What is Total Quality Management?

Definition: Total quality management is a managerial accounting concept where an organization strives to produce higher quality products with few defects being shipped to customers. Total quality management is a lean business practice often associated with continuous improvement and just-in-time inventory and just-in-time manufacturing.

What Does Total Quality Management Mean?

A total quality management system involves the entire organization from management and department managers to employees. Under a TQM system, employees are encouraged to strive to produce higher quality products and find waste during the production process.

Managers are encouraged to discover wasteful and inefficient processes and implement newer, more cost effective ways of producing the same products.


The TQM concept goes beyond even producing products since it implies improving the complete organization. Waste in any area of the business is identified even in general and administrative costs. Since customer service is a large part of every modern business, customer service quality standards are also looked at for improvement.

In essence, the total quality management concept looks at all aspects of business and tries to improve efficiency and eliminate wasteful spending. TQM even seeks to improve intangible assets like a company’s image and brand. Customer’s perception of a brand is important for sales as well as product pricing strategies. If a company can perform public service or increase advertising efforts to improve its public perception, the total quality management system would support that.

TQM is about improving the company as whole in every aspect.

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