ISSN 1392–0561. INFORMACIJOS MOKSLAI.

2006 37

Integration of Total Quality Management

and Knowledge Management

Juozas Ruþevièius
Vilniaus universiteto Ekonomikos fakulteto
Vadybos katedros profesorius
Vilnius University, Faculty of Economics,
Department of Management, Professor
Saulëtekio al. 9, 1–715, LT-10222 Vilnius
Tel. (370) 5 236 6155, mob. 8686-09710
El. paðtas: juozas.ruzevicius@ef.vu.lt

As contemporary society transforms itself into a more learned society and progresses towards
knowledge economy, totally new global social and economic contexts keep appearing which
require new management principles, skills, abilities and levels of competency. Experts forecas-
ting variations in the European economy state that the most important factors affecting busi-
nesses in the European Economic Area and economic development in general will be knowled-
ge, the manufacture of innovative products, and the improvement of manufacturing and ma-
nagement methods. This is why particular attention has been given to knowledge economy,
innovations and the quality of human resources in the updated Lisbon Strategy. Quality studies
have been acknowledged as a fundamental management discipline by many European busi-
ness, study and research organisations. The main purpose of this article has been to reveal the
peculiarities and correlations between total quality management and knowledge management,
to illustrate the influence of these elements on levels of competition among organisations, and
to present an integrated model for the mentioned management measures.

Variations in the economic situation unavoi- portunities to successfully operate in an envi-

dably influence changes in organisations as
well as the necessity of their effective mana-
gement (Evans, Dean, 2003; Ruþevièius, 2004).
As knowledge or the new economy becomes
further established it is not only international
economic relations that undergo radical chan-
ges, but also the extent to which organisations
can participate in these changes. So far, know-
ledge organisation has somewhat better op-
ronment that is difficult to forecast and highly
variable, due to the processes of economic glo-
balisation. Extreme competition and work-
sharing has created the potential for and ne-
cessity of sharing this knowledge. Relations
arising only from market co-operation are re-
latively limited, and so, they tend to lead to
the sharing of knowledge and the formation
of partnerships (Ruþevièius, 2005; Slatkevièie-

30
në et al., 2005; Ramanauskienë, Ramanaus-
kas, 2006).
It is obvious that a contemporary organi-
sation must not only effectively manage the
quality of its products and practices, but also
master and apply knowledge management.
The importance of this issue is further proven
by the fact that, in the last year, quality mana-
gement and knowledge management have re-
ceived particular attention from researchers.
However, the majority of authors treat quali-
ty and knowledge management as two absolu-
tely different theories and independent sys-
tems of management practice measures. All
of this reveals the relevance and newness of ana-
lysing the peculiarities and correlations bet-
ween quality management and knowledge ma-
nagement as measures affecting levels of com-
pletion among organisations.
Aim – to reveal the peculiarities and cor-
relations between quality management and
knowledge management, to illustrate the in-
fluence of these elements on levels of com-
pletion among organisations, and to present
an integrated model for the mentioned mana-
gement measures. Research object – quality and
knowledge management as the subject-mat-
ter for research and study disciplines as well
as organisation management measures. Met-
hodology. The article was written using acade-
mic literature and a logical analysis and gene-
ralisations of economic activity incorporating
theoretical and methodological affirmations.
Systematised operations in business practice
and results from the author‘s research on the
issue of quality were also used.
Research results
Quality integrated model
Quality, as a concept, does not easily fit into
any given timeframe. Our human understan-
ding of quality lies a long way back in history,
perhaps even a million years ago, or when hu-
mans first began constructing tools (Shewhart,
1989). The concept of quality rests on its ma-
nagement, so before delving deeper into qua-
lity management measures and systems we
should first familiarise ourselves with defini-
tions of quality. The concept of quality has long
been analysed by numerous representatives
from many academic and business back-
grounds. Despite this, one universal and com-
mon definition of quality is yet to be agreed
on. The reason for this is the complexity and
breadth of quality as a concept which is due to
the great variance in quality, in terms of all
the factors and issues that affect it. In other
words, quality is not a static, but a dynamic
concept that, over time, is treated differently
depending on current specifications and the
particular object concerned (Anand, 1997;
Ruþevièius, Makijovaitë, 1998; Ruþevièius,
2005). Quality may be defined as meeting cer-
tain set standards and specification require-
ments, being suitable for use, or the degree of
customer/client satisfaction. We may evaluate
quality according to which particular aspect
of consumer needs a given product satisfies.
In this approach we may evaluate the product‘s
functionality, reliability, and how it meets va-
rious social, ergonomic, aesthetic, environ-
mental and economic requirements. The aut-
hor of this article suggests we define quality in
terms of the total sum of a product‘s features
that ascribe its suitability to meet all expressed
and implied consumer needs as determined by
the product‘s conditions of use and its purpose.
Quality also incorporates a product‘s defecti-
ves and its impact on the environment. In bu-
siness practice the concept of quality is often
interpreted more narrowly, that is, how a pro-
duct‘s features satisfy standards, technical
regulations, specifications, legal acts and com-
31
mercial contract requirements (Ruþevièius, scientists and market participants ect.)
2005). and quality culture;
Quality is important not only as a measure 2. Social quality;
of how competitive a business is, it also deter- 3. Quality of economic management, or-
mines the efficacy of state governance and ot- ganisational performance and business
her public sector organisations, the stability of excellence;
a nation’s economy, and the quality of life its 4. Qualitative diversity of products;
citizens enjoy. This is why it is necessary to bro- 5. Product quality and their environmen-
tal indicators design;
aden our understanding of quality, so that ot-
6. Quality management systems, compa-
her aspects (e.g., social) are also covered. The
rative testing of product quality and ot-
author’s model of quality management sub-
her;
systems is shown in Fig. 1. While analysing the
7. Infrastructure for quality assurance.
quality aspects of business competitiveness, the
author proposes such subsystems related to the
Total Quality Management (TQM)
quality management as:
1. The value orientations (of the society, The term “Total Quality Management” is cur-
the government representatives, the rently well established in scientific and acade-

1. Value orientation
7. Infrastructure (nationals,
for quality religious, organs of
assurance government, market
s, consumers)
participantÕ,
& quality culture
6. Quality management, Systems Principles 2. Social quality
standardisation, (quality of life, consumer
certification, satisfaction indicators,
quality evaluation, quality of governance, social
comparative testing of responsibility, partnership)
product quality QUALITY
Methods Functions
5. Product Models
(commodities, services, 3. Quality of economic
intellectual property, management,
processes...) quality & sustainable development,
environmental indicator’s organisational performance &
design business excellence
4. Qualitative
diversity of products

Fig. 1. The quality integrated model

32
mic circles, as well as in business world and
has replaced a number of different terms such
as Total Quality Control, Total Quality Impro-
vement and Strategic Quality Management
that were bringing a lot of confusion a decade
ago, but basically described the same concept.
Despite the fact that there is no unanimous
opinion of what is the essence of TQM is or
what are the key issues it covers, definitions
that describe the concept the most precisely
and comprehensively are presented below.
Walsh et al. (2002) describes TQM as the cre-
ation of an organizational culture, in which
continuous strive to satisfy the needs of the
clients is encouraged and sustained by using
an integrated system of tools, methods and
trainings. Anjard (1998) refers to TQM as a
purposeful cultural movement towards estab-
lishing a management philosophy, which
would stimulate all employees to bear respon-
sibility for providing high quality services and
products. Gunasakaran et al. (1998) defines
TQM as a management philosophy and a sys-
tem of methods and procedures that formula-
tes an overall systematic approach to quality:
that everyone is responsible for it.
According to the opinion of the author of
this article, TQM is a management theory (phi-
losophy) putting an exclusive emphasis on qu-
ality and a system of practical management to-
ols, which allows an organization, which cho-
oses to use them, to continuously improve it-
self by involving its employees into all proces-
ses of quality improvement to fully satisfy the
needs of internal and external customers and
to provide value to the employees, sharehol-
ders, clients and society. To reach the afore-
mentioned goals TQM organization uses an
integrated system of more than 100 manage-
ment methods, models, employees’ competen-
cy development system and follows these prin-
ciples (Kanji, Asher, 1996; Ruþevièius, Maki-
jovaitë, 1998; Ruþevièius, 2003; 2005; Ruþevi-
èius et al., 2004; Ewans, Dean, 2003):
– organization’s top management’s dedi-
cation to pursuing quality and providing
leadership;
– directing management activities to-
wards satisfying the needs of internal
and external customers and systemically
measuring this process;
– continuous improvement of all organi-
zation’s activities;
– involving every employee into quality
im provement processes;
– creation of unconformity prevention
(and not only identification) system;
– public announcement and pursuance of
organization’s vision, values, mission,
quality policy and commitments;
– switching the emphasis in quality area
towards developing human resources
(taking care of employees’ needs, inc-
reasing their qualification, etc.)
– designing quality assurance system as a
continuous and integral process, con-
centrating the efforts towards ensuring
that quality is the result of all the inter-
mediate stages (process management);
– devoting attention to data, facts and
their systematic analysis (fact-based de-
cision making, quality measurement,
systematic application of quality mana-
gement methods);
– taking care of customers’ success (fol-
lowing the principle – “we succeed, if
our clients succeed”);
– involving organization’s partners into
solving the problems of quality impro-
vement and expansion;
– emphasizing teamwork and coopera-
tion within organization;
– eliminating the atmosphere of fear (to
make mistakes, criticize, etc.). Const-
ructive criticism and analysis of mista-
kes is used as a tool for improving or-
ganizational activities;
33
 – corporate social responsibility;
– development of ecology-friendly cultu-
re (precautious expansion, promoting
business philosophy of environment-
friendly manufacturing processes and
products);
– prioritizing change management and
knowledge management;
– systematic training and education of or-
ganization’s employees, directed to-
wards transforming their mindsets and
company’s culture into one supporting
the concept of TQM and facilitating the
adoption of its methodologies and the
implementation of the quality policy.
Knowledge management (KM)
Knowledge management has in recent years
received particular attention from various aca-
demic fields. Some academics claim that this
interest has risen as a result of the transfor-
mation from a post-industrial economy to a
knowledge economy (Ives et al., 1997), where
the source of long term excellence and profi-
tability is based on how an enterprise creates
and uses knowledge (Desouza, 2003). Irres-
pective of the greater interest in this area, there
is no universally accepted KM model – there
is not even any agreement on the actual age
of this discipline. Some analysts (Wiig, 1999)
claim that KM is not possible without the la-
test computer technology, and correlates the
rise of this discipline with its appearance and
development. Other academics state that KM
is not a new concept, rather, it is simply newly
structured and maintained by new technolo-
gies, their mediums and equipment (Ives et
al., 1997). The authors who support this opi-
nion claim that the history of knowledge ma-
nagement began with the oldest civilisations –
the first manifestations of KM, such as recor-
34
ding, storing and utilising data, appeared over
3,000 years ago with the introduction of cu-
neiform (Ives et al., 1997). The invention of
computer technology and its further develop-
ment (since the early 1980s) has resolved a
number of problems which had limited the
processes by which knowledge was entered, sa-
ved and dispersed. However, it has also made
these processes more complex. Many authors
tend to announce this period as the beginning
of modern knowledge management. The com-
mon requirements of knowledge management
and its aims have not changed a great deal sin-
ce its inception, however, it is the amount of
information, the content dynamism, and the
typical workplace, among other elements, that
have changed. For this reason knowledge ma-
nagement has had to use two main contempo-
rary technologies: computer databases (for sa-
ving large amounts of information) and web
technology, to facilitate the exchange of infor-
mation as much on a company level as on a
global scale (Ives et al., 1997). The state of ra-
pid changes in information and use of new to-
ols has made many early methods and measu-
res once used in the field of knowledge mana-
gement obsolete – they no longer meet toda-
y‘s requirements. Thus, irrespective of the long
history of the development of KM we may say
that at present, knowledge management is a
discipline that is being rediscovered and refor-
med, having no apparent structure.
Even though there are many ways of grou-
ping types of knowledge, that which has recei-
ved the widest academic acclaim’s the division
of knowledge into two categories: tacit and ex-
plicit. Knowledge, as the object under exami-
nation, may exist in two forms – explicit or fac-
tual knowledge and tacit knowledge, also
known as know-how (Polanyi, 1989). Because
each of these categories has a specific influ-
ence on and formulates the process of im-
plementing KM, we may engage in a further
analysis of their differences. The greatest dif-
ference between tacit and explicit knowledge
is that where explicit knowledge is somehow
explained, saved or documented, tacit know-
ledge is not recorded in any way (McInerney,
2002). In addition, tacit knowledge is subjec-
tive and personal, and may be partly transfer-
red, helping both individuals or whole organi-
sations work more successfully. The transfor-
mation of explicit knowledge into another le-
vel of explicit knowledge occurs by reorgani-
sing, i. e. sorting, supplementing, joining and
categorising, current expressible knowledge
and thereby creating new knowledge. The
transformation of explicit knowledge into tacit
knowledge (internalisation) occurs when an em-
ployee acquires new information, a process
which deepens their tacit knowledge. The con-
version of tacit knowledge into explicit knowledge
(externalisation) manifests itself as the trans-
formation of contextual knowledge into facts
that remain so even once they are taken out
of context. The transformation of tacit know-
ledge into another level of tacit knowledge (so-
cialisation) occurs when experiences are sha-
red, when working as one team, and when di-
rectly exchanging knowledge through regular
interaction (Lindvall et al., 2003). Each of the
afore mentioned knowledge transformations
are characterised by different “knowledge set-
tings”, a typical constituent of KM. In the aut-
hor’s opinion, the main field of KM is the use
and development of an organisation’s knowled-
ge resources in order to reach its goals. Explicit
documented knowledge needs to be managed as
much as does tacit subjective knowledge. An or-
ganisation’s management must establish and de-
termine all the processes involved in the identi-
fication, creation, storage and dispersal of know-
ledge. For this to occur, the implementation of
an organisational training system that would
encourage others how to create, store, maintain
and share knowledge is necessary. By incorpo-
rating both types of knowledge into this sys-
tem, explicit and tacit, the content of KM
would not limit itself solely to technical mat-
ters (which would make it very similar to in-
formation management – precisely what KM
is most commonly mistaken for), but would
integrate human skills and experience. TQM
and KM theories are in some respects mar-
kedly different, but they do have common aims
as well as other common points of contact.
The integration of TQM and
knowledge management
Based on the comparison above we can dis-
tinguish four fields of commonality in TQM
and KM: similar aims; areas receiving parti-
cular attention; the position of the organisa-
tion in regards to management; as well as is-
sues concerning the financial benefit of imple-
menting these systems. The author proposes
the following model for the integration of
knowledge management into TQM, which
could be used in TQM training and when im-
plementing total quality and knowledge ma-
nagement in an organisation (Fig. 2).
The model contains the main principles of
TQM, which, raising several issues in them-
selves, can be resolved by KM. However, the
least discussed field remains intellectual capi-
tal (IC), which is why it is incorporated into
the model as a fundamental value within an
organisation. Human resources and IT are na-
tural extensions of IC, so this is also reflected
in the model. The effectiveness of a business
is reflected in its implementation of TQM prin-
ciples, so this field is not shown separately in
the model.
Intellectual capital is a common point of
contact through which corresponding KM stra-
35
 IC
Process and product
quality measurement
Strategy
Leadership
Fig. 2. Model for the integration of TQM and
knowledge management
(IC – intellectual capital; IT – information
technology)
tegies could be applied to each TQM princip-
le – depending on the essence and content,
resolutions from the IT and/or human resour-
ces fields may also be applied. When analy-
sing the potential benefits and advantages of
KM measures in total quality management it
is important to note that it may be especially
difficult to attain these goals if the actions un-
dertaken by the leadership are not aligned in sup-
36
port of KM. Also important is the creation of
strategies that would encourage the creation,
storage and dispersal of knowledge in an or-
ganisation. The sharing of knowledge should
become one of the essential values within an
organisation, while business managers should
regard employee training and passing know-
ledge on to others as one of the most impor-
tant priorities of an organisation.
Conclusions
A contemporary organisation must not only
effectively manage the quality of its products
and practices but also master and implement
knowledge management. KM is a interdiscip-
linary concept covering the greater part of an
organisations’ activities. The main field of KM
is the use and development of an organisa-
tion’s knowledge resources in order to meet
its goals. Explicit documented knowledge ne-
eds to be managed as much as tacit subjective
knowledge. An organisation’s managers need
to establish and determine all the processes
related to the identification, creation, storage
and dispersal of knowledge. For this to occur
organisations must implement a system that
would train employees how to create, store,
maintain, safeguard and share knowledge. Alt-
hough the concepts of TQM and KM are mar-
kedly different there are four fields of com-
monality: goals; areas receiving particular at-
tention; the position they hold in the organi-
sation in terms of its general management; and
issues regarding the financial benefits of imple-
menting these systems. The author has devised
a model that integrates knowledge management
into TQM, which could be used in TQM trai-
ning and when implementing TQM and know-
ledge management in an organisation.
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pagrindinë sritis yra organizacijos þiniø iðtekliø nau-
dojimas ir plëtra organizacijos tikslams siekti. Orga-
nizacijos vadovybë turi nustatyti ir apibrëþti visus pro-
cesus, susijusius su þiniø identifikavimu, kûrimu, kau-
pimu ir sklaida. Tam bûtina ádiegti þiniø kûrimo, kau-
pimo, palaikymo, prieþiûros, dalijimosi þiniomis ska-
tinimo ir organizacinio mokymosi sistemà. Remda-
masis atlikta analize autorius iðskiria keturias VKV
ir ÞV panaðumø sritis: panaðûs tikslai, didesnio dë-
mesio sritys, vieta organizacijos bendrojoje vadyboje
ir jø diegimo finansinës naudos vertinimo proble-
mos. Autorius siûlo VKV ir þiniø vadybos integravi-
mo modelá, kurá bûtø galima panaudoti mokant vi-
suotinës kokybës ir þiniø vadybos, ir jà diegiant or-
ganizacijoje. Modelis perteikia pagrindinius VKV
principus, kurie susieti su daugeliu þiniø vadybos
sprendþiamø klausimø. Intelektinis kapitalas, kaip
fundamentinë organizacijos vertybë, yra jungties tað-
kas, per kurá tam tikros ÞV strategijos gali bûti tai-
komos kiekvienam VKV principui.