7 Quality Organizations and Service

PERFORMANCE PROFITS CUSTOMERS

After studying these topics, you will benefit by: Knowing how organizational structures and functions influence quality and customer satisfaction Naming the key elements and purpose of a company strategy Illustrating and interpreting an organizational chart Defining quality and its importance in business

After studying these topics, you will benefit by: Researching methods of increasing one’s creativity and innovation Explaining how customer service affects performance and profits Describing how best to handle a difficult customer

PRODUCTIVITY IN A QUALITY-FOCUSED WORKPLACE Productivity: to perform a function that adds value to the company Whatever you produce (output) should add value to the company Productivity at work starts with: Ethics Attitude Goals

PRODUCTIVITY IN THE WORKPLACE Mission Statement: a statement of purpose (what and why) Vision Statement: a company’s viable view of the future (where) Values Statement: standard of behavior (how) Directional Statements: foundation for why a company exists and how it will operate (mission, vision, and value)

PRODUCTIVITY IN THE WORKPLACE Company Strategy Strategy: outlines major goals and objectives and serves as a company road map Strategic plan: a formal document that identifies how the company will secure, organize, use, and monitor its resources Company resources Human (employees) Fiscal (financial) Capital (long-term investments)

PRODUCTIVITY IN THE WORKPLACE Company Strategy Goal: a target. Describes what needs to be achieved Objectives: short-term goals (specific activities) that support a goal; objectives have timelines and are measurable

TOPIC SITUATION Juan Joins a Committee What additional advantages will Juan gain if he joins the committee? How can Juan prepare for this experience?

LINES OF AUTHORITY President Marketing Vice President Operations Finance Mgmt. Info. Systems Sales Advertising Production Distribution Accounting Director Computer Accounts Receivable Supervisor Payable Organizational structure: the way a company is organized Organization chart: a graphic display of the formal lines of authority. Identifies key functions within the company Figure 7-1

TOPIC SITUATION Lucia Meets the CEO Why should you know a company’s organizational structure and identities of key executives?

LINES OF AUTHORITY Company Structure: Key Titles Investors/ Owners Board of Directors President/C.E.O. Senior Management (Vice Presidents) Middle Management (Directors, Managers) Operation Managers (Supervisors, Assistant Managers) Employees Company Structure: Key Titles The Leader-reports to Board Responsible for overall strategy and policies Assists President/CEO in identifying and implement company strategy Work on tactical issues (link strategy into day-to-day operations Work on operational issues (daily issues) Figure 7-2

LINES OF AUTHORITY Major Organizational Functions Divisions: major functions within a business Departments: carry out specific functions within divisions Key business functions Finance and accounting Human resource management Operations Information systems Marketing Legal counsel

LINES OF AUTHORITY Finance and Accounting: area responsible for securing the distribution and growth of a company’s financial assets Capital budget: long-term investments Operational budget: short-term items

LINES OF AUTHORITY Human Resources: area responsible for recruiting, hiring, training, evaluating, compensating, promoting, and terminating employees Deals with the employee (people) side of business

LINES OF AUTHORITY Operations: area that deals with the production and distribution of the company’s product Information Systems (IS): deals with electronic management of information within an organization Routinely back-up files Empty electronic trash bin Conduct routine virus checks Responsible for reported computer viruses and system problems

LINES OF AUTHORITY Marketing: area responsible for creating, pricing, selling, distributing, and promoting the company’s product Every employee is a walking billboard for the company Legal Counsel: handles all legal matters relating to the business Check with company legal counsel prior to engaging in a contract on behalf of the company

TOPIC SITUATION Max Orders Supplies What should Max do? Justify your response.

QUALITY AND THE COMPANY A building, its employees, and the product produced are major elements that define a company, but a company needs customers to succeed Each job in the company has a purpose Do your best at all times

THINK ABOUT IT Why do some employees not care about quality?

QUALITY AND THE COMPANY Important Company Elements Customer loyalty Employee loyalty Profit

QUALITY AND THE COMPANY Quality: a predetermined standard that defines how a product is to be provided Customers demand quality in the product and from the company’s employees If customers don’t perceive that they have received a quality product, they will not make a repeat purchase

QUALITY AND THE COMPANY Customer Loyalty Customers will repeat purchases when they receive value and a quality product Companies want to build brand loyalty with customers Customers will be loyal to a company and its products when quality products and customer service are consistently provided Value: customers believe they received a good deal for the price they paid

QUALITY AND THE COMPANY Employee Loyalty Employee loyalty: an employee’s obligation to consistently support a company and its mission Do your job and do it well Show respect for company policies, your coworkers, and the company’s customers Promote the company and its products Do not speak poorly of your company, coworkers, or the company’s product

QUALITY AND THE COMPANY Profits The success of a company depends on profit Profit: revenue minus expenses Revenue: money coming in from sales Expenses: costs involved in running the business As profits increase, the company can grow

QUALITY AND THE COMPANY Product vs. Good vs. Service Product: what is produced by a company; this can be a good, a service, or both Good: a tangible item, something that you can physically see or touch Service: an intangible product, in other words, you cannot touch or see the product

Quality Employees + Quality Inputs WHO IS THE CUSTOMER? To create a satisfied customer, you need a high-quality product or service and excellent customer service Quality Employees + Quality Inputs = Quality Products = Satisfied, Loyal Customers = Profits

QUALITY When it comes to quality, the expectation of customers is high Customers expect that a product will last Value: when customers believe they are getting a good deal for the price they paid Customers expect value Customers measure product quality by comparing your product to similar products

CREATIVITY AND INNOVATION Creativity: coming up with a new and unique good, service, or system. A creative person will ask, “what if” instead of being constrained by the barrier of an item’s or service’s original use Innovation: process of turning a creative idea into reality

TALK IT OUT Discuss the difference between a service and customer service.

EXCELLENT CUSTOMER SERVICE DEFINED Customer: an individual or business that buys or uses the company’s product A company cannot survive without customers Internal customers exist within a company Coworkers and other departments External customers are individuals whom the company serves outside Customers, vendors, and investors

EXCELLENT CUSTOMER SERVICE DEFINED Customer Service: the treatment an employee provides a customer Respect and kindness Competent: an employee who knows the product his or her company offers Dependable: an employee who is reliable and takes responsibility to assist a customer Responsive: an employee who provides a customer personal attention

EXCELLENT CUSTOMER SERVICE Impressions As soon as a customer comes in contact with a business, an opinion is formed about that business There is only one first impression, so it must be good The appearance of the building and/or employees can be the reason a customer comes to your company in the first place

TALK IT OUT How does personal appearance influence a customer’s trust and perception of you?

THE IMPACT OF CUSTOMER SERVICE Get to know your customers Excellent customer service is the biggest reason customers return Build a relationship with the customer that will make him or her loyal to you and your business A business needs satisfied customers to not only make repeat purchases but also to tell others about their favorable experience

TALK IT OUT How should you handle a situation when you observe a verbal conflict between two employees that is taking place in front of a customer?

THE DIFFICULT CUSTOMER “The customer is always right” The customer may not be right Although the customer may be wrong, adopt an attitude that the customer is unhappy and do all you can to help the customer solve the problem Have patience and sympathize with the customer

THINK ABOUT IT How do you normally respond to conflict? Does your response hinder or help you provide appropriate service to a difficult customer?

TOPIC SITUATION Kiana and Customer Service What specific actions did the pizza shop take to display excellent customer service to Kiana?

THE DIFFICULT CUSTOMER Tips for Handling the Customer Stay calm, let the customer talk, and listen for facts—let the customer vent for a few minutes, do not interrupt or say “please calm down,” do not take harsh words personally Watch body language—tone of voice, eye contact, and arm movement; if you feel a customer has the potential to become violent or physically abusive, immediately seek assistance Acknowledge the customer’s frustration—say, “I can understand why you are upset,” and summarize the concern to let him or her know you understand

THE DIFFICULT CUSTOMER Tips for Handling the Customer (cont.) Make sure the problem gets solved—try to take care of the problem yourself Know company policy—if a customer challenges a policy, calmly and politely explain the purpose of the policy Expect conflict, but do not accept abuse—if a customer shows aggressiveness or is cursing, politely tell that customer you cannot help until he or she is able to treat you in a respectful manner; if he or she continues the inappropriate behavior, immediately call a supervisor

TALK IT OUT If a customer is angry, with a raised voice, how should you respond to that customer?