Defining Quality: Alternatives and Implications

1. Carol A. Reeves and David A. Bednar Defining Quality:Alternatives and Implications Source: The Academy of Management Review, Vol. 19, No. 3, Special Issue: ”Total Quality” (July 1994), pp. 419-445 S-72.2530 Acceptability and Quality of Services 20.11.2008 Jani Nieminen

2. Defining Quality: Alternatives and Implications (1994) by C.A. Reeves, D.A. Bednar Agenda • No universal definition of quality for products and services! • Relation to course topic: • Assessment requires definition • Analysis of different definitions and trade-offs in accepting one over another • Strengths • Weaknesses • Quality implications in the marketplace

3. Defining Quality: Alternatives and Implications (1994) by C.A. Reeves, D.A. Bednar Definitions Quality is Excellence Quality is Value Quality is Conformance to Specifications Quality is Meeting and/or Exceeding Customers’ Expectations ISO Definition: “The totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.” (from ISO 8402:1994)

4. Quality is... Defining Quality: Alternatives and Implications (1994) by C.A. Reeves, D.A. Bednar Excellence Strengths Weaknesses • Easy to market • Motivates workforce • Universal • Uncompromising • High achievement • Subjective • Little practical guidance • Difficult to measure • May change to regular • May increase cost and price

5. Quality is... Defining Quality: Alternatives and Implications (1994) by C.A. Reeves, D.A. Bednar Value Strengths Weaknesses • Multiple attributes • Excellence, price, durability • Focuses attention on both • Internal efficiency • External effectiveness • Allows comparisons between varying products or services • Difficult to identify individual components • Quality ≠ Value • Quality < Value? • Quality > Value?

6. Quality is... Defining Quality: Alternatives and Implications (1994) by C.A. Reeves, D.A. Bednar Conformance to specifications Strengths Weaknesses • Precisely measurable • Leads to efficiency • Necessity for global strategy • Specifications should come from customer needs • Most appropriate for industrial customers • Specifications vs. Subjective perception of Quality • Inappropriate for services • May reduce adaptability • Needs may expire

7. Quality is... Defining Quality: Alternatives and Implications (1994) by C.A. Reeves, D.A. Bednar Meeting and/or Exceeding Customers’ Expectations Strengths Weaknesses • Customers’ perspective • Applicable across industries • Responsive to market changes • All-encompassing • Multiple attributes • Differentiation • Most complex • Different customers have different preferences • Difficult to measure • Customers may not identify expectations • Pre-purchase attitudes • Short-term vs. Long-term • Satisfaction vs. Service

8. Defining Quality: Alternatives and Implications (1994) by C.A. Reeves, D.A. Bednar ISO Definition of Quality • “The totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.” • (ISO 8402:1994 Quality management and quality assurance Vocabulary) • Compares characteristics to requirements • Results in a degree of Quality • Relation to definitions in this article: • Conformance to Specifications • Meeting/Exceeding Expectations -> Value • Quality is always relative to needs

9. Defining Quality: Alternatives and Implications (1994) by C.A. Reeves, D.A. Bednar Implications • Conflicting empirical findings concerning • Price • Market share • Cost • Quality influenced by • Organizational output • Time • Different customers

10. Defining Quality: Alternatives and Implications (1994) by C.A. Reeves, D.A. Bednar Quality and Price • Positive relationship in marketing literature • Defined as excellence • Value or Conformance to specifications • Should lead to lower prices • Meeting and/or exceeding expectations • Price/quality relationship defined by expectations

11. Defining Quality: Alternatives and Implications (1994) by C.A. Reeves, D.A. Bednar Quality and Market Share • Positively related when quality is based on manager assessments • When defined as the degree of excellence, opposite results • If specifications or expectations are well defined, may lead to positive relationship

12. Defining Quality: Alternatives and Implications (1994) by C.A. Reeves, D.A. Bednar Quality and Cost • Conformance to specifications • Inverse relationship • Excellence increases cost • Value or Meeting/Exceeding expectations • Demands, desires, requirements define cost

13. Defining Quality: Alternatives and Implications (1994) by C.A. Reeves, D.A. Bednar Quality and Organizational Output • Definition suitable for output? Quality and Time • Expectations change -> measurement timing! Quality and Different Customers • Whose definition of quality is most important?

14. Defining Quality: Alternatives and Implications (1994) by C.A. Reeves, D.A. Bednar Conclusion • Quality compared to competitors • Multiple definitions may be required • Understanding of quality often requires simplifying the definition • May facilitate measuring • Future challenge in quality definition: • Comparable definitions • Multiple components

15. Defining Quality: Alternatives and Implications (1994) by C.A. Reeves, D.A. Bednar Critique • Suggests combination of definitions, yet does not deliver any • Weaknesses result from narrow definition • Suggestion (modified from ISO Definition): • Specifications derived from users’ Expectations • Conformance leads to Excellence • Excellence exceeds Expectations • results in satisfaction and Value for user • QUALITY