Total Quality Management Essay

Document Type:Essay

Subject Area:Management

Document 1

The company was founded in 1976 after a ruling that oil by-products be converted to useful chemicals, fertilizers, and chemicals. SABIC has grown over the years and has also resulted in the transformation of the small fishing villages around it into modern cities (Burton, 2016). The company provided the villagers with jobs and due to the increase in population in the villages, there were new opportunities for growth created. When the organization started, the production was below ten million tons but by 2003, the production had increased to forty-two million metrics and the productions rates currently stand at sixty million metric tons employing over fifty thousand people in all its branches. The current revenue of SABIC stands at 40 billion US dollars. The transformation was also slower than expected.

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Therefore, it took the company a lot of time to get back to where they were. The employee felt demotivated by the transformation which then caused low production in the company when it was already experiencing delays in receiving supply. Since the changes were happening in all the subsidiaries of SABIC, most of the branches reported a decline in production and sales. The goods produced during this period of transformation had an issue with quality which the company promised to resolve as soon as possible. The company, therefore, experienced a lot of resistance from the employees who thought that they would be phased out by the transformation. However, no employees were laid off and the company trained the employees about the about the upgrades such that SABIC would not need another set of employee to fulfill the new roles that came with the upgrades.

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Finally, the prices of most of the goods changed. The poor quality goods can be attributed to the changes in the SBUS and reshuffling of employees at the time (Datamonitor, 2012). SABIC had invested a lot of funds in the upgrade which meant that for their customers to continue enjoying their services, they would have to pay an extra cost through the prices. Also, they felt included in the changes in the organization which resulted in a reduction in resistance. Thus, the productivity of the organization has been increasing. Current states of the company Currently, SABIC is operating in different countries and not only in Saudi Arabia. There has been an increase in revenue from all the subsidiaries since 2015 after the changes in the company happened.

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Before the changes happened, the company had recorded a revenue of 50. Although the goods of the organization may be of high quality, they may not be what the consumers need. Therefore, to improve on the sales, SABIC should align the needs of the consumers with the production in the company. Also, the company should develop an organizational understanding of the cost of quality. The cost of fixing a commodity with low quality after the commodity has reached the consumer is way higher than dealing with the source of the problem (Peters et. al, 2014). Burton, E. Business and entrepreneurship in Saudi Arabia: Opportunities for partnering and investing in emerging businesses. Datamonitor (Firm). Saudi Basic Industries Corporation (SABIC). New York, NY: Datamonitor. Berlin: Springer.

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