MGT 366 Final exam Review Sheet
Chapter 9 Management of Quality
An organization’s reputation for superior quality can give it a competitive advantage in the marketplace.
Superior quality can enhance the reputation of the firm, increase its market share, increase the loyalty of
the customers, reduce the risk of liability claims, reduce costs, and increase productivity.
Quality is defined as the ability of a product or service to consistently meet or exceed customer
Operational definitions of quality generally refer to one or more dimensions of quality.
For products, these include performance, special features, conformance to expectations, reliability,
durability, service after delivery, aesthetics, safety, and perceived quality.
For services these include,
tangibles, convenience, reliability, responsiveness, time, assurance, and courtesy.
The consequences of poor quality relate to loss of business, deterioration of the firm’s reputation,
product liability and higher costs and expenses.
Costs can be categorized as failure costs, appraisal
costs, and prevention costs.
Quality can be improved by R & D efforts, by efforts of improvement teams, and by suggestions from
employees and customers.
Modern quality management stresses prevention of mistakes rather than finding and correcting mistakes
after they occur.
This has placed increased emphasis on both product design and process design.
Quality gurus such as Deming, Juran, Crosby, and Ishikawa have greatly influenced current thinking and
practice of quality management.
Quality awards, such as the Malcolm Baldrige Award and the Deming Prize have generated interest in
quality improvement, and helped to focus attention on the importance of quality.
They have also helped
to educated business people on quality management.
Companies that do business internationally often benefit from ISO certification.
Total Quality Management (TQM) is a philosophy that says that quality is the responsibility of
everybody in the organization.
The focal point is customer satisfaction.
Important features include
continuous improvement, benchmarking, employee empowerment, the use of teams for problem solving,
decisions based on facts and knowledge of tools for identifying and solving problems.
Continuous improvement is a philosophy towards the improvement of quality that many organizations
have adopted: The quest for higher and higher levels of quality should never end.
improvement provides a structured approach to quality improvement.
It is directed primarily at
The Japanese term for continuous improvement is
The conceptual basis for continuous improvement is the plan-do-study-act (PDSA) cycle:
studying and documenting the current process.
Collect data on the process.
Develop a plan.
to implementing the plan on a small scale, and collecting data.
means to evaluate the data
collected during the do phase.