Differing Perspectives on Quality Chapter 1 Differing Perspectives on Quality S. Thomas Foster, Jr. Boise State University PowerPoint prepared by Dave Magee University of Kentucky Lexington Community College ©2004 Prentice-Hall

Chapter Overview Recognizing Different Perspectives on Quality What is Quality? Differing Functional Perspectives on Quality The Three Spheres of Quality Other Perspectives on Quality Arriving at a Common Understanding of Quality using a Contingency Perspective of Quality

Recognizing Different Perspectives on Quality There are many different definitions and dimensions of quality. For the present, you should view quality as a measure of goodness that is inherent to a product or service. Employees working for the same firm often view quality differently as illustrated in the next slide. Perceptions on Quality Can Vary In order to communicate effectively about quality, managers need to recognize that differences in perceptions of quality exist.

What Is Quality? Garvin’s Definitions of Quality David Garvin of the Harvard Business School found that most definitions of quality were either transcendent, product-based, user-based, manufacturing-based, or value-based. Garvin’s Dimensions of Product Quality Using the five definitions of quality, Garvin developed a list of eight quality dimensions. Service Quality Dimensions Parasuraman, Zeithamel, and Berry of Texas A&M University published a widely recognized set of service quality dimensions.

Garvin’s Definitions of Quality Slide 1 of 2 Transcendent Definition Quality is something that is intuitively understood but nearly impossible to communicate such as beauty or love. Product-Based Definition Quality is found in the components and attributes of a product. User-Based Definition If the customer is satisfied, the product has good quality.

Garvin’s Definitions of Quality Slide 2 of 2 Manufacturing Based Definition If the product conforms to design specifications, it has good quality. Value-Based Definition If the product is perceived as providing good value for the price, it has good quality.

Garvin’s Product Quality Dimensions Slide 1 of 3 Performance Features Durability Reliability Serviceability Conformance Aesthetics Perceived Quality

Garvin’s Product Quality Dimensions Slide 2 of 3 Performance Refers to the efficiency with which a product achieves its intended purpose. Features Attributes of a product that supplement a product’s basic performance. Reliability The propensity for a product to perform consistently over its useful design life. Conformance Numerical dimensions for a product’s performance, such as capacity, speed, size, durability, color, or the like.

Garvin’s Product Quality Dimensions Slide 3 of 3 Durability The degree to which a product tolerates stress or trauma without failing. Serviceability Ease of repair. Aesthetics Subjective sensory characteristics such as taste, feel, sound, look, and smell. Perceived Quality Based on customer opinion. Customers imbue products and services with their understanding of their goodness.

Service Quality Dimensions Slide 1 of 3 Parasuraman, Zeithamel, and Berry’s Service Quality Dimensions Tangibles Responsiveness Service Reliability Assurance Empathy

Service Quality Dimensions Slide 2 of 3 Tangibles Include the physical appearance of the service facility, the equipment, the personnel, and the communication material. Service Reliability Differs from product reliability in that it relates to the ability of the service provider to perform the promised service dependably and accurately. Responsiveness The willingness of the service provider to be helpful and prompt in providing service.

Service Quality Dimensions Slide 3 of 3 Assurance The knowledge and courtesy of employees and their ability to inspire trust and confidence. Empathy Caring, individual attention paid to customers by the service firm.

Why Does It Matter That Difference Definitions of Quality Exist? Understanding that definitions and dimensions of quality exist allows measures to be taken to provide a better basis for communication and planning in a firm.

Differing Functional Perspectives on Quality Engineering Perspective Operations Perspective Strategic Management Perspective Marketing Perspective Financial Perspective Human Resources Perspective

Engineering Perspective on Quality Slide 1 of 4 Nature of Engineering Perspective Engineers are interested in applying mathematical problem solving skills and models to the problems of business and industry. Two of the major emphases in engineering Product design Process design

Engineering Perspective on Quality Slide 2 of 4 Product Design Engineering Involves all of those activities associated with developing a product from concept development to final design and implementation. Product design life cycle Key to quality as quality is assured at the design stage. Concurrent engineering The simultaneous performance of product and process design activities. Has resulted in improved quality and faster speed to market for new products.

Engineering Perspective on Quality Slide 3 of 4 Product Design Life Cycle Figure 1.1 Idea Generation Prototype Iterations Preliminary Design Prototype Development Final Definition Product Design & Evaluation Implemen- tation

Engineering Perspective on Quality Slide 4 of 4 Related Concepts Life Testing Is a facet of reliability engineering that concerns itself with determining whether a product will fail under controlled conditions during a specified life. Redundancy Is applied so that a back up system can take over for the failed primary system. Statistical Process Control Is concerned with monitoring process capability and process stability.

Operations Perspective on Quality Slide 1 of 6 Nature of Operations Perspective The operations management view of quality is rooted in the engineering approach. Like engineers, operations managers are very concerned about product and process design. However, rather than focusing on only the technical aspects of these activities, operations concentrates of the management of these activities. Operations management has developed into an integrative field, combining concepts from engineering, operations research, organizational theory, organizational behavior, and strategic management.

Operations Perspective on Quality Slide 2 of 6 Systems View Operations management utilizes the systems view to address quality problems that underlies modern quality management thinking. The systems view involves the understanding that product quality is the result of the interactions of several variables such as machines, labor, procedures, planning, and management.

Operations Perspective on Quality Slide 3 of 6 The Systems View of Operation Management Figure 1.3 Planning Organizing Inputs Conversion Process Outputs Customers Feedback Controlling

Operations Perspective on Quality Slide 4 of 6 Operations/Marketing Interface In recent years, a major advance in operations management has been the improved understanding of the operations/marketing interface. The interface has resulted in an increased focus on the customer. This externalized view is important as operations managers in firms still tend to be focused heavily on meeting production schedules, sometimes at the expense of good quality.

Operations Perspective on Quality Slide 5 of 6 Strategic View of Operations Management Among the recent advances in operations management has been a migration towards a more strategic view. Ferdows and Demeyer linked this strategic view of operations management to quality management by proposing the Sand Cone Model in which quality was identified as the base on which lasting improvement in other competitive dimensions were established.

Operations Perspective on Quality Slide 6 of 6 An Operations Management Competence Model The Sand Cone Model Figure 1.4 Cost Efficiency Speed Dependability Quality

Strategic Management Perspective on Quality Slide 1 of 3 Nature of the Strategic Management Perspective Strategy refers to the planning processes used by an organization to achieve a set of long term goals. The planned course of action must be cohesive and coherent in terms of goals, policies, plans, and sequencing to achieve quality improvement. Initially, quality-related strategic planning was treated as if it were a separate exercise from firm-level strategic planning. However, quality management, to become pervasive in a firm, needed to be included in all of the firm’s business practices, including strategic planning.

Strategic Management Perspective on Quality Slide 2 of 3 A Generic Strategic Planning Process Figure 1.5 Firm Mission and Goals External Analysis Internal Analysis Strategic Options Business Level Strategy Corporate Level Strategy Operational Subplans Organizational Design Org. Reward Systems Conflict Politics and Change Strategic Alignment Between Structure and Goals

Strategic Management Perspective on Quality Slide 3 of 3 Goal of Strategic Quality Planning The ultimate goal of strategic quality planning is to aid an organization to achieve sustainable competitive advantage. Research shows that quality is still the major concern of CEOs.

Marketing Perspective on Quality Slide 1 of 3 Nature of Marketing Perspective Marketing efforts are often focused on managing perceptions of quality. Relationship Management Directing attention toward satisfying and delivering value to the customer. Tools for Influencing Customer Perceptions of Quality Price and advertising are the primary tools for influencing customer perceptions of quality, but are imperfect mechanisms.

Marketing Perspective on Quality Slide 2 of 3 A Marketing System Figure 1.7 Organization Offering Payment Intermediary Offering Payment Offering Payment Customer

Marketing Perspective on Quality Slide 3 of 3 Focus on Service Another important contribution of the marketing perspective has been the focus on service. Customer service surveys are important tools for assessing the multiple dimensions of quality.

Financial Perspective on Quality Slide 1 of 4 Nature of the Financial Perspective One of the most commonly asked questions about quality management is “will it pay us financial benefits?” The financial perspective relies more on quantified, measurable, results-oriented thinking. W. Edwards Deming made the first theoretical attempt to link quality improvements to financial results through the “Deming Value Chain.”

Financial Perspective on Quality Slide 2 of 4 The Deming Value Chain Figure 1.8 Improve Quality Cost decrease because of less rework, fewer mistakes, fewer delays, snags; better use of machine-time and materials Productivity Improves Capture the Market Stay in Business Provide Jobs and More Jobs

Financial Perspective on Quality Slide 3 of 4 Law of Diminishing Marginal Returns According to this law, there is a point at which investments in quality improvement will become uneconomical. According to the quadratic economic quality level model, higher levels of quality will result in higher expenditures. This view is at odds with the ethic of continual improvement.

Financial Perspective on Quality Slide 4 of 4 Basic Economic Quality Level Model Figure 1.9 Cost Total Quality Costs = Sum of Losses and Gains Costs of Improving Quality Minimum Cost Losses due to poor quality Optimum Quality Level Quality

Human Resources Perspective on Quality Slide 1 of 3 Nature of Human Resources Perspective Understanding the human resources perspective on quality is essential as it is impossible to implement quality without the commitment and action of employees. Related Concepts Employee Empowerment Organizational Design Job Analysis 360-degree evaluation Total Quality Human Resources Management

Human Resource Perspective on Quality Slide 2 of 3 Employee Empowerment Empowering employees involves moving decision making to the lowest level in the organization. Organizational Design Human resources managers are involved in many aspects of organizational design, such as the design of reward systems, pay systems, organizational structure, compensation, training mechanisms, and employee grievance arbitration. Job Analysis Involves collecting detailed information about a particular job.

Human Resource Perspective on Quality Slide 3 of 3 360-Degree Evaluation A performance measurement system in which an employee’s peers, supervisors, and subordinates are involved in evaluating the worker’s performance. Total Quality Human Resources Management (TQHRM) TQHRM involves many of the concepts of quality management to provide a more supportive and empowered environment.

The Three Spheres of Quality Slide 1 of 4 Figure 1.10 Quality Management Quality Assurance Quality Control

The Three Spheres of Quality Slide 2 of 4 Quality Control Includes phases of analysis, relation, and generalization. Activities relating to quality control include: Monitoring process capability and stability Measuring process performance Reducing process variability Optimizing processes to nominal measures Performing acceptance sampling Developing and maintaining control charts

The Three Spheres of Quality Slide 3 of 4 Quality Assurance Refers to activities associated with guaranteeing the quality of a product or service. Quality assurance activities include tasks such as: Failure mode and effects analysis Concurrent engineering Experimental design Process improvements Design team formation and management Off-line experimentation Reliability/durability product testing

The Three Spheres of Quality Slide 4 of 4 Quality Management The management processes that overarch and tie together the control and assurance activities. Quality management activities: Planning for quality improvement. Creating a quality organizational culture. Providing leadership and support. Providing training and retraining. Designing an organizational system that reinforces quality ideals. Providing employee recognition. Facilitating organizational communication.

Other Perspectives on Quality Slide 1 of 2 The Value-Added Perspective on Quality A customer-based perspective on quality that is utilized by services, manufacturing, and public sector organizations. Involves a subjective assessment of the efficacy of every step of the process for the customer.

Other Perspectives on Quality Slide 2 of 2 Cultural Perspectives on Quality International marketers have long noted that there are differences in tastes and preferences between cultures and nations. It is not so obvious that approaches to quality improvement may differ according to culture.

Contingency Approach to Quality Contingency Theory Contingency theory presupposes that there is no theory or method for operating a business that can be applied in all situations. As a result, a coherent quality strategy will need to address key environmental variables. Contingency Approach Definitions and dimensions of quality applied within an organization will, and should vary. Dimensions of quality will depend on the environment in which a company operates. Provides flexibility to managers in pursuing quality.

Chapter Summary Recognizing Different Perspectives on Quality What is Quality? Differing Functional Perspectives on Quality The Three Spheres of Quality Other Perspectives on Quality Arriving at a Common Understanding of Quality using a Contingency Perspective of Quality