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Joseph A. DeFeo

Quality Insider

Quality’s Effect on Society and the National Culture

Regulation comes at a cost—but that cost creates value

Published: Monday, November 22, 2010 - 10:04

The growth of commerce, science, and technology has greatly expanded the extent and variety of goods and services, helping many to lead longer, safer lives. However, this has also created a new dependency, with new risks that must be mitigated to prevent financial and cultural loss.

High quality has long been a goal common to all countries. Governing bodies have established quality standards that involve programs of regulation to which all organizations must adhere. In addition, the rise in lawsuits, with an accompanying rise in claims and damages, certainly argues for the importance of maintaining quality.

In modern industrial societies, people place their health and safety behind numerous protective “dikes” of quality control, as Joseph M. Juran described the process. Individuals and nations live behind these dikes and must deal with numerous breaks in them. While technology certainly offers benefits, it makes society dependent on its continued performance. Reliable quality is needed to protect against service interruptions, or even disasters.

Consumerism

Consumerism has arisen as a movement to help consumers solve problems through collective action. Starting in the 1970s, researchers began identifying dominant consumer problems and perceptions. It was found that expectations rise faster than improvement, and consumers tend to have a negative view of business attitudes toward their problems. Perceptions may be wrong, but they are nevertheless important. Ideally, the remedies should eliminate problems at the source.

Consumers could make better buying decisions with greater product information, which organizations are often hesitant to disclose. This has led to product testing—whether consumer-financed, government-financed, or company-financed—as an independent source of such information. Standards organizations have become important to consumers, due to their efforts to objectively quantify product quality.

Post-purchase remedies at consumers’ disposal include warranties, mediation, and arbitration. There are also consumer-affairs organizations and government agencies in place to which consumers can turn. Most observers and insiders believe that the consumer movement has kept businesses on their toes, but also resulted in higher prices.

National and global challenges

The growth of international trade and multinational organizations has meant that attention must be directed at understanding the effect of national cultures and global economies on quality management. Natural resources and limitations, as well as human leadership, influence how goals are prioritized. Globally, all capitalist economies share similarities that influence the priority of quality as a goal. In the case of capitalist societies, competition in quality is permitted, and even encouraged.

Cultural differences come into play when dealing with organizations and people from different areas of the world. Language barriers must be overcome, as well as customs and traditions. Even mutual suspicions arising from ancient cultural disputes or rivalries can create stumbling blocks to innovation.

Government and regulation

Governments are in a powerful position to establish and enforce quality standards. The evolution of technology has necessitated standardization of concepts and practices. The safety and health of the citizenry is a major factor in government regulation, as well as the safety and health of the state. Government regulation relative to the economics of the citizenry is a hot-button issue, due to resistance to government involvement in free-market systems.

Nevertheless, quality-related legislation has grown to formidable proportions. In the United States, much of it falls within the scope of the Federal Trade Commission, which regulates advertising, product information and compliance. Agencies usually adopt the Pareto principle of “the vital few and the useful many,” coined by Juran. By distinguishing the two, agencies can focus their resources for optimum results. The vital few are identified via data such as frequency of injuries or frequency of complaints. The useful many are usually dealt with through the provision of self-help information, rather than direct solutions.

Regulation comes at a cost—but that cost creates value. The cost consists mainly of two components: running the regulatory agencies, and complying with regulations. The value comes in the form of safety, health, and a clean environment, as well as providing consumers with honest information and prompt redress.

Safety and liability

During the 20th century, the number of lawsuits related to product quality, and the size of damages awarded, rose dramatically. The cost of product liability has become a major factor affecting the way organizations do business. The best defense against lawsuits is to eliminate the causes of injuries at their source. The improvement of product safety and company defense is accomplished through efficient management and product design that incorporates safety concerns, quality control in the manufacturing process, effective marketing and advertising, customer service, and documentation.

Still, product liability can be negatively affected by deficiencies in legal systems. Some of these deficiencies have been addressed or reviewed, but in many cases the problem may exist on a cultural level. Personal liability may even come into play, with decision-making individuals—as opposed to organizations—being directly targeted in civil suits.

The environment

Environmental protection is a special category of government regulation that has become more important over time. As the environmental damage caused by industrial organizations was recognized, legislation was put in place to keep irresponsible corporate behavior in check. Dedicated agencies and ministries have been created, and specific processes have been developed just for dealing with environmental issues. A growing body of literature has emerged.

Solutions were originally more costly, but organizations have made working out more affordable solutions a priority. Numerous issues have been identified, including air pollution, climate change, energy conservation, genetic engineering, land degradation, and resource depletion. Through the identification of these issues, more efficient methods of problem solving can be determined.

Multinational collaboration

And finally, the need for collaboration across cultures presents some challenges. Multiple countries may be involved in the manufacture, marketing, installation, and maintenance of products, which makes such collaboration crucial for quality control. Numerous methodologies have evolved to coordinate such multinational activities.

Among the most widely used of these methodologies is standardization, typically achieved through international organizations set up with that goal in mind. Contract management is very important, as is the consistent transfer of technological know-how via international societies, conferences, and training courses.

Recent efforts to unite quality societies globally may lead to better recognition among executives that quality is a legitimate function and one that will aid in the preservation of societal improvements. Once this happens we can focus on the real issues.

Discuss

About The Author

Joseph A. DeFeo’s picture

Joseph A. DeFeo

Joseph A. DeFeo is president and executive coach with Juran. He is recognized worldwide for his training and consulting expertise which enables organizations to achieve superior results. For additional information, visit www.juran.com.

Comments

Nicely done

Thanks, Joe, for a good article looking at quality from the broadest possible perspective. Lots here to think about.