TQM AT AMERICAN EXPRESS
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This research paper explores the ramifications of the recent announcement by American Express (Amex) of its Total Quality Management Program (TQM), which it labels American Express Quality Leadership (AEQL), as a major policy initiative. The problem AEQL is intended to remedy is the declining market share of American Express in its core business, credit cards and other travel related services, insofar as that decline stems from the failure of the company to remedy the causes of customer dissatisfaction with its products and services. Amex's recent re-affirmation of its adherence to TQM is consistent with its traditional reputation as a high quality supplier; however, during the 1980s and early 1990s, the company, owing to confusion in its overall strategic objectives and for other reasons, neglected its core business and its customers. Its belated rededication to TQM, while worthwhile, may not be sufficient to remedy many of its problems, some of which appear to be insoluble. It is recommended that Amex place most of its emphasis on implementing TQM in international markets where its position is still strong and its potential for future growth is the greatest. The concept of Total Quality Management is not new. Its broad-scale acceptance by major corporations since the 1970s is largely attributable to the success Japanese industrial concerns enjoyed in adapting the theories of American quality control experts W. Edwards Deming and
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h since the 1980s has grown exponentially, doubling every three to four years. Greenwald (1992) said that many giant American companies "began to falter when their managers, swollen with arrogance and complacency, allow[ed] themselves to lose touch with their customers" (p. 28). Resistant to change, Amex rejected overtures from banks, for example, to issue lower cost credit cards, to depart from its practice of charging annual fees and insisting on payment in full within 30 days, to offer frequent flyer awards with purchases or to join with other major companies such as AT&T in introducing new cards. As a result, even though its travel-related sales, included credit cards steadily rose, Amex lost market share, from a leading position in the mid-1980s to 25 percent in 1990 and 14 per cent in 1995, while its competitors Visa and Mastercard increased their shares to 48 percent and 26 percent, respectively, in 1995 (Spiro, 1994, p. 34). Upstart Visa is now five times larger than Amex. Its first attempt at entering the lower end of the credit card market through the introduction of the Optima card in 1988 resulted in large write-offs for credit losses. Even in its traditional market, the Economist said in 1992 that "Amex has lost grou
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Some common words found in the essay are:
American Express, Warren Buffett, Upstart Visa, Services IDS, Quality Forum, George Weineskirch, Clark Sr, Robinson Amex, Recommendation Amex, Karl Malden's, american express, na 1996 september, na 1996, credit card, 1996 september, card market, credit cards, total quality, market share, core business, total quality management, quality management, credit card market, 1996 september 42, post 1992 11,
Approximate Word count = 1773
Approximate Pages = 7 (250 words per page)
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