5-Quality as Strategy
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Transcript of 5-Quality as Strategy
Chapter 4Chapter 4
©2001 Prentice-Hall©2001 Prentice-Hall©2001 Prentice-Hall©2001 Prentice-Hall
S. Thomas Foster, Jr.S. Thomas Foster, Jr.Boise State UniversityBoise State University
Slides Prepared bySlides Prepared byBruce R. BarringerBruce R. Barringer
University of Central FloridaUniversity of Central Florida
S. Thomas Foster, Jr.S. Thomas Foster, Jr.Boise State UniversityBoise State University
Slides Prepared bySlides Prepared byBruce R. BarringerBruce R. Barringer
University of Central FloridaUniversity of Central Florida
Strategic Quality PlanningStrategic Quality Planning
Source: Source: asgard.kent.edu/mis/syllabi/Summer2002/Chapter4Polin44150.ppt asgard.kent.edu/mis/syllabi/Summer2002/Chapter4Polin44150.ppt
Only Slide Nos.15 to 22 on “Quality as Strategy”Only Slide Nos.15 to 22 on “Quality as Strategy”are relevant for BS-IIare relevant for BS-II
Transparency 4-2Transparency 4-2© 2001 Prentice-Hall© 2001 Prentice-Hall
Chapter OverviewSlide 1 of 2
Chapter OverviewSlide 1 of 2
• Strategy Content
• The Importance of Time in Quality Improvement
• Leadership for Quality
• Quality and Ethics
• Quality as a Strategy
• Quality Strategy Process
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Chapter OverviewSlide 2 of 2
Chapter OverviewSlide 2 of 2
• Deploying Quality (Hoshin Kanri)
• Does Quality Lead to Better Business Results?
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Strategy Content1 of 2
Strategy Content1 of 2
• Why is Quality Planning Important?– As we have discussed in previous chapters,
quality improvement is a planned managerial activity.
– Quality improvement involves identifying potential improvements, prioritizing potential areas for improvement, and planning the implementation of projects and improvements.
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Strategy Content2 of 2
Strategy Content2 of 2
• Strategy Content Variables– Among the strategy content variables we
discuss are time, leadership, quality costs, generic strategies, orders winners, and quality as a core competency.
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The Importance of Time in Quality Improvement
The Importance of Time in Quality Improvement
• Two Important Aspects of Time– There are two aspects of time that we discuss:
• The time it takes to achieve business goals as a result of quality.
• The speed at which companies improve.
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Leadership For QualitySlide 1 of 5
Leadership For QualitySlide 1 of 5
• Leadership– Leadership is the process by which a leader
influences a group to move toward the attainment of superordinate goals.
• Superordinate goals are those goals that pertain to achieving a higher end that benefits not just the individual, but the group.
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Leadership For QualitySlide 2 of 5
Leadership For QualitySlide 2 of 5
Types of Power
Power of Expertise Reward Power
Sometimes a leader has special knowledge (or is perceived to have special
knowledge).
If a leader has rewards that he or she can
bestow on subordinates in return for some
desirable position, the leader has reward
power.
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Leadership For QualitySlide 3 of 5
Leadership For QualitySlide 3 of 5
Types of Power
Coercive Power Referent Power
If the leader has power to punish the follower for not following rules or
guidelines, the leader has coercive power.
If a leader is charismatic or charming and is
followed because he or she is liked, then the leader has referent
power.
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Leadership For QualitySlide 4 of 5
Leadership For QualitySlide 4 of 5
Types of Power
Legitimate Power
Legitimate power comes with the position.
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Leadership For QualitySlide 5 of 5
Leadership For QualitySlide 5 of 5
• Leadership Dimensions– Trait dimension
• Leadership characteristics tied to the personal “traits” of leaders (such as height and intelligence).
– Leader skills• Attributes such as knowledge, communication,
planning, and vision.
– Leader behavior• This approach discusses how leaders behave to
identify specific leadership styles and the effects of leadership style on subordinate performance.
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How Leaders Resolve ConflictSlide 1 of 2
How Leaders Resolve ConflictSlide 1 of 2
• Passive Conflict Resolution– Some managers and leaders ignore conflict.
• Win-win– Leaders might seek solutions to problems that
satisfy both sides of a conflict by providing win-win scenarios.
• Structured Problem Solving– Conflicts can be resolved in a fact-based
manner by gathering data regarding the problem and have the data analyzed by a disinterested observer.
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How Leaders Resolve ConflictSlide 2 of 2
How Leaders Resolve ConflictSlide 2 of 2
• Confronting Conflict– At times, it is best to confront the conflict and
help subordinates resolve conflicts.
• Choosing a Winner– In some cases the leader may choose a winner
of the conflict and develop a plan of action for conflict resolution between the parties.
• Selecting a Better Alternative– Sometimes there is an alternative neither of the
parties to the conflict has considered.
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Quality and EthicsQuality and Ethics
Quality appears to be good business. Quality is also good ethics. It is unethical to ship defective products knowingly to a customer. Reliable products reflect an
ethical approach to management.
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Quality as StrategySlide 1 of 8
Quality as StrategySlide 1 of 8
• Quality as a Strategy– We now discuss quality as a strategy from the
perspective of generic strategies. These generic strategies are cost, differentiation, and focus
• Costs of Quality– There are two broad categories of costs: costs
due to poor quality and costs associated with improving quality.
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Quality as StrategySlide 2 of 8
Quality as StrategySlide 2 of 8
• PAF Paradigm– Prevention costs are those costs associated with
preventing defects and imperfections from occurring.
– Appraisal costs are associated with the direct costs of measuring quality.
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Quality as StrategySlide 3 of 8
Quality as StrategySlide 3 of 8
Examples of Appraisal Costs
Laboratory acceptance testing
Inspection and tests by inspectors
Inspection and tests by noninspectors
Set-up for inspection and testing
Product quality audits
Review of test and inspection data
On-site performance tests
ISO 9000 qualification activates
Quality award assessments
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Quality as StrategySlide 4 of 8
Quality as StrategySlide 4 of 8
• PAF Paradigm (continued)– Failure costs are roughly categorized into two
areas of costs.• Internal failure costs are those associated with on-
line failure.
• External failure costs are associated with product failure after the production process.
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Quality as StrategySlide 5 of 8
Quality as StrategySlide 5 of 8
Lundvall-Juran ModelCost
Conformance
C 1 ==Prevention & appraisal costs C 2 ==
Failure Costs
C 1 C 2+
00 11qq
c
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Quality as StrategySlide 6 of 8
Quality as StrategySlide 6 of 8
• Differentiation Through Quality– Differentiation is achieved by a competitor if
the customer perceives the product or service to be unique in an important way
• Quality Through Focus– Think of a product that is particularly regional
or is marked to a particular group. That limited region or group is the object of the focus strategy.
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Quality as StrategySlide 7 of 8
Quality as StrategySlide 7 of 8
• Order Winners– Terry Hill of the London Business School
defined a process for setting strategy that is centered on the identification of the order winning criteria (OWC).
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Quality as StrategySlide 8 of 8
Quality as StrategySlide 8 of 8
• Quality as Core Competency– Quality, in and of itself, is probably not a core
competency.– However, core competency is built on the
foundation of a long-term commitment to quality and continual process improvement.
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Quality Strategy ProcessSlide 1 of 2
Quality Strategy ProcessSlide 1 of 2
• Forced-Choice Model– The forced-choice model, pictured in the
following slide, is one of several strategic-planning models that could be adapted to demonstrate integrated quality planning.
– The forced-choice model is particularly useful for companies that are relatively inexperienced in strategic planning.
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Quality Strategy ProcessSlide 2 of 2
Quality Strategy ProcessSlide 2 of 2
Forced-Choice Model
Environmental AssessmentEnvironmental Assessment Organization’s PositionOrganization’s Position
Strategic options
Requirements for implementing options
Contingency plans
Statement of mission
Interrelated set of financial and nonfinancial objectives
Statement of strengths and weaknesses
Forecast of operational needs
Major future programs
Broad economic assumptions
Key government and regulatory issues
Major technological forces
Significant market opportunities and threats
Explicit strategies of competitors
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Deploying Quality (Hoshin Kanri)Slide 1 of 2
Deploying Quality (Hoshin Kanri)Slide 1 of 2
• Hoshin– Hoshin is Japanese for a compass, a course, a
policy, or a plan.• Kanri refers to management control. In English,
this is generally referred to as policy deployment.
• Hoshin Process– Figure 4.4 in the textbook gives an overview of
the Hoshin process.
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Deploying Quality (Hoshin Kanri)Slide 2 of 2
Deploying Quality (Hoshin Kanri)Slide 2 of 2
• Hoshin Process– The company develops a three-to-five year
plan, and senior executives develop the current year’s Hoshin objectives.
– Then the process of catchball occurs.
• Catchball– Is the terms used to describe the interactive
nature of the Hoshin planning process.
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Does Quality Lead to Better Business Results?
Slide 1 of 3
Does Quality Lead to Better Business Results?
Slide 1 of 3
• “Do Quality Efforts Pay Off?”– The effects of quality on business results is
mixed. – There are two primary reasons for this:
• First, there are many variables that affect profitability besides quality.
• Second, many companies implement quality incorrectly.
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Does Quality Lead to Better Business Results?
Slide 2 of 3
Does Quality Lead to Better Business Results?
Slide 2 of 3
• Quality and Price– The price-quality relationship becomes
increasingly unclear when culture differences in an international setting are considered.
• Quality and Cost– A fundamental difference exists between a low-
cost strategy based on competitive pricing, and a low-cost orientation that is based on continual learning and production competence.
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Does Quality Lead to Better Business Results?
Slide 3 of 3
Does Quality Lead to Better Business Results?
Slide 3 of 3
• Quality and Productivity– The relationship between quality and
productivity is clear. The elimination of waste results in higher productivity.
• Quality and Profitability– High quality is no guarantee of success. Firms
must still successfully market, manage cash, and do the many other things that ensure profitability.