Study Guide to Go

Chapter 8: Maintaining Control and Improving

Quality
Chapter Outlines

Fundamentals of Organizational Control

Types of Control
Components of Organizational Control Systems
Identifying Control Problems

The Quality Challenge

Defining Quality
Five Types of Product Quality
Unique Challenges for Service Providers
Defining Service Quality

An Introduction to Total Quality Management (TQM)

1. Do It Right the First Time
2. Be Customer-Centered
3. Make Continuous Improvement a Way of Life
4. Build Teamwork and Empowerment
The Seven Basic TQM Process Improvement Tools

Deming Management
Principles of Deming Management
Deming’s 14 Points

Glossary

control taking preventive or corrective actions to keep things on track.

feedforward control active anticipation and prevention of problems, rather than

passive reaction.

concurrent control monitoring and adjusting ongoing activities and processes.

feedback control checking a completed activity and learning from mistakes.

benchmarking identifying, studying, and building upon the best practices of

organizational role models.

executive reality check top managers periodically working at lower-level jobs to

become more aware of operations.

internal auditing independent appraisal of organizational operations and

systems to assess effectiveness and efficiency.

quality conformance to requirements.

total quality management (TQM) creating an organizational culture committed

to continuous improvement in every regard.

internal customer anyone in your organization who cannot do a good job unless
you do a good job.

customer-centered satisfying the customers needs by anticipating, listening,

and responding.

kaizen a Japanese word meaning continuous improvement.

flow chart graphic display of a sequence of activities and decisions.

fishbone diagram a cause-and-effect diagram.

Pareto analysis bar chart indicating which problem needs the most attention.

control chart visual aid showing acceptable and unacceptable variations from
the norm for repetitive operations.

histogram bar chart indicating deviations from a standard bell-shaped curve.

scatter diagram diagram that plots relationships between two variables.

run chart a trend chart for tracking a variable over time.

Deming management application of W. Edwards Demings ideas for more

responsive, more democratic, and less wasteful organizations.

PDCA cycle Demings plan-do-check-act cycle, which relies on observed data to

continuously improve operations.
 Learning Objective Summary

Learning Objective 1: Describe three types of control, and identify the

components common to all control systems.
• Feedforward control is preventive in nature.
• Feedback control is based on the evaluation of past performance.
• Concurrent control occurs when managers monitor and adjust ongoing
operations to keep them performing to
standard.
• The three basic components of organizational control systems are objectives,
standards, and an evaluation reward system.

Learning Objective 2: Identify five types of product quality, explain

how providing a service differs from manufacturing a product, and list
the five service-quality dimensions.
• 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.
• Service providers face a unique set of challenges that distinguish them from
manufacturers:
- Direct customer participation
- Immediate consumption of services
- Provision of services at customers’ convenience
- Tendency of services to be more labor-intensive than manufacturing
- 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.

Learning Objective 3: Define total quality management (TQM), discuss

the basic TQM principles, and describe at least three of the seven TQM
process improvement tools.
• Total quality management (TQM) involves creating a culture that is 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.
• Seven basic TQM process improvement tools are flow charts, fishbone
diagrams, Pareto analysis, control charts, histograms, scatter diagrams, and run
charts.

Learning Objective 4: Explain how Deming’s PDCA cycle can improve

the overall management process, and identify at least four of Deming’s
famous 14 points.
• 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.
• PDCA work never ends because lessons learned from one cycle are
incorporated into the next.
• Deming’s famous 14 points seek to revolutionize Western management
practices:
- In general, 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, selecting suppliers
only on the basis of low cost, fear, slogans and numerical quotas, and barriers to
pride in workmanship.
• Transformation, according to Deming, is everyone’s job.

Test Preppers

Test Prepper 8.1

True or False?

_____ 1. The control function involves preventive or corrective actions.

_____ 2. An example of feedforward control is putting a higher grade of gasoline into
your car to keep it running well.
_____ 3. The organization’s culture is a control subsystem.
_____ 4. Although objectives are useful performance targets, they are of little practical
use in the control function.
_____ 5. The essence of executive reality checking is hiring outside consultants to
monitor how well the organization is doing.
_____ 6. Employee dissatisfaction can be a sign of inadequate control.

Multiple Choice
_____ 7. To measure performance during the control function, _____ serve as
yardsticks.
a. organization charts
b. budgets
c. strategic plans
d. operational plans
e. objectives

_____ 8. _____ control involves monitoring and adjusting ongoing activities and
processes.
a. Benchmarking
b. Concurrent
c. Quality
d. Feedback
e. Feedforward

_____ 9. An air-freight shipping company must constantly keep a close eye on the
weather. This is an example of what kind of control?
a. Secondary
b. Preliminary
c. Feedforward
d. Feedback
e. Conventional

_____ 10. Which of these involves identifying, studying, and building upon the best
practices of organizational role models?
a. Benchmarking
b. Kaizen
c. Pareto analysis
d. PDCA cycle
e. TQM

_____ 11. Bidu has implemented a new strategy at his public accounting firm for
identifying control problems. He has asked a group of employees to appraise various
operations and systems within the firm. Which control technique is Bidu implementing?
a. Concurrent control
b. External auditing
c. Executive reality check
d. Social auditing
e. Internal auditing

Test Prepper 8.2

True or False?
_____ 1. According to Philip Crosby, “conformance to requirements” is the basic
definition of quality.
_____ 2. Another name for value-based quality is manufacturing-based quality.
_____ 3. Because they are intangible, services cannot be measured.
_____ 4. “Assurance” was identified by Texas A&M researchers as one of the five service
quality dimensions.

Multiple Choice
_____ 5. Which of the following is not a product quality type?
a. Feature-based quality
b. Transcendent quality
c. Product-based quality
d. User-based quality
e. Value-based quality

_____ 6. When a textile manufacturing manager does a cost-benefit analysis on a new

state-of-the-art stitching machine, the type of product quality at issue is
a. value-based.
b. product-based.
c. user-based.
d. manufacturing-based.
e. transcendent.

_____ 7. The RATER service-quality dimension that relates to the provision of caring and
individualized attention to customers is
a. assurance.
b. reliability.
c. responsiveness.
d. professionalism.
e. empathy.

Test Prepper 8.3

True or False?

_____ 1. TQM has no connection with the organization’s culture (an internal factor)
because it is customer-driven (an external force).
_____ 2. Kaizen is a Chinese word meaning “rise above.”
_____ 3. Empowering employees at all levels is at the heart of TQM.
_____ 4. To reduce costs and eliminate unnecessary steps, managers should use
flowcharts.
_____ 5. A data point between the upper and lower control limits indicates acceptable
quality on a control chart.
Multiple Choice
_____ 6. What is at the core of the definition of total quality management (TQM)?
a. Visionary leadership
b. Employee satisfaction
c. Pride
d. Continuous improvement
e. Motivation

_____ 7. One of the four principles of TQM is

a. do it right the first time.
b. inspecting everything twice.
c. striving for zero defects.
d. people are the biggest threat to quality improvement.
e. technology is the key.

_____ 8. Kaizen practitioners view quality as

a. a journey, not a destination.
b. the only reality.
c. perfection.
d. spiritual fulfillment.
e. the ultimate end.

_____ 9. A TQM tool that would be useful for identifying the roughly 20 percent of a
supermarket’s employees who are responsible for about 80 percent of the absenteeism
is
a. benchmarking.
b. fishbone diagram.
c. flowcharting.
d. Pareto analysis.
e. run chart.

_____ 10. Which of these would be most appropriate for graphically plotting the
correlation between two product characteristics, such as the diameter and weight of
tennis balls?
a. A fishbone diagram
b. A histogram
c. A run chart
d. A scatter diagram
e. A control chart

Test Prepper 8.4

True or False?
_____ 1. Deming’s quality management philosophy is a direct outgrowth of Taylor’s
scientific management.
_____ 2. Deming believed quality improvement drives the entire economy.
_____ 3. In Deming’s PDCA cycle, the “C” stands for “corrective action.”
_____ 4. One of Deming’s 14 points recommends getting rid of numerical quotas.

Multiple Choice

_____ 5. According to Deming, _____ is the most important part of the production line.
a. the consumer
b. the employee
c. the supervisor
d. engineering
e. technology

_____ 6. Who or what did Deming blame up to 85 percent of substandard quality on?
a. Lazy workers
b. Substandard materials
c. The system
d. Careless management
e. Poorly maintained machinery

_____ 7. What does “A” in Deming’s PDCA cycle stand for?

a. Alternatives
b. Act
c. Activities
d. Attitudes
e. Actual results

Test Prepper Answer Key

8.1
1. T 2. T 3. T 4. F 5. F 6. T 7. e 8. b 9. c 10. a 11. e
8.2
1. T 2. F 3. F 4. T 5. d 6. a 7. e
8.3
1. F 2. F 3. F 4. a 5. T 6. d 7. a 8. a 9. d 10. d
8.4
1. F 2. T 3. F 4. T 5. a 6. c 7. b