INTRODUCTION
Management can be simply defined as the act of handling, controlling or managing activities that usually involves people. It involves planning, organizing, leading and controlling. To be able to handle people is to know what people want, and to do this, the maxim “customers come first”, should be followed. Almost every management that came and has come throughout the years has followed this principle. According to Susan Clarke (2003), a certified behavior and values analyst, in order to survive in a business, a management must identify the needs and expectations of both internal and external customers. But what are the benefits that the customers, both internal and external, can get from a management that works with quality? It is easy to say that, through our every day experiences that experiencing quality service gives one a feeling of satisfaction. As the author’s own experience as a customer, quality strategy makes a customer becomes fond of the company who has put up the service, making him or her comes back for more. With all these positive effects on customers, it is a wonder how quality strategy ensure that both internal and external customers benefit in terms of customer service. How do management teams ensure the service they offer really leaves a mark of satisfaction on the customer’s face? It is a question that this paper aims to find out. The author will use theories, illustrated examples from the author’s, as well as other people’s personal experiences regarding the topic to find out whether management firms are sure that their quality strategies are really beneficial to their customers or not. The author will also use related literatures from books, articles, and journals, as well as profiles from companies that offer quality management strategy services, that would help draw the conclusion of the study.
QUALITY MANAGEMENT
To be able to answer the question: “how quality strategy ensure that both internal and external customers benefit in terms of customer service?” we must first find out what quality is, its role and importance in management, and how consumers react to it.
Quality obviously can be defined as a degree of excellence. Different people are different individuals, so it is better to define quality according to the customer’s perspective. Therefore, a firm’s products and services must be compared to the products or services offered by competitors. Usually, business firms examine quality from the perspective of management. Identifying customer requirements is not easy, so these should be examined continuously. “Companies known for product or service quality use several methods to determine desirable quality-related attributes, including customer surveys, focus groups, customer comments, constant interaction with the customer, and other methods. Once quality has been defined, a firm can test conformance and correct any problems.” Finally, companies must also know how to identify the criteria that customers use when they perceive value, a perspective that involves the concept of relative value (Buehler, 1991).
Quality is just one of the two major sources of competitive advantage. The other one is productivity. Productivity indicates how well an organization utilizes its labor, capital, and raw material resources. Improved productivity clearly reduces costs and enhances competitiveness and profitability. The relationship between quality and productivity is undeniably important. Productivity is the ratio of outputs and inputs and quality is concerned to both of these. An increase in inputs and a decline in outputs lower productivity.
The Importance of Quality
Deterioration in the quality of the products or services can disrupt schedules, delay deliveries, increase rework and scrap, waste manpower, materials, and machine time, and increase warranty costs. Poor quality products not only increase cost, but also affect sales in a sense that poor quality is mostly doomed to rejection and lessens the chance of selling or offering other products to the customer. Also, the damage to the company reputation can eventually cause incalculable losses in terms of reduced sales and market share lost to competitors.
“Businesses that improve quality acquire a competitive advantage through quality-induced product differentiation or the creation of something perceived as unique throughout the industry. Product differentiation on the basis of quality creates a defensible competitive position and protects a firm against inroads of rival firms. Customers who prefer quality products are willing to pay more. Customer loyalty and the uniqueness associated with quality are difficult barriers for new competing firms to surmount. In short, productivity and quality improvement are important sources of competitive advantage” (Buehler, 1991).
In terms of profits, quality increase profits by lowering costs, increasing sales, or a combination of both factors. Quality reduces costs and thus increases productivity in several ways. Quality also affects a firm’s sales and market share. The Sandberg Consulting Engineering located in London agrees with this. The company states in an article entitled Quality For Profit, published in their website, that “those companies with foresight fully to appreciate the bottom line benefits of consistently meeting clients specifications and of enhancing the effectiveness and efficiency of their management systems have prospered (Sandberg 2001). Powerhouse, the third largest electrical retailer in the UK, is another company who makes their products more reliable to gain more profit. The company has even sought the guidance of a competent research institute to increase the quality of their products. (www.etlsemko.com. 2003)
Theory for Quality Management
William F. Roth (1992), author of the book entitled “A Systems Approach to Quality Improvement” writes that the System Theory in Management is important in the use of quality management. He quotes that “the systems theory of management is built upon the tenet that ‘the whole is more than the sum of its parts.’ This means that when all the necessary pieces are assembled, and the relationship between them is correct, the whole created possesses characteristics of its own that go beyond those of the pieces. For a quality improvement effort to truly succeed, such a whole must evolve.”
To determine Systems Theory, we must first define system. A system is a collection of part unified to accomplish an overall goal. If one part of the system is removed, the nature of the system is changed as well. For example, a pile of sand is not a system. If one removes a sand particle, you’ve still got a pile of sand. However, a functioning car is a system. Remove the carburetor and you’ve no longer got a working car. A system can be looked at as having inputs, processes, outputs and outcomes (McNamara 1999). The principles and methods of Systems Theory resemble the scientific method. It has a hypothesis, design a controlled experiment collect data, and analyze data. “The purpose is to maintain the use of science in management to obtain “real time” results that can be used instantaneously to affect control in the organization (some have even accused systems theory of being “science in management” rather than a “science of management”). The goal is to maintain your attention on the whole at all costs. To managers, this means:
1. Define the company as a system
2. Establish system objectives (performance criteria)
3. Identify wider systems (the environment)
4. Create formal subsystems (including a humanistic, psychosocial subsystem)
5. Integrate the subsystems with the whole system (if not the subsystems themselves, whatever interrelates them with other subsystems (faculty.ncwc.edu.2001).
Systems Theory is one of the areas of expertise that are important
in the field of quality management. In applying systems theory into the quality of the product or service that the company promotes, the systematic quality improvement processes must be followed. According to Roth, systematic quality improvement processes must include five overlapping phase. The managers must undergo the familiarization, vehicle placement, training implementation of measurement techniques, and long range of strategic planning.
Ken Orr of the Ken Orr institute wrote a paper about data quality and systems theory. He concluded that, “too often, the primary focus of data quality projects is to increase the internal controls involved in entering and editing data. As laudable as these efforts are, they are ultimately doomed to failure, as are one-shot attempts to clean up data. The only way to truly improve data quality is to increase the use of that data. If an organization wants to improve data quality, it needs to insure that there is stringent use of each data element (Orr 1998).
Quality and Customers
The customers are important and satisfying their needs is one of the means for an organization or company to survive. Different strategies are being used by different companies to ensure that they would meet the quality that the customers expect. One example is the Lincoln Electric, a company that has been immensely successful in the arc welding industry. Established in 1906, it has become a world market share leader, fending off assaults from domestic and foreign rivals. James Lincoln, who was its CEO for over fifty years and molded the firm to his philosophy, firmly believed that the customer’s interests came first and employees were next in importance. He felt shareholders were relatively unimportant and would automatically be taken care of if customers and employees were (Simons, 1993).
In the book, Value-Directed Management: Organizations, Customers, and Quality (Simons, 1993), it is said that with values, a management can serve a company better. Simon (1993) asks his readers “How does one instill a sense of strategy achievement and generate the driving force of a strategy of value in the entire workforce?” He answers, “Certainly not by adhering to the traditional top-down strategy paradigm. Rather, a vibrant spirit of oneness with the firm and its strategy must be encouraged and created. Awareness, acceptance, and active pursuit of the firm’s strategy have to be consciously and constantly cultivated. Moreover, and equally importantly, a cadre of zealous and imaginative workers driven by the value metaphor needs to be established in order for strategy to link the firm at all levels to the external environment. Strategy will then become a tangible, exciting activity with customer value as its prime mover, its living core.” (Simons, 1993).
The Total Quality Management is another example of strategy that deals with quality for the satisfaction of the customers. It is a way of managing people and business processes to ensure complete customer satisfaction at every stage, internally and externally. The TQM is supported by three key management functions: people, process and systems in the organization. The core of the Total Quality Management is the customer supplier interfaces, both internally and externally and at each interface lie a number of processes. The core must be surrounded by commitment to quality, communication of the quality message, and recognition of the need to change the culture of the organization to create total quality. (Dept. of Trade and Industry, UK 2003)
In each organization, divisions and sub-divisions exists a series of customers, suppliers and customer-supplier interfaces, which are called the quality chains. These chains can be broken down at any point where one the three included in quality chains do not meet the requirements necessary for one to respond positively. Failure to meet the requirements on any part of the quality chain has a way of multiplying. It also creates problem elsewhere leading to more failures. Having the ability to meet the customers’ need is vital. The persons in the quality chain must be trained to know how to handle the customer-supplier interface, like knowing the customers, finding out their true needs and expectations, knowing how to measure ones ability to meet the customers needs and expectations, continually meeting their needs and expectations, and knowing how to monitor their change in needs and expectations. Regarding the suppliers, a customer should know first who his internal suppliers are, then his true needs and expectations from them. A customer must also know how to communicate with his suppliers and to find out if they do have the ability to meet his expectations. Finally, to know how to inform his supplier the changes he wants in his needs and expectations. (Dept. of Trade and Industry, UK 2003)
The ideal solution is to have an open partnership style between customers and suppliers, where both share and benefit. But the TQM is beneficial only if the management would distinguish and avoid certain bad habits and practices that would be harmful to the system. It includes practices like not giving clear directions, not understanding or ignoring competitive position, each department working only for itself, trying to control people through systems, confusing quality with grade, accepting that a level of effects or errors are inevitable, firefighting reactive attitude, and the “it’s not my problem attitude. Also, the organization must learn to address the culture in the organization as well as individual cultures of the employees (Dept. of Trade and Industry, UK 2003). So basically, in Total Management Quality, a leader, to totally ensure quality, must be knowledgeable about his customers, the customers, as well as the company’s culture, and the capacity of the company to meet the customers’ expectations, and the customers’ capacity to need their products or services.
Kathleen Cotton (2001) researched the application of TQM in the Secondary Education in Mt. Edgecumbe High School at Sitka, Alaska, and came up with positive results. By applying the following guidelines:
The following results have been observed:
1. Resources and teaching activities are reviewed for content and appropriateness and are modified according to experience to increase their effectiveness in helping students learn.
2. Objectives may be posted or handed out to help students keep a sense of direction. Teachers check to see that objectives are understood.
3. Teachers are sensitive to the learning style differences among students, and, when feasible, they try to identify and use learning strategies and materials which are appropriate to differing styles.
4. Students are taught strategies for learning and for remembering and applying what they have learned….
5. Teachers communicate interest and caring to students both verbally and through such nonverbal means as giving undivided attention, maintaining eye contact, smiling, and positive head nodding.
6. Students are allowed and encouraged to develop a sense of responsibility and self-reliance. Older students, in particular, are given opportunities to take responsibility for school-related matters and to participate in making decisions about important school issues.
7. Teachers foster positive teacher-student and student-student relationships through the use of cooperative learning strategies.
8. The principal and other administrators continually express expectations for improvement of the instructional program.
9. No one is complacent about student achievement; there is an expectation that educational programs will be changed so that they work better.
The company Analog Devices Incorporated also applies the Total Management Quality strategy in their business. The company that specializes in data quotes that “Analog Devices is committed to Total Quality Management and the philosophy of continuous improvement embodied in its principles. It is our objective to learn continuously from each other, our customers, and our suppliers, and to work together to improve our processes, our services, and our products. TQM has provided the framework and equipped us with the tools to face the challenges of this journey.” The Analog Devices also added, “We are proud of our teams and their accomplishments, and of the success that our TQM program has helped Analog Devices to achieve. We invite you to participate in our program and are anxious to hear any suggestions or observations you may have about our work (Analog Devices Inc. 1995-2003). “
The company Statistics Finland Inc., a company that specializes in statistics also implements the Total Management Quality strategy in their company. It is their way of ensuring their customers that what they receive is true customer service. They include that good performance capacity is built on the following characteristics:
1. Results orientation:
Excellence is dependent upon balancing and satisfying the needs of all: employees, customers, data suppliers and society in general.
2. Customer focus:
A clear focus on the needs of current and potential customers when planning products, services and lines of action.
3. Leadership and constancy of purpose:
The behavior of an organization’s leaders creates a clarity and unity of purpose within the organization and an environment in which the organization and its people can excel.
4. Management by processes and facts:
Organizations perform more effectively when all inter-related activities are understood and systematically managed and decisions concerning current operations and planned improvements are made using reliable information.
5. Personnel development and involvement:
Shared values and a culture of trust and empowerment encourage everyone and merges the organization’s goals with the interests of the personnel.
6. Continuous learning, innovation and improvement:
The management and sharing of knowledge within a culture of continuous learning, innovation and improvement enables an organization to develop to the utmost and to become distinguished from others.
7. Development of partnerships:
An organization works more effectively when it has mutually beneficial relationships with its partners, built on trust knowledge and integration.
8. Public responsibility:
Exemplary enterprise citizenship. (Laiho, No Date)
Conclusion
Quality is delighting the customers by simply meeting their needs and expectations. Quality makes the customers come back for more, and to ensure that, the customers must really feel satisfied. As a former employee of the government, the author has encountered many experiences that will prove that quality service, and really meaning it, leads to customer satisfaction in the extent that the customers would not want to transact with anyone anymore but with the one that that customer has become fond of. As a customer, the author has a great need for quality service. One reason is because it provides comfort, satisfaction and trust. The author feels that being a customer, he make sure that that service he is about to get is with the quality that he wants.
This term paper came up with the conclusion that quality strategy can ensure that customers, both internal and external, benefit in terms of customer service by using the right theory, applying the total management quality strategy, giving importance into values, implementing all of these correctly and diligently, and avoiding practices that would lower the quality of the service like not giving clear directions, not understanding or ignoring competitive position, each department working only for itself, trying to control people through systems, confusing quality with grade, accepting that a level of effects or errors are inevitable, firefighting reactive attitude, and the “it’s not my problem” attitude. Also, this paper concludes that by using, the Total Quality Management strategy, the companies used as example previously, honestly ensures their customers that the benefits they receive is genuine and real.
Bibliography
Analog Devices Inc., (1995-2003). Total Quality Management (TQM).
http://www.analog.com/
Arogyaswamy, Bernard, Simons, R.P., (1993). Value-Directed
Management: Organizations, Customers, and Quality. p. 6 -53. Quorum Books. Place of Publication: Westport, CT.
Buehler, Vernon M. (1991). The Quest for Competitiveness: Lessons
from America’s Productivity and Quality. p. 5 – 9. Praeger Publishers. Place of Publication: New York
Cotton, Kathleen, (2001). Applying Total Quality Management Principles
To Secondary Education. http://www.nwrel.org/scpd/sirs/9/s035.html
Department of Trade and Industry, UK (2003). Total Quality
Management (TQM) p. 1-5. www.gov.dti.uk/quality/tqm.
Orr, Ken (1996, 1997, 1998). Data Quality and Systems Theory.
Communications of the ACM, May 1998, W. Wanamaker Drive, Topeka
Roth, William F. (1992). A Systems Approach to Quality Improvement,
p. 1–13. Praeger Publishers. Place of Publication: New York.
www.etlsemko.com (2003). Retailer Invests in Quality and Profit.
www.etlsemko.com
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