Which of the following increases quality risks? In any event, it must be the wrong decision. We have all heard of this sentence, “Risk is always evil,” but it is increasingly evident that many companies have chosen to ignore this vital truth. While this may make sense from a business perspective, which I am not qualified to evaluate, the fact remains that many companies do not understand the full implications of this statement. For our purposes, let’s assume that risk is constantly and consistently wrong.
A company should never choose to build its infrastructure in less-developed countries because of lower costs. If we are talking about customer satisfaction, then this argument has some merit. Customer service quality may indeed be affected by the country in which a company operates. However, the opposite is often true – cheaper labor markets typically increase the amount of low-quality service that customers experience, leading to higher customer dissatisfaction.
Let me explain. Most companies conduct quality assessments, but they often base these assessments on subjective criteria rather than objective criteria such as incidence data. This means that although some cases may be more severe than others, the evaluation may not necessarily point to one of the quality risks described above. For example, which of the following causes an increase in customer dissatisfaction? The answer is none because no objectively measurable event caused customer dissatisfaction.
Let us look at two dimensions. On the one hand, customer satisfaction is a continuous, unidirectional function that changes only when customer expectations change. Therefore, if the customer expectations are already high, there is no reason to expect that they will decrease. Thus, it is entirely predictable that the correlation between an increase in service quality and an increase in customer dissatisfaction will be zero or, at most, very small. If, however, the customer expectations are lower than the current performance level, then a decrease in dissatisfaction is possible along with an increase in perceived quality.
Now let us look at the other two dimensions of which we have just been concerned. In the first dimension, external failure affects conformance levels. Conformity affects company reputation, the image of the company, and the company’s ability to compete. This, therefore, reduces the overall profitability of the company in any market situation. Thus, an increase in external failure would tend to raise quality risk profiles.
In the second dimension, sustained quality improvement can result in wrong sizes. This occurs when, instead of identifying problem areas, organizations settle for correcting a few aspects instead of changing the entire system. This type of discrepancy between quality targets and actual performance results can result in false economies. In practice, companies resolve inaccurate dimensions by improving service, quality, and timeliness. However, if these improvements do not improve real-world business outcomes, false dimensions remain and cause tradeoffs in quality.
In this article, two dimensions of quality management have been considered. The first dimension, quality management goals, has been repeatedly called out as the most critical indicator of company quality. Without clearly defined plans, and inactivity due to lack of funds and interest in the goal may mean achieving no company targets. Thus, companies cannot improve. Likewise, companies are bound to fail if company managers do not set the necessary plans, even with high productivity levels.
In the following articles, I will discuss the remaining three dimensions of quality management: company profitability, customer satisfaction, and false quality risks. In the meantime, I encourage you to explore the other dimensions and consider what they might mean for your company. I do not think that this is all you need to know because I have several additional articles that address these issues more thoroughly. In particular, you should investigate the definition of continuous improvement and its relation to time and budget. Finally, remember that continual improvement requires constant monitoring, so it is a good idea to regularly examine whether these efforts are improving the business for your customers and employees, and if so, how!