Managing Quality: Integrating the Supply Chain, 5e (Foster)

Chapter 4 Strategic Quality Planning

1) Which of the following is not an example of a strategic content variable?

A) time
B) leadership
C) quality costs
D) generic strategies
E) product development
Answer: E
Topic: Strategy Content
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

2) ________ involves a power-sharing relationship between two or more individuals where the
power is distributed unevenly.
A) Leading
B) Empowerment
C) Planning
D) Organizing
E) Controlling
Answer: A
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

3) ________ goals are those goals that pertain to achieving a higher end that benefits not just the
individual but the group.
A) Substantive
B) Deterministic
C) Congruent
D) Superordinate
E) Hierarchical
Answer: D
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

4-1
4) ________ is derived from a leader's possession of special knowledge.
A) Power of expertise
B) Reward power
C) Coercive power
D) Referent power
E) Legitimate power
Answer: A
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

5) If a leader grants raises or promotions to subordinates in return for some desirable action, the
leader has ________.
A) coercive power
B) legitimate power
C) reward power
D) power of expertise
E) referent power
Answer: C
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

6) If the leader has power to punish the follower for not following rules or guidelines, the leader
has ________.
A) power of expertise
B) referent power
C) legitimate power
D) coercive power
E) reward power
Answer: D
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

7) ________ often results in unintended responses, and causes the follower to rebel and attempt
to even the power relationship.
A) Reward power
B) Coercive power
C) Legitimate power
D) Power of expertise
E) Referent power
Answer: B
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

4-2
8) If a leader is charismatic or charming and is followed because he or she is liked, then the
leader has ________.
A) referent power
B) coercive power
C) power of expertise
D) legitimate power
E) reward power
Answer: A
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

9) A case of ________ power is the mentor who is admired by his or her protégés who want to
be like the mentor.
A) reward
B) referent
C) legitimate
D) coercive
E) power of expertise
Answer: B
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

10) ________ is derived from the positions that different people hold within an organization.
A) Power of expertise
B) Coercive power
C) Referent power
D) Reward power
E) Legitimate power
Answer: E
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

11) Which of the following is a knowledge skill exhibited by a leader?

A) assertiveness
B) image building
C) identifying opportunities
D) evaluation skills
E) risk taking
Answer: E
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

4-3
12) Which of the following is a communication skill exhibited by a leader?
A) time management
B) assessing the climate
C) ethics
D) evaluation skills
E) conflict management
Answer: E
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

13) Which of the following is a planning skill exhibited by a leader?

A) developing competence
B) structuring
C) risk taking
D) identifying opportunities
E) assertiveness
Answer: B
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

14) Which of the following is a vision skill exhibited by a leader?

A) decision making
B) identifying opportunities
C) risk taking
D) conflict management
E) time management
Answer: B
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

15) ________ means that leaders provide funding, slack time, and resources for quality
improvement efforts to be successful.
A) Cost evaluation
B) Task management
C) Time management
D) Commitment to quality
E) Task structuring
Answer: D
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

4-4
16) Commitment to quality is measured ________.
A) in decades
B) in quarters
C) in budget-cycles
D) annually
E) monthly
Answer: A
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

17) What are the three broad categories of the PAF paradigm?
A) performance, appraisal, and functional costs
B) process, assessment, and failure costs
C) prevention, appraisal, and failure costs
D) performance, assessment, and failure costs
E) process, appraisal, and functional costs
Answer: C
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

18) ________ costs are costs that limit the occurrence of defects and imperfections.
A) Process
B) Assessment
C) Prevention
D) Failure
E) Appraisal
Answer: C
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

19) ________ costs include costs such as training, quality planning, process engineering, and
other costs associated with quality beforehand.
A) Prevention
B) Process
C) Appraisal
D) Assessment
E) Failure
Answer: A
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

4-5
20) Which of the following is considered a prevention cost?
A) cost of troubleshooting
B) laboratory acceptance testing
C) warranty
D) supplier quality assurance
E) on-site performance tests
Answer: D
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

21) ________ costs are associated with the direct costs of measuring quality.
A) Failure
B) Appraisal
C) Assessment
D) Prevention
E) Process
Answer: B
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

22) ________ costs include lab testing, inspection, test equipment and materials, and losses due
to destructive tests.
A) Assessment
B) Failure
C) Prevention
D) Appraisal
E) Process
Answer: D
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

23) Which of the following is considered an appraisal cost?

A) supplier assessment
B) cost of troubleshooting
C) process waste
D) robust design
E) product quality audits
Answer: E
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

4-6
24) ________ failure costs are those associated with online failure.
A) Indirect
B) Generic
C) External
D) Internal
E) Direct
Answer: D
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

25) ________ failure costs are associated with product failure after the production process.
A) External
B) Indirect
C) Direct
D) Generic
E) Internal
Answer: A
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

26) Failure after the customer takes possession of the product results in a(n) ________ failure
cost.
A) indirect
B) generic
C) external
D) internal
E) direct
Answer: C
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

27) Which of the following is considered a failure cost?

A) on-site performance tests
B) warranty
C) supplier quality assurance
D) robust design
E) product quality audits
Answer: B
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

4-7
28) Using the ________, quality costs can be modeled to show the trade-offs between these
costs.
A) law of diminishing marginal returns
B) order-winning criterion
C) forced-choice model
D) supply chain strategy
E) PAF paradigm
Answer: A
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

29) Using the law of diminishing marginal returns, quality costs can be modeled to show the
trade-offs between these costs. This trade-off model is called the ________.
A) order-winning criterion
B) supply chain model
C) PAF paradigm
D) forced-choice model
E) Lundvall-Juran model
Answer: E
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

30) The Lundvall-Juran quality cost model states that ________.

A) as quality increases, customer satisfaction increases
B) as expenditures in inspection and control activities increase, quality conformance decreases
C) as design and manufacturing costs increase, quality increases
D) as expenditures in prevention and appraisal activities increase, quality conformance increases
E) as inspection costs increase, customer satisfaction decreases
Answer: D
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

31) If a product is regional or is marketed to a particular segment of the population, then the
generic strategy in use is ________.
A) quality
B) cost
C) differentiation
D) flexibility
E) focus
Answer: E
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

4-8
32) The key to the Hill model for strategic quality planning is reaching consensus on the
________.
A) order-winning criterion
B) Lundvall-Juran model
C) supply chain model
D) PAF paradigm
E) forced-choice model
Answer: A
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

33) Prahlad and Hamel have identified the strategic concept of ________.
A) core competence
B) process engineering
C) task management
D) quality control
E) employee empowerment
Answer: A
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

34) ________ refers to the variables, definitions, components, and concepts that are included in
the strategy.
A) Content
B) Process
C) Prototype
D) Paradigm
E) Criterion
Answer: A
Topic: Quality Strategy Process
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

35) ________ consists of the steps for developing strategy within an organization.
A) Prototype
B) Criterion
C) Process
D) Content
E) Paradigm
Answer: C
Topic: Quality Strategy Process
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

4-9
36) In the forced-choice model, the organization's position is determined by examining
________.
A) major future programs
B) major technological forces
C) key government issues
D) explicit strategies of competitors
E) broad economic assumptions
Answer: A
Topic: Quality Strategy Process
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

37) In the forced-choice model, the environmental assessment is completed by examining

________.
A) the forecast of operational needs
B) explicit strategies of competitors
C) the statement of mission
D) interrelated set of financial and nonfinancial objectives
E) major future programs
Answer: B
Topic: Quality Strategy Process
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

38) Kanri refers to:

A) quality control
B) employee empowerment
C) product development
D) management control
E) quality conformance
Answer: D
Topic: Quality Strategy Process
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

39) The acronym TQEM stands for ________.

A) total quality environmental management
B) total quality engineering and management
C) total quality employee management
D) total quality energy management
E) total quality evaluation and management
Answer: A
Topic: Does Quality Lead to Better Business Results?
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

4-10
40) The plan-do-check-act cycle is associated with ________.
A) W. Edwards Deming
B) Walter Shewhart
C) Joseph Juran
D) Armand Feigenbaum
E) Kaoru Ishikawa
Answer: A
Topic: Supply Chain Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

41) The two dimensions of strategic planning are content and process.
Answer: TRUE
Topic: Strategy Content
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

42) Strategic planning implies planning for the short term.

Answer: FALSE
Topic: Strategy Content
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

43) Leading involves a power-sharing relationship between two or more individuals where the
power is distributed unevenly.
Answer: TRUE
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

44) If a leader has power to punish the follower for not following rules or guidelines, the leader
has referent power.
Answer: FALSE
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

45) A leader with coercive power grants raises and promotions to employees.
Answer: FALSE
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

4-11
46) Referent power is derived from personal charisma or charm.
Answer: TRUE
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

47) Legitimate power is derived from the position an individual holds in an organization.
Answer: TRUE
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

48) Superordinate goals pertain to achieving a higher end that benefits not just the individual but
the group.
Answer: TRUE
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

49) Conflict management is an example of a knowledge skill exhibited by a leader.

Answer: FALSE
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

50) Assertiveness is an example of a communication skill exhibited by a leader.

Answer: TRUE
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

51) Acceptance of diversity is an example of a vision skill exhibited by a leader.

Answer: FALSE
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

52) The trait dimension of leadership deals with variables, such as height, productivity, and
intelligence.
Answer: TRUE
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

4-12
53) Nothing can damage a quality improvement effort faster than management's failure to
consider implementing changes that employees recommend.
Answer: TRUE
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

54) Commitment to quality means that leaders provide funding, slack time, and resources for
quality improvement efforts to be successful.
Answer: TRUE
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

55) Commitment to quality is measured in budget cycles.

Answer: FALSE
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

56) Appraisal costs include costs such as training and quality planning.
Answer: FALSE
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

57) Appraisal costs are associated with the direct costs of measuring quality.
Answer: TRUE
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

58) Supplier monitoring is an example of a preventive cost.

Answer: FALSE
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

59) Failure costs are categorized into tangible failure costs and intangible failure costs.
Answer: FALSE
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

4-13
60) Internal failure costs are the costs associated with online failure.
Answer: TRUE
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

61) External failure costs are associated with product failure after the production process.
Answer: TRUE
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

62) Warranties and concessions are examples of failure costs.

Answer: TRUE
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

63) Increasing prevention and appraisal costs could result in a significant increase in failure
costs.
Answer: FALSE
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

64) The Lundvall-Juran quality cost model states that as expenditures in appraisal activities
increase, quality conformance should decrease.
Answer: FALSE
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

65) Differentiation is achieved by a competitor if the consumer merely perceives the product or
service to be unique.
Answer: TRUE
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

66) The order winning criterion cannot be applied to service strategy.

Answer: FALSE
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

4-14
67) Core competencies diminish with use.
Answer: FALSE
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

68) Core competency is built on the foundation of a long-term commitment to quality and
continual process improvement.
Answer: TRUE
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

69) The forced-choice model is only useful for companies that are experienced in strategic
planning.
Answer: FALSE
Topic: Quality Strategy Process
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

70) Kanri is the term used to describe the interactive nature of the Hoshin planning process.
Answer: FALSE
Topic: Deploying Quality (Hoshin Kanri)
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

71) Catchball involves reporting from teams and feedback from management.
Answer: TRUE
Topic: Deploying Quality (Hoshin Kanri)
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

72) A low-cost orientation is based on continual learning and production competence.

Answer: TRUE
Topic: Does Quality Lead to Better Business Results?
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

73) Simplification of processes results in flows that are of lower productivity.

Answer: FALSE
Topic: Does Quality Lead to Better Business Results?
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

4-15
74) Sustainability is the ability to meet the needs of the current generation without compromising
the ability of future generations to meet their needs.
Answer: TRUE
Topic: Does Quality Lead to Better Business Results?
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

75) The acronym TQEM stands for Total Quality Engineering and Management.
Answer: FALSE
Topic: Does Quality Lead to Better Business Results?
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

76) TQEM systems involve a holistic systems view of the processes causing environmental
degradation.
Answer: TRUE
Topic: Does Quality Lead to Better Business Results?
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

77) What are the factors involved in quality improvement?

Answer: Quality improvement is a planned managerial activity. It involves identifying potential
improvements, prioritizing potential areas for improvement, and planning the implementation of
projects and improvements.
Topic: Strategy Content
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

78) What are content variables? Provide examples of the content variables that are considered in
the strategic planning process?
Answer: Content variables outline key considerations when developing a strategic plan. These
considerations are either explicitly or implicitly addressed in the strategic planning processes.
Examples of key content variables in the context of quality planning are time, leadership, quality
costs, generic strategies, order winners, and quality as a core competency.
Topic: Strategic Supply Chain Alliances between Customers and Suppliers
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

4-16
79) What sort of consequences can ensue if management sets numeric goals for quality
improvement?
Answer: According to Donald Wheeler, a quality expert, when numeric goals for quality
improvement are set, one of three things will occur:
1. People will achieve the goals and incur positive results.
2. People will distort the data.
3. People will distort the system.
There are many practical examples that could be drawn from public policy.
Topic: The Importance of Time in Quality Improvement
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

80) Discuss the importance of leadership as a key strategic variable for quality management.
Answer: Leadership is a key strategic variable for quality management. A leader organizes,
plans, controls, communicates, teaches, advises, and delegates. Leading involves a power-
sharing relationship between two or more individuals where the power is distributed unevenly.
Leadership is the process by which a leader influences a group to move toward the attainment of
superordinate goals. Superordinate goals are those goals that pertain to achieving a higher end
that benefits not just the individual but the group.
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

81) Explain the five powers exhibited by a leader.

Answer: Power of expertise: Sometimes a leader has special knowledge (or is perceived to have
special knowledge). This type of power tends to have very narrow parameters in that the
followers will follow only within the confines of the leader's expertise.

Reward power: If a leader has rewards that he or she can bestow on subordinates in return for
some desirable action, the leader has reward power. This is often the case in the granting of
raises, promotions, rewards, recognition, or a variety of other incentives.

Coercive power: If the leader has power to punish the follower for not following rules or
guidelines, the leader has coercive power. Such power often results in unintended responses,
such as the follower giving up or circumventing the leader's rule surreptitiously.

Referent power: If a leader is charismatic or charming and is followed because he or she is liked,
then the leader has referent power. A case of referent power is the mentor who is admired by his
or her protégés who want to be like the mentor.

Legitimate power: As a result of the positions that different people hold within an organization,
the manager has the obligation to request things of subordinates, and the subordinates have the
duty to comply with the request. This is the exercise of legitimate power.
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

4-17
82) Explain the four important skills that effective leaders exhibit.
Answer: The four important skills for leaders are knowledge, communication, planning, and
vision. The different phases identify skill sets that are needed by managers.
In Phase 1, knowledge helps the leader accept risk and moderate the stress associated with the
risk by using coping mechanisms or healthy outlets.
In Phase 2, the leader must be able to communicate with other leaders and subordinates.
In Phase 3, the leader must be able to plan and make decisions.
Finally, in Phase 4, the leader must be able to formulate a coherent vision of the future toward
which to plan.
Topic: Leadership for Quality
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

83) What is the relationship between quality and ethics?

Answer: Quality is not only good business, it is also good ethics. It is unethical to ship defective
products knowingly to a customer. Reliable products and low defect rates reflect an ethical
approach of management's care for its customers.
Companies focusing on their customers often develop a set of ethics that includes valuing
employees. This is reflected in education, training, health, wellness, and compensation programs
that show empathy for the employees. Increasingly, environmental friendliness is seen as an
ethical concern.
Topic: Quality and Ethics
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

84) Explain the three categories of quality costs.

Answer: The PAF paradigm 9 translates quality costs into three broad categories, which are then
subdivided into other categories. The three categories are prevention, appraisal, and failure costs
(hence the acronym PAF).
Prevention costs are those costs associated with preventing defects and imperfections from
occurring. Prevention costs are the most subjective of the three categories of costs. Prevention
costs include costs such as training, quality planning, process engineering, and other costs
associated with assuring quality beforehand.
Appraisal costs are associated with the direct costs of measuring quality. These can include a
variety of activities such as lab testing, inspection, test equipment and materials, losses because
of destructive tests, and costs associated with assessments for ISO 9000:2008 or other awards.
Failure costs are roughly categorized into two areas of costs: internal failure costs and external
failure costs. Internal failure costs are those associated with online failure, whereas external
failure costs are associated with product failure after the production process.
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

4-18
85) What is the Lundvall-Juran Quality Cost Model?
Answer: Using the law of diminishing marginal returns, quality costs can be modeled to show
the trade-offs between these costs. This trade-off model, called the Lundvall—Juran model.
The Lundvall—Juran model is a simple economic model. It states that as expenditures in
prevention and appraisal activities increase, quality conformance should increase. For example,
the more we spend on training and developing our employees, the more benefit we should get.
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

86) Explain the importance for the Hill model in reaching a consensus on the order-winning
criterion (OWC).
Answer: The key to the Hill model is reaching consensus on the OWC. The process for doing
this involves segmenting the business into smaller markets that can each be identified with an
order-winning criterion. This provides an understanding of the markets the company is serving.
Products are chosen for each market, and marketing provides sales forecasts for the identified
markets.
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

87) Explain quality as a core competency.

Answer: Core competence consists of communication, involvement, and a deep commitment to
working across organizational boundaries. Core competencies do not diminish with use. Unlike
physical assets, which do deteriorate over time, competencies are enhanced as they are applied
and shared. For firms operating in rapidly evolving markets or industries, the ability to change
can be more important than the actual changing technology of the moment. Hence organizations
producing outstanding products or services with a good understanding of processes are better
positioned to operate in the changing market because they can introduce new products rapidly
with fewer quality-related holdups. Therefore, core competency is built on the foundation of a
long-term commitment to quality and continual process improvement.
Topic: Quality as a Strategy
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

88) Explain the forced-choice model of strategic planning.

Answer: The forced-choice model of strategic planning is one of several strategic planning
models that could be adapted to demonstrate integrated quality planning. It is selected here
because of its simplicity and its usefulness for firms that are beginning strategic planning. It is
generic and is used simply for explanation purposes. It is particularly useful for companies that
are relatively inexperienced in strategic planning.
Topic: Quality Strategy Process
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

4-19
89) Explain the Hoshin planning process.
Answer: Hoshin is Japanese for a compass, a course, a policy, or a plan. This is to indicate a
vision or purpose to an existence. Kanri refers to management control. In English, this is
generally referred to as policy deployment. Hoshin has been used in Japan since the 1960s as a
means of implementing policy. Implicit in the Hoshin Kanri is the use of the basic seven tools of
quality, the new tools of quality, and quality function deployment.
In the Hoshin process, the company develops a three- to five-year plan, and senior executives
develop the current year's Hoshin objectives. Then the process of catchball occurs. Catchball is
the term used to describe the interactive nature of the Hoshin planning process. Catchball
involves reporting from teams and feedback from management. The development of the Hoshin
plan results in the cascading of action plans that are designed to achieve corporate goals.
Topic: Deploying Quality (Hoshin Kanri)
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

90) Give reasons why the effects of quality on business results are mixed.
Answer: The effects of quality on business results are mixed; some firms have been wildly
successful with their quality efforts, and other companies have been unsuccessful in gaining
bottom-line results. There are two primary reasons for this.
First, many variables affect profitability besides quality. You might produce the highest-quality,
obsolete product in the world. If you produce a high-quality product or service that no one wants
to buy, quality management systems likely will not save you.
Second, many companies implement quality incorrectly. That you can claim you are
implementing quality does not guarantee you will be successful. Quality improvement takes a
long time, and many firms desire quick returns on investment for quality training programs.
Topic: Does Quality Lead to Better Business Results?
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

91) Explain the relationship between quality and cost.

Answer: A fundamental difference exists between a low-price strategy, which is based on
competitive pricing, and a low-cost orientation that is based on continual learning and production
competence. Because of the possible relationship between pricing and low-cost structure, we
anticipate that quality will tend to provide a competitive advantage relative to other competitors
by allowing firms with a high-quality strategy to incur lower costs they can pass along to the
customers.
Topic: Does Quality Lead to Better Business Results?
Learning Outcome: Discuss the total cost of quality and compare the common methods of
managing quality

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