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2001 Prentice-Hall
Chapter Overview
Slide 1 of 2
Strategy Content
The Importance of Time in Quality
Improvement
Leadership for Quality
Quality and Ethics
Quality as a Strategy
Quality Strategy Process
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Chapter Overview
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Strategy Planning
Strategic planning has two important
dimensions.
These are content and process.
Strategic content answers the question of what
is to be contained in the strategic plan.
Strategic process consists of the steps used to
develop the strategy.
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Strategy Planning
Strategic content refers to the variables,
definitions, components, and concepts that are
included in the strategy.
Strategic process consists of the steps for
developing strategy within an organization.
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Strategy Content
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Strategy Content
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Leadership
Leadership is the process by which a leader
influences a group to move toward the
attainment of super-ordinate goals.
Super-ordinate goals are those goals that
pertain to achieving a higher end that
benefits not just the individual, but the
group.
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Types of Power
Power of Expertise
Reward Power
Sometimes a
leader has special
knowledge (or is
perceived to have
special
knowledge).
If a leader has
rewards that he or
she can bestow on
subordinates in
return for some
desirable position,
the leader has
reward power.
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Types of Power
Coercive Power
Referent Power
If a leader is
charismatic or
charming and is
followed because
he or she is liked,
then the leader has
referent power.
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Types of Power
Legitimate Power
Legitimate
power comes
with the
position.
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Leadership Dimensions
Trait dimension
Leadership characteristics tied to the personal
traits of leaders (such as height and intelligence).
Leader behavior
This approach discusses how leaders behave to
identify specific leadership styles and the effects of
leadership style on subordinate performance.
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Leadership Skills
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Confronting Conflict
At times, it is best to confront the conflict and help
subordinates resolve conflicts.
Choosing a Winner
In some cases the leader may choose a winner of
the conflict and develop a plan of action for
conflict resolution between the parties.
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Quality as Strategy
Although quality can still win orders in some
market, in many markets quality has become an
order qualifier.
This means that high-quality production is an
essential ingredient to participation in the
market.
Quality is still an effective tool in successful
exporting in the international market.
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Quality as Strategy
Slide 1 of 8
Quality as a Strategy
We now discuss quality as a strategy from the
perspective of generic strategies. These generic
strategies are cost, differentiation, and focus.
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Quality as Strategy
Costs of Quality
New definitions of cost are expansive, considering the
the summation of costs over the life of a product.
This includes service, maintenance, and operating
costs for products
The life cycle costs for many products may be
staggering when environmental costs are considered.
There are two broad categories of costs: costs due to
poor quality and costs associated with improving
quality.
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Quality as Strategy
Costs of Quality
Taguchi and others have provided insight into
the issue of quality costs.
The title of the classic book by Crosby Quality
Is Free reveals an interest in the costs of
quality.
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Quality as Strategy
Slide 2 of 8
PAF Paradigm
Prevention costs are those costs associated with
preventing defects and imperfections from
occurring.
Prevention costs include costs such as training ,
quality planning, process engineering, and
other costs associated with assuring quality
beforehand (see Table 4.3).
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Quality as Strategy
PAF Paradigm
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 or other awards (see Table 4.4).
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Quality as Strategy
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Quality as Strategy
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Quality as Strategy
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C1 + C2
cmin
C1 =
0%
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Prevention &
appraisal costs
C2 =
Failure Costs
q
Conformance Ratio
100%
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Quality as Strategy
Slide 6 of 8
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Quality as Strategy
Quality Through Focus
Think of a product that is particularly regional
or is marked to a particular group.
That limited region or group is the object of
the focus strategy.
Such a focus strategy can be very profitable.
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Quality as Strategy
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Order Winners
Terry Hill of the London Business School
defined a process for setting strategy that is
centered on the identification of the order
winning criteria (OWC).
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Quality as Strategy
Quality as a Core Competency
Communication, involvement, and a deep
commitment to working across
organizational boundaries.
It involves many levels of people and all
functions.
Core competencies do not diminish with use.
Competencies are enhanced as they are
applied and shared.
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Quality as Strategy
Slide 8 of 8
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Forced-Choice Model
The forced-choice model is one of several
strategic-planning models that could be
adapted to demonstrate integrated
quality planning.
The forced-choice model is particularly
useful for companies that are relatively
inexperienced in strategic planning.
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7. Key government
and regulatory issues
8. Major technological forces
Organizations Position
1. Statement of mission
2. Interrelated set of financial
and non-financial objectives
3. Statement of strengths
and weaknesses
9. Significant market
opportunities and threats
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Hoshin
Hoshin is Japanese for a compass, a course, a policy,
or a plan.
Kanri refers to management control.
In English, this is generally referred to as policy
deployment.
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