Chapter 16
Organizational Control and Quality Improvement
1. Feedforward control is preventive in nature, whereas feedback control is based on the evaluation of past performance. Managers engage in concurrent control when they monitor and adjust ongoing operations to keep them performing up to standard. The three basic components of organizational control systems are objectives, standards, and an evaluation-reward system.
2. According to the performance pyramid, strategic control involves the downward translation of objectives and the upward translation of performance measures. Both external effectiveness and internal efficiency criteria need to be achieved.
3. The four elements of a crisis management program are (1) anticipate (conduct a crisis audit), (2) plan (formulate contingency plans), (3) staff (create a crisis management team), and (4) practice (perfect the program through practice).
4. Product quality involves much more than the basic idea of “conformance to requirements.” Five types of product quality are transcendent, product-based, user-based, manufacturing-based, and value-based.
5. Service providers face a unique set of challenges that distinguish them from manufacturers. Because we live in a predominantly service economy, it is important to recognize these challenges: (1) direct customer participation, (2) immediate consumption of services, (3) provision of services at customers’ convenience, (4) the tendency of services to be more labor-intensive than manufacturing, and (5) the intangibility of services, making them harder to measure. Consumer research uncovered five service-quality dimensions: reliability, assurance, tangibles, empathy, and responsiveness (RATER). Consumers consistently rank reliability number one.
6. Total quality management (TQM) involves creating a culture dedicated to customer-centered, employee-driven continuous improvement. The four TQM principles are
• Do it right the first time.
• Be customer-centered.
• Make continuous improvement a way of life.
• Build teamwork and empowerment.
7. Seven basic TQM process improvement tools are flow charts, fishbone diagrams, Pareto analysis, control charts, histograms, scatter diagrams, and run charts.
8. Deming’s plan-do-check-act (PDCA) cycle forces managers to make decisions and take actions on the basis of observed and carefully measured data. This procedure removes quality-threatening guesswork. The PDCA cycle also helps managers focus on what is really important. PDCA work never ends, because lessons learned from one cycle are incorporated into the next.
9. Deming formulated his famous 14 points in an effort to revolutionize Western management practices. In summary, they urge managers to seek continuous improvement through extensive training, leadership, teamwork, and self-improvement. The points call for doing away with mass quality inspections; with selecting suppliers only on the basis of low cost, fear, slogans, and numerical quotas: and with barriers to pride in workmanship. This transformation, according to Deming, is everyone’s job.