Quality Management in

Business

Name : Doan Minh Thanh

ID number: P1007208

Course : Business Management

Module : Quality Management in Business

Lecture : Shamima Hossain

Due date : April 11th, 2014

Group : 1A

TABLE OF CONTENTSI. QUALITY MANAGEMENT................................................................................................................................... 4

What is Quality?..................................................................................................................................................... 4

The Evolvement of Quality Management...................................................................................................4

Identify different approaches of quality management and explain the similarities and

differences between them................................................................................................................................ 7

W. Edwards Deming....................................................................................................................................... 7

Joseph Juran..................................................................................................................................................... 10

Philip Crosby................................................................................................................................................... 11

Similarities of three gurus.........................................................................................................................12

Differences....................................................................................................................................................... 13

II. THE BENEFITS OF QUALITY MANAGEMENT.......................................................................................14

What is Customers Satisfaction?.................................................................................................................14

What is Continuous Improvement?...........................................................................................................15

Added-values To Be Gained...........................................................................................................................20

Types of Information and Effective Marketing Can Improve Quality.........................................21

III. QUALITY CONTROL.........................................................................................................................................24

Quality Management Measurement...........................................................................................................24

Planning for quality......................................................................................................................................24

Organizing and Leading Quality.............................................................................................................24

Controlling for Quality................................................................................................................................ 25

User’s Surveys vs. Non-user’s Surveys.....................................................................................................27

What are the methods of consultation employed in one quality scheme to encourage

participation by under-represented groups?........................................................................................28

Identify the value of complaints procedures and analyse how they may be used to

improve quality................................................................................................................................................... 29

IV. QUALITY MANAGEMENT & PERFORMANCE.......................................................................................30

What is the role of self-assessment in order to determine an organization’s current ‘state

of health’?............................................................................................................................................................... 30

Benchmarking.................................................................................................................................................30

European Foundation for Quality Management (EFQM)............................................................31

What are the importance of communication and record keeping?.............................................33

How quality scheme can be effectively implemented by following guidelines on the

stages of staff consultation............................................................................................................................ 35

Propose new systems or modifications to existing systems that could improve service

quality..................................................................................................................................................................... 36

CONCLUSION............................................................................................................................................................. 37

REFERENCES............................................................................................................................................................ 38

I. QUALITY MANAGEMENTWhat is Quality?

Quality is the ability of a product or service provided by the company to do what it is

supposed to do and moreover, it also satisfies the expectation of the customers (Robbins &

Coulter, 2012). In another hand, Goestch & Davis (2012) defined that quality is a dynamic

state associated not only with the products and services but also people, processes, and

environments that meets and even exceeds the customers expectations as well as produce

the superior value. Moreover, Menezes (2012) emphasized the employees involvement and

continuous improvement in quality. Quality is also a key for the performance improvement

(Abdullah & Tarí, 2012). However, Knowles (2011) discussed that the products or services

that derived from the outdated or defective market research information are unlikely to

meet the customers’ requirements or expectations. An example for the typical flawed

market research is the case of Coca-Cola in 1980 (Hartley, 2009) when the company

thought that the taste was the most important factor for the decrease in sales of Coca-Cola

in 1970s and 1980s. Therefore, they tried to make the Coke be sweeter and introduced the

New Coke with the new flavour. However, Coca-Cola did not calculate to the traditional and

symbolic value of the drink toward the Americans – which was indispensable. The result

was that Coca-Cola had to bring back the original taste.

The Evolvement of Quality ManagementQuality Management has evolved from the old management methods which focused

only on the volume of production and the cost of the product with the traditional

inspection (post production inspection method) and assurance into a real Total Quality

Management (TQM) which is defined as directing or managing the whole production

process to produce an excellent product or service to meet the customer’s needs (Gale,

2009).

The development of the Quality Management has gone through six periods

(Knowles, 2011):

1. The Era of Craftmanship Workers

2. The Period of Mass Production and Quality Assurance

3. Quality Control

4. Total Quality Management

5. Standards and Awards

6. Initiatives

In the period before the Industrial Revolution (end of 18th Century and in the

beginning of 20th Century), the production process was based totally on craftsman, who

was both the products maker and quality inspector. Therefore, at that time, due to the

weak distribution channels, it was very important for craftsman to create the reputation in

the local markets. As a result, the craftmanship guilds appeared, the guildmasters were the

one who made the tested or checked the members of the guild. The craftmen at that

moment would know who were their customers, or customers’ demand within the local

areas.

During the Industrial Revolution and the Gold Rush in 1900s, the rapid

establishment of factories and automation, the factories owners did not need many skilled

and traditional workers or craftmen. The excellent representative for the mass production

would be Henry Ford with the famous Model-T who wanted to manufacture cars and

distribute them cheaply to a large number of customers (Gale, 2009). Therefore, more and

more unskilled workers appeared in the factories. Their only mission was to sustain the

mass production process. In order to segregate between the conforming and defective

products, some persons were employed as the inspectors. This was also the era of the

inspection and quality assurance. Frederick Winslow Taylor was the one who started

scientific management with detailed contribution toward the relationship management

between the inspectors and workers (Robbins & Coulter, 2012).

However, the critique on traditional method which is mainly based on inspection

and assurance due to the reasons below:

1. Lack of Leadership: Old conventional corporates emphasized the roles of control

and organisations (management) instead of vision and motivation (leadership)

(Knowles, 2011).

2. Output-orientation with short-term focus: because the managers tended to focus

into the short-term profits; therefore, the inspectors were orderd to accept even

the non-conforming products in order to increase the output.

3. In order to innovate the products, more and more technical issues appeared and

the unskilled workers with lacking of training could not have enough knowledge

to afford in the new working process.

During the 1920s, the statistical methods were applied in the monitoring of the

quality. At this time, the theory of statistical process control appeared with the great

contribution from Walter A. Shewhart and Edwards Deming (Gale, 2009). However, it was

only widely used after World War II when the Japanese industry was completely destroyed.

At that time, Japan leaders decided that they had to make an improvement in quality

production. Therefore, they asked the support from quality experts including of Juran,

Shewhart, Deming and Feigenbaum (Gale, 2009). The quality management has become the

production philosophy of Japanese.

Since the rapid breakthrough of quality management in Japan, the years of 1960s-

1970s witnessed the prevailed spreading of “Made in Japan” products in U.S. and Europe

because they were cheaper with higher quality.

The Western countries took late action until 1980s in Britain, in order to compete

the Japan products, the British Standard 5750 (BS5750) for quality management was born

in 1979 and in 1983, the National Quality Campaign started (Gale, 2009).

After that, the International Standardisation Organisation (ISO) 9000 appeared to

create the international standards for quality management. The Total Quality Management

(TQM) has developed and become a worldwide concept for performance and quality

management of firms all over the world.

Identify different approaches of quality management and explain the similarities and differences between them.

All of quality management approaches are based mainly on some specific products

or services quality standards. Moreover, the implementation will be conducted by the

quality control and planning to ensure the efficiency.

However, the approaches are still separated by some differences. For example,

continuous improvement will focus on improve the small amounts of issues with an

ongoing bias to create the incremental effect. Total Quality Management will include of a

whole big process and standardized quality programmes in the manufacturing. Last but not

least, the quality assurance will be focused in the quality assurance scheme.

In this part, an analysis on different approaches regarding to quality management of

typical gurus will be conducted to identify the similarities and differences among them.

Quality gurus include of W. Edwards Deming, Joseph Juran, and Philip Crosby.

W. Edwards Deming

Regarding to Gale (2009), Deming is one of the most influential and well-known

quality guru with his main contribution in realizing the essential role of organisational

culture and attitude of employees. He emphasized the vital role of leadership and

management’s responsibility to motivate the operation units (workers, employees, and so

on) can work better. His main theory concentrates on reducing the costs and increasing the

productivity through less re-work, mistakes, delays and taking advantage of materials as

well as time efficiently (Slack, et al., 2013). Deming had three notable theories: Fourteen

points, System of Profound Knowledge and PDCA Cycle.

First of all, Deming’s fourteen points for improvement of quality focuses on the

importance of statistical control methods, the participation of both management and

employees, on the job training for employees, the open working environment and

improvement’s purposes. Regarding to Slack et al. (2013), fourteen points are:

1. Create constancy of purpose or publish the organisation’s aims and plan.

2. Study and adopt new philosophy to eliminate the stubborn or common

acceptance of delay, mistakes or defects.

3. Cease dependence on inspection.

4. End awarding business that is based only on price.

5. Improve constantly the system of production and service.

6. Institute the on-the-job training.

7. Institute the role of leadership or supervison on employees’ productivity.

8. Drive out the fear, create a trusthworthy environment and an innovative

attitude.

9. Break down the barriers among departments and optimise the efforts among

staffs and teams.

10. Eliminate the numerical goals, encouragements or targets for employees and

provide the achievements’ approaches.

11. Eliminate the numerical quotas or work standards.

12. Give people the feeling of pride regarding to their jobs.

13. Develop the training and self-education programs.

14. Put people to work to achieve the above points.

However, beside the fourteen points that can help the transformation process in

organisation becomes more easily, Deming also pointed out Seven Deadly Diseases that can

avoid firms from implementing such transformation (Knowles, 2011):

1. Lack of constancy of purpose in order to plan the products or services.

2. Concentrate on short-term profits.

3. Personal evaluation or performance review based on management objectives.

This disease can eliminate the potential innovative factor because such poor

rating system will encourage people to do well within the system and discourage

people to make improvement.

4. Job hopping of management level.

5. Applying the visible data for decision making.

6. Excessive medical cost.

7. Excessive cost of liability.

Although Fourteen Points concentrated much on the management role and action

toward the responsibility to motive the employees for improving the organisation,

Deming’s System of Profound Knowledge focuses on the understanding of the

organisation’s sytem thinking combining with the other learning approaches generated

from other elements (Knowles, 2011). This creates the profound knowledge for Deming’s

philosophy regarding to quality management and he stated that without the profound

knowledge, the action of management level can cause ruination (Slack, et al., 2007).

Deming’s System of Profound Knowledge includes of four theories:

Theory of Systems Thinking: this theory emphasizes the important role of every

people within the organisation understand how the whole systems work and the process

that can generate outcomes (Knowles, 2011). This theory focuses on seeing the

organisation as a joint process instead of combination of individuals.

Theory of Variation: the theory focuses on how people can forecast and react to the

variation happening within the system and predicts the organisational behaviours

regarding to that variation.

Theory of Knowledge: Theory of Knowledge concentrates on the cummulative

growth regarding to experience and learning curve of the organisation.

Theory of Psychology: this theory focuses on the different human’s feelings toward

the changes or innovation occurred. The management level has to aware these feelings in

order to support and enhance employees’ performance.

Joseph Juran

Joseph Juran is famous for his Quality Trilogy with the main philosophy of

emphasizing on product deficiencies management through quality planning, quality

control, and quality improvement (Knowles, 2011). Regarding to Gale (2009), the detail of

Quality Trilogy theory are:

The aim of quality planning is providing the management level the ability to make

the creating of products and services be able to satisfy clients’ requirements. In this section,

the firms have to clarify the customers’ segmentation (who the customers are) as well as

their needs. Then, the firms will produce the products or offer services that can adapt with

those needs. After that, the firms also need to create the process in order to distribute those

products and services. The operating staffs will be transferred the detailed plan. During the

operation process, not 100% of products are ensured good. The deficiency would be

occurred and the waste becomes chronic.

The purpose of quality control is avoiding the defect as much as possible because it

is unable to prevent the chronic waste. During this stage, the organisations will conduct the

inspection in order to make comparison between the actual products or services with the

details in plan. The chronic waste is an opportunity for improvement of quality – which is

the third factor of Quality Trilogy.

Quality improvement has the purpose to seek the improvement of product quality

and reduce the mistakes or errros that can be occurred during the production. Through the

quality control, this stages will find for better quality management level through the

experience of the product deficiencies.

Additionally, Juran made the link between the customers’ satisfaction with the

product and pointed out ten steps for achievement the quality improvement:

1. Build awareness of the need and opportunity for improvement.

2. Set goals for improvement.

3. Organise to reach the goals.

4. Provide the training for employees.

5. Carry out projects to solve problems.

6. Report progress.

7. Give recognition.

8. Communicate results.

9. Keep score of improvements achieved.

10. Maintain momentum through making the annual improvement becomes a part

of organisation’s regular processes.

Philip Crosby

Philip Crosby is famous for his work on cost of quality (Slack, et al., 2007) and

defined the quality as “Quality is conformance to requirements while non-quality is non-

conformance” (Knowles, 2011). He developed the concepts of Zero Defects and the book

Quality is Free with the main philosophy so-called Crosby’s Four Absolutes of Quality (Gale,

2009):

1. Quality is conformance to requirements, not goodness.

2. The system for causing quality is prevention, not appraisal.

3. The performance standard is zero defects and not just only “nearly zero defect”.

4. The measurement of quality is the price of non-conformance, not indexes.

In order to support for the theory of Four Absolutes of Quality, like Deming, Crosby

also developed Fourteen Steps of Quality Improvement (Gale, 2009):

1. Management commitment of formalising policy for quality.

2. Forming quality improvement teams.

3. Quality measurement: establishing the quality measures in order to identify the

possible improvement as well as taking action to correct if needed.

4. Evaluate the cost of quality in order to clarify whether the necessary action can

causes greater profit for organisation.

5. Quality awareness shoud be raised and all employees should have the attitude to

show their concerns toward the quality of products.

6. Corrective action is taken to eliminate the root of defects. In this step, it would be

efficient if the employees can have the habit to take the corrective action.

7. Zero-defects planning: the firms need to establish a committee to manage the

zero-defects programme.

8. Training the supervisor: the supervisors and managers have to attend the formal

training programme and understand all the steps clearly.

9. Zero-defects day: this day is used to announce the message of the plan to every

employee.

10. Goal setting: this activity is for encouraging the supervisors and employees to set

improvement goals.

11. Error cause removal: employees are encouraged to describe and communicate

with supervisors regarding to the problems that can cause obstacles for them

from conducting zero-defect tasks.

12. Recognition: formal recognition for employees who achieve the goals.

13. Quality council is established for quality management.

14. Do it all over again.

Similarities of three gurus

1. All three gurus emphasized on the important role of creating the internal culture

of quality management within the organisation.

2. Crosby, Deming and Juran all mentioned about the importance of training, self-

education programme among employees to motivate the quality management.

3. All three gurus agreed on the importance of the organisation operated as a

whole-intertwining body with the efficient collaboration, communication and

implementation among departments.

4. All three gurus share the same point of view that the quality management needs

the commitment of management level.

5. The quality management models or steps of three gurus are continuous and non-

stop cycles and processes in order to enhance the experience curve.

6. All three gurus have the same ideas regarding to the organisation must

communicate the goals and vision clearly to support employees in creating the

approaches or methods to achieve those goals.

Differences

Objectives

Deming with his System of Profound Knowledge concentrated on how to predict the

variations regarding to quality management and the necessary action in order to reduce

those variations. With the PDCA cycle, the organisation can have the incremental

experience everytime the process operates.

Crosby, in another way, emphasizes on absolute objective of zero-defects products

or services.

Juran connected the quality management with the fitness for customers’ usage and

organisation’s objectives.

Management responsibility

Deming insisted that 94% of the quality problems belongs to the management

responsibility (Richards, 2012).

Juran, in another hand, stated the management responsibility on the basis of pareto

analysis and 80/20 rules – which means 20% part consists of vital parts. In Juran’s work,

the 20% products’ defects can cause 80% problems. Concerning to his vew, less than 20%

of the quality problems are due to workers and the remaining part being caused by

management (Samatis, 1997).

For Croby, this guru just only stated that the primary responsibility for poor quality

belongs to management.

Measurement

Crosby and Juran focused the cost of quality while Deming calculated a number of

other varied costs (Radziwill, 2013).

II. THE BENEFITS OF QUALITY MANAGEMENTWhat is Customers Satisfaction?

Customer satisfaction or dissatisfaction occurs when customers feel that they are

please or disappointed with a product or service perceived performance in comparison

with their expectations: if the product’s performance does not meet their expectation, the

customers will feel dissatisfied; if the product’s performance reach the customers’

expectations, they are surely satisfied; and if that performance can exceed their

expectation, the customers are delighted and highly satisfied and they surely recommend

or make the loyalty commitment (Kotler & Keller, 2012).

In the case of InterContinental Hotels Group (IHG), they use the tool so-called Guest

Satisfaction Tracking System (GSTS) with a complicated sets of feedback factors for the

customers to give a comprehensive assessment about their experience during the stay at

the hotel. For example, the below image is some of the assessment factors related to the

customers’ experience in an InterContinental hotel regarding to the Food and Beverage

(F&B) in Meetings:

There are some factors such as: food presentation, service time, authentic food

options, and so on. There are eight customers gave feedback toward the F&B during

Meetings. The overall satisfaction score for the F&B quality was 86.6 YTD (year-to-date)

and overall satisfaction score for the F&B service was 88.8 YTD. While the F&B quality did

not show much fluctative figures in the analysis of three months variance, the F&B service

had a decline in the overall satisfaction.

Through the example of IHG, key factors identification plays an important part in

driving customers to contribute in giving feedback process and supporting the

organisations in recognizing which fields would need to be improved.

What is Continuous Improvement?Continuous improvement is defined as a large number of small improvements are

implemented in all departments, areas, and functions in organisations continuously and on

an ongoing bias to create an incremental outcome (Daft, 2010). The continuous

improvement will involve everybody within organisation (Knowles, 2011). There is a

popular word for continuous improvement so-called kaizen in Japanese (“kai” means

change and “zen” means good). Regarding to Gale (2009), there are two typical kaizen

types in a day-to-day basis organisations.

The first one is called “point kaizen”, this means the immediately implementation

will be made whenever the managers, or the employees identify there are a problem in the

business process. Right after the problems are pointed out, the solutions will be made right

on the spot.

The second one is called “system kaizen” which involves a more whole organisation

change. System kaizen main focus is the firm transition or evolution to another state. A list

of steps or schedule will be planned and operated, the resources will be evaluated and

gathered in order to reach the desire state.

For IHG, the company has been applying the “system kaizen”. The top corporate

level managers will identify and plan the necessary implementation program with list of

steps in order for the organisation applies. For example, they develop a matrix for the

leadership competencies development among employees (InterContinental Hotels Group,

2012):

A more obvious way to carry out the continuous improvement regarding to quality

is identifying the quality gaps on the basis of between the Customer’s expectations

concerning to the products or services with Customer’s perceptions concerning to the

products or services (Slack, et al., 2013). Gap analysis helps the organisations to identify the

perspectives of satisfaction and the areas that need improving. Parasuraman et al. (1985)

in a book of Slack et al. (2013) pointed out a conceptual model of service quality related to

customers’ domains and operation domains of organisations.

Figure 1. Parasuraman model of service quality (Slack, et al., 2013)

Basically, Gale (2009) clarified there were five gaps that an organisation need to

consider to improve the quality management:

Service Quality Gap: this is the difference between the services or products that

customers actually received with the services or products that they expected. For instance,

the customers may want to buy a pack of instant noodle with full of dried meat, vegetables

and so on that being advertised; however, in fact, they just receive the instant noodle pack

with soup and added spicies.

Management Understanding Gap : this is the difference between the quality of

services or products that perceived by management in comparison with customers’

expectation.

Service Design Gap (Image of product of service – The actual product or

service): this is the difference between the management’s perception concerning to

customers’ perception and the development of this perception into delivery standard.

Service Delivery Gap: this is the difference between the actual delivery standard

and the planned one.

Communication Gap: this concentrates on what is communicated to deliver to

consumers and what is actually delivered.

As a result, when the customer experiences exceed the customer expectation, the

organisations can create the competitive advantage to sustain and even expand within the

market. Therefore, the organisation can use various methods to collect the data regarding

to the customers’ expectation in order to have strategic implementation to adapt with

those needs. The questionnaire in the aspect of SERVQUAL to help customers evaluate

particular service providers. Regarding to Buttle (1996), the SERVQUAL questionnaire can

be categorised into five fields:

1. Reliability: it is the ability of the organisation to perform the promised service

dependably and accurately.

2. Assurance: in this aspect, it rates the staffs’ knowledge and courtesy as well as

their abilities to carry out trust and confidence.

3. Tangibles: it is the appearance of the tangible facilities, human resources, and

communication materials.

4. Empathy: it is used to rate whether the employees deliver the caring spirit,

individualized attention to customers.

5. Responsiveness: it is used to rate the degree that employees are willing to

support customers in a professional manner and with prompt service.

In the case of IHG, an example of InterContinental Hanoi Westlake Hotel with the

Event & Convention Sale team will be analysed. The figure below shows the Guests

Satisfaction Survey result of this hotel in November 2012.

In the figure, the statistical data is totally followed in SERVQUAL five fields. For

example, in the aspect of Reliability, the question “Sent me a proposal within agreed time”

of InterContinental Hanoi Westlake has a slight increase to 93.7% agreed customers. For

the Assurance field, however, the question “Understood what I needed for a successful

event and met my needs” has a decrease to 90.5% customers agreed with this.

Through the detail report regarding to different gaps between the customers’

expectations and the actual experiences that employees can bring to them, the

management can plan for the upcoming goals and specific steps to enhance the services

quality.

Added-values To Be GainedThe added value is the value that the business owners or vendors add to their

products or services that they provide and make the implementation or modification in a

specific way to create a greater value regarding to their customers (Gilliam & Voss, 2013).

There are various types of added value that the business owners can provide to

their customers; it could be quality added value, corporate social responsibility (CSR)

added value, cultural added value, causal relationship added value, financial added value,

or marketing added value and so on.

In the case of IHG, the organisation has taken advantage of their unique resources:

Priority Club Reward (PCR) which is one of the largest membership program in the world

with 77.8 million members worldwide (IHG, 2013) to add the value in order to attract new

customers and maintain the loyalty rate. IHG has formed the strategic alliances with

MasterCard, Air France, British Airways, Qantas, and other services providers to help

customers save the point whenever they use the service from these companies such as

spending as many as possible in the MasterCard credit account, the customers will be

awarded with the points or when customers fly, they can exchange the miles into points.

The points after that can be redeemed to exchange the room night or other services in any

hotels of IHG. Moreover, when the customers reach enough capacity of points, they will be

automatic upgraded to a new level of members (PCR has three levels: Standard, Gold and

Platinum).

From the above analysis parts, it can be agreed that IHG has been conducting well in

creating the channels to collect the general perspective of customers’ toward products and

services that the company provides. As a result, once conducting efficient continuous

quality management, the organisation can bring as well as achieve added values below:

Cultural values lead to financial added-value – the altogether parts of

company, customers and suppliers: Regarding to Woods (1998), the continuous quality

management to bring better experiences of products and services to customers can help to

enhance the people identification of the company not just only a building, a brandname, an

asset but also a kind of culture in developing win-win-win strategy among company,

customers and suppliers. The quality products that adapt well with customers’ perception

can increase their loyalty with the company and together with the collaboration of airlines,

MasterCards or other allied services getting along with the membership program, it can

bring financial added value to customers – customers can have discount regarding to not

only hotel rooms but also flight ticket or credit loan. The other suppliers can have potential

value from updating customers database from five-stars hotel. The hotels with the stable

generated revenue can have the employees’ loyalty and reduce the financial loss from

human resources turnover, absenteeism and so on.

Financial added-value of superior products with reduced price for customers:

with the continuous improvement process from the survey and other methods, the

customers can be ensured that the delivered services or products are continuously

updated. Together with the increasing pleasant feeling after using the products or services

is the typical brandname identification that adapt with customers’ expectation. For

example, because customers are satisfied with an IHG hotel and become more satisfactory,

this can lead them to automatically choose and consider all IHG’s hotels are superior. The

more times the customers use the service, together with membership card program, the

cheaper they will have to pay for future similar service.

Types of Information and Effective Marketing Can Improve Quality

Regarding to Solomon, Bamossy, Askegaard, & Hogg (2006), the consumers when

they decide to go buying a product, they may recognize the need and then search the

marketplace for the specific information. Once they have the information, they will have the

cognitive toward the products, the awareness, the interest and then the desire to possess

the products and if they are satisfied with the products, it will become habitual consuming

behaviour. Hence, that company will have loyalty customers. The main goal of a business

marketing expert is he or she must create and maintain strong relationship with customers

and provide them the added value. This leads to the rapid growth of relationship marketing

in comparison with conventional transactional marketing. The relationship marketing

emphasizes in developing a long-term bonds and interactive relationship between the

marketers and customers – in which the main concern of a marketer is to move the

customers up the ladder of loyalty to the main objective that customers will become a

partner (Lancaster & Massingham, 2011).

For this reason, the firms will have the objectives to provide the information for

customers as much as possible. In the rapid growth era of e-commerce, the customers will

have trend to search for information on the Internet first because this is the fastest and

more interactive way with immediate information. The customers will have the general

information about the company’s vision, mission statement and an overview about the

products that the company offers. In the case of IHG, the company’s vision provides for the

customers with the products it has – “When we have great brands”, the values, people and

ways of working and the vision of the company to “Become one of the world’s great

companies” (InterContinental Hotels Group, 2012):

Figure 2. IHG’s Vision (IHG, 2013)

After the company and products’ overview, the customers will have tendency to

search further for information. Hence, the firms have to present the products’ details and

their features in order for customers to easily search the right products which meet their

demands. For example, in order to brief introduce the features of Crowne Plaza, IHG made a

statement “An upscale brand in major urban centres, gateway cities and resort destinations

offering business travellers high levels of comfort, service and amenities” (IHG, 2013).

Beside that, IHG also gives out the hyperlink that lead to the booking page in order

to make it be easy for customers to pre-order the rooms or services. The IHG’s booking

website will show for customers the detailed information about their destinations as well

as the available IHG hotels in those places. Moreover, the booking page also helps

customers to catch up with the price along with the benefits, VAT, breakfast and service

charge information.

In the aspect of Quality Management, regarding to Slack et al. (2013), the

marketing’s important role is to communicate the organistation’s products or services to

the market to generate requirement from customers. Therefore, an effective marketing can

help the customers as well as company in various fields:

Reducing the Service Design Gap: through the effective marketing programmes,

the management can communicate efficiently the company’s message and perception to

customers and implement or maybe able to change the customers’ perception to deliver

the designed services or products concerning to management perception. A typical

example of IHG is the launching of the new brand in China market – Hualuxe Hotel which is

an upscale hotel brand. Although the core delivered products and services standard is

totally similar to another upper scale of IHG – InterContinental; however, through the mass

media marketing, IHG creates a perception for customers in China is that this brand is a

totally excellent and better hotel chain which is particularly built for China market.

Enhancing the information flow regarding to the quality and capabilities of

operation: the effective marketing approaches can motivate the customers in increasing

the communicating flow between them and the company. With this information regarding

to customers’ requirement, marketing function can cordination with the other operation

department to identify the capabilities as well as the constraints that exist within the

internal processes (Slack, et al., 2013).

III. QUALITY CONTROLQuality Management Measurement

In order to achieve the quality, the management functions include of planning,

organizing, leading and controlling need to be conducted (Robbins & Coulter, 2012).

Planning for quality

The managers must have goals regarding to the quality improvement and plan

strategies to accomplish those goals (Robbins & Coulter, 2012). Mauch (2010) has the

planning defined as the management function with the main role of producing and

incorporating objectives, strategies and business policies to answer three main questions:

1. Where are we at the moment?

2. Where do we want to be?

3. How can we get there from here?

For instance, UnitedHealthcare implement a new accountable care innitiative to

make the collaboration with 130 hospitals and 19,500 physicians within the states of

Wisconsin, United States to achieve faster service, improve the quality and reduce the cost

(Business Wire, 2013).

The quality planning process will help the organisation to produce the Quality Plan

– which is a document that help the firms to define the activities operations in order to

achieve the requirement of quality.

Organizing and Leading Quality

Quality improvement initiatives are fulfilled by the corporate employees; therefore,

top managers play an important role in organizating and leading these employees in order

to achieve the best outcomes (Robbins & Coulter, 2012). Therefore, the managers are

considered as the individuals in charge of strategy and decision making is the crucial part

related to organisation’s success; hence, the managers have to integrate the quality

management implementation into the corporate strategy (Albacete-Saez, et al., 2011).

Controlling for Quality

The initiatives for quality improvement will not be possible if there is no any

approach to monitor and evaluate the progress (Robbins & Coulter, 2012). The most

concerning issue of the monitoring process is that it also needs the objective realization

since at the top management levels, there appears the issue when the organization’s

objectives are not being met and in the middle or lower levels of mangement, the objectives

that the managers are responsible are not being met (Mauch, 2010). As a result, the quality

objectives should be qualified and the management levels should treat the quality as a

priority and strategic issues (Albacete-Saez, et al., 2011). Regarding to Mauch (2010), there

are ten items that the managers can use to establish the objectives and key quality factors:

1. Profitability

2. Productivity

3. Products

4. Markets

5. Financial resources

6. Physical facilities

7. Research and innovation

8. Human Resources

9. Organisation

10. Customer services

Therefore, after realizing the objectives of the organisation. The organisations

leaders will be establish a department or centre which has the key responsibility in

managing the key quality factors. They will keep the activities logging book in order to keep

track with daily work routine and the feedback process from customers. Then they will use

some of quantiative tools and standards for measuring the quality management such as:

Statistical Process Control (SPC), Total Quality Management (TQM), ISO-9000, Six Sigma

and so on.

Six Sigma

Being developed by Motorola in 1986, Six Sigma has the purpose to enhance the

outputs quality through effort of eliminating the causal defects (Knowles, 2011). Regarding

to Gale (2009), Six Sigma has three key principles. The first principle of Six Sigma is

measuring the quality management and this also means that measuring wrong issues can

cause wrong results. Secondly, all the measures should be publicly visible and the

leadership commitment to make decision making based totally on openly statistical data.

Last but not least, the third principle of Six Sigma is when occurring change or

implementation, the performance may go down but it requires the management patience

before it recovers.

Six Sigma provides problem-solving methodology of five-stages DMAIC to support

management:

Define (D): in this stage, the management will identify the areas or processes that

have poor performance. After that, organisations put the objectives to implement in those

processes with the cost calculation of positive financial effect.

Measuring (M): in this stage, key critical factors or aspects of the processes will be

measured and relevant information will be collected.

Analyse (A): some various analysis methods and tools such as SPC, hypothesis

testing and so on are used in order to identify the problems laid within the process.

Improve (I): a corrective process will be designed in order to reach the desired level

of improvement.

Control (C): the organisations adjust process control tools in order to manage the

process constantly.

User’s Surveys vs. Non-user’s SurveysIn order to gain the feedback from the customers, the XYZ Ltd can use the survey

methods to get the comment from customers. The surveys can be carried out toward both

users and non-users.

For the users survey, the users can help XYZ Ltd in understanding the customer

loyalty scale toward the companies’ products or services and their feedbacks can help the

firms to organise the actual internal factors related to strengths and weaknesses. Through

collecting the primary data from users’ survey, the data which is related to customers’

perspective toward the products and services would be relevant. Since these customers

have been using the products or services of the company; therefore, their comments and

feedback would be represented for the demands and needs of other customers.

For the non-users survey, XYZ Ltd can gain the benefit from this type of survey.

Since the non-users are not the customers of the organisation; hence, they can help XYZ Ltd

to know the actual reasons why they are not keen in using company’s products. As a result,

the firm can have the information about their requirement as well as their expectation

related to the products and services. XYZ Ltd then will know which competitive advantages

that they are lacking in comparison with other competitors and the company will make

implementation accordingly. This type of information will help XYZ in pulling the non-users

with appropriate strategy and make them become customers.

However, there are some disadvantages appear regarding to the survey:

1. The respondents may not feel comfortable with some sort of questions and they

can give inaccurate answers.

2. The conductor needs to spend time to ensure the sample is representative;

moreover, the design and pilot tasks are also carried out to ensure good

response rate (Saunders, et al., 2009).

3. The high cost if conducting the surveys through postal or telephones.

4. The survey conductor may make mistake in data storage and encounter with

high risk of spreading respondents’ information.

What are the methods of consultation employed in one quality scheme to encourage participation by under-represented groups?

The under-represented groups are the group of users or customers that do not have

or little communication with the company and hence, they do not give or have little

feedback regarding to the company’s products or servcies. However, the lack of

communication does not mean their information or potential feedback would not be useful

for the company, vice versa, their details could be very valuable toward the strategic

quality implementation of the company and more of them join in feedback process, more

errors in statistical measurements will be deducted.

There are many reasons to explain why these group are underrepresented. It could

be the customer satisfaction tracking system cannot reach or make an easy access for them,

the difference in language, or even the different communication culture, and so on.

If the customer satisfaction tracking system cannot reach the customers to get the

information, the company should find a way in order to make it be more easy for customers

to access such as building the survey interface right on the company’s website. In case the

linguistic difference is the main problem, the company can build up more language options

and support for customers. Additionally, if the different communication culture is the main

problem, the company can carry out the group survey in order to encourage the customers

to express their ideas more.

There are some types of consultation that can be employed to encourage these

under-represented group to give out their feedback: (1) Survey by mail, telephone, paper,

questionnaire, etc.; (2) Focus group interview; (3) Conference; (4) Online interactive

survey

Identify the value of complaints procedures and analyse how they may be used to improve quality

Organisations also design the complaints procedures and process in order for

customers to express their comments regarding to the imperfect sides of the products or

services. The handling complaints process would be very important because the customers

would create a mass effect toward the word-of-mouth marketing. The handling process

would bring back the loyalty customers and more potential customers will be attracted. In

the other hand, bad handling method would destroy the company’s reputation.

Not only do the customers complain about the products or services, they can give

bad feedback toward the staffs or company’s human resources due to the attitude or the

way those staffs provide the services.

Once the company XYZ Ltd can identify which sources of complaints, the leaders can

have proper implementation. In case the complaints came from bad products or services,

the company can check again the production process through the daily logging activities

and the quality management stage. Otherwise, if the complaints came from the staffs,

proper department training programs have to be scheduled.

IV. QUALITY MANAGEMENT & PERFORMANCEWhat is the role of self-assessment in order to determine an organization’s current ‘state of health’?

Slack et al. (2013) stated that self-assessment as a comprehensive, systematic and

regular review of an organisation’s activities and results referenced against a model of

business excellence. Regarding to Knowles (2011), the purpose of self-assessment is to

help the organisation in identifying and put action on areas or fields of improvement

process that require additional effort and maintain that which is already going well.

It is important for the firms to acknowledge the “state of health” so that they can

identify if the business operation status is good or bad. In the planning and controlling

process, the firms will have to determine their business objectives and implement the

appropriate activities in order to reach the goals. Moreover, a process of assessment for

those activities should be conducted in order to see if they are carried out well and to

which extent the firms have achieved. In addition, the firms can have a clear understanding

in which aspect needed improving.

Benchmarking

The Benchmarking could be a popular tool for the self-assessment process.

Benchmarking is defined as “the activity of comparing methods and/or performance with

other processes in order to learn from them and/or assess performance” (Slack, et al.,

2013). By using this tool, the organisation can be allowed to make the comparison with the

other competitors and find out their own strengths, weaknesses, rooms for improvements.

The principles of Benchmarking are based on the two ideas:

1. Problems in managing the processes are mostly shared by other processes in

somewhere else.

2. There probably exists another operation elsewhere that has developed better

approaches to do things.

Regarding to Slack et al. (2013), Benchmarking can be applied as continuous

process comparison in order to constantly indentify the weaknesses as well as strengths

among competitors or processes so the organisations can create own competitive

advantages regarding to quality improvement once they can develop other better business

model or techniques.

Secondly, Benchmarking, in another hand, does not provide any particular solutions

except of ideas and information that can help organisation to assess themselves for

improvement.

Thirdly, applying Benchmarking does not mean copying other operations or

processes, it requires studying and adapting new processes with a pragmatic manner.

Last but not least, Bechmarking would require investment.

Beside the Benchmarking, the organisations can carry out the Employees Survey or

Internal assessment by questionnaires to identify the fields that would require the

improvements. Another popular and standard method can be applied is the model

developed by European Foundation for Quality Management (EFQM).

European Foundation for Quality Management

(EFQM)

EFQM Excellence Model is the model that supports to “clarifies the categories of

activity that supposedly ensure high levels of quality; now used by many companies to

examine their own quality-related procedures” (Slack, et al., 2013). According to EFQM

Excellence Model, an excellent organisation would achieve such categories (Knowles,

2011):

1. Achieving a balanced set of results through adapting with customers’ satisfaction

and requirements of other stakeholders in long-term.

2. Adding value for customers through the continuous innovation process

concerning to products and services.

3. Leading with vision, inspiration and integrity.

4. Succeeding through people and considering human resources as main

competitive advantage.

5. Nurturing creativity and innovation.

6. Building good partnership.

7. Taking responsibility for a sustainable future regarding to environmental

factors.

As a results, through above categories of such excellent organisation, EFQM

developed a model that provide holistic view regarding to organisation in the aspect of

pursuing excellence (Knowles, 2009).

Figure 3. EFQM Excellence Model (Slack, et al., 2013)

What are the importance of communication and record keeping?  The communication plays a crucial part in the daily work routine of the organisation

since it is the decisive factor for the flow of information within the internal organisation. In

the aspect of quality managemet, the firms would have to get the proper information as

soon as possible since it can help them to make the immediate implementation and

enhance the customers’ experience. Moreover, the communication also accelerates the

innovation and creative ideas to augment the production. With the good communication

with customers, the firms can know which aspect they need to improve or which are the

strengths in their services or products. As a result, the firms can add more values into the

products and ladder up the customer satisfaction by exceed their expectation. Regarding to

Oakland (2003), the organisation quality management directive must be signed by all

business unit, division or process leaders and every employee within organisation must be

distributed. The directive should include of (Oakland, 2003):

Need for improvement

Concept for total quality

Importance of understanding business process

Approach that will be taken and people’s role

Individual and process group responsibilities

Principles of process measurement

Changes in technology

Regarding to the internal control, the flow of information may help the leaders to

plan the implementation of quality control. The recordings of the past information play

important roles in supporting the leaders make the appropriate comparison and forecast.

Moreover, they also point out the non-conforming process or products that can cause the

fall in quality. The reasons for the record keeping are:

1. Recording can help to track the achievement of the process through the

comparison and benchmarking of different information and data.

2. The record keepings can help the management to identify the change regarding

to customers’ expectations and the gap between expectation and experiences

exist at that time.

3. Record can support the management in confronting with the past and at the

moment data to make improvement if needed.

4. Record keeping can help the management in monitoring the situation of using

the resources and materials to implement the change regarding to improvement.

5. The record keeping can be valuable primary source of data for management to

conduct benchmarking between their organisation’s process with other

competitors’ operation process.

However, during the usage of record keeping, the staffs have to take notice to some

details as below:

1. The data of recording must be legible and retrievable for internal usage.

2. The data must be secured carefully and confidentially to prevent other external

factors that can cause damage to data storage and even espionage.

3. The storage must prevent the external modification or any impact that can cause

change or damage to the data.

In another hand, the record keeping also encounters with some factors of

disadvantages of:

1. It quite takes time and tremendous effort to record and categorise of such large

amount of data.

2. The organisation have to invest cost in implementing an appropriate system for

record keeping process.

3. The organisation have to invest cost in training and developing particular staffs

for operating such system.

4. It requires the commitment from leadership and management concerning to

continuous, integrity and confidential of recording data.

How quality scheme can be effectively implemented by following guidelines on the stages of staff consultation.

In order to make an appropriate implementation of a quality scheme, the leaders

should make a proper communication, consultation or even the training for the staffs since

the human resource is the key factor of the organisation operation and those staffs will be

responsible for transmitting the visionary objectives of the leaders into reality. During the

implementation process, the staffs should be treated as they are the important parts of the

organisations instead of being ordered

For example, when adjusting the new Leadership Competencies Program, IHG had

to make it become a training program firstly in order to support the staffs to have the clear

understanding about the benefits of having leadership competencies (InterContinental

Hotels Group, 2012). After the training, IHG made that progame become an internal audit

and culture in working for staffs.

Deming suggested a model in order to support for such implementation with

“Deming’s Cycle” of PDCA. PDCA is an acronym of Plan-Do-Check-Act. Regarding to Slack et

al. (2013), through the continuous PDCA process, the organisation can have the

incremental growth regarding to the experiences in quality management.

1. Plan (P): the organisation will plan a change or test.

2. Do (D): conduct the change or test, better on small proportion first.

3. Check (C): check the results.

4. Act (A): take action based on the results.

After the step 4 – Act (A) – the organisation can repeat Step 1 with new knowledge.

Propose new systems or modifications to existing systems that could improve service quality

For the InterContinental Hotels Group (IHG), the main problem of the organisation

is that it has so many brands to control and manage (a total of eleven brands worldwide).

Although it has a diversified portfolio of brands and hotel rooms – IHG is the largest hotel

chain measured by room with 679,050 rooms worldwide, the culture and specific values of

those hotel brands bringing to the customers are not clear. So many hotel brands make the

customers feel confuse about the quality as well as the standard of each of them.

Therefore, IHG need to develop the hotel values in the vertical way in stead of

horizontal way. Creating more added value and relationship marketing programs to

enhance the brand awareness of the customers instead of developing more new

brandnames. In addition, IHG can pursue the merge and acquisition strategy to buy the

local authentic hotels to augment the local experience for customers. Moreover, IHG should

focus in training and performance appraisal and management program. Creating a new

comprehensive and interactive training programs in order to help the hotel’s departments

to catch up with the other departments job specification. This will increase the smooth in

operation conduct.

Another aspect that causes the defect in service quality of IHG comes from the

unappropriate management of daily routine mistakes and errors of employees. IHG should

implement a statistical method to identify the most popular mistakes that employees

usually make in order to create suitable training programs to improve their skills as well as

abilities. The recommended approach would be Statistical Process Control (SPC), which can

help IHG in putting the data collection of issues in a more systematic way. IHG needs to

apply the PDCA model of Deming to repeat the solving process until the mistakes becoming

zero.

1. Plan (P): IHG collects the data regarding to frequent mistakes that employees

make in daily routine. Then, IHG establishes the corrective actions that can help

employees to improve themselves.

2. Do (D): IHG tests on a small proportion of employees. Regarding on the collected

result after the test, IHG can make the change to improve the plan.

3. Check (C): IHG checks the results of the change.

4. Act (A): in case the results are positive, IHG then can expand the action to larger

proportion of employees.

Repeating the Steap 1 for other new mistakes.

CONCLUSIONQuality management plays crucial role for any organisation all over the world. The

quality management helps the organisations to create the products and deliver the services

to reach the customers’ expectations and those make the organisations to own the

competitive advantage within the market.

However, the quality management cannot be implemented in an appropriate way if

there does not exist the harmonic collaboration between employees and management. In

most theories of gurus in the aspect of quality management, leadership plays a vital part to

help make the intertwining link between the quality improvement with the strategic

objectives as well as benefits of organisation. With the appropriate objectives, it would be

easy for employees to follow.

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