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CHAPTER 1
Introduction to Quality
Teaching Notes
In the first class session, we typically provide a few introductory remarks about the importance
of quality. A good way to start is to make students read the opener to Part 1 and engage in a
discussion of Harrington’s comments. We often show a video to further engage students. Many
quality-focused videos are available on YouTube. One of our favorite videos features Pal’s
Sudden Service, which is about a small quick service restaurant chain, and was the first quick
service (fast food) restaurant chain to receive the Baldrige Award. A more recent one about
quick service restaurant operations is K&N Management, presented as a case in a later chapter of
the text. Students can easily grasp the significance of quality in these familiar settings.
The first chapter provides an overview of the importance of quality in a rapidly changing
business environment. Actually, that has become a cliché. Perhaps we should use the phrase: “a
chaotic business environment.” Students at both the undergraduate and graduate level are likely
Key objectives for Chapter 1 should include:
• To emphasize that of the three important concepts of performance excellence –
productivity, cost, and quality – the most significant factor in determining the long-run
success or failure of any organization is quality.
• To focus on the multi-faceted definitions of quality. Definitions include transcendent
Introduction to Quality 2
external customers, who may be intermediaries between the producer and the consumer;
and internal customers, who are the recipients of goods and services from suppliers
within the producing firm.
• To define specifications, which are key to the manufacturing perspective, as targets and
tolerances determined by designers of products and services.
• To review the evolution of quality from the 12th Century B.C. Zou Dynasty in China,
through the Craftsmanship era in the 1700’s, through the Japanese post-World War II
• To introduce the concept of quality assurance — providing consumers with goods and
services of appropriate quality, as a point of reference. Statistical quality control (SQC)
is the application of statistical methods for controlling quality. SQC was vital to military
production during World War II, and grew rapidly in application in the following years.
These definitions are often how the average person thinks of quality, but it requires
pointing out its limitations, as technical, rather than managerial, approaches.
• To provide a framework for understanding that the quality movement has influenced not
only product and service improvements, but the way in which organizations are managed,
leading to the concepts of Big Q – managing for quality in all organizational processes as
opposed to simply in manufacturing, referred to as Little Q. In addition, total quality
management (TQM), or simply total quality (TQ), developed as a total, company-wide
effort—through full involvement of the entire workforce, and requiring a focus on
• To show how aligning and integrating quality principles into all fundamental business
activities underlies the concept of performance excellence, characterized by delivery of
ever-improving value to customers and stakeholders, contributing to organizational
sustainability, improvement of overall organizational effectiveness and capabilities, and
organizational and personal learning.
• To explore the failures in quality initiatives, usually resulting from managerial mistakes,
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• To develop the view of a production and service systems that focuses on lateral
relationships, as opposed to the traditional hierarchical view of organizations.
• To differentiate between production and service organizations, as well as their
similarities, and to highlight the differences in service organizations that must be
addressed when designing and implementing quality assurance systems.
• To show that quality in manufacturing and quality in services must be approached
differently in terms of employees’ responsibilities and type and use of technology.
ANSWERS TO QUALITY IN PRACTICE FEATURES
The Evolution of Quality at Xerox: From Leadership Through Quality to Lean Six Sigma
Although Xerox has had its ups and downs during business cycles, that should not prevent you
from using their remarkable turn-around in quality in the 1990’s as a lesson in management
commitment and focus, which is still having an impact. Instructors may want to point out that
Xerox is a prime example of companies that, time after time, have let other business issues blind
1. Contrast Leadership for Quality and Lean Six Sigma as quality initiatives for Xerox.
How did their motivations differ? What differences or similarities are evident in the
principles behind these initiatives and the way in which they were implemented?
In the 1980’s, after stumbling badly, Xerox made a remarkable turn-around in quality by
developing principles that were very similar to the core principles in this chapter. They
incorporated the core principles of: 1) a focus on customer satisfaction; 2) striving for continuous
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improvement; and 3) encouraging the full involvement of the workforce by their three objectives
of Leadership Through Quality These could be summarized as:
The Lean Six Sigma endeavor differs from earlier initiatives in that while it still
incorporates the “old” Leadership Through Quality approach, it places a new emphasis on:
1. Customer-focused employees
2. Participation and teamwork to attain speed and agility
3. Alignment of individual goals and plans with corporate objectives and results
4. Work processes that are customer-focused and with results built on quality
measurement
5. Communication and knowledge sharing for improvement
2. What lessons might this experience—particularly in responding to the new crisis—have
for other organizations?
The lessons that are evident in this experience are that excellence in quality requires excellence
in management, that you “can’t take your eye off the ball” if you aspire to high levels of quality,
and that new competitive challenges require new approaches.
In Xerox’s first lesson, a repeat of what happened in the early 1980’s with different
players, there were a number of management problems that occurred at Xerox in the late 1990’s
and early 2000’s that distracted them from what was happening with customers, employees, and
the competitive environment. As a result (the second lesson), not much attention was paid to
maintaining, much less improving, quality approaches that had been so successful several years
Introduction to Quality 5
Kearns to Allaire to the recently fired Thoman, made necessary changes to fix problems that
were evident at the time, but none of these senior leaders were successful in changing the culture
of the copier bureaucracy, “the Burox”, as they were called, inside the company. Also, as stated
earlier, it is much easier to build and sustain TQ when management has a clear vision, a focus on
customers and continuous improvement, strong measurement systems, a cross-functional
orientation, and high employee morale. Recently, that has not been the case at Xerox. Both
Allaire, who never made a “clean break” after retiring as CEO, and Thoman, who was an
outsider brought in from IBM, were accused of having “their reach exceed their grasp” when it
came to grand strategies that could not be successfully carried out at an operating level. Can one
3. Discuss the meaning of “Quality is a race without a finish line.” What is its significance
to Xerox, or to any organization?
By saying that Quality is a race without a finish line, a slogan that Xerox management has
recently revived, there is a focus on two things: a) quality must not be just a program that will
fade out in a year or two; and b) to embrace the idea of continuous improvement, people must
assume that there will always be better ways found to do things. For Xerox, this includes
communication, becoming a learning organization, and continuing to use benchmarking, a
Quality in Practice: Quality Practices in Modern China
1. Do you see any parallels between China’s early quality efforts and post–World War II
Japan? What differences are evident?
There are obvious parallels between today’s China and post-World War II Japan. The Chinese
have used their abundant human resources to produce low-cost goods sold around the world.
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2. What opportunities can China learn from the progress made in quality in Japan and
the West over the past half-century?
China has a significant opportunity to leverage the learning and take advantage of progress made
in quality in Japan and the West over the past half-century. For example, the author had been
invited to lecture and assist local government officials and industry executives about the Baldrige
Award. Because the West has developed a large base of quality knowledge, there is much that
ANSWERS TO REVIEW QUESTIONS
1. What factors have contributed to the increased awareness of quality in modern business?
There have been several factors contributing to increased awareness of quality including gaps
between U.S. and international competitors’ quality levels, product recalls, and massive quality
failures. The realization of the superior quality of Japanese, German, and other products from
non-U.S. firms in the 1970’s, ‘80’s and up to the present (Then, in initial quality levels; today, in
long-term product reliability) was a wake-up call about the lack of U.S. quality. In the last 20
2. What practices do Motorola and Mid-America Transplant in the Quality Profiles use to
help them achieve high quality?
At Motorola, two key beliefs guide the culture of the firm: respect for people and
uncompromising integrity. Motorola was a pioneer in continual reduction of defects and cycle
times in all the company’s processes, from design, order entry, manufacturing, and marketing, to
administrative functions. Customers report high levels of satisfaction, and the division
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demonstrates strong financial, product quality, cycle time, and productivity performance. These
results stem from exceptional practices in managing human assets, sharing data and information
with employees, customers, and suppliers, and aligning all its business processes with key
organizational objectives.
Mid-America Transplant has a mission-driven workforce, and staff members have an
exceptional level of understanding of how their individual positions align with the Mid-America
Transplant mission of “saving lives through excellence in organ and tissue donation.” The
3. Summarize the six quality perspectives described in this chapter.
The six perspectives are: the transcendent, product, user, value, manufacturing, and customer
perspectives. The customer is the driving force for the production of goods and services, and
customers generally view quality from either the transcendent or the product perspective. The
transcendent, or judgmental, definition of quality holds that quality is “both absolute and
universally recognizable, a mark of uncompromising standards and high achievement.” As such,
it cannot be defined precisely—you just know it when you see it. It is often loosely related to the
features and characteristics of products as featured by marketing efforts to promote product
excellence in the minds of consumers.
The product perspective implies that higher amounts of product attributes are equivalent
to higher quality, so designers often try to incorporate more features into products, whether the
customers want them or not.
The user perspective of quality is meaningful to people who work in marketing. This
leads to a user-based definition of quality – fitness for intended use, or how well the product
performs its intended function. The manufacturer must translate customer requirements into
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4. Distinguish among consumers, external customers, and internal customers. Illustrate
how these concepts apply to a Chipotle’s restaurant, a Walmart, or a similar franchise or
chain store.
Consumers are the final purchasers of a product or service. In the case of fast-food restaurants,
such as Chipotle, they are the people who buy and consume the restaurant’s individually-made
tacos, burritos, etc. External customers are companies within a “chain of customers,” that are
provided with goods and services from suppliers. Chipotle would be an external customer of
5. Explain why a single quality definition is not sufficient.
This can be explained in the context of Figure 1.1 and the discussion in the section “Integrating
Quality Perspectives in the Value Chain.” Customers, and marketing, design, manufacturing
functions view quality differently and apply the concepts to meet their own needs.
6. Briefly summarize the history of quality before and since the industrial revolution. What
caused the most significant changes?
Evidence of quality dates back to ancient Egypt, as indicated in the precision and uniformity of
methods used in the construction of the pyramids. The craftsperson of the Middle Ages took
special care to ensure quality in his/her product, a necessary step since he/she dealt directly with
the customer. In the late 18th Century, Eli Whitney helped trigger the Industrial Revolution with
his development of interchangeable machine parts. The Industrial Revolution itself was a key
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alignment of quality objectives with organizational goals, leading to the concept of performance
excellence.
7. Define the following terms:
a. quality assurance – any planned and systematic activity directed toward providing consumers
with products (goods and services) of appropriate quality, along with the confidence that
products meet consumers’ requirements.
b. total quality – a concept which includes the three fundamental principles of: a focus on
customers; participation and teamwork; and continuous improvement and learning. It requires
that organizations strive to understand the needs and wants of both intermediate customers and
final consumers, seek input of ideas and solutions to problems from employees at every level,
and continuously look for, test, implement, and evaluate new ways to perform organizational
processes, better.
c. performance excellence – an integrated approach to organizational performance management
that results in: 1. Delivery of ever-improving value to customers and stakeholders, contributing
d. competitive advantage – a concept that denotes a firm’s ability to achieve market superiority.
A strong competitive advantage provides customer value, leads to financial success and business
sustainability, and is difficult for competitors to copy. High quality is itself an important source
of competitive advantage.
8. Explain how each major function of a manufacturing system contributes to total quality.
Quality concerns of each major function within a manufacturing system vary. Thus, each major
function contributes to total quality in various ways, as follows:
• Marketing and Sales – Effective market research and solicitation of customer feedback
are necessary for developing quality products.
• Product Design and Process Engineering – Designers and technicians must make sure
that products are not over- or under-engineered. Over-engineering results in ineffective
use of a firm’s resources and products. Under-engineered products with poor process
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• Manufacturing and Assembly – Quality must be built into a product; it cannot be
inspected into it. Proper control of labor, materials, and equipment is necessary to
achieve high quality.
• Tool Engineering – Tools used in manufacturing and inspection must be designed and
maintained for continual production of a quality product. Tool performance should be
consistently monitored so that worn or defective tools can be identified and replaced.
• Industrial Engineering and Process Design – Team members from these areas must
work with product design engineers to develop realistic specifications of quality. In
9. Explain the role of the quality function in a typical company.
The quality function should support and provide guidance for quality activities throughout the
organization. This often includes:
• Quality control (QC). Techniques and activities that focus on controlling or regulating
processes and materials to fulfill quality requirements and prevent defective products or
services from being passed on.
• Metrology. Ensuring that the measurements used in controlling quality are meaningful
and accurate, and ensuring that measurement equipment is calibrated and traceable to the
National Institute of Standards and Technology (NIST).
• Training. Providing training that supports employee skills training and education in
quality-related topics.
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high-quality suppliers are selected and that incoming purchased parts and materials are
acceptable in grade, timeliness, and other characteristics.
• Product/service design. Working with sales, design, and other functions to ensure
quality in products under development.
10. Why is service quality especially important in today’ s business environment?
Service is defined as: “any primary or complementary activity that does not directly produce a
physical product — that is, the non-goods part of the transaction between buyer (customer) and
seller (provider).” Service firms are organizations in industries and sectors including: hotels and
lodging places, and establishments providing personal, business, repair, and amusement services;
health, legal, engineering and other professional services; membership organizations. Real estate
sales and services, financial services, retailers, transportation, and public utility organizations are
also generally considered to be service firms. Basically, they include all nonmanufacturing
11. Discuss the differences between manufacturing and service organizations. What are the
implications of these differences for quality management?
Differences between manufacturing and service organizations are significant, yet both types have
activities that fall into manufacturing and service categories. The contrasts between service and
manufacturing quality include:
• Customer needs and performance standards are difficult to quantify in services.
• The production of services often requires a high degree of customization.
• The output of many services is intangible, unlike manufactured goods.
12. Explain the roles of people and information technology in providing quality service.
How does The Ritz-Carlton Hotel Company, LLC use employees and information
technology for quality service?
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Employees need information technology as a tool for providing quality service in today’s fast–
moving business environment. Information technology is essential in modern service
organizations because of the high volumes of information they must process and because
customers demand service at ever-increasing speeds. Intelligent use of information technology
13. How can business support activities help to sustain quality in an organization? Give
examples of some key business support activities and their role in quality.
Business support activities must aid in quality production in their own separate ways, but still
remain aligned with the organizations’ purpose, objectives, goals, and plans. Support activities
help to provide for specialized handling of non-core processes. Thus, team members in the core
activities can focus on quality issues in their own areas. Key business support activities play a
role in sustaining quality as follows:
• Financial studies can help expose the costs of poor quality and propose ways of reducing
it. Accounting data are useful for identifying areas for quality improvement and tracking
the progress of quality improvement. Financial and accounting personnel can also apply
quality improvement techniques to improve their own operations.
• Human resource managers must ensure that employees have the proper skills, training,
and motivation to do quality work, and that they are recognized and rewarded for such.
14. How does quality support the achievement of competitive advantage?
Introduction to Quality 13
A firm‘s competitive advantage lies in its ability to achieve market superiority. It is a) driven by
customer wants and needs; b) makes a significant contribution to the success of the organization;
c) matches the organization’s unique resources with opportunities in the environment; d) is
durable, lasting, and difficult for competitors to copy; e) provides a basis for further
15. What did Philip Crosby mean by “Quality is free”?
The late Philip Crosby made the point that “quality is free” because he wanted to emphasize the
savings and benefits that have since been more fully (see answer to question 15, below)
documented, in terms of design and conformance quality. Money saved by avoiding scrap,
16. Explain the role of both design and conformance quality in improving a firm’s
profitability.
A product’s value in the marketplace, and hence, its profitability, is influenced by the quality of
its design. Conformance quality is achieved through adherence to specifications of the product,
as designed. Improved conformance to quality standards in production also saves rework, scrap,
and warranty expenses, thus decreasing manufacturing and service costs. Overall quality can be
17. What evidence exists to counter the claim that “Quality does not pay”?
The evidence to counter the claim that “quality does not pay” is mounting. For example, the
Department of Commerce studies of Malcolm Baldrige Award winners through 2002 showed
that an investment in common stock of the winners would have produced a 3.8 to 1 advantage
over a similar investment in the S&P 500. However, in 2003, for the first time since the Baldrige
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18. Why is it important to personalize quality principles?
Personal quality is an often-neglected area, which, if emphasized, can have a significant impact
on individuals and organizations. Simply by recording defects in specific categories, the number
ANSWERS TO DISCUSSION QUESTIONS
1. Discuss how either good or poor quality affects you personally as a consumer. For
instance, describe experiences in which your expectations were met, exceeded, or not met
when you purchased goods or services. Did your experience change your regard for the
organization and/or its product? How?
Students should have numerous personal examples of how good and poor quality has affected
them. Often, they are harder pressed to come up with an example of good quality than one of
poor quality. For example, one of the authors experienced outstanding quality when he went to a
2. Discuss the importance of quality to the national interest of any country in the world.
Given China’s emergence as a global economic power, of what importance do you believe
that quality will play in their future?
Quality has been a topic of national interest in the U.S. as well as to countries around the globe
since the discovery by many consumers in the early 1970’s that many goods and services
produced in certain quality-focused countries, or by specific companies, had higher quality
standards in production and better track records with consumers. In the past, American
negligence of quality resulted in consumers preferring foreign-made products. This preference
Introduction to Quality 15
3. We noted that high quality is not necessarily related to price. Discuss this, drawing from
your own knowledge and experience, and provide examples where this may and may not be
true.
As emphasized throughout this chapter, quality has a number of definitions and aspects. Thus it
is difficult to say whether quality is closely or distantly related to price in a specific case. Most
people, whether rich or poor, exhibit some sense of being value-conscious in defining quality.
They look for bargains where they can get more, and/or spend less, than they had expected for a
similar good or service. Thus they want to obtain the “biggest bang for their buck,” whether
buying a luxury SUV or an economy sub-compact car. Either or both of those can be bargains if
4. A reader wrote to Business Week (July 9 & 16, 2007, p. 16) and noted: “ Americans have
switched from Detroit Big Three vehicles to Honda and Toyota vehicles not for visual
design features but for durability, reliability, good fuel consumption, and low full cost of
operation. Detroit needs to offer five-passenger, 35-mile-per-gallon vehicles with 100,000-
mile bumper–to-bumper warranties over 10 years of ownership to cause satisfied Honda
and Toyota buyers to switch.” What definitions of quality are implied in these comments?
The definitions of quality implied in these comments emphasize a product-based and “fitness for
use” perspective, based on value. The writer may also be implying that the after-market service
quality of the traditional Detroit auto companies is not competitive with such firms as Toyota or
5. Choose a product or service to illustrate how several definitions of quality can apply
simultaneously.
Students should be able to find many good examples. For example, if a student chooses an Apple
watch, he or she may point to its transcendent quality. The student might say, “I just like the