Business Studies

Chapter 19

What Quality means and why it is important for all businesses

Quality means to produce a good or a service which meets customer expectations. It doesn’t mean high-
quality product rather it is as per customer expectations. A Business needs to try to ensure that all the
products it sells are free of faults or defects: This ensures that the business:

 Establishes brand image

 Builds brand loyalty
 Will maintain a good loyalty
 Will help to increase sales
 Attracts new customers
But if quality is not maintained, the business will:

 Lose customers to other brands

 Have to replace faulty products or repeat poor service which raises costs for business
 Have customers who tell other people about their experiences - bad reputation - lower sales and
profits
A manufacturing Business needs a product with a good design, minimal faults and as per customer
wish/expectations including customer service, delivery times and convenience.

Quality control
Quality control is the checking for quality at the end of the production process, whether it is the
production of a product or a service.
A way to make sure that products get out of factory with no defects is to have a Quality Control
Department whose job is to take samples at regular intervals to check for errors .If errors or faults were
found then a whole batch of production might have to be scrapped or reworked. It would check that
quality was maintained during production of goods, try to eliminate errors before they occur, and find
any defective product before they get out of factory. Business may also use ‘mystery customer’ to test
out service if quality is as expected
Advantages
 It tries to eliminate faults or errors before customer receives product or service
 Less training required for workers
Disadvantages
 Expensive as employees need to be paid to check product or service
 Identifies the fault but doesn’t find why fault has occurred – difficult to remove the problem
 Increased costs if products have to be scrapped or reworked or service-repetition
Quality Assurance
It is the checking for the quality standards throughout the production process, whether is the production of a
product or service. Its purpose is to ensure customer satisfaction, greater sales, increased added value and
increased profits. To implement quality assurance system, several aspects of production must be included.
Attention must be paid to design of product, the components and material used, delivery schedules, after-sales
services and quality control procedures. The workforce must support the use of this system otherwise it might not
be effective.
Advantages

 Tries to eliminate faults or errors before the customer receives the product or service
 Fewer customer complaints
 Reduced costs if products do not have to be scrapped or reworked or service repeated
Disadvantages

 Expensive to train employees to check the product or service

 Relies on employees following instructions of standards set

Total Quality Management (TQM)

TQM is the continuous improvements of products and processes by focusing on quality at each stage of production. It
tries to get ut right first time and not have any defects. There is an emphasis on ensuring that the customer is
always satisfied, and customer can be anyone else or from another department. This ensures that quality is
maintained throughout the business and no faults should occur, as all employees are concerned with ensuring that
a quality good or service is delivered.

It also means that costs will fall. It is closely liked with Kaizen and Quality circles1

How can a customer be assured of a quality product or service?

Can look for quality mark associated with the product or service – business can apply for this quality mark and will
have to follow certain guidelines and rules to keep this mark

In state of service, having a good reputation and recommendations by satisfied customers will help repeat
customers as well as gain new ones. Internet sites are useful ways for businesses to gain good reputation if
satisfied customers put positive reviews on the site and in contrast, Business may get bad reputation in case of
negative reviews.

1
Quality circles are where groups of workers meet regularly and discuss problems and possible solution. Workers are encouraged
to suggest new ideas to reduce waste and ensure zero defects