DEMING'S 14 POINTS FOR MANAGEMENT (c. 1982, by W. Edwards Deming)

The American economy was in a state of decline when Ronald Reagan was elected president in 1980. The declining status of American industry, called "deindustrialization," led to a sustained period of "stagflation," during which the economy suffered from both stagnation and inflation. One industry particularly hard-hit by deindustrialization was the U.S. auto industry, which was being crushed by high-quality, low-priced vehicles from Japan. Ironically, American consultants, such as W. Edwards Deming (1900–1993), who had invigorated Japan's post-war economy by advocating quality and worker involvement as the greatest priorities of business, had built the Japanese industries. In the 1980s, American businesses turned to Deming's theories to help them navigate the new challenges of the global economy. Deming's 14 Points for Management, which advocated giving power of production to workers, was highly popular among American business leaders.

Leah R.Shafer,
Cornell University

See also: Industrial Management

The 14 points are the basis for transformation of American industry. It will not suffice merely to solve problems, big or little. Adoption and action on the 14 points are a signal that the management intend to stay in business and aim to protect investors and jobs. Such a system formed the basis for lessons for top management in Japan in 1950 and in subsequent years. The 14 points apply anywhere, to small organizations as well as to large ones, to the service industry as well as to manufacturing. They apply to a division within a company.

• 1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.
• 2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership for change.
• 3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
• 4. End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.
• 5. Improve constantly and forever any system of production and service, to improve quality and productivity, and thus constantly decrease costs.
• 6. Institute training on the job.
• 7. Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
• 8. Drive out fear, so that everyone may work effectively for the company.
• 9. Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.
• 10. Eliminate slogans, exhortations, and targets for the work force asking for zero defect and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
• 11a. Eliminate work standards (quotas) on the factory floor. Substitute leadership.
• b. Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.
• 12a. Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.
• b. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective.
• 13. Institute a vigorous program of education and self-improvement.
• 14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody's job.

SOURCE: Out of the Crisis. Cambridge, Mass.: MIT Center for Advanced Engineering, 1986; MIT Press, 2000.