings.

SMCFs are mostly indigenous firms, however they do not perform as expected. Multinational and large construction firms though few in number, operate on a large scale and execute the majority of contracts in Nigeria; in contrast, indigenous contractors considerably outnumber their multinational counterparts and operate on small and medium scales, but they are responsible for a very small proportion of the value of contracts executed in Nigeria (Ogunpola, 1984; Olateju, 1991; Samuel, 1999 and Idoro, 2004). This implies that a large number of registered SMCF’s services have not been adequately utilized on the delivery of capital projects by the client.

Shittu (1997) surmised that the combination of the small and medium construction firms make up 90 percent of the total registered contractors in Nigeria. Unfortunately, they have not played the significant and crucial role they are expected to play in Nigeria’s economic growth, development and industry (Basil, 2005).Idoro (2010) opined that multinational and large construction firms have however continued to succeed in Nigeria as the preferred type of Construction Company. Idoro (2010) also discovered that Nigerian clients give expatriate contractors preference over their indigenous counterparts in the award of contracts because they perceive the performance of the former is better than the latter in work quality standards. In the context of construction project, contractor performance is usually considered as a significant contributor to client satisfaction. Performance is therefore key for any contractor to survive. The challenge before indigenous contractors is to determine the way in which the confidence of clients can be gained and their impression of these contractors can be reversed. One of such ways is the application of Total Quality management. It is increasingly been adopted by construction companies as an initiative to solve quality problems and to meet the needs of the final customer (Kanji & Wong, 1998 as cited in Hoonakker, 2010). The major findings from a study by Aniagbaoso (2014) shows that multinationals take TQM seriously because it is what makes their brand unique and different from any other brand in the market. And the quality of their product affects the demand of their products. For SMCFs to be able to compete effectively, they need to adopt some of the practices of their multinational and large counterparts, especially those practices that are very prominent in giving them a competitive advantage. According to Faihan (2013), one of such practices is TQM. Pheng and Teo (2004) believed that the benefits of higher customer satisfaction, better quality products and higher market are often obtained following the adoption of TQM  by construction companies. Although the interest and the need to implement

TQM continue to be high among large organisations, small organisations are still lacking behind in TQM implementation (Hansson, 2002).

TQM has become one of the most successful practices in helping companies enhance competitiveness and prosperity through ensuring sustainable growth (Osayawe and McAndrew, 2005). TQM focuses on the process of improvement, customer and supplier involvement and training and education in an effort to achieve customer’s satisfaction, cost effectiveness and defect-free work and it provides culture and climate essentials for innovation and for technology advancement (David and Murat,1997) . When TQM is fully applied in small and medium construction firms as an improvement tool, it will increase their profit level, increase the level of employment, and expand their business, innovation and overall development of the economy in Nigeria.

This issue is crucial because the majority of firms in the construction industry are small firms (Riza, 2015). Therefore, it is important to focus improvement efforts on TQM of small organisations so that the overall industry performance may be improved. The desires of all beneficiaries such as stakeholders, customers (internal and external) to attain success in the construction industry are not enough to achieve the desired quality. TQM has become one of the most successful practices in helping companies enhance competitiveness and prosperity through ensuring sustainable growth, (Osayawe and McAndrew, 2005). As such, all parties should be involved in implementation of TQM in other to effectively improve the construction industry in proper and methodological way.