Quality Management in China
Marina Chan, Kitlen Fung, C M Ip, Tony Mak & William Wong
After the adoption of the open market
policy by the Chinese Government in the late ‘70, the awareness of the
importance of quality among Chinese companies has been rising gradually.
On one hand, the Chinese Government has laid down some policies and
regulations to emphasize and promote the importance of quality and quality
management. High percentages of state-owned enterprises have started to
implement modern quality management or TQM since the early 1980s.
On the other, the development of market economy has intensified
competitive pressures, which in turns has created a strong driving force in
purpose of this study is to analyze the current status of quality management in
Mainland China and gives some suggestions in achieving TQM.
Section 2 gives an overview of the existing situation of quality
management in China. The problems
encountered and other important issues concerning quality management in China
are outlined. Since we believe that
the historical development of quality control in the Chinese history had big
influences on today’s quality management, in Section 3, we discuss different
stages of development of quality management starting from the ‘70s in.
The influence of the Chinese culture in quality management is analyzed in
Section 4. The market forces
are discussed in Section 5. In the final Section, we have given some recommendations in
accomplishing TQM in China.
study begins with a literature review on issues related to quality improvement/
management in Mainland China. The
materials that we have gone through cover different areas such as China’s
ancient history of managing quality, TQM application in China, culture and the
problems of Chinese management, worker participation and motivation, ISO 9000,
Asian power, economic reform, etc. From these materials, we could draw a picture
of the current status of quality management in China and understand the causes
of the current situation.
getting enough background information about the current status of quality
management in Mainland China, site visits in Shanghai and Guangdong were
arranged to get in-depth information through observations, informal discussions
and talks with front-line employees.
Current Situation and Problems of Quality Management in China
from the late ‘70, the Chinese Government has spent a lot of effort in
promoting quality management. Polices
and regulations were passed to put pressures on producers to pay more attention
to their product quality. Under the
pressures of the government, the implementation rate of TQM in China is
unexpectedly high, especially in state-owned enterprises.
A survey (Yu, Cochran and Spencer 1998) reported that 96% of the
state-owned enterprises claimed that they had implemented TQM. At the same time,
the fierce competition arising from market economy makes the managers take TQM
in their enterprises more voluntarily. Generally
speaking, the senior management’s commitment in improving quality is high.
However, the quality of products from China is still undesirable.
there are a lot of obstacles and problems in the process of deployment of modern
quality management or TQM in China. The
following paragraphs depict the major obstacles and problems.
concept of modern quality management was not properly promoted.
Chinese managers and workers do not have a good understanding of modern
quality management principles. There
are different versions of quality management concept in different parts of the
country. Some managers still cannot distinguish between quality
control and quality management.
top-down approach in implementing the quality management system causes a lot of
problems. At the country level, the
government gives directions to force enterprises to implement TQM.
Insides the enterprises, the policy and regulations are also implemented
from the top to the middle and bottom levels of the management and finally
reached every employee. The enterprises are forcing the employees to participate
instead of encouraging them to get involved.
Since the employees only take it as another order from the above, they
were not enthusiastic. This leads
to low participation. Such
authoritarian approach creates more fears at the workplace, which further lessen
low employee participation is not just caused by the top-down implementation
approach. The Chinese
society has historically been dominated by respect for age and hierarchy of
authority. The large power distance
in China makes it very difficult to implement the participatory management
model. Workers would rather follow
orders instead of giving suggestions.
to the lack of training resources, the training provided on quality management
is not comprehensive enough to cover employees at different levels.
Training provided to bottom-line employees is very limited.
No training on statistical control, problem solving skills, leadership
abilities is given to bottom-line employees.
the Chinese government has laid down policies and regulations about improving
quality for enterprises to follow, there is a lack of actual government support
in terms of funding, technologies and other resources.
Also, no recognition is given to the enterprises with significant quality
the western world, it is believed that statistical process control is one of the
vital elements in improving quality. However,
in China, little emphasis has been placed on statistical analysis, owning to
limited resources and inadequate technology.
concept of earning quick money, which is very popular among people in Mainland
China, is another obstacle in improving quality. In order to gain the highest profit in the shortest time,
people would rather sacrifice high quality for higher productivity and cheaper
businesses award contracts based on connection instead of the quality of
products. It seriously destroys the
incentives of improving quality. The
“harmonious” culture of the Chinese is also a hindrance to treating quality
Historical Development of Quality Management in China
is one of the earliest nations to have developed a civilization. In our more
than 5,000 years of history, we could trace the first Chinese quality system or
quality control system back to Shang and Zhou Dynasties (17th century
and 18th century B.C.) The new China has, since 1949, developed its
quality management along with the souci-political-economic development in China.
In the current section, we outline the development of quality management
in China from a historical perspective.
From 1949 up to the present, we can divide quality management development
into five stages, viz., quantity age, dark age, experimental stage, promotion
stage and strengthening stage.
1949, the communists took over the Mainland China and established a socialist
society, which adopted a centrally planned economy.
Under the centrally planned economy, the state set production goals and
targets for the enterprises, allocated resources and raw materials to them, laid
down broad policies and guidelines to be followed in their operations and
management, and distributed or marketed their output.
The ultimate goal of enterprise managers was to produce enough products
to meet the goals set by the state.
Managers did not need to take care of the quality of products.
As long as they produced, the state would buy without taking quality
centrally planned economy followed the strict and stiff Soviet managerial model.
Under this model, quality control only involved inspection of products,
and only the inspection department was responsible for product quality.
awareness of quality concern was typified by the formation of the quality
control research group in 1957.
The group introduced quality production education and statistical process
The application of SPC was limited to the machine and apparel industries.
SPC was never integrated with the management systems during those years.
In the early 1960s, China put forward a quality management model namely,
"two participations, one reform, three-way combinations" which was
based on the philosophy of cooperative relationships among managers,
technicians, and workers.
A new system combining self-inspection, mutual inspection, and line
inspection was developed.
Line workers were encouraged to create teams to discuss problems related
to product quality.
is noted that a centrally planned economy was not compatible with product
centrally planned economy shielded people from competition and was concerned
with meeting production targets rather than satisfying customers.
Quality management operated in this direction led to low motivation of
staff toward quality improvement.
1966 to 1976, the Cultural Revolution was rampant throughout China.
The efforts toward developing quality management in China were all
revolution frantically raised emphasis of quantity in a zenith.
It focused on outputs of heavy industries with almost no regards to
quality as well as management.
SPC was even treated as a symbol of anti-revolution. All developments
including quality management ceased in the period.
1978, China had realized that it had to reform its economic and social systems
if it was to build a prosperous and modern country.
A key strategy for change was to increase exports in order to buy
advanced foreign science and technology.
To compete in the international marketplace, China had to improve product
the practice of quality management had been promoted widely and strongly since
1978 to 1979, the period represented the experimental stage of quality
1978, Beijing Internal-Combustion Engine Company established an exchange
relationship with a Japanese company and imported quality management (TQC and
QCC) from that firm.
The experiment was expanded to some other enterprises in Beijing and
other provinces after managers paid visits to the company.
At the same time, the national China Quality Control Association was
year later, quality control associations were established in fourteen provinces
and three industrial ministries.
promotion stage covered from 1980 to 1985.
In 1980, the National Council of Economy issued "Temporary
Provisions of Total Quality Management in Industrial Organizations".
The provisions emphasized the important role of quality management in
economic development, and offered ways of promoting and implementing it.
The provisions included sections on quality planning, quality management
in design, quality management in production, quality management in customer
service, quality management systems, employee participation in quality
management, training, rewards, and punishment.
They required that everyone in industrial organizations should learn and
participate in quality management and all industrial organizations should start
to implement quality management from March 1980.
Between 1980 and 1985, more than 10 million copies of a textbook relating
to quality management were sold.
Moreover, televised lessons sponsored by the China Science Association,
the China Quality Control Association and the China Central Television were
studied by over 20 million Chinese managers and workers.
During the same period, the number of quality control circles increased
rapidly on the work floor.
1986, China has embarked into the fifth stage during which quality management
has undergone the strengthening, deepening and diffusion processes.
Training has been expanded to different levels, and its effectiveness has
been determined through examination and assessment.
The number of registered quality circles reached 2.85 million nationwide
in 1990. In
1993, the economic benefits created by these circles amounted to about RMB 2.22
December 1988, China adopted the ISO 9000 series of standards for its own
national standards with conversion made for technical contents and the coding
August 1992, the State Council issued "Decision on Further Strengthening
The document emphasized the crucial meaning of quality and quality
September 1993, the National People's Congress passed the Product Quality Law.
The Law holds producers responsible for the quality of their products.
It requires producers to manufacture products that: (1) conform to
applicable standards of the state or trade; (2) are free of unreasonable dangers
to persons and property; (3) have the properties that should be possessed by the
product, except where explanations about defects have been provided; and (4)
conform with samples or packaging descriptions.
In December 1993, the State Economic and Trade Commission, the State
Science and Technology Commission, and the State Technical Supervision Bureau
jointly issued "Regulations of Adoption of International Standards and
Foreign Advanced Standards".
The regulations made the requirements more detailed and enforceable.
management has undergone several stages and has become a more concern among
enterprises in China.
From non-existence to gathering momentum, quality management has gained a
legal status that it deserved.
The battle is not, nevertheless, over.
We reckoned that there were a lot of challenges at best or a lot of
shortcomings at worst.
Despite that the government has placed strong emphasis on quality
management and enacted laws to force its way into the enterprises, the effect
brought forth by quality management is not particularly exciting.
We might describe quality management in China with the idiom, “the
spirit is willing, but the flesh is weak”. The challenges of quality
management in China lie more in the culture and the economic system, which will
be discussed in the following section.
quality management requires everybody in the organization have a mindset of
quality. In addition to the influence of historical, political and ideological
background which shape the behavior of workers in China, the long history of the
Chinese culture also plays an important role in the development of quality
management in China.
the establishment of the People’s Republic of China in 1949, the Workers’
Congress has mandated workers’ participation in setting rewards, penalty and
other regulations in relation to the interests of workers. The socialist ideals,
however, have not changed the well-entrenched traditional Chinese value of
respect for the senior, the aged and the hierarchy of authority. The deference
to and dependence on power and authority distinguish Chinese culture from that
in the Western world where rules are repeatedly debated and challenged. The
large power distance of Chinese culture discourages the participatory management
philosophy that underpins the Western tenets of quality management.
the Chinese culture, it is very difficult to build a “bottom-up” management
system. For example, the quality drive in China has very much been government
mandated. Organizations prepare corresponding policies that are then enforced
using systems of reward and/or penalty. The autocratic cultural also goes again
Deming’s belief that fears and quotas should be removed from the management
system and joy should be returned to the workplace.
is also not surprising that few if any critique is offered by the frontline
workers when quality plans are introduced by the management, even though the
system is subsequently, privately, criticized in the implementation stage by the
workers. The management then feels alienated and labels the criticism.
of revolutions, warfare, reforms and poverty have entrenched a sense of
insecurity in the Chinese culture. The Chinese are more risk aversive and
resistant to new management concepts. The propensity to maintain the status quo
and preference to follow the peer are the major impediments to successful
implementation of quality management system in China.
Chinese culture is considered strong on collectivism and is group-oriented (Hofstede
1994; Fernandex et al. 1997). Strong peer pressure discourages education in the
areas of leadership, entrepreneur and experimentation. The Chinese value
“face” predominates, especially with the authority and seniors in autocratic
organizations, while the basic tools of quality management system such as work
team, quality circle and statistical quality control are neglected.
In the interest of face saving, the frontliners are reluctant to point
out mistakes. Chinese managers are unwilling to accept mistakes, especially in
front of peers or seniors.
management systems emphasize documentation and traceability. The systems are
formally documented by way of procedures; they are also unofficially defined by
the culture and shared values of the organization. On the other hand, Chinese
culture has been praised as “flexible”, because it has adapted to and
survived the four thousand years of changes in the environment. This
“flexibility” is often manifested in organization when workers ask for
“special” consideration due to “special” situation or need. Rules and
procedures are habitually requested to be bent or by-passed.
above-mentioned culture of collectivism, face-saving, deference and autocracy is
at the very heart of the guan xi so treasured by the Chinese. The western
quality management system as “modified” by Chinese culture is, instead of
“following the book”, tailored and curtailed in accordance with
“special” considerations, individual judgement and guan xi to produce
“good enough”, albeit random, outcome. In addition to problems resulting
from non-conformity, the “flexibility” hinders continual improvement of the
existing systems because the modifications and results are undocumented. We
regard this Chinese culture as the biggest impediment to the long-term
development of quality management in China.
there are still some cultural characteristics that are favourable for the
success of quality management in China. The collective and group oriented
aspects in the Chinese culture facilitate the development of quality management
in China. Once shared beliefs in value of quality and team participation are
developed in the workplace, peer group pressure will ensure that the quality
crusade will continue.
The Shift from a Planned Economy to a Market Economy
the past, China followed a centrally planned economy.
The state set the production goal and targets, allocated resources, laid
down management policies and guidelines.
The managers’ role was to meet the production targets in terms of
was not a concern with managers.
However, with the south visit of Deng, China has officially moved from a
state-controlled economy to a market economy.
Private enterprises emerged to compete against state-owned industries.
Increased competition has woken the industries to the importance of
quality to sustain and dominate the market.
The concept of quality management is a result of the market economy.
Open Door Policy
has taken an aggressive role to get into the international business arena.
One of the targets China has been striving to achieve is to enter the
World Trade Organization (WTO).
As a condition for successful entry, China has been forced to remove
tariffs for foreign competitors.
Foreign competition has put great pressure on local industries.
The quality of most foreign goods is more superior than local products
and many of these foreign goods quickly take up a sizeable market.
This is a great threat to local industries.
To survive and flourish, they must improve the quality of their products.
China’s open door policy has facilitated the development of quality
a population of 1.1 billion and a rapidly growing middle class bent on
consumption, China is an attractive market to many companies in the Western
world as well as those in Asia such as Japan, Taiwan and Hong Kong.
Her open door policy and pursuit of a market economy have encouraged a
lot of foreign companies to set up business in China.
Many of these companies partner with local companies to set up joint
most cases, the foreign companies will bring in not only the high technologies
but also their quality management practices and standard requirements.
This serves to reinforce the concept of quality management among local
export has grown tremendously in the past decade.
Foreign trade has been a great source of income for China.
To maintain this income source, China has to compile with the quality
standard laid down by the foreign markets.
In most of these markets, ISO 9000 is the required standard.
This is another external factor that speed up the practice of quality
management in China.
Identify National Goals - A Top-down Impetus
identified seven factors which hinder the success of quality management, one of
which is the lack of constancy of purpose to plan products and services
that are demanded by the market. China should identify the national priorities
and goals in the global market place and develop national core competencies to
provide products and services in demand.
than emphasizing on short-term gain, such as the number of ISO9000 accreditation
achieved at each province, or dressing up QC passing rates by lowing the quality
requirements, organizations in China should be encouraged, possibly aided with
venture capital, to invest in genuine improvement of quality.
nation should continue the direction of a market economy that stimulate
competition, and the drive to improve productivity through continuous quality
improvement and process reengineering. The government should remove fear amongst
the managers of state owned enterprises. As resources invested on quality will
one-day increase productivity and profit, the approach of using immediate term
profitability to appraise the managers’ performance should be amended.
of just laying down policies and regulations, the government should provide more
support, such as financial support for R&D, implementation of quality
improvement, investment in human resources training and education, and
recognition of quality achievements through national awards. Organizations
should be allowed to repeatedly win the awards for superior and continuously
quality management achievements. Moreover, the government should continuously
monitor the role of technology support as an enabler of quality improvement and
business process reengineering.
Market Orientation - Improvement on Strategic Thinking of Organization
is recommended that the organizations should adopt a contingent approaches. The
scope and pace of quality management improvement should be adjusted according to
the organizational goals and strategies, resources available, and the market
positioning of the organization. A Plan-Do-Check-Act improvement cycle is
suggested. Organizations should constantly review the market requirements - how
appropriate are the existing processes to provide products and services for the
Top-down Encouragement - Continue Emphasis on Quality at the Top
appraisal and reward systems should be designed to align the goals of workers
with the organizational drive to continually improve quality. A well design
reward system should reduce job-hopping by managers, another “deadly
disease” identified by Deming. Investments in the use of statistical tools
such as SQC should be promoted in order to avoid making decision with little or
no consideration given to what is not known or cannot be known.
Sustain Effort with Bottom-up Concern and Cultural Enhancement
emphasis on quality is part of the Japanese culture.
The concept of quality is achieved through education.
It is a long process but it has brought Japan great success in quality
management. The quality concept should be built in our education. We should
enhance Chinese culture with a personal dedication to quality. Young people
should be taught to be serious about the things they do and learn to deliver
China has implemented quality management since the 50s, the concept of quality
management has been weak and the quality of many manufactured products remains
one hand, The centrally planned economy had a lot to account for, which only
required managers to meet quantity and not quality.
On the other, the Chinese culture and values have also generated
unfavourable factors such as too much respect for the authority, face saving
attitude, unquestioned obedience, which have hindered the development of quality
since her open door policy, a lot of foreign companies have come to do business
in China. They
have brought in quality management standards and practices, which facilitate the
development of quality management in China.
Trading with the west has also forced China to face up to the issue of
continue to flourish in export
trade, China has to meet international quality standards.
is a concept that takes time to develop.
China has started with rules and regulations for managers to follow.
But to be really successful, China has to instill the concept to her
people at a young age.
Education is a key factor.
If China starts building in the concept of quality to her education
system now, in the not too far future, China can share with Japan the reputation
of being a country that guarantee quality products.
Chronology of Quality Management in China Since 1949
Industries were mainly manual operations. Delegated
inspectors and professional quality inspection mechanisms were only
observed in military industry.
Management models of Soviet Union were introduced.
Mainly focused on quality control by inspection only.
Some machine and apparel industries started using
With the strong emphasis on socialism, nearly all
prefer quantity rather than quality, and the idea of SPC is rejected.
The phenomenon of "1 year of production, 3
years of rework" appeared.
The first quality control research group was
founded in China, offered courses about SQC.
The Sino-Soviet relationship was broken.
The management system "two participations, one
reform, three-way combinations" was established.
Mr. Yuanzhang Liu lead a SQC experiment at
Beijing's Qinghe Wool Yarn Factory.
Beijing Internal-Combustion Engine Company
introduced the concept of TQC and QCC from Japan.
Ishikawa lead a visit of Japanese quality
management delegation in China.
The first Quality Month was started in September
The national China Quality Control Association (CQCA)
The National Council of Economy issued
"Temporary Provisions of Total Quality Management in Industrial
Organizations", and stated that all industrial organizations should
start to implement TQM.
The programme of the State Quality Management Prize
Adopt GB/T10300 that was equivalent to ISO 9000
With the success of Wuhan Steel Factory that was
later known as a "quality-efficiency model" organization, the
link between quality and efficiency were confirmed and promoted.
The State Council issued the "Decision on
Further Strengthening Quality Management".
The National People's Congress passed the Product
The National People's Congress passed the Consumer
Rights Protection Law.
The State Economic and Trade Commission, State
Science and Technology Commission, and the State Technical Supervision
Bureau jointly issued "Regulations of Adoption of International
Standards and Foreign Advanced Standards".
The Chinese ISO 9000 accreditation body, CNACR,
signed the MLA with other 16 countries.
Hofstede, G. 1994. Cultural constraints in management theories.
International Review of Strategic Management Vol. 5, pp 27-48.
Fernandex, D.R., Carlson, D.S., Stepina, L.P. and Nicholson, J.D. 1997. Hofstede's
country classification 25 years later. The Journal of Social Psychology Vol
137, no. 1, pp 43-54.
Yu, C.S., Cochran, D.S. and Spencer, B. 1998. Quality Management
Practices in China. Quality Management Journal, no. 2, pp 91-106.
Li, C.K. and Cheung, F.S. 1996. ISO 9000 and Chinese Management
Culture. Hong Kong Economic Journal Monthly Vol 228, pp 70-75.
Wang, Y.W. 1998. Brief Discussion on Corporate Culture and Product
Quality in China. Quality & Management Aug/Sep 1998.
Juran, J.M. 1990. China's Ancient History of Managing for Quality.
Quality Progress, Jul 1990, pp 31-35 and Aug 1990, pp 25-30.
Copyrighted 19 September 1998
Back to Quality Plaza