The International Organization for Standardization defines total quality management, or TQM as “a management approach for an organization, centered on quality, based on the participation of all its members and aiming at the long-term success through customer satisfaction, and benefits to all members of the organization and to society.” TQM has significant advantages in terms of quality improvement, increased productivity, greater financial yield and more customer loyalty. It also has several challenges and disadvantages.

Demands a Change in Culture

TQM demands an organizational culture that focuses on continuous process improvement and customer satisfaction. It requires a change of attitude and a reprioritization of daily operations. TQM also requires a long-term management commitment and constant employee involvement. According to Forbes, changing an organization’s culture is a difficult challenge, because culture amalgamates an interlocking set of values, processes, attitudes, communication practices, roles, goals and assumptions, and is often met with resistance by employees, who view it as a threat to their jobs.

Demands Planning, Time and Resources

A good TQM system often takes years to implement, and that occurs only after significant planning, time, long-term resource allocation and unwavering management commitment. Lack of proper planning can cause a TQM system to ultimately fail.

Quality is Expensive

TQM is expensive to implement. Implementation often comes with additional training costs, team-development costs, infrastructural improvement costs, consultant fees and the like. The system also requires continuous investment in the form of refresher trainings, process and machine inspections, and quality measurement. TQM is not suitable for very small companies, because its implementation, training and execution costs far supersede its financial gains.

Takes Years to Show Results

TQM is a long-term process that shows results only after years have passed. It requires perseverance, patience, dedication and motivation. Many organizations give up on it after failing to see tangible results quickly. Organizations that function in highly competitive environments cannot afford the luxury of time.

Discourages Creativity

TQM’s focus on task standardization to ensure consistency discourages creativity and innovation. It also discourages new ideas that can possibly improve productivity.

Not a Quick-Fix Solution

Many companies, in their excessive focus on quality, end up losing financially. Both Xerox, the American document management company, and Federal Express, the cargo airline, suffered significant financial setbacks after winning the Baldrige Quality Awards -- awards that recognize quality performance. According to the book, "Corporate Transformation and Restructuring," two-thirds of companies that embrace TQM fail to experience major performance breakthroughs or improvements in customer satisfaction. According to an Arthur D. Little survey of 500 companies, only 36 percent felt that TQM improved their competitiveness.