BS Management

SIXTH EDITION

Quality Management for Organizational Excellence Introduction to Total Quality

David L Goetsch Stanley B. Davis

Pearson Education International

CONTENTS

PART ONE Philosophy and Concepts 1

CHAPTER 1 The Total Quality Approach to Quality Management: Achieving Organizational Excellence 3

I WHAT IS QUALITY? 4

QUALITY, VALUE, AND ORGANIZATIONAL EXCELLENCE 6

THE TOTAL QUALITY APPROACH DEFINED 6

Two VIEWS OF QUALITY 9

KEY ELEMENTS OF TOTAL QUALITY 10

TOTAL QUALITY PIONEERS 12

KEYS TO TOTAL QUALITY SUCCESS 19

THE FUTURE OF QUALITY MANAGEMENT IN THE 21ST CENTURY 21

SUMMARY 22

KEY TERMS AND CONCEPTS 23

FACTUAL REVIEW QUESTIONS 23

CRITICAL THINKING ACTIVITY 23

DISCUSSION ASSIGNMENTS 24

ENDNOTES 2 5 /

CHAPTER 2 Quality and Global Competitiveness 26

THE RELATIONSHIP BETWEEN QUALITY AND COMPETITIVENESS 27

COST OF POOR QUALITY 27

COMPETITIVENESS AND THE U.S. ECONOMY 29

FACTORS INHIBITING COMPETITIVENESS 30

COMPARISONS OF INTERNATIONAL COMPETITORS 36

HUMAN RESOURCES AND COMPETITIVENESS 36

CHARACTERISTICS OF WORLD-CLASS ORGANIZATIONS 37

MANAGEMENT BY ACCOUNTING: ANTITHESIS OF TOTAL QUALITY 40

U.S. COMPANIES: GLOBAL STRENGTHS AND WEAKNESSES 41

QUALITY MANAGEMENT PRACTICES IN ASIAN COUNTRIES 43

SUMMARY 44

KEY TERMS AND CONCEPTS 44

FACTUAL REVIEW QUESTIONS 45

CRITICAL THINKING ACTIVITY 45

DISCUSSION ASSIGNMENTS 45

ENDNOTES 46

V I I

viii Contents

CHAPTER 3 Strategic Management: Planning and Execution for Competitive Advantage 47

W H A T IS STRATEGIC MANAGEMENT? 48

COMPETITIVE STRATEGY 48

CORE COMPETENCIES AND COMPETITIVE ADVANTAGE 48

COMPONENTS OF STRATEGIC MANAGEMENT 49

STRATEGIC PLANNING OVERVIEW 50

CREATIVE THINKING IN STRATEGIC PLANNING 50

CONDUCTING THE SWOT ANALYSIS 51

DEVELOPING THE VISION 53

DEVELOPING THE MISSION 54

DEVELOPING THE GUIDING PRINCIPLES 56

DEVELOPING BROAD STRATEGIC OBJECTIVES 57

DEVELOPING SPECIFIC TACTICS (ACTION PLAN) 60

EXECUTING THE STRATEGIC PLAN 64

STRATEGIC PLANNING IN ACTION: A "REAL-WORLD" CASE 65

SUMMARY 69

KEY TERMS AND CONCEPTS 70

FACTUAL REVIEW QUESTIONS 70

CRITICAL THINKING ACTIVITY 71

ENDNOTES 71

CHAPTER 4 Quality Management, Ethics, and Corporate Social Responsibility 72

DEFINITION AND OVERVIEW OF ETHICS 73

TRUST AND TOTAL QUALITY 75

VALUES AND TOTAL QUALITY 77

INTEGRITY AND TOTAL QUALITY 79

RESPONSIBILITY AND TOTAL QUALITY 79

MANAGER'S ROLE IN ETHICS 79

ORGANIZATION'S ROLE IN ETHICS 81

HANDLING ETHICAL DILEMMAS 82

ETHICS TRAINING AND CODES OF BUSINESS CONDUCT 82

MODELS FOR MAKING ETHICAL DECISIONS 84

BELIEFS VERSUS BEHAVIOR: W H Y THE DISPARITY? 85

ETHICAL DILEMMAS: CASES 87

CORPORATE SOCIAL RESPONSIBILITY DEFINED 90

SUMMARY 91

KEY TERMS AND CONCEPTS 91

FACTUAL REVIEW QUESTIONS 92

CRITICAL THINKING ACTIVITY 92

Contents ix

DISCUSSION ASSIGNMENT 92 x

ENDNOTES 93

CHAPTER 5 Partnering and Strategic Alliances 94

PARTNERING OR STRATEGIC ALLIANCES 94

INNOVATIVE ALLIANCES AND PARTNERSHIPS 99

INTERNAL PARTNERING 99

PARTNERING WITH SUPPLIERS 101

PARTNERING WITH CUSTOMERS 105

PARTNERING WITH POTENTIAL COMPETITORS 106

GLOBAL PARTNERING 110

EDUCATION AND BUSINESS PARTNERSHIPS 110

SUMMARY 111

KEY TERMS AND CONCEPTS 111

FACTUAL REVIEW QUESTIONS 112

CRITICAL THINKING ACTIVITY 112

DISCUSSION ASSIGNMENTS 113

ENDNOTES 114

CHAPTER 6 Quality Culture: Changing Hearts, Minds, and Attitudes 115

/ UNDERSTANDING WHAT A QUALITY CULTURE IS 115

QUALITY CULTURE VERSUS TRADITIONAL CULTURES 117

ACTIVATING CULTURAL CHANGE 119

CHANGING LEADERS TO ACTIVATE CHANGE 120

LAYING THE FOUNDATION FOR A QUALITY CULTURE 120

LEARNING WHAT A QUALITY CULTURE LOOKS LIKE 123

COUNTERING RESISTANCE TO CULTURAL CHANGE 123

ESTABLISHING A QUALITY CULTURE 127

MAINTAINING A QUALITY CULTURE 131

SUMMARY 131

KEY TERMS AND CONCEPTS 132

FACTUAL REVIEW QUESTIONS 133

CRITICAL THINKING ACTIVITY 133

DISCUSSION ASSIGNMENT 133

ENDNOTES 134

CHAPTER 7 Customer Satisfaction, Retention, and Loyalty 135

UNDERSTANDING W H O IS A CUSTOMER 136

UNDERSTANDING CUSTOMER-DEFINED QUALITY 136

IDENTIFYING EXTERNAL CUSTOMER NEEDS 137

IDENTIFYING INTERNAL CUSTOMER NEEDS 140

Contents

COMMUNICATING WITH CUSTOMERS 141

USING CUSTOMER FEEDBACK TO MAKE DESIGN IMPROVEMENTS 142

CUSTOMER SATISFACTION PROCESS 143

CUSTOMER-DEFINED VALUE 144

CUSTOMER VALUE ANALYSIS 145

CUSTOMER RETENTION 146

ESTABLISHING A CUSTOMER FOCUS 148

RECOGNIZING THE CUSTOMER-DRIVEN ORGANIZATION 150

VALUE PERCEPTION AND CUSTOMER LOYALTY 150

CUSTOMER LOYALTY MODEL 151

CUSTOMER LOYALTY VERSUS CUSTOMER PROFITABILITY 152

CUSTOMERS AS INNOVATION PARTNERS 154

SUMMARY 155

KEY TERMS AND CONCEPTS 156

FACTUAL REVIEW QUESTIONS 156

CRITICAL THINKING ACTIVITY 157

DISCUSSION ASSIGNMENTS 157

ENDNOTES 158

CHAPTER 8 Employee Empowerment 160

EMPLOYEE EMPOWERMENT DEFINED 160

RATIONALE FOR EMPOWERMENT 162

INHIBITORS OF EMPOWERMENT 163

MANAGEMENT'S ROLE IN EMPOWERMENT 167

IMPLEMENTING EMPOWERMENT 168

How TO RECOGNIZE EMPOWERED EMPLOYEES 171

AVOIDING EMPOWERMENT TRAPS 172

BEYOND EMPOWERMENT TO ENLISTMENT 172

SUMMARY 173

KEY TERMS AND CONCEPTS 174

FACTUAL REVIEW QUESTIONS 174

CRITICAL THINKING AcnviTY 174

DISCUSSION ASSIGNMENTS 175

ENDNOTES 176

CHAPTER 9 Leadership and Change 177

LEADERSHIP DEFINED 178

LEADERSHIP FOR QUALITY 181

LEADERSHIP SKILLS: INHERITED OR LEARNED? 183

LEADERSHIP, MOTIVATION, AND INSPIRATION 183

LEADERSHIP STYLES 184

Contents xi

LEADERSHIP STYLE IN A TOTAL QUALITY SETTING 186

BUILDING AND MAINTAINING A FOLLOWING 186

LEADERSHIP VERSUS MANAGEMENT 189

LEADERSHIP AND ETHICS 190

LEADERSHIP AND CHANGE 190

EMPLOYEES AND MANAGERS ON CHANGE 191

RESTRUCTURING AND CHANGE 191

How TO LEAD CHANGE 192

LESSONS FROM DISTINGUISHED LEADERS 197

SERVANT LEADERSHIP AND STEWARDSHIP 203

NEGATIVE INFLUENCES ON LEADERS: H O W TO COUNTER THEM 205

SUMMARY 206

KEY TERMS AND CONCEPTS 206

FACTUAL REVIEW QUESTIONS 207

CRITICAL THINKING ACTIVITY 207

DISCUSSION ASSIGNMENTS 208

ENDNOTES 209

CHAPTER 10 Team Building and Teamwork 210

OVERVIEW OF TEAM BUILDING AND TEAMWORK 210

BUILDING TEAMS AND MAKING THEM WORK 213

FOUR-STEP APPROACH TO TEAM BUILDING 216

CHARACTER TRAITS AND TEAMWORK 220

TEAMS ARE C O A C H E D — N O T BOSSED 222

HANDLING CONFLICT IN TEAMS 224

STRUCTURAL INHIBITORS OF TEAMWORK 226

REWARDING TEAM AND INDIVIDUAL PERFORMANCE 227

RECOGNIZING TEAMWORK AND TEAM PLAYERS 229

LEADING MULTICULTURAL TEAMS 230

SUMMARY 231

KEY TERMS AND CONCEPTS 232

FACTUAL REVIEW QUESTIONS 232

CRITICAL THINKING ACTIVITY 232

DISCUSSION ASSIGNMENT 232

ENDNOTES 233

CHAPTER 11 Effective Communication 234

DEFINING COMMUNICATION 234

UNDERSTANDING THE ROLE OF COMMUNICATION IN TOTAL QUALITY 236

UNDERSTANDING COMMUNICATION AS A PROCESS 237

RECOGNIZING INHIBITORS OF COMMUNICATION 237

xii Contents

ESTABLISHING A CONDUCIVE COMMUNICATION CLIMATE 239

COMMUNICATING BY LISTENING 240

UNDERSTANDING NONVERBAL COMMUNICATION FACTORS 245

COMMUNICATING VERBALLY 247

COMMUNICATING IN WRITING 249

COMMUNICATING CORRECTIVE FEEDBACK 252

IMPROVING COMMUNICATION 253

How INTERPERSONAL SKILLS AFFECT COMMUNICATION 255

PERSONALITY AND COMMUNICATION 256

SUMMARY 258

KEY TERMS AND CONCEPTS 259

FACTUAL REVIEW QUESTIONS 259

CRITICAL THINKING ACTIVITY 260

DISCUSSION ASSIGNMENT 260

ENDNOTES 260

CHAPTER 12 Education and Training 262

OVERVIEW OF EDUCATION, TRAINING, AND LEARNING 262

RATIONALE FOR TRAINING 268

TRAINING NEEDS ASSESSMENT 271

PROVIDING TRAINING 274

EVALUATING TRAINING 277

MANAGERS AS TRAINERS AND TRAINEES 279

WORKFORCE LITERACY 286

IMPROVING LEARNING 287

WHY TRAINING SOMETIMES FAILS 288

QUALITY TRAINING CURRICULUM 289

ORIENTATION TRAINING 290

CUSTOMER TRAINING 291

ETHICS TRAINING 292

MAKING E-LEARNING WORK 292

SUMMARY 293

KEY TERMS AND CONCEPTS 294

FACTUAL REVIEW QUESTIONS 295

CRITICAL THINKING ACTIVITY 295

DISCUSSION ASSIGNMENTS 296

ENDNOTES 297

CHAPTER 13 Overcoming Politics, Negativity, and Conflict in the Workplace 298

INTERNAL POLITICS DEFINED 299

POWER AND POLITICS 300

ORGANIZATIONAL STRUCTURE AND INTERNAL POLITICS 301

Contents xiii

INTERNAL POLITICS IN ACTION 304

INTERNAL POLITICIANS AND THEIR METHODS 307

IMPACT OF INTERNAL POLITICS ON QUALITY 312

CONTROLLING INTERNAL POLITICS IN ORGANIZATIONS 315

OVERCOMING NEGATIVITY IN ORGANIZATIONS 322

OVERCOMING TERRITORIAL BEHAVIOR IN ORGANIZATIONS 323

MANAGING CONFLICT IN ORGANIZATIONS 324

SUMMARY 328

KEY TERMS AND CONCEPTS 329

FACTUAL REVIEW QUESTIONS 329

CRITICAL THINKING ACTIVITY 330

DISCUSSION ASSIGNMENTS 330

ENDNOTES 331

CHAPTER 14 ISO 9000 and Total Quality: The Relationship 332

ISO 9000: THE INTERNATIONAL STANDARD FOR QUALITY MANAGEMENT SYSTEMS 332

ISO 9000's OBJECTIVE 334

How ISO 9000 Is APPLIED TO ORGANIZATIONS . 334

THE ISO 9000 QUALITY MANAGEMENT SYSTEM: A DEFINITION 335

AUTHORITY FOR CERTIFICATION/REGISTRATION 336

ISO 9000 REGISTRATION STATISTICS 336

ORGANIZATIONAL REGISTRATION TO ISO 9001 338

BENEFITS OF ISO 9000 339

THE ORIGIN OF ISO 9000 339

COMPARATIVE SCOPE OF ISO 9000 AND TOTAL QUALITY MANAGEMENT 340

MANAGEMENT MOTIVATION FOR REGISTRATION TO ISO 9001 342

ISO 9000 AND TOTAL QUALITY MANAGEMENT WORKING TOGETHER 343

THE FUTURE OF ISO 9000 344

SUMMARY 345

KEY TERMS AND CONCEPTS 345

FACTUAL REVIEW QUESTIONS 346

CRITICAL THINKING ACTIVITY 346

DISCUSSION ASSIGNMENT 346

ENDNOTES 347

PART TWO Tools and Techniques 349

CHAPTER 15 Overview of Total Quality Tools 351

TOTAL QUALITY TOOLS DEFINED 352

PARETO CHARTS 352

xiv Contents

CAUSE-AND-EFFECT DIAGRAMS 355

CHECK SHEETS 359

HISTOGRAMS 363

SCATTER DIAGRAMS 372

R U N CHARTS AND CONTROL CHARTS 375

STRATIFICATION 377

SOME OTHER TOOLS INTRODUCED 380

MANAGEMENT'S ROLE IN TOOL DEPLOYMENT 389

SELECTING THE RIGHT TOOL FOR THE JOB 391

SUMMARY 391

KEY TERMS AND CONCEPTS 393

FACTUAL REVIEW QUESTIONS 393

CRITICAL THINKING ACTIVITIES 394

DISCUSSION ASSIGNMENT 397

ENDNOTES 397

CHAPTER 16 Problem Solving and Decision Making 398

PROBLEM SOLVING FOR TOTAL QUALITY 399

Two MODELS FOR SOLVING AND PREVENTING PROBLEMS 400

PROBLEM-SOLVING AND DECISION-MAKING TOOLS 408

DECISION MAKING FOR TOTAL QUALITY 408

THE DECISION-MAKING PROCESS 409

OBJECTIVE VERSUS SUBJECTIVE DECISION MAKING 411

SCIENTIFIC DECISION MAKING AND PROBLEM SOLVING 412

EMPLOYEE INVOLVEMENT IN PROBLEM SOLVING AND DECISION MAKING 414

ROLE OF INFORMATION IN DECISION MAKING 415

USING MANAGEMENT INFORMATION SYSTEMS 417

CREATIVITY IN DECISION MAKING 418

SUMMARY 419

KEY TERMS AND CONCEPTS 420

FACTUAL REVIEW QUESTIONS 421

CRITICAL THINKING ACTIVITY 421

DISCUSSION ASSIGNMENTS 423

ENDNOTES 424

CHAPTER 17 Quality Function Deployment 425

WHAT IS QFD? 425

BENEFITS OF QFD 428

CUSTOMER INFORMATION: FEEDBACK AND INPUT 429

QFD TOOLS 431

IMPLEMENTING QFD 436

Contents x v

SUMMARY 440

KEY TERMS AND CONCEPTS 440

FACTUAL REVIEW QUESTIONS 441

CRITICAL THINKING ACTIVITY 441

DISCUSSION ASSIGNMENT 441

ENDNOTES 441

CHAPTER 18 Optimizing and Controlling Processes Through Statistical Process Control 442

STATISTICAL PROCESS CONTROL DEFINED 443

RATIONALE FOR SPC 444

CONTROL CHART DEVELOPMENT 450

MANAGEMENT'S ROLE IN SPC 462

ROLE OF THE TOTAL QUALITY TOOLS 463

AUTHORITY OVER PROCESSES AND PRODUCTION 464

IMPLEMENTATION AND DEPLOYMENT OF SPC 465

INHIBITORS OF SPC 471

SUMMARY 473

KEY TERMS AND CONCEPTS 474

FACTUAL REVIEW QUESTIONS 474

CRITICAL THINKING ACTIVITY 475

DISCUSSION ASSIGNMENTS 475

ENDNOTES 480

CHAPTER 19 Continual Improvement Methods with Six Sigma, Lean, and Lean Six Sigma 481

RATIONALE FOR CONTINUAL IMPROVEMENT 481

MANAGEMENT'S ROLE IN CONTINUAL IMPROVEMENT 482

ESSENTIAL IMPROVEMENT ACTIVITIES 482

STRUCTURE FOR QUALITY IMPROVEMENT 484

THE SCIENTIFIC APPROACH 485

IDENTIFICATION OF IMPROVEMENT NEEDS 486

DEVELOPMENT OF IMPROVEMENT PLANS 487

COMMON IMPROVEMENT STRATEGIES 488

ADDITIONAL IMPROVEMENT STRATEGIES 491

THE KAIZEN APPROACH 494

GOLDRATT'S THEORY OF CONSTRAINTS 498

THE CEDAC APPROACH 499

Six SIGMA CONCEPT 503

LEAN OPERATIONS 508

LEAN SIX SIGMA 511

xvi Contents

SUMMARY 513

KEY TERMS AND CONCEPTS 514

FACTUAL REVIEW QUESTIONS 515

CRITICAL THINKING ACTIVITY 515

ENDNOTES 515

CHAPTER 20 Benchmarking 517

BENCHMARKING DEFINED 518

BENCHMARKING VERSUS REENGINEERING 519

RATIONALE FOR BENCHMARKING 520

PREREQUISITES TO BENCHMARKING 522

OBSTACLES TO SUCCESSFUL BENCHMARKING 523

ROLE OF MANAGEMENT IN BENCHMARKING 524

BENCHMARKING APPROACH AND PROCESS 526

MAKING FULL USE OF BENCHMARKING DATA 531

PERPETUAL BENCHMARKING 531

BENCHMARKING RESOURCES 532

SUMMARY 532

KEY TERMS AND CONCEPTS 533

FACTUAL REVIEW QUESTIONS 533

CRITICAL THINKING ACTIVITY 534

DISCUSSION ASSIGNMENTS 536

ENDNOTE 537

CHAPTER 21 Just-in-Time Manufacturing 538

WHAT D O W E CALL IT? 538

JIT DEFINED 538

RATIONALE FOR JIT 540

DEVELOPMENT OF JIT 542

RELATIONSHIP OF JIT TO TOTAL QUALITY AND WORLD-CLASS

MANUFACTURING 548

BENEFITS OF JIT 549

REQUIREMENTS OF JIT 559

AUTOMATION AND JIT 574

SUMMARY 575

KEY TERMS AND CONCEPTS 575

FACTUAL REVIEW QUESTIONS 576

CRITICAL THINKING ACTIVITY 577

DISCUSSION ASSIGNMENTS 577

ENDNOTES 579

Contents xvii

CHAPTER 22 Implementing Total Quality Management 581

RATIONALE FOR CHANGE 582

REQUIREMENTS FOR IMPLEMENTATION 585

ROLE OF TOP MANAGEMENT: LEADERSHIP 594

ROLE OF MIDDLE MANAGEMENT 596

VIEWPOINTS OF THOSE INVOLVED 597

IMPLEMENTATION VARIATION AMONG ORGANIZATIONS 597

IMPLEMENTATION APPROACHES TO BE AVOIDED 601

A N IMPLEMENTATION APPROACH THAT WORKS 602

GETTING O N WITH IT 607

W H A T TO D O IN THE ABSENCE OF COMMITMENT FROM THE T O P 607

IMPLEMENTATION STRATEGIES: ISO 9000 AND BALDRIGE 609

SUMMARY 611

KEY TERMS AND CONCEPTS 612

FACTUAL REVIEW QUESTIONS 612

CRITICAL THINKING ACTIVITY 613

DISCUSSION ASSIGNMENT 615

ENDNOTES 615

INDEX 616