QUALITY AND WORK FORCE MANAGEMENT PRACTICES: THE MANAGERIAL PERFORMANCE IMPLICATION

Quality has been in the limelight as organizations have sought to create a competitive advantage and theorists have sought to understand the implications of quality management. This paper examines the synergistic effects of the quality emphasis in the organizations, the use of appropriate work force management practices, and the managerial performance outcomes as interactive phenomena. Using data from multiple levels of employees in manufacturing units in various industries, we tested hypotheses regarding the managerial performance impact of the synergy in work force management practices and the quality emphasis. The results indicate that the effectiveness of work force management practices in enhancing managerial performance varies with the emphasis on quality that is manifested by meeting and exceeding customer needs and preferences through accurate, consistent, reliable, and durable products, and by making design changes in the products as desired by the customer.     

ENVIRONMENTAL PERFORMANCE AS A DRIVER OF SUPERIOR QUALITY

We explore theoretically and empirically how efforts to enhance environmental performance may enable other types of manufacturing improvements. Drawing on a unique data set comprised of detailed surveys of 42 automotive assembly plants, associated quality metrics, and in‐depth qualitative data from 17 automotive assembly plants, we show that attaining superior environmental performance can be a significant driver of superior quality. We highlight the synergistic and reciprocal nature of environmental and broader manufacturing improvement efforts, and show that environmental improvement tools and know‐how can be an important source of competitive advantage.     

TOTAL QUALITY MANAGEMENT: A LITERATURE REVIEW AND AN AGENDA FOR FUTURE RESEARCH

Total quality management (TQM) is a revolutionary approach to effective management. The research in TQM has emerged from practical needs of organizations embracing this philosophy, and the literature is mostly conceptual and practitioner-oriented. There is a lack of sound theoretical framework classifying past efforts and guiding future research. To fill the void, a study of the published TQM literature is undertaken. A review, classification, and analysis of the research in TQM spanning the last two decades is presented. A total of 226 TQM-related articles are identified from 44 refereed management journals published from 1970 to 1993. These articles are then classified and analyzed using the following two-dimensional scheme: (1) article orientation (conceptual, case study, empirical, analytical, simulation, and overview) and (2) article focus using the Malcolm Baldrige National Quality Award criteria. The analysis of the literature presents pertinent developments in each of the seven criteria. In addition, it provides future research directions as well as a ready reference of the TQM literature. The suggestions for research should guide future developments in the TQM field and help transform it into a formal discipline.     

THE IMPACT OF HUMAN ERROR ON DELIVERING SERVICE QUALITY

This paper opens a new avenue for investigation of quality issues in services. We take the viewpoint that a substantial portion of service failures is the result of human error in the delivery process. Drawing upon the Generic Error Modeling System (gems) from the cognitive science literature, we develop a framework for understanding the role of human error in service failures. An empirical investigation assesses the applicability of this framework to services, identifies which error mechanisms are important sources of service failure, and clarifies how the different roles of customers and providers affect the errors made by each.     

PIECING TOGETHER SERVICE QUALITY: A FRAMEWORK FOR ROBUST SERVICE*

This paper addresses the issue of service design, specifically that of designing the service encounter for improved quality. We introduce a framework based on the three T's of task, treatment, and tangibles as a means of organizing the application of the diverse and growing body of service quality literature to encounter design. The framework is consistent with how successful service managers disaggregate the design problem. More importantly, we show that mutually supportive interrelationships between the three T's produce an opportunity for designing in a robustness to service failure. The framework is supported by case based evidence.     

DYNAMIC INTERACTION OF PRICE AND DESIGN QUALITY FOR PRODUCTS WITH CONVEX PRODUCTION COSTS

Price and design quality define value for customers and are often used by firms to position products in the marketplace. Setting price and quality level on a new product for the first time and making appropriate changes over time to these variables to reflect changing conditions in the market requires careful coordination of design, manufacturing, and marketing variables. We present a control theoretic model to study the complex interaction among price, quality, and cost during the life cycle of a product. Our model considers the major design-manufacturing-marketing tradeoffs and helps determine optimal pricing, design quality, and production strategies in a dynamic environment with convex production costs.     

PRODUCT AND SERVICE QUALITY: THE ANTECEDENTS OF CUSTOMER LOYALTY IN THE AUTOMOTIVE INDUSTRY

Prior literature has examined product quality and service quality separately as antecedents of customer loyalty. In the context of the automotive industry, we present a framework that examines the simultaneous impact of product and service quality on consumers' purchase intentions. The framework is operationalized as several hypotheses that posit relationships between service quality, service satisfaction, product quality, and customer loyalty. The hypotheses are tested using three sources of data: (i) archival data on product quality and customer purchases, (ii) consumersíresponses to a survey instrument, and (iii) Consumer Reports. Results indicate general support for main hypotheses proposed.     

AN EXAMINATION OF THE INDIRECT PRODUCTIVITY GAINS FROM QUALITY IMPROVEMENT

Recent theoretical work suggests that quality-improvement activities can yield significant indirect effects through process improvements and reduced factory congestion and confusion, benefits that are overlooked or hidden in most management accounting or cost of quality systems. Using time series data from two consumer durables manufacturing plants, I estimate the indirect productivity gains from quality improvement. The evidence from the plants indicates that the indirect effects from improved quality are at least two to three times the direct benefits attributable to lower scrap, rework, and inventory holding costs. An important implication of these findings is that companies that justify investments and measure performance based only on the direct costs of poor quality will motivate managers to make suboptimal decisions regarding quality-improvement activities.     

A TOTAL QUALITY MANAGEMENT-BASED INCENTIVE SYSTEM SUPPORTING TOTAL QUALITY MANAGEMENT IMPLEMENTATION

Although there have been many cases of total quality management (TQM) success, embracing TQM does not always lead to performance improvements. Many companies resist the changes in organizational processes such as compensation and performance appraisal systems that are required to link TQM efforts to bottom-line performance. We present the basic structure of a TQM-based compensation system that can provide incentives based on a variety of performance measures, including an explicit incentive for the reduction of variability in product variables. As a result, this approach encourages the continuous improvement central to the TQM philosophy, rather than serving as a disincentive for such improvement as do many traditional compensation systems. The set of performance measures can be adjusted periodically to focus on those measures deemed most likely to yield significant increases in customer satisfaction, further supporting the core elements of TQM. The approach is described using examples from the paper manufacturing operation where it has been successfully implemented. A longitudinal analysis of several performance measures is used to demonstrate the effectiveness of the new compensation system.     

An Empirical Investigation in Sustaining High‐Quality Performance

Many organizations that were once quality leaders have had challenges sustaining high‐quality performance. Although research has examined frameworks and concepts that lead to high‐quality performance, few studies examine how to sustain high‐quality performance. Sustaining performance may require additional capabilities from what it takes to achieve it. Drawing on quality management literature, organizational resilience literature, and the theory of dynamic capabilities in the strategy literature, this study empirically investigates the effects of four capabilities that help sustain high‐quality performance. The analysis shows that capabilities in improvement, innovation, sensing weak signals, and responsiveness all help sustain high‐quality performance. This suggests that what it takes to achieve high‐quality performance is different, in part, from what it takes to sustain it. The data comes from a survey of 147 manufacturing business units. The analysis shows that the relative benefits of these capabilities may depend on the level of competitive intensity and environmental uncertainty. The findings provide empirical support for a theoretical model and practical guidance for sustaining quality performance.     

UNDERSTANDING THE IMPORTANT DIFFERENCES BETWEEN THE MALCOLM BALDRIGE NATIONAL QUALITY AWARD AND ISO 9000 REGISTRATION

Market globalization, higher requirements for improved quality, and tough, faster-pace, price-sensitive competition have led to two parallel and visible quality thrust: the Baldrige Award in the U.S. and, internationally, the ISO 9000 standards. The relationship between the Baldrige Award and ISO 9000 registration is widely confused. Two common misper-ceptions stand out: (1) that they both cover the same requirements and (2) that they both address improvement, relying on high quality results, and thus, are both forms of recognition. Many have concluded that the Baldrige Award and ISO 9000 are equivalent and that companies should choose one or the other. These conclusions are incorrect. The Baldrige Award and ISO 9000 registration differ fundamentally in focus, purpose, and content. The focus of the Baldrige Award is on enhanced competitiveness. The Award Criteria reflect two key competitiveness thrusts: (1) delivery of ever-improving value to customers and (2) improvement of overall operational performance. The Award's central purpose is educational-to encourage sharing knowledge and experience of competitiveness and to drive this learning, creating an evolving fund of knowledge. By contrast, the focus of ISO 9000 registration is on conformity to practices specified in the registrant's own quality systems. Its central purpose is to enhance and facilitate trade. The Baldrige Award addresses competitiveness factors either not addressed in ISO 9000 registration or addressed differently. These factors include a customer and market focus, results orientation, continuous improvement, competitive comparisons, a tie to business strategy, cycle time and responsiveness, integration via analysis, public responsibility, human resource development, and information sharing. Overall, ISO 9000 registration covers less than 10% of the scope of the Baldrige Award Criteria and does not fully address any of the 28 Criteria items. As a result, the national drive to improve competitiveness could be diminished. Companies required to or electing to seek ISO 9000 registration are encouraged to integrate their conformity efforts with the Baldrige Award competitiveness improvement framework.     

A Contingent View of Quality Management‐The Impact of International Competition on Quality

Much of the research on quality practices and performance reflects a resource‐based perspective of the firm, dealing primarily with internal issues of managerial and technological competence in developing and executing an effective TQM strategy. The neoclassical perspective on the influence of the competitive environment on quality practices and performance remains conspicuously absent in the empirical quality literature. Our study aims to address this gap by examining the contingent role of international competition on quality management and performance. We develop and test an integrative framework of quality management, consisting of high involvement work practices, quality practices, quality performance, and firm performance. We then examine the contingent effects of international competition on the constructs and relationships of the framework. International competition was found to moderate the relationship between quality practices and customer satisfaction performance, as well as the relationship between high involvement work practices and firm performance. The moderator effects suggest interesting implications for quality theory and practice.     

THE QUALITY REVOLUTION

Our understanding of quality has undergone great changes over the last decade, propelled forward by the quality paradigm that has evolved in Japan. This paradigm has rendered obsolete the traditional quality-cost trade off model. I outline the key elements responsible for forcing a new understanding of quality-cost relationships.     

BEYOND PRACTICES: A QUALITATIVE INQUIRY INTO HIGH PERFORMANCE ELECTRONICS ASSEMBLY

This paper is based on the cumulative or synergies theory of manufacturing performance, as opposed to the trade‐off perspective. The paper compares the cases of two British contract electronics assemblers, the first one having achieved a high level of performance on productivity, quality, and dependability, and the second one having achieved a lower level of performance on these criteria but higher flexibility. The case material is used to develop a “high school” analogy that helps to understand why companies come to achieve cumulative manufacturing performance in an industrial sector where competitive pressure is particularly high.     

EXPLODING THE MYTH: DO ALL QUALITY MANAGEMENT PRACTICES CONTRIBUTE TO SUPERIOR QUALITY PERFORMANCE?

In his landmark article on total quality management, Powell (1995) lamented the lack of large scale studies investigating quality management practices and performance. This study begins to fill that void using a large, random sample of manufacturing sites. The results show that quality practices can be categorized into nine dimensions. However, not all of them contribute to superior quality outcomes. “Employee commitment,” “shared vision,” and “customer focus” combine to yield a positive correlation with quality outcomes. Conversely, other “hard” quality practices, such as “benchmarking,” “cellular work teams,” “advanced manufacturing technologies,” and “close supplier relations” do not contribute to superior quality outcomes.     

ON-LINE QUALITY MANAGEMENT: INTEGRATION OF PRODUCT INSPECTION AND PROCESS CONTROL

A growing recognition that quality management is an important factor in defining a firm's competitive position has led to renewed attention to this function and has resulted in implementation of elaborate systems for on-line quality control comprising product inspection and process control. Traditionally, these functions have been treated independently, with very little interaction. In this paper we examine, in detail, a scheme that integrates the two functions, and we demonstrate that such an approach can result in significant cost savings. The motivation for this work comes from our experience in a wafer fabrication facility that suggested that exchange of quality information between different stages of production could result in significant performance improvements. To illustrate this approach, we consider a specific environment characterized by a single-stage continuous production process whose status is monitored by an X̄ control chart. We assume that quality-related costs may be described as a function of the process output. This is analogous to Taguchi's quality loss function and may be interpreted as a generalization of conventional classification of process output as either acceptable or defective units. The integrative scheme essentially relies on utilization of the process status information (based on process control) in making product inspection decisions. For this system we derive a cost model and develop a solution procedure to determine optimal decision parameters. Limited computational results indicate that the scheme has significant potential for reducing quality-related costs.     

DEVELOPING SOPHISTICATED QUALITY IMPROVEMENT APPROACHES THROUGH BUSINESS-ACADEME COLLABORATIONS: INTRODUCTION TO THE SPECIAL ISSUE

The pursuit of better performance has led to a number of business-academe collaborations. These collaborators have developed a number of sophisticated approaches that go far beyond such traditional simple methods as benchmarking against the best company, Ishikawa diagrams on feedback and control, Pareto diagrams, incentive systems based solely on output or quality, standard process control charts, and separate treatment of control charts and product inspection. The authors in this special issue report on approaches like benchmarking industrial performance through industry studies; the use of an artificial-intelligence statistical-tree growing method to analyze complex customer service data; an incentive system based on the total quality management (TQM) concepts of continuous improvement, teamwork, adaptation to change, and a focus on customer satisfaction; and integration of product inspection and process control. Because of the continuing widespread interest in TQM, there is an opportunity to take stock of how successful TQM initiatives have been and how we should consolidate and further extend the knowledge in TQM. Two of the papers report on the gap between what organizations espouse as TQM and what they actually implement and on the literature on TQM.     

Linking Work Design to Mass Customization: A Sociotechnical Systems Perspective*

Mass customization has gained increasing importance in recent years due to its ability to provide customized products efficiently and effectively, and manufacturing companies are continuously searching for ways to develop their mass‐customization ability. Despite extensive literature focusing on mass customization, few studies have systematically examined the impact of work‐design practices on a company's mass‐customization ability. Using the Sociotechnical Systems theory as a foundation, we link work‐design practices with mass‐customization ability, specifically identifying ten work‐design practices and examining their impact on mass‐customization ability using survey data and empirical research methods. The results support our hypothesized links and suggest that work‐design practices that manage both the technical and the social dimensions for achieving organization success have significant impact on a company's ability to achieve mass customization.     

Quality Management and Cooperative Values: Investigation of Multilevel Influences on Workgroup Performance

Unsuccessful quality initiatives often are attributed to an organizational culture that does not recognize the importance of the cooperative values that underlie “soft” quality management practices, like customer focus and empowerment. Yet, the literature remains unclear as to how quality management and cooperative values interrelate by failing to incorporate the multilevel influences on this relationship in organizations. This research analyzes a multilevel model based on sociotechnical systems and quality management theories. Secondary data are used to test an explanation of how organizational‐level and workgroup‐level quality management practices relate to cooperative cultural values and workgroup performance. A single‐level model is also tested to demonstrate its inadequacies. Based upon the support for a multilevel model, managerial insights are provided that aid in deciding where resources should be allocated during a quality initiative.     

STRATEGIC ASPECTS OF QUALITY: A THEORETICAL ANALYSIS

This paper investigates the relationship between aspects of quality and long run profitability and growth of a firm. The paper first determines whether a stable relationship among price, aspects of quality, and the sales rate exists, by examining the equilibrium properties of a dynamic model. Then, we use the derived equilibrium expressions to develop insights into the strategic nature of “quality reputation” and, how to integrate marketing (i.e., pricing) and quality related decisions. The paper shows under certain conditions it might be more advantageous to manipulate “quality reputation” through advertising and product innovations than to increase product quality. We comment on quality based strategic options a firm must consider to ensure long run growth and profitability.