TOTAL QUALITY MANAGEMENT

SUBMITTED BY

V.TAMILSELVI

DEPARTMENT OF BUSINESS ADMINISTRATION

PARVATHYS ARTS AND SCIENCE COLLEGE

DINDIGUL
 TOTAL QUALITY MANAGEMENT

UNIT –I

Definition and Important concepts of Total Quality Management – Historical Background of

TQM – A comparison of the approaches of Juran, Crosby and Deming on Quality – Obstacles
in inspiring Quality – Analysis of current situation in India – Quality Vs. Absence of Quality:
Cost of Quality.

UNIT – II

Process of TQM – Philosophy, Goals and Objectives. Leadership Committment; Developing

TQM frame work – Cultural Change – Management of Change – Team Work –
Communication – Delegation – Training – Organise oneself and others – Time Management.

UNIT – III

Quality Transformation stages – Decision to adopt Incubation – Planning and Promotion –

Education – Never ending Improvement.

UNIT – IV

Quality Expectations – Quality Information use in TQM – Information and Performance

Indicators – Assessment of Quality – Audit - Customer Satisfaction Survey – Community
participation – Internal customers and Third party satisfaction – Staff Involvement – Satisfaction
process – Control Techniques – Other Indicators.

UNIT – V

Rights and Responsibilities of Customers – Consumerism – COPRA – Identification of

Prime Job – Key Result areas – Performance standards and Target setting – Standard setting
(Bench Marking ) and Monitoring of standards – Key Components of continuous quality
improvement – Professional norms and code of conduct.
 UNIT –I

Total Quality Management

The concept of quality control is quite old. In the recent years, Total Quality Management
(TQM) has drawn the world wide attention and is being undertaken in different organisations –
both profit as well as non-profit. It is now being adopted as a management philosophy.
Total quality management techniques have brought quality awareness and changes in the
attitudes of the employees. Various efforts towards understanding, adopting and promoting TQM
are due to the rapid changes taking place in the global economy, changing market conditions,
customer’s expectations and mounting competitive pressures.

Many big organizations have recognised the role of TQM in meeting these challenges. The
evolution of the concepts and philosophy of TQM has taken many years of trials and tribulations
in different organisations all over the world.

PRINCIPLES OF TQM

1. Customers requirements - ( both internal & external) must be met first time & every
time

2. Everybody must be involved

3. Regular two way communication must be promoted I

4. Identify the training needs and supply it to the employees

5. Top management commitment is must

6. Every job must add value

7. Eliminate waste & reduce total cost

 8. Promote creativity 9. Focus on team work.

MEANING AND DEFINITION

Total Quality management provides the concept that ensures continuous improvement in an
organisation. The philosophy of TQM stresses on a systematic, integrated and consistent
approach involving everyone and everything in an organisation.

It aims at using all people in multifunctional teams to bring about improvements from within the
organisation. Everyone associated with the organisation is fully involved in continuous
improvement (including its customers and suppliers if feasible).

Some of the important definitions of TQM are as under:

“Total Quality Management (TQM) is an approach to improving the effectiveness and
flexibility of business as a whole. It is essentially a way of organising and involving the whole
organisation, every department every activity, every single person at every level.”

Oakland
“Total Quality Management is a combination of socio-technical process towards doing the
right things (externally), everything right (interally), first time and all the time with economic
viability considered at each stage of each process.”

Zaire and Simintiras

“TQM is the systematic analysis, but the focus is turning from a process driven by external
controls through procedure compliance and enhancement to a process of habitual improvement
where control is embedded within and is driven by the culture of the organisation.”

—Foster and Whittle

“TQM is a strategic approach to produce the best product and service possible through
constant innovation.”
Atkinson
“TQM is a management system, not a series of programs, it is a system that puts customer
satisfaction before profit. It is a system that comprises a set of integrated philosophies, tools and
processes used to accomplish business objectives by creating delighted customers and happy
employees. ”

Price and Chell

From the above definitions, it is clear that TQM is a long term success strategy for the
organisation, it aims at customer satisfaction, employee satisfaction, product quality at ail stages
and brings about continuous improvements and innovations of total quality. TQM is a journey.

It never ends and has become a necessity for every organisation. Dr. Frag Diwan of All India
Management Association, New Delhi has very nicely concluded that TQM is “an all
encompassing dynamic process in an organisation to promote never ending involvement in the
effectiveness and efficiency of all elements of a business.”

NEED FOR QUALITY:

The need for quality was felt, during World War II due to the unprecedented need for
manufacture goods. From them on methodologies for assuring quality in products and services
evolved continuously finally lead to TQM.

DIMENSIONS OF PRODUCT AND SERVICE QUALITY:

PRODUCT QUALITY:

1. Performance - Fulfillment of primary requirement

2. Features - Additional things that enhance performance

3. Conformance - Meeting specific standards set by the industry

4. Reliability - Consistence performance over a period of time

5. Durability - Long life and less maintenance

6. Service - Ease of repair, guarantee, and warranty

7. Response - Dealer customer relationship, human interface

8. Aesthetics - exteriors, packages, appearance

9. Reputation - Past performance, ranking, branding

SERVICE QUALITY:

1. Reliability - Refers to the dependability of the service providers and their ability to keep their
promises.

2. Responsiveness - Refers to the reaction time of the service.

3. Assurance - Refers the level of certainty a customer has regarding the quality of the service
provided.

4. Empathy - Being able to understand the needs of the customer as an individual.

TQM FRAME WORK:

CONTRIBUTIONS OF DEMING:

1. Create and publish the Aims and Purposes of the organization.

2. Learn the New Philosophy.

3. Understand the purpose of Inspection.

4. Stop awarding business based on price alone.

5. Improve constantly and forever the System.

6. Institute Training.

7. Teach and Institute Leadership.

8. Drive out Fear, Create Trust and Create a climate for innovation.

9. Optimize the efforts of Teams, Groups and Staff areas.

10. Eliminate exhortations for the Work force.

11a. Eliminate numerical quotas for the work force.

11b. Eliminate Management by objectives.

12. Remove Barriers that rob people of pride of workmanship.

13. Encourage Education and Self-improvement for everyone.

14. Take action to accomplish the transformation.

CONTRIBUTIONS OF JURAN:

THE JURAN TRILOGY

Juran views quality as fitness for use

Juran Trilogy is designed to reduce the cost of quality over time.

1. QUALITY PLANNING

1. Determine internal & external customers.

2. Their needs are discovered.

3. Develop product / service features.

4. Develop the processes able to produce the product / service features.

5. Transfer plans to operations.

2. QUALITY CONTROL

1. Determine items to be controlled.

2. Set goals for the controls.

3. Measure actual performance.

4. Compare actual performance to goals.

5. Act on the difference.

3. QUALITY IMPROVEMENT

1. Establishment of quality council.

2. Identify the improvement projects.

3. Establish the project teams with a project leader.

4. Provide the team with the resources.

CONTRIBUTIONS OF CROSBY:

The Four absolutes of quality are

1. Quality is defined as conformance to requirements.

2. The system for causing Quality is prevention.

3. The performance standard must be zero defects.

4. The measurement of Quality is the Price of Nonconformance

Crosby’s Fourteen Points:

1. Management Commitment

2. Quality Improvement Team

3. Quality Measurement

4. Cost of Quality Evaluation

5. Quality Awareness

6. Corrective Action

7. Establish an Ad Hoc Committee for the Zero Defects Program

8. Supervisor Training

9. Zero Defects Day

10. Goal Setting

11. Error Cause Removal

12. Recognition

13. Quality Councils

14. Do It Over Again

OBSTACLES (BARRIERS) IN IMPLEMENTING TQM:

1. Lack of Management Commitment

2. Inability to change Organizational culture

3. Improper planning

4. Lack of continuous training and education

5. Incompatible organizational structure and isolated individuals and

departments.

6. Ineffective measurement techniques and lack of access to data and

results.

7. Paying inadequate attention to internal and external customers

8. Inadequate use of empowerment and teamwork

9. Failure to continually improve

BENEFITS OF TQM

Customer satisfaction oriented benefits:

1. Improvement in product quality

2. Improvement in product design

3. Improvement in production flow

4. Improvement in employee morale and quality consciousness

5. Improvement in product service

6. Improvement in market place acceptance

Economic improvement oriented benefits:

1. Reduction in operating costs

2. Reduction in operating losses

3. Reduction in field service costs

4. Reduction in liability exposure

QUALITY STATEMENTS

a. Vision statement,

b. Mission statement, and

c. Quality policy statement

1. The vision statement is a short declaration of what on organization aspires to be tomorrow.

2. It is the ideal state that might never be reached; but on which one will work hard continuously
to achieve. Successful visions provide a brief guideline for decision making.

3. The vision statement should be coined in such a way that the leaders and the employees
working in the organization should work towards the achievements of the vision statement.

a) The mission statement describes the function of the organization. It provides a clear statement
of purpose for employees, customers, and suppliers.

b) The mission statement answers the following questions: who we are? Who are our customers?
; What we do? and how we do it?
i. The quality policy is a guide for everyone in the organization as to how they provide products
and service to the customers.

ii. It should be written by the CEO with feedback from the workforce and be approved by the
quality council.

iii. A quality policy is a important requirement of ISO 9000 quality systems.

FIVE IMPORTANT FACTORS IN TOTAL QUALITY MANAGEMENT

1. COMMITMENT AND UNDERSTANDING FROM EMPLOYEES

It is key to ensure that all employees within your organization know about the Total
Quality Management (TQM) policies and make them an fundamental part of their work.
Your employees should know your corporate goals and recognize the importance of these
goals to the overall success of your organization.

Employees need to know what is expected from them and why. It may sound like a no -
brainer but too often this is not driven home by management. When employees understand
and share the same vision as management a world of potential is unleashed. If they are in
the dark, commitment is lacking and policies will not be successfully deployed.

2. QUALITY IMPROVEMENT CULTURE

The organizational culture needs to be modernized on a continuous basis to

encourage employee feedback. Your employees are full of valuable knowledge-
embrace it! Listen to those executing the processes that keep your business moving
daily. If employees have an idea on how to improve operations, they need to know
management respects their ideas or they will not share.

3. CONTINUOUS IMPROVEMENT IN PROCESS

There is no standing still. If you are not moving forward, you are moving
backwards. Total Quality Management (TQM) is a continuous process and not a
 program. This requires constant improvement in all the related policies, procedures and
controls established by management.

Do your research. Keep your ear to the market and make an effort to routinely revise
all aspects of your operation. There should be a constant effort to improve p roficiency
– which will result in constant scopes for improvement (even if some improvements are
small).

4. FOCUS ON CUSTOMER REQUIREMENTS

In today’s market, customers require and expect perfect goods and services with
zero defects. Focusing on customer requirements is significant to long term survival
and essential in order to build relationships with customers.

People do business based on emotion. Competitors will always be a risk. Keep your
customers close and happy. Make sure precise requirements of all customers are
documented and understood by everyone that touches the account.

5. EFFECTIVE CONTROL

It is essential to monitor and measure the performance of the business. It’s easy to
forget how many times in a year an employee does not conform to a controlled
procedure or how many times a piece of equipment was down due to unplanned
maintenance.

If strict documentation is maintained, you will be able to objectively quantify areas

for improvement and focus your efforts where they will provide the greatest return of
both your time and financial resources.

Total quality management ensures that every single employee is working towards the
improvement of work culture, processes, services, systems and so on to ensure long term
success.
Total Quality management can be divided into four categories:

▪ Plan
▪ Do
▪ Check
▪ Act

Also referred to as PDCA cycle.

Planning Phase

Planning is the most crucial phase of total quality management. In this phase employees have
to come up with their problems and queries which need to be addressed. They need to come up
with the various challenges they face in their day to day operations and also analyze the
problem’s root cause. Employees are required to do necessary research and collect relevant data
which would help them find solutions to all the problems.

Doing Phase

In the doing phase, employees develop a solution for the problems defined in planning phase.
Strategies are devised and implemented to overcome the challenges faced by employees. The
effectiveness of solutions and strategies is also measured in this stage.

Checking Phase

Checking phase is the stage where people actually do a comparison analysis of before and
after data to confirm the effectiveness of the processes and measure the results.

Acting Phase

In this phase employees document their results and prepare themselves to address other
problems.
 HISTORY OF TOTAL QUALITY

The roots of Total Quality Management (TQM) can be traced back to early 1920s when
statistical theory was first applied to product quality control. This concept was further developed in
Japan in the 40s led by Americans, such as Deming, Juran and Feigenbaum. The focus widened
from quality of products to quality of all issues within an organisation – the start of TQM.

The following shows the history of Total Quality Management, from inspection to business
excellence.

Inspection

Quality Control and Statistical Theory

Quality in Japan

Total Quality

Total Quality Management

Quality Awards and Excellence Models

Business Excellence

How the BPIR can help Quality Practioners and Managers

INSPECTION

Inspection involves measuring, examining, and testing products, process and services against
specified requirements to determine conformity. The use of inspection has been evident throughout
the history of organised production. In the late Middle Ages, special measures were taken to inspect
the work of apprentices and journeymen in order to guard the Guild against claims of makeshift or
shoddy work.

During the early years of manufacturing, inspection was used to decide whether a worker’s job
or a product met the requirements; therefore, acceptable. It was not done in a systematic way, but
worked well when the volume of production was reasonably low. However, as organisations
became larger, the need for more effective operations became apparent.

In 1911, Frederick W. Taylor helped to satisfy this need. He published ‘The Principles of
Scientific Management’ which provided a framework for the effective use of people in industrial
organisations. One of Taylor’s concepts was clearly defined tasks performed under standard
conditions. Inspection was one of these tasks and was intended to ensure that no faulty product left
the factory or workshop; focuses on the product and the detection of problems in the product;

• It involves testing every item to ensure that it complies with product specifications;

•It is carried out at the end of the production process; and relies on specially trained inspectors.

This movement led to the emergence of a separate inspection department. An important new
idea that emerged from this new department was defect prevention, which led to quality control.

Inspection still has an important role in modern quality practices. However, it is no longer seen
as the answer to all quality problems. Rather, it is one tool within a wider array.

UNIT – II

GOAL CHARACTERISTICS

The goals and objectives a company defines under a quality management system have to be clear,
achievable and measurable. A clear goal is one that addresses a specific objective from the
company's strategic plan. It includes details of what employees have to do to achieve it. To let
employees determine when the company has reached its goal, the goal has measurable characteristics
that indicate how much progress is required and when the company has fulfilled its objectives.

IMPROVING QUALITY
One of the key goals of any quality management system is to improve quality of products or
services your company provides. Quality in such a system has three components. High quality means
high accuracy, compliance with applicable standards, and high customer satisfaction. The objective
of the system is to measure each component and achieve improvements. Product testing can measure
accuracy and compliance with standards while functional testing can show whether the products
meet customer expectations. Test scores yield information about problems and indicate areas where
there is room for improvement.

INFLUENCING CULTURE
An important component of quality management systems is influencing the culture of the
organization. A quality-oriented company culture values the characteristics of quality that the system
measures and strives for continuous improvement. Such a culture orients itself toward the customers
and fulfilling their needs. When there are problems with quality, employees are ready to take
responsibility for possible mistakes and focus on avoiding them in the future. This orientation is a
key factor in improving the test results that measure quality.

FOCUSING TRAINING NEEDS

Quality management systems detail the skills, training and qualifications that are prerequisites for
carrying out specific tasks. When problems arise despite the skill of employees, additional training
may be required. When employees don't achieve the quality goals the company sets for them, the test
results often indicate the sources of problems and the kind of training that will improve performance.
If a company can measure the quality of its products and cultivate a quality-centered culture,
employees are motivated to take the appropriate training so they can achieve the company's quality
goals and objectives.

LEADERSHIP
“Leadership is lifting of man‟s visions to higher sights, the raising of man‟s performance to a
higher standard, the building of man‟s personality beyond its normal limitations”.

CHARACTERISTICS FOR LEADERSHIP

• The customers first.

• Value people.
• Built supplier partnership.
 • Empower people.
• Demonstrate involvement/commitment.
• Strive for excellence.
• Explain and deploy policy. Improve communication.
• Promote teamwork.
• Benchmark continuously.
• Establish system.
• Encourage collaboration.

LEADERSHIP ROLES
1. Producer role.
2. Director role.
3. Coordinator role roles.
4. Checker role.
5. Stimulator role.
6. Mentor role.
7. Innovator role.
8. Negotiator role.

CHARACTERISTICS OF QUALITY LEADERS

1. They give priority attention to external and internal customers and their needs.
2. They empower, rather than control, subordinates.
3. They emphasis improvement rather than maintenance.
4. They emphasis prevention.
5. They emphasis collaboration rather than competition.
6. They train and coach, rather than direct and supervise.
7. They learn from the problems.
8. They continually try to improve communications.
9. They continually demonstrate their commitment to quality.
10.They choose suppliers on the basis of quality, not price.
11.They establish organizational systems to support the quality effort. 12.They encourage and
recognize team effort.

LEADERSHIP CONCEPTS
A leader should have the following concepts
1. People, Paradoxically, need security and independence at the same time.
2. People are sensitive to external and punishments and yet are also strongly self - motivated.
3. People like to hear a kind word of praise. Catch people doing something right, so you can pat
them on the back.
4. People can process only a few facts at a time; thus, a leader needs to keep things simple.
5. People trust their gut reaction more than statistical data.
6. People distrust a leader‟s rhetoric if the words are inconsistent with the leader‟s actions.

THE 7 HABITS OF HIGHLY EFFECTIVE PEOPLE

1. Be Proactive
2. Begin with the End in mind
3. Put First Things First
4. Think Win – Win
5. Seek First to Understand, then to Be Understood
6. Synergy
7. Sharpen the Saw (Renewal) .

ROLE OF SENIOR MANAGEMENT

1. Management by Wandering Around (MBWA).
2. Strategy of problem solving and decision making.
3. Strong information base. 4. Recognition and Reward system.
5. Spending most of the time on Quality.
6. Communication.
7. Identify and encourage potential employee.
8. Accept the responsibility.
9. To play a role model.
10.Remove road blocks.
11.Study TQM and investigate how TQM is implemented elsewhere.
12.Establish policies related to TQM.
13.Establish „priority of quality‟ and „customer satisfaction‟ as the basic policy.
14.Assume leadership in bringing about a cultural change. www.annauniversityplus.com

DEVELOPING TQM FRAMEWORK

CULTURE CHANGE, MANAGEMENT OF CHANGE

TEAMWORK
A team is defined as a group of people working together to achieve common objectives or goals.

TEAMWORK
Teamwork is the cumulative actions of the team during which each member of the team subordinates
his individual interests and opinions to fulfill the objectives or goals of the group.

NEED FOR TEAMWORK:

1. Many heads are more knowledgeable than one.
2. The whole is greater than the sum of its members.
3. Team members develop a rapport which each other.
4. Teams provide the vehicle for improved communication.

TYPES OF TEAM
Permanent teams
These teams perform on a permanent basis and are not dissolved once the task is accomplished. Let
us understand the concept with an example.
Mike, Peter, Joe and Ana had a strong inclination towards branding as well as promotions and hence
were a part of the branding team with a leading organization. They were primarily responsible for
promoting their brand and designing marketing strategies to generate maximum revenue for their
organization. They worked extremely hard and always managed to achieve their targets well in
advance, but their team was always in place and never dissolved. Their organization never asked
them to leave or ever dissolved their team. Such teams are called permanent teams.
Work or no work, the human resources team, operation team, administration team always function
effectively through out the year and hence are permanent teams.
Temporary teams
Unlike permanent teams, temporary teams loose their importance, once the task is accomplished.
Such teams are usually formed for a shorter duration either to assist the permanent team or work
when the members of the permanent team are busy in some other project.
When organizations have excess of work, they generally form temporary teams which work in
association with the members of the permanent team for the accomplishment of the task within the
stipulated time.
Task Force
Such teams are formed for a special purpose of working on any specific project or finding a
solution to a very critical problem.
The government generally appoints special teams to investigate critical issues like bomb blasts,
terrorist attacks and so on. The task force explores all the possible reasons which led to a severe
problem and tries to resolve it within a given deadline.
Committee
Committees are generally formed to work on a particular assignment either permanently or on a
temporary basis. Individuals with common interests, more or less from the same background,
attitude come together on a common platform to form a committee and work on any matter.
To organize any cultural event, organizations generally make committees to raise funds, invite
celebrities and all the major tasks involved to successfully organize any event. The committee
members work together, design strategies to successfully accomplish the task.
In educational institutes, various committees are formed where students with a common interest join
hands to organize cultural events and various other activities required for the all round development
of students.
Organization / Work Force
Such groups are formed in organizations where team members work together under the expert
guidance of leader. A leader or a supervisor is generally appointed among the members itself and he
along with his team works hard to achieve a common goal. The leader all through must stand by his
team and extract the best out of each team member. He must not underestimate any of his team
members and take his team along to avoid conflicts.

Self Managed Teams

Self Managed Teams consist of individuals who work together again for a common purpose but
without the supervision of any leader. Here as the name suggests every individual is accountable for
his individual performance.
The team members of self managed teams must respect each other and should never loose focus
on their target. No leader is appointed and the team members have to take their own responsibility.
Individuals take the initiative on their own and are their own guides and mentors.

Cross Functional Teams

Let us understand this with the help of an example.
Maria and Andy both were part of the branding team. They got an assignment from their superiors to
be completed within two days. Unfortunately Andy met with an accident and was advised complete
bed rest. To avoid delays, Peter from the operations team was shifted to the marketing team to assist
Maria for the time being and form a team.
Such teams are called cross functional teams. Ideally the employees should be more or less on the
same level to avoid ego hassles. Individuals from different areas come and work together for a
common objective to form a cross functional team. In such teams, people from different areas,
interests and likings join hands to come out with a unique idea to successfully complete a task.

Virtual Teams
Virtual teams consist of individuals who are separated by distances and connected through
computer. Here individuals communicate with each other online through internet. Sam at Los
Angeles can form a team with Mandy at Mexico and Sara at Denver all working for a common
objective but the communication is totally digital through internet.
Such teams are helpful when employees need to connect with each other and are located at
different places. Individuals supporting any community in social networking sites such as facebook
or orkut also form a virtual team as all the members are from different locations but support a
common community. They all have a common objective -to support and promote their community.

CHARACTERISTICS OF SUCCESSFUL TEAMS

1. Sponsor
2. Team Charter
3. Team Composition
4. Training
5. Ground Rules
6. Clear Objectives
7. Accountability
8. Well-Defined decision procedure
9. Resources
10. Trust
11. Effective Problem Solving
12. Open Communication
13. Appropriate Leadership
14. Balanced Participation
15. Cohesiveness.

1. Sponsor
In order to have effective liason with the quality council, there should be a sponsor. The sponsor
is a person from the quality council; he is to provide support to the organization.
2. Team Charter
A team charter is a document that defines the team’s mission, boundaries, the background of the
problem, the team’s authority and duties, and resources. It also identifies the members and their
assigned roles – leader, recorder, time keeper and facilitator.
3. Team Composition
The size of the team should not exceed ten members except in the case of natural work teams or
self-directed teams. Teams should be diversed by having members with different skills, perspective
and potential. Wherever needed, the internal and external customers and suppliers should be
included as a team member.
4. Training
The team members should be trained in the problem-solvingtechniques, team dynamics and
communication skills.
5. Ground Rules
The team should have separate rules of operation and conduct. Ground rules should be discussed
with the members, whenever needed it should bereviewed and revised.

6. Clear Objectives
The objective of the team should be stated clearly. Without the clear objective, the team
functions are not to be effective.

7. Accountability
The team performance is accountable. Periodic status report of the team should be given to the
quality council. The team should review its performance to determine possible team process
weaknesses and make improvements.

8. Well-defined Decision Procedures

The decision should be made clearly at the right time by the team.

9. Resources
The adequate information should be given to the team wherever needed. The team cannot be
expected to perform successfully without the necessary tools.

10. Trust
Management must trust the team to perform the task effectively. There must also be trust among
the members and a belief in each other.

11. Effective Problem-Solving

Problem-solving methods are used to make the effective decision.
12. Open Communication
Open communication should be encouraged i.e., everyone feels free to speak in the team
whatever they are thinking, without any interruptions.

13. Appropriate Leadership

Leadership is important in all the team. Leader is a person who leads the team, motivates the
team and guides the team in a proper direction.

14. Balanced Participation

Everyone in a team should be involved in the team’s activities by voicing their opinions, lending
their knowledge and encouraging other members to take part.

15. Cohesiveness
Members should be comfortable working with each other and act as a single unit, not as
individuals or subgroups.

ELEMENTS OF EFFECTIVE TEAM WORK

1. Purpose
2. Role and responsibilities
3. Activities
4. Effectiveness
5. Decisions
6. Results, and
7. Recognition.

COMMON BARRIERS TO TEAM PROGRESS:

1. Insufficient training.
2. Incompatible rewards and compensation.
3. First-line supervisor resistance.
4. Lack of planning.
5. Lack of management support.
6. Access to information systems.
7. Lack of Union support.
8. Project scope too large.
9. Project objectives are not significant.
10.No clear measures of success.
11.No time to do improvement work

CULTURAL CHANGE
Reasons for changes in work culture
A new management, a new team leader, a new boss brings a change in the organization
culture.
A new employee but obvious would have new ideas, concepts and try his level best to implement
them. He would want the employees to work according to him. His style of working, behaviour and
ideologies would definitely bring a change in the work culture.

Financial loss, bankruptcy, market fluctuations also lead to change in the work culture of
the organization.
When an organization runs into losses, it fails to give rewards and appraisals to the employees as
it used to give earlier.

Acquiring new clients might cause a change in the work culture.

The employees might have to bring about a change in their style of working to meet the
expectations of the new clients.

The employees on their own might realize that they need to bring a change in their attitude,
perception and style of working to achieve the targets at a much faster rate.
Such self-realization also changes the work culture.
Importance of Delegation

Delegation of authority is a process in which the authority and powers are divided and shared
amongst the subordinates. When the work of a manager gets beyond his capacity, there should be
some system of sharing the work. This is how delegation of authority becomes an important tool in
organization function.

Through delegation, a manager, in fact, is multiplying himself by dividing/multiplying his work

with the subordinates. The importance of delegation can be justified
Through delegation, a manager is able to divide the work and allocate it to the subordinates. This
helps in reducing his work load so that he can work on important areas such as - planning, business
analysis etc.

With the reduction of load on superior, he can concentrate his energy on important and critical
issues of concern. This way he is able to bring effectiveness in his work as well in the work unit.
This effectivity helps a manager to prove his ability and skills in the best manner.

Delegation of authority is the ground on which the superior-subordinate relationship stands. An

organization functions as the authority flows from top level to bottom. This in fact shows that
through delegation, the superior-subordinate relationship become meaningful. The flow of authority
is from top to bottom which is a way of achieving results.

Delegation of authority in a way gives enough room and space to the subordinates to flourish their
abilities and skill. Through delegating powers, the subordinates get a feeling of importance. They get
motivated to work and this motivation provides appropriate results to a concern.

Job satisfaction is an important criterion to bring stability and soundness in the relationship
between superior and subordinates. Delegation also helps in breaking the monotony of the
subordinates so that they can be more creative and efficient
.
 Delegation of authority is not only helpful to the subordinates but it also helps the managers to
develop their talents and skills. Since the manager get enough time through delegation to concentrate
on important issues, their decision-making gets strong and in a way they can flourish the talents
which are required in a manager.
Through granting powers and getting the work done, helps the manager to attain communication
skills, supervision and guidance, effective motivation and the leadership traits are flourished.
Therefore it is only through delegation, a manager can be tested on his traits.

Delegation of authority is help to both superior and subordinates. This, in a way, gives stability to a
concern’s working. With effective results, a concern can think of creating more departments and
divisions flow working.
This will require creation of more managers which can be fulfilled by shifting the experienced,
skilled managers to these positions. This helps in both virtual as well as horizontal growth which is
very important for a concern’s stability.

Therefore, from the above points, we can justify that delegation is not just a process but it is a way
by which manager multiples himself and is able to bring stability, ability and soundness to a concern.

Principles of Delegation

There are a few guidelines in form of principles which can be a help to the manager to process of
delegation. The principles of delegation are as follows: -

Principle of result excepted- suggests that every manager before delegating the powers to the
subordinate should be able to clearly define the goals as well as results expected from them. The
goals and targets should be completely and clearly defined and the standards of performance should
also be notified clearly.
For example, a marketing manager explains the salesmen regarding the units of sale to take place
in a particular day, say ten units a day have to be the target sales. While a marketing manger
provides these guidelines of sales, mentioning the target sales is very important so that the salesman
can perform his duty efficiently with a clear set of mind.
Principle of Parity of Authority and Responsibility- According to this principle, the manager
should keep a balance between authority and responsibility. Both of them should go hand in hand.
According to this principle, if a subordinate is given a responsibility to perform a task, then at the
same time he should be given enough independence and power to carry out that task effectively.
This principle also does not provide excessive authority to the subordinate which at times can be
misused by him. The authority should be given in such a way which matches the task given to him.
Therefore, there should be no degree of disparity between the two.

Principle of absolute responsibility- This says that the authority can be delegated but responsibility
cannot be delegated by managers to his subordinates which means responsibility is fixed. The
manager at every level, no matter what is his authority, is always responsible to his superior for
carrying out his task by delegating the powers. It does not means that he can escape from his
responsibility. He will always remain responsible till the completion of task.
Every superior is responsible for the acts of their subordinates and are accountable to their
superior therefore the superiors cannot pass the blame to the subordinates even if he has delegated
certain powers to subordinates example if the production manager has been given a work and the
machine breaks down. If repairmen is not able to get repair work done, production manager will be
responsible to CEO if their production is not completed.

Principle of Authority level- This principle suggests that a manager should exercise his authority
within the jurisdiction/framework given. The manager should be forced to consult their superiors
with those matters of which the authority is not given that means before a manager takes any
important decision, he should make sure that he has the authority to do that on the other hand,
subordinate should also not frequently go with regards to their complaints as well as suggestions to
their superior if they are not asked to do. This principle emphasizes on the degree of authority and
the level upto which it has to be maintained.

Communication
A business can flourish when all objectives of the organization are achieved effectively. For
efficiency in an organization, all the people of the organization must be able to convey their message
properly. Communication is the activity of conveying information through the exchange of thoughts,
messages or information as by speech, visuals, signals, writing or behavior. Emphasis on
communication came from human relation approach of management. The human relation writer
conceptualized that if worker new what is expected of them, and are aware of the objectives of the
organization, and there is regular feedback of their performance, they invariably will be more
productive.
Communication is defined as the exchange of information and understanding between two or
more persons or groups. Note the emphasis on exchange and understanding. Without understanding
between sender and receiver concerning the message, there is no communication. All information is
encoded, and prior agreement must be reached on the meaning of the code. Quality must be
carefully defined and measures agreed upon.
Communication downward cannot work because it focuses on what we want to say.
Communication should be up & down. Employees should be encouraged to set measurable goals.

Methods of Communication
Verbal communication either between individuals or groups, using direct or indirect methods,
such as public address and other broadcasting systems and recordings.

Written communication in the form of notices, bulletins, information sheets, reports, e-mail and
recommendations.

Visual communication such as posters, films, video, internet/intranet, exhibitions, demonstrations,

displays and other promotional features. Some of these also call for verbal and written
communication.

The people in most organizations fall into one of four ‘audience’ groups, each with particular
general
attitudes towards TQM:
1. Senior managers, who should see TQM as an opportunity, both for the organization and
themselves.
2. Middle managers, who may see TQM as another burden without any benefits, and may perceive a
Vested interest in the status quo.
3. Supervisors (first line or junior managers), who may see TQM as another ‘flavor of the period’ or
campaign, and who may respond by trying to keep heads down so that it will pass over.
4. Other employees, who may not care, so long as they still have jobs and get paid, though these
people must be the custodians of the delivery of quality to the customer and own that responsibility.

Communicating the quality message Senior management needs to ensure that each group sees
TQM as being beneficial to them.

. The implementation strategy must then be based on two mutually supporting aspects:
1. ‘Marketing’ any TQM initiatives.
2. A positive, logical process of communication designed to motivate people (‘discovery’,
affirmation, participation, and team-based learning). The key medium for motivating the employees
and gaining their commitment to quality is face-to-face communication and visible management
commitment.
Communicating the quality strategy
• The essence of changing attitudes is to gain acceptance for the need to change, and for
this to happen it is essential to provide relevant information, convey good practices, and generate
interest, ideas and awareness through excellent communication processes.

• This change will require direct and clear communication from the top management to all
staff and employees, to explain the need to focus on processes. Everyone will need to know their
roles in understanding processes and improving their performance.

• An excellent way to accomplish this first step is to issue a total quality message that clearly states
top management’s commitment to quality and outlines the role everyone must play.

• This can be in the form of a quality policy or a specific statement about the organization’s
intention to integrate quality into the business operations.
Example 1: We can become a total quality organization only with your commitment and dedication
to improving the processes in which you work. We will help you by putting in place a program of
education, training, and teamwork development, based on business and process improvement, to
ensure that we move forward together to achieve our business goals.

Example 2: We wish to convey to everyone our enthusiasm and personal commitment to the total
quality approach, and how much we need your support in our mission of business improvement.
We hope that you will become as convinced as we are that business and process improvement is
critical for our survival and continued success.

The quality director or TQM coordinator should then assist the senior management team to prepare a
directive. This must be signed by all business unit, division, or process leaders, and distributed to
everyone in the organization. The directive should include the following:
Need for improvement.
Concept for total quality.
Importance of understanding business processes.
Approach that will be taken and people’s roles.
Individual and process group responsibilities.
Principles of process measurement.
Communication Model
This communication model indicates the potential for problems through environmental
distractions, mismatches between sender and receiver (or more correctly, decoder) in terms of
attitudes – towards the information and each other – vocabulary, time pressures, etc

Effective Communication
Effective communication is an indispensable instrument for organizational success, because
without
Communication one remains isolated and stranded. Effective communication occurs when a desired
effect is the result of intentional or unintentional information sharing, which is interpreted between
multiple entities and acted on in a desired way.
 This effect also ensures the message is not distorted during the communication process. Effective
communication should generate the desired effect and maintain the effect, with the potential to
increase the effect of the message.
Therefore, effective communication serves the purpose for which it was planned or designed.
Possible purposes might be to elicit change, generate action, create understanding, inform or
communicate a certain idea or point of view.
When the desired effect is not achieved, factors such as barriers to communication are explored,
with the intention being to discover how the communication has been ineffective.

Role of Effective Communication

As a life-wire of an organization communication attempts to protect and promote the corporate
image of an organisation through an effective public relations system. Since communication is an act
of transmitting information or a rejoinder can save an organisation a lot of embarrassment.
The specific role of communication as a tool for industrial relations with respect to collective
bargaining and negotiation is worth mentioning
Here communication takes the persuasive style. In areas of conflict resolutions communication
does a wonderful job. There is perhaps no better method of resolving conflicts and conflict situation
than through effective communication

Time Management in Corporates - Need and its Importance

Time Management refers to making the best possible use of time and doing the right thing at the
right time.
Managing time well plays a pivotal role in finishing off tasks within the stipulated time frame and
also increases productivity of an individual.
Employees must learn to manage time well at the workplace to achieve targets ahead of deadline
and make a mark of their own. One who understands the value of time is never overburdened and
enjoys each and every moment to the fullest.

Time Management is Important in Corporates

 Every organization works on deadlines. Time Management helps individuals to finish work
within the assigned time and stay stress free and relaxed through out the day. Time Management
helps you plan specific time slots for all your day to day tasks at workplace.

Time Management helps an individual to prioritize things. It is important for an employee to

understand what is important and urgent at the moment. Staying overburdened at work leads to
frustration and eventually one loses interest in work. .

Effective Time Management makes you a favourite amongst your superiors, clients as well as
fellow workers. Do not keep work pending from your end. Finish off tasks as and when required.
Ignoring critical issues is pointless. You have to do it in any case. Discuss with your co workers or
immediate reporting boss and find out a solution. Keeping a check on your time helps you complete
task just when it is needed.

Managing time well helps an employee to plan his career path effectively. Doing things on time
helps you reach the top of your career within the shortest possible time frame. Employees who just
work for the sake of doing work and do not pay attention to deadlines are never taken seriously at
the workplace. They are the ones who always crib and complain of excessive work load.
Time Management makes you an organized individual.
One needs to keep things at their respective places. Avoid keeping heaps of paper and stacks of
files on your desk. Not only it gives a cluttered look to your workstation but also wastes half of your
time in searching important documents, files, folders and so on. Individuals should prefer writing on
notepads instead of loose papers
.
Effective Time Management helps an individual to identify the time wasters at the workplace. It is
foolish to waste time on unproductive things which yield no results. No one expects you to work at a
stretch for the whole day. Assign some time in your daily schedule to check updates on social
networking sites or calling up your friends but do know where to draw the line. Your office does not
pay you for gossiping and loitering around.
Time Management makes an individual disciplined and punctual. One gets in the habit of reaching
work on time as a result of effective time management.
 Unit - III

Quality transformation

Quality Transformation is a small advisory firm acting on a global scale, focusing on

providing expert guidance toward successful transformation programs. Quality
Transformation comprises a network of senior advisors that will support your business during
the complete lifecycle of the transformation journey

Quality transformation definition: Quantity conversion during transformation enables you to

convert data records from the source unit of measure into a unit of measure in the target of the
transformation. ... With a fixed unit of measure, the unit is fixed for the key figure.

Quality Transformation is a small advisory firm acting on a global scale, focusing on providing
expert guidance toward successful technology enabled business transformation programs.

Quality transformation stages:

• Decide.
• Prepare.
• Launch.
• Expand.
• Sustain.

1.Decide

There are many factors that drive why a business needs to transform itself. They can be
competitive, regulatory, financial, customer driven or cultural. They can even be as simple as a
change in leadership. However, once there has been a decision to change certain factors need to
be considered.

Not understanding the needs and requirements of the organization. Failing to analyse
where you have been and where you want to go and develop the “transition gap” that has to be
crossed. Believing they are capable of doing this alone and not selecting an experienced partner
that can assist in the transition and will give open, honest and hard (when necessary) feedback
2. Prepare

Upon deciding on the direction and gaining agreement, senior management must be
prepared to articulate the strategy, direction, and plan to achieve the transformation. Watch out
for: Fragmented message from the top Not developing a set of metrics Refusing to identify and
acknowledge “cultural” leaders

3. Launch

This is a phase of activity where you begin to educate the organization on the transformation
direction, what values will change, what behaviors are expected, what will be the support
structure to assist in the transformation and how people will be measured and evaluated.

Individuals will need to be shown what to do and how to do things in a different manner.
Watch out for: Non-involvement of Leadership Moving too fast Lack of Measurement

4. Expand

This phase of the Roadmap is literally an expansion into all other parts of the organization as
the cultural transformation begins to take on a life of its own. Watch out for: Not recognizing
what needs to be changed and making adjustments. Understanding the level of maturity the “first
adopters” have and providing some new tools, methods, and techniques for them.

Keeping in mind that “new adopters’ need nurturing and support and won’t just “get it”.
Developing a group of internal experts in change management to go after and address the “hard
cases” that refuse change.

5.Sustain

Once an organization has reached this phase in a transformation they will be somewhere
between2.5 to 4 years in the maturity cycle. Sustaining is when the new cultural values have
been embedded into your environment and you hear things like the operational individuals being
able to quote the corporate vision and values and explain them to people.
 Planning and promotion:

Planning and promotion definition: Definition: The Promotional Planning is a process of

optimizing the utilization of marketing tools, strategies, resources to promote a product and
service with the intent to generate demand and meet the set objectives.

Decision to adapt incubation:

Incubation is defined as a process of unconscious recombination of thought elements that

were stimulated through conscious work at one point in time, resulting in novel ideas at some
later point in time. ... Many guides to effective thinking and problem solving advise the reader to
set problems aside for a time.

Incubation process:

The definition of incubation is the process of keeping something at the right temperature and
under the right conditions so it can develop. When a mother bird sits on her eggs until they are
ready to hatch, this is an example of incubation.

Never ending improvement in total quality transformation:

The JapaneseA continuous improvement model of plan, do, check, act use the word kaizen
to describe this ongoing process of unending improvement – the setting and achieving of ever-
higher goals TQM and zero defects are also used to describe continuous improvement efforts
Six Sigma – A program to save time

Continuous process improvement in TQM:

TQM focuses on continuous improvement of organizational processes resulting in high quality

products and services. The ideal goal of TQM is do things right the first time and every time. The
customer is the ultimate judge of quality. Quality cannot be improved without significant losses
in productivity.
Continuous Improvement Process

The Continual Improvement Process (CIP) is an ongoing effort to

improve products, services, or processes. It’s is a six step systematic approach to plan, sequence
and implement improvement efforts using data and elaborates on the Shewhart Cycle (Act, Plan,
Do, Study). The CIP provides a common language and methodology which enables
understanding the improvement process. The CIP always links back to each organization own
goals and priorities.

The six (6) steps of the Continuous Improvement Process are:

Identify Improvement Opportunity: Select the appropriate process for improvement.

Evaluate Process:

Select a challenge/problem

Analyze: Identify and verify the root cause(s).

Take Action: Plan and implement actions that correct the root cause(s).

Study Results: Confirm the actions taken to achieve the target.

Standardize Solution: Ensure the improved level of performance is maintained.

Plan for Future:

Plan what is to be done with any remaining problems

Evaluate the team’s effectiveness Set a target for improvement

Tools that can be used to help with the Continual Improvement Process are:

• Benchmarking
• Force Field Analysis
• Flowcharts
• Affinity Diagram
• Delphi Technique
• Pareto Chart
• Cause and Effect Diagram
• Scatter Diagram
• Check Sheet
• Control Chart
• Process Capability Index and Ratio
• ISO 14000

Information Quality Dimensions

The InfoQual methodology focuses on the Plan and Check phases of the PDCA cycle.
Therefore IQ dimensions and metrics, on which these phases are based, are at the centre of the
method. They are used to explore customer needs, to specify the desired information properties,
to communicate the benchmarks and to compare the performance of the resulted product (i.e.
information quality) against targets.

1.The hierarchical organization of IQ dimensions

There is a growing body of research literature concerning the measurement of information

quality. The Dutch company Cap Gemini Pandata (Delen & Rijsenbrij,1992). decomposes the
entire information quality notion into four dimensions, 21 aspects and 40 attributes. They include
this structure in the company procedure covering SW packages auditing.

The TDQM Institute (Wang, Storey and Firth, 1995) has evaluated the research literature on
dimensions of data quality. They conclude that there is a lack of consensus on what constitutes a
"good" data quality dimensions set. Furthermore, there is no agreement on the definition of
seemingly simple dimensions such as "Accuracy." Three research avenues are suggested:
(1) to use a scientifically grounded approach in order to rigorously define information quality
dimensions.

(2) to create a universal standard set of operational quality dimensions.

(3) to let information quality dimensions be defined by the information customer(user).

Level A: User satisfaction, as the ultimate criteria to information quality. User satisfaction can
and should be measured directly, through customer satisfaction surveys (Bailey and Pearson,
1983).

Level B: IQ USERS NEEDS, which reflect users' expectations. They are specified by the user,
in his words (voice of the customer). "Ease of Use" is a common example. When there are many
stated customer needs, they can be grouped in order to allow easier manipulation.

Level C: IQ METRICS, which translate the customer needs into technical characteristics of the
desired information solution. Ideally, but not in all cases, they can be directly quantified (e.g.,
Number of Steps Required to Complete operation X).

Figure 2: Hierarchical organization of IQ dimensions.

1.Operations on IQ customer needs & metrics

The InfoQual methodology is designed to support the team in defining, prioritizing and
performing other operations on these two object types, namely IQ Users Needs and IQ Metrics.
These operations are listed in Table B.
Operation Description Output Examples

Find out what are the users' IQ

EXTRACT needs needs, expressed in his words Timeliness, Relevancy, Accuracy
(voice of customer)

Translate abstract needs into Need= Accuracy

TRANSLATE needs
concrete metrics. Metrics= error rate, precision

Define how the metric will be Error rate ,defined as % of

DEFINE metrics measured (definition, unit, scale, documents with at least one
data source) erroneous field

Explore interdependencies between Tradeoff between Completeness

ANALYZE metrics
metrics (tradeoffs, synergy) & Response time

Rank metrics by importance, In application X importance order

PRIORITIZE
according to user needs and other is: Response time, error rate,
metrics
considerations format standardization

MEASURE current Measure the current IQ

Response time= 8 days (average)
performance performance

BENCHMARK Explore IQ performance in other In company Y: Response time= 4

performance organizations. hours.

SET TARGETS
Determine target values Response Time= 3 hours
values

Each metric has different scale and

Performance Scale:
NORMALIZE unit. This operation creates a

metrics common scale, in order to enable 5-outstanding 4-good,

the evaluation of the overall IQ
 performance (integrated IQ index) 3-acceptable 2-poor

COMMUNICATE Communication of metrics

performance and information to all stakeholders, Graphical report
targets including management

PERFORMANCE INDICATOR

A performance indicator or key performance indicator ( KPI) is a type of performance

measurement. KPIs evaluate the success of an organization or of a particular activity (such as
projects, programs, products and other initiatives) in which it engages.

Often success is simply the repeated, periodic achievement of some levels of operational
goal (e.g. zero defects, 10/10 customer satisfaction), and sometimes success is defined in terms
of making progress toward strategic goals.

Accordingly, choosing the right KPIs relies upon a good understanding of what is
important to the organization. What is deemed important often depends on the department
measuring the performance – e.g. the KPIs useful to finance will differ from the KPIs assigned to
sales.

Since there is a need to understand well what is important, various techniques to assess
the present state of the business, and its key activities, are associated with the selection of
performance indicators.

These assessments often lead to the identification of potential improvements, so performance

indicators are routinely associated with 'performance improvement' initiatives. A very common
way to choose KPIs is to apply a management framework such as the balanced scorecard.
Categorization of indicators

Key performance indicators define a set of values against which to measure. These raw sets
of values, which can be fed to systems that aggregate the data, are called indicators. There are
two categories of measurements for KPIs.

Quantitative facts without distortion from personal feelings, prejudices, or interpretations

presented with a specific value - objective- preferably numeric measured against a standard.

Qualitative values based on or influenced by personal feelings, tastes, or opinions and presented
as any numeric or textual value that represents an interpretation of these elements.

An 'indicator' can only measure what 'has' happened, in the past tense, so the only type of
measurement is descriptive or lagging. Any KPI that attempts to measure something in a future
state as predictive, diagnostic or prescriptive is no longer an 'indicator' it is a 'prognosticator' - at
this point, it is analytics (possibly based on a KPI).

Points of measurement

Performance focuses on measuring a particular element of an activity. An activity can

have four elements: input, output, control, and mechanism. At a minimum, an activity is required
to have at least an input and an output. Something goes into the activity as an input; the activity
transforms the input by making a change to its state; and the activity produces an output.

An activity can also have to enable mechanisms that are typically separated
into human and system mechanisms. It can also be constrained in some way by a control. Lastly,
its actions can have a temporal construct of time.

• Input indicates the inputs required of an activity to produce an output.

• Output captures the outcome or results of an activity or group of activities.
• Activity indicates the transformation produced by an activity (i.e., some form of work).
• Mechanism is something that enables an activity to work (a performer), either human or
system.
• Control is an object that controls the activity's production through compliance.
• Time indicates a temporal element of the activity.
IDENTIFYING THE INDICATORS OF THE ORGANISATION

Performance indicators differ from business drivers and aims (or goals). A school might
consider the failure rate of its students as a key performance indicator which might help the
school understand its position in the educational community, whereas a business might consider
the percentage of income from returning customers as a potential KPI.

The key stages in identifying KPIs are:

• Having a pre-defined business process (BP).

• Having requirements for the BPs.
• Having a quantitative/qualitative measurement of the results and comparison with set
goals.
• Investigating variances and tweaking processes or resources to achieve short-term goals.

Key performance indicators (KPIs) are ways to periodically assess the performances of
organizations, business units, and their division, departments and employees. Accordingly, KPIs
are most commonly defined in a way that is understandable, meaningful, and measurable. They
are rarely defined in such a way that their fulfillment would be hampered by factors seen as non-
controllable by the organizations or individuals responsible. Such KPIs are usually ignored by
organizations

KPIs should follow the SMART criteria. This means the measure has a Specific purpose for
the business, it is Measurable to really get a value of the KPI, the defined norms have to
be Achievable, the improvement of a KPI has to be Relevant to the success of the organization,
and finally it must be Time phased, which means the value or outcomes are shown for a
predefined and relevant period. In order to be evaluated, KPIs are linked to target values, so that
the value of the measure can be assessed as meeting expectations or not.

Accounts

Some examples are:

• Percentage of overdue invoices

• Percentage of purchase orders raised in advance
 • Number of retrospectively raised purchase orders
• Finance report error rate (measures the quality of the report)
• Average cycle time of workflow
• Number of duplicate payments

Marketing and sales

• New customer acquisition

• Demographic analysis of individuals (potential customers) applying to become
customers, and the levels of approval, rejections, and pending numbers
• Status of existing customers
• Customer attrition
• Turnover (i.e., revenue) generated by segments of the customer population
• Outstanding balances held by segments of customers and terms of payment
• Collection of bad debts within customer relationships
• Profitability of customers by demographic segments and segmentation of customers by
profitability
• Many of these customer KPIs are developed and managed with customer relationship
management software.
• Faster availability of data is a competitive issue for most organizations. For example,
businesses that have higher operational/credit risk (involving for example credit cards or
wealth management) may want weekly or even daily availability of KPI analysis,
facilitated by appropriate IT systems and tools.

Manufacturing

Overall equipment effectiveness is a set of broadly accepted non-financial metrics which

reflect manufacturing success.

OEE = availability x performance x quality

Availability = run time / total time, by definition this is the percentage of the actual amount of
production time the machine is running to the production time the machine is available.
Performance = total count / target counter, by definition this is the percentage of total parts
produced on the machine to the production rate of machine.

Quality = good count / total count, by definition, this is the percentage of good parts out of the
total parts produced on the machine.

Cycle time ratio (CTR) = standard cycle time / real cycle time

• Capacity utilization
• Rejection rate

Professional Services

Most professional services firms (for example: management consultancies, systems

integration firms, or digital marketing agencies) use three key performance indicators to track the
health of their businesses. They typically use professional services automation (PSA) software to
keep track of and manage these metrics.

Utilization rate = the percentage of time employees spend generating revenue

Project profitability = the difference between the revenue generated by a project and the cost of
delivering the work

Project success rate = the percentage of projects delivered on time and under budget

System operations

• Availability / uptime
• Mean time between failure
• Mean time to repair
• Unplanned availability
• Average time to repair

Project execution

• Earned value
• Cost variance
 • Schedule variance
• Estimate to complete
• Manpower spent / month
• Money spent / month
• Planned spend / month
• Planned manpower / month
• Average time to delivery
• Tasks / staff
• Project overhead / ROI
• Planned delivery date vs actual delivery date

Supply chain management

Businesses can utilize KPIs to establish and monitor progress toward a variety of goals,
including lean manufacturing objectives, minority business enterprise and diversity spending,
environmental "green" initiatives, cost avoidance programs and low-cost country
sourcing targets.

Any business, regardless of size, can better manage supplier performance with the help of
KPIs robust capabilities, which include:

• Automated entry and approval functions

• On-demand, real-time scorecard measures
• Rework on procured inventory
• Single data repository to eliminate inefficiencies and maintain consistency
• Advanced workflow approval process to ensure consistent procedures
• Flexible data-input modes and real-time graphical performance displays
• Customized cost savings documentation
• Simplified setup procedures to eliminate dependence upon IT resources
• Main SCM KPIs will detail the following processes:
• Sales forecasts
• Inventory
 • Procurement and suppliers
• Warehousing
• Transportation
• Reverse logistics

Suppliers can implement KPIs to gain an advantage over the competition. Suppliers have
instant access to a user-friendly portal for submitting standardized cost savings templates.
Suppliers and their customers exchange vital supply chain performance data while gaining
visibility to the exact status of cost improvement projects and cost savings documentation.

Human Resource Management

• Employee turnover
• Employee performance indicators
• Cross-functional team analysis

UNIT - IV

Quality assessment is the data collection and analysis through which the degree of
conformity to predetermined standards and criteria are exemplified. If the quality, through this
process is found to be unsatisfactory, attempts are made to discover the reason for this

Assessment is a key part of today's educational system. ... The purpose of assessment is to
gather relevant information about student performance or progress, or to determine student
interests to make judgments about their learning process.

A quality audit is a process by which you review and evaluate an element of your
business to ensure that you're meeting certain standards. The standards vary—you can set them
or you can follow standards set by your industry.
Quality Audit Types

1. Internal Audits. Internal audits ensure that an organization is meeting its own quality
standards or contractually required standards. ...
2.External Audits. ...
3. Second Party Audits. ...
4. Third Party Audits. ...
5. Process Audits. ...
6. Product Audits. ...
7. System Audits.
The objective of quality audit is to verify the compliance of the department/organization to the
defined Quality Management system and eh requirements of ISO 9001:2015. Also, it provides
the assurance and confidence to the management that the processes of the organization are being
complied.

The following is a list of 10 commonly performed quality audit types

InternalQuality System Audit

This type of audit is an examination of the tool used to measure quality itself. An internal quality
audit seeks to evaluate an organization’s Electronic Quality Management System (EQMS). The
quality documentation and processes managed by the software solution are reviewed to ensure
maximum efficiency and high-quality product outcomes.

The software manual is audited to ensure all critical areas of the solution are covered and all
key employees readily have access to the document. Work instructions are audited to ensure
conformity to standard operating procedures and to confirm quality processes are meeting
targets.

Supplier Audit
Supplier audits allow an organization to collaborate in real-time directly with its suppliers. By
auditing the supply chain, companies can control the quality of its suppliers and sub-tier
suppliers and introduce accountability for poor performers.
 Key performance indicators (KPIs) quickly identify areas for improvement. With this level of
transparency, suppliers are able to view purchase order activity such as receipt and inspection
history in order to collaborate on non conformances and corrective actions.

Production Team Audit

Production team members usually get an examination (audit) when Operator Acceptance or
Certified Operator programs are in place, or when skills management re-qualifications are
required. Auditors evaluate changes to processes, evidence of training, past activity for escapes,
nonconformance, and conformity inspections of operator accepted product as part of the re-
qualification.

Safety Audit
A safety audit looks at the plans and procedures designed to protect the safety of company
employees. This type of audit can include a review of equipment operation or an examination of
organizational procedures to ensure routine safety. Successful safety policies prevent injuries and
accidents from occurring and improve overall employee well-being.

Facilities Audit
A facilities audit addresses quality concerns of a corporation’s assets. Components of a
facilities audit can include a review of building systems such as HVAC, manufacturing
equipment or technology. Processes associated with these facilities are reviewed to ensure safety
and identify improvements that could affect quality outcomes.

Environmental Audit
Environmental audits are designed to help companies create a safer work environment by
helping to identify areas of workplace risk with an actionable plan to meet OSHA and other
standards. An audit is conducted to ensure employees are adhering to regulatory standards and
using appropriate personal protective equipment.

Risk Assessment Audit

A risk assessment is a process that identifies potential workplace hazards, then categorizes
each risk so preventative measures can be put into place. An audit of this type helps companies
put an effective risk mitigation strategy into action. When all risks have been identified,
preventative measures can be prioritized, preventing adverse workplace and economic
consequences.

Design Control Audit

Design control audits are conducted within highly regulated industries to ensure that
manufacturers follow a formalized process that results in an end-product that meets acceptable
quality and safety standards and adequately serves user needs. The design plan and design inputs
and outputs are reviewed for proper acceptance criteria and a risk analysis is performed.

Regulatory Audit
Regulatory audits are conducted to verify compliance with a specific set of regulations or
standards. Quality practices are examined, and the data collection process is systematically
reviewed to identify possible areas of nonconformance. Examples of regulatory agencies include
FAA, DARPA, DCMA, ISO, AS9100 as well as many others.

Method Validation Audit

A method validation audit is used by the FDA or other regulatory authorities to ensure that the
analytical test methods used in the manufacturing process are standardized, reproducible and
documented. This methodology is applied to testing that requires consistency and accuracy,
usually in cases of products manufactured for human use.

CUSTOMER FOCUS:

Customer is the King.

“Quality what the customer wants” It emphasis on the customer. Customer satisfaction must
be the primary goal of any organization, therefore it is essential that every employee in the
organization understands the importance of the customer. A satisfied customer will led to
increased profits.
CUSTOMER SATISFACTION MODEL:

Customer satisfaction is not an objective but a feeling or attitude. Since it is subjective it is not
easy to measure. There are so many facets to a customer experience with a product and service
that need to be measured individually to get the accurate picture of customer satisfaction.

Customer Satisfaction Model – Teboul

Types of Customers:

1. Internal customers

2. External customers

Internal Customers:

1. The customers inside the organization

2. The flow of work, product and service in the organization, each department is

dependent on one and another.

3. Every person in a process is considered as the customer of the other preceding

operation.

External Customers:

1. Uses the product or service

2. Who purchase the product.

3. Who influence the sale of the Product or services.

Kano Model

CUSTOMER COMPLAINTS:

Customer Satisfaction analysis helps the organization in the following ways:

1. A totally satisfied customer contributes to revenue of the company.

2. A totally dissatisfied customer decrease revenue.

CUSTOMER FEEDBACK:

Customer feedback is required for the following reasons.

1. To discover customer dissatisfaction

2. To identify the customer needs

3. To discover relative priories of quality

4. To compare performance with competition

5. To determine opportunities for improvement.

TOOLS OF CUSTOMER COMPLAINTS:

a. Comment card

b. Customer Questionnaire

c. Focus Groups

d. Toll Free telephone

e. Customer Visit

f. Report Card

g. Internet & Computers

h. Employee Feedback.

i. Mass customization

CUSTOMER RETENTION

It means “retaining the customer” to support the business. It is more powerful and

effective than customer satisfaction.

For Customer Retention, we need to have both “Customer satisfaction & Customer

loyalty”.

The following steps are important for customer retention.

1. Top management commitment to the customer satisfaction.

2. Identify and understand the customers what they like and dislike about the

organization.

3. Develop standards of quality service and performance.

4. Recruit, train and reward good staff.

5. Always stay in touch with customer.

6. Work towards continuous improvement of customer service and customer

retention.

7. Reward service accomplishments by the front-line staff.

8. Customer Retention moves customer satisfaction to the next level by

determining what is truly important to the customers.

9. Customer satisfaction is the connection between customer satisfaction and

bottom line.

Employee Involvement: The Secret to Quality Management Success

Much like worker bees keep the hive going strong, your employees keep your quality
management plans on track. That is, of course, if they are invested in your strategies and 101%
on board with your objectives. Plenty has been said about the importance of employee
involvement. From creating a culture of continuous improvement, to competency training,
incentives and even leadership nurturing, your company is only as good as the people you the
long run.
The primary reasons that involvement matters so much include the following:

• Involved employees are able to make informed, logical decision with the help of their
extensive understanding of the process;
• Involved employees are more likely to get behind decisions they helped to make;
• Involved employees can notice and report on improvement areas or competency gaps;
• Involved employees are better equipped to take instant corrective actions;
• Involved employees feel like they are part of the company, and have more morale and
motivation to make it successful;
• Involved employees communicate better with their peers and work more productively
and effectively with others;
• Involved employees handle change better and wish to have more control over the work
environment;
• Involved employees are committed to achieving goals because they feel truly invested.

Instead of seeing employee involvement as a once-off thing that is not really anything to stress
over on a long-term scale, realise that when it comes to your improvement strategies,
involvement needs to be done on a holistic, deeper level throughout the organisation. When this
is mastered properly, there is far more chance of your quality management strategies succeeding.

CUSTOMER SATISFACTION

Quality Glossary Definition: Customer satisfaction

Customer satisfaction is defined as a measurement that determines how happy customers are
with a company’s products, services, and capabilities. Customer satisfaction information,
including surveys and ratings, can help a company determine how to best improve or changes its
products and services.

An organization’s main focus must be to satisfy its customers. This applies to industrial firms,
retail and wholesale businesses, government bodies, service companies, nonprofit organizations,
and every subgroup within an organization.
 Model of Customer Satisfaction

There are two important questions to ask when establishing customer satisfaction:

1. Who are the customers?

2. What does it take to satisfy them?

WHO ARE THE CUSTOMERS?

Customers include anyone the organization supplies with products or services. The table below
illustrates some supplier-customer relationships.
Note: that many organizations are both customers and suppliers.

Supplier-customer relationship examples

Supplier Customer

Automobile manufacturer Individual customers

Automobile manufacturer Car dealer

Bank Checking account holders

High school Students and parents

Hospital Patients

Hospital Insurance company

Insurance company Hospital

Steel cutting department Punch press department

Punch press department Spot weld department

All departments Payroll department

WHAT DOES IT TAKE TO SATISFY THE CUSTOMER?

Organizations should not assume they know what the customer wants. Instead, it is
important to understand the voice of the customer, using tools such as customer surveys, focus
groups, and polling. Using these tools, organizations can gain detailed insights as to what their
customers want and better tailor their services or products to meet or exceed customer
expectations.

Customer Satisfaction Process Improvement

CUSTOMER SATISFACTION RESOURCES

R. L. Polk & Co.: Making Every Issue the Only Issue (PDF) Annual customer surveys for
R. L. Polk & Co. identified opportunities for improvement in customer contact and issue
resolution. By following the same steps for every issue and performing full root cause
analysis for 100% of issues, Polk increased operational excellence and improved customer
satisfaction.

Move from Product to Customer Centric (Quality Progress) "Customer centricity" is about
listening to your customers, with a focus on collecting, understanding, and acting on customer
feedback and providing tools for easy access to this information.
Don’t Measure Customer Satisfaction (PDF) Customer perceived value is a better alternative
to traditional customer satisfaction measurements.

Quality Control: Concept, Significance and Techniques.

Concepts of Quality and Quality Control:

Quality

Quality may be defined as follows:

Quality is the degree of excellence a product possesses with respect to design of product and
conformity with certain prescribed standards and specifications; so as to meet customers’
expectations most satisfactorily.

John D. Mclellan defines quality as follows:

“Quality is the degree to which a product conforms to specifications and workmanship

standards.”

Certain pertinent observations on the concept of quality may be made as follows:

(i) Quality is a Subjective Concept:

A product which one thinks ‘as superior’, may be rated as ‘inferior’ by some other,
one.

(ii) Quality is a Relative Concept:

It is relative to the cost of the product i.e. quality is something which is consistent with the
price of the product.

(iii) Quality is a conditional concept;

i.e. the characteristic of quality has a meaning and relevance; only when it meets the purpose for
which it is bought by a buyer.
(iv) Quality is a dynamic concept;

i.e. the notion of quality changes with times. Products regarded in the past as possessing
excellent quality may be looked down upon as sub-standard, by people of modern times.

Quality Control

Quality control may be defined as follows:

Quality control involves establishment of quality standards and installation of systems to

ensure that these standards are maintained and practiced.

Following are cited certain outstanding definitions of quality control:

(1) “Quality control is systematic control of management of the variables in the manufacturing
process that affects goodness of the end product.” —H.N. Broom.

(2) “Quality control means the recognition and removal of identifiable causes of defects and
variations from the set standards.” —J. A. Shubin

(3) “Quality control is that industrial management technique or group of techniques by means of
which products of uniform acceptable quality are manufactured.” —Alford and Beaty.

Steps in the process of quality control:

(i) Establishing quality standards; in terms of size, design, durability, appearance etc., on the
basis of customers’ preferences and cost of production.

(ii) Selecting the manufacturing process; this permits output of the required specifications.

(iii) Developing measurement techniques; to ensure whether production conforms to set

specifications or not.
(iv) Monitoring product quality; which requires designing a system of periodical checks of the
end product to find out deviations from set standards of a quality; and locating causes of such
deviations.

(v) Taking corrective action; to remove the causes of deviations

Significance of Quality Control:

Quality control is significant for the following reasons:

(i) Cost Reduction and Profit Maximization:

Quality control helps in better utilisation of productive resources; and in elimination of all sort of
wastes. Thus it leads to cost reduction and profit maximisation for the enterprise.

(ii) Increase in Operational Efficiency:

Quality control implies control over quality of raw-materials, performance of men and machines
etc. Thus it brings about more operational efficiency of the organisation.

(iii) Maximum Customer Satisfaction:

Quality control minimizes complaints from customers and results in maximum customer
satisfaction. It is quality that brings customers back for a second time, third time and so on. Thus
quality control leads to sales maximisation; and consequently profit maximisation.

(iv) Good-Will and Image of the Enterprise:

Quality control builds goodwill of the enterprise in society. It makes for an image of the
enterprise in the eyes of the public, due to the quality products offered by the enterprise.

(v) Insurance against Heavy Losses:

Quality control protects the manufacturer against heavy losses which may be caused due to
rejection of large quantity of sub-standard products.
(vi) Promotes Employees’ Productivity:

Quality control inculcates a feeling of quality consciousness among employees; and promotes
their productivity.

(vii) Morale of Employees:

Quality control heightens morale of employees; as they feel that they are working for an
enterprise producing goods of superior quality.

Techniques of Quality Control:

(I) Inspection

(II) Statistical quality control (SQC)

(I) Inspection:

Inspection is that component of quality control programme which is concerned with checking
on the performance of items to the specifications set for it. It involves periodic checking and
measuring – before, during and after the production process. Because of the numerous variables
that enter into manufacturing, inspection is a never ending process.

Inspection may be ‘Centralized’ or ‘Floor Inspection.’:

Under centralized inspection, all the work from a department is sent to the Inspection
Department, before passing on to the next operation. Floor inspection, on the other hand, follows
the practice of sending inspectors to the floor and inspects work at the machines of operatives. It
is also called patrolling or travelling inspection.

Advantages of centralized inspection:

(i) Centralised inspection ensures impartial supervision; because the inspector is not under the
strain of not rejecting the work of a person with him he has good personal relations.
(ii) Under centralized inspection, it is easier to keep records of items/parts which are approved or
rejected.

(iii) Production work is liable to less interruption, under centralized inspection.

Advantages of floor inspection:

(i) Since work is inspected on the floor; delay in sending work to next station is avoided.

(ii) Inspector can immediately locate the fault and suggest rectification.

(iii) It involves minimum material handling.

(II) Statistical Quality Control (SQC):

SQC is based upon the laws of probability. It is a system for controlling the quality of
production within specified limits (tolerance limits) by means of a sample procedure and
continuing analysis of inspection results.

Grant defines SQC as follows:

“SQC is a simple statistic method for determining the extent to which quality goods are being
met without necessarily checking every item produced and for indicating whether or not the
variations which occur are exceeding normal expectations. It enables us to decide whether to
reject or accept a particular product.”:

SQC does not produce a quality product. It merely informs management that things are not
going as they should. Management must take necessary action to remove the causes of variations
and ensure production of quality products.

Inspections vs. SQC:

It is an interesting academic exercise to compare inspection and SQC.

The two techniques of quality control may be compared as follows:

 (i) The result of inspection is acceptance or rejection of production; while SQC enables
management to take action so that products will meet specifications. As such
inspection enables one “to be wiser after the event” whereas SQC enables one “to get
wiser before the event.”
(ii) (ii) Inspection can be cent per cent; while SQC always involves sampling.

Techniques of SQC:

Techniques of SQC can be divided into two parts:

(1) Process control

(2) Acceptance sampling

Following is a brief account of these techniques of SQC:

(1) Process Control:

The checking up of quality characteristics under process control is done with the help of
charts. There may be many types of charts like ‘X-Chart’, ‘R-Chart’, ‘C-Chart’ and ‘P-Chart’.
All types of charts are similar in composition and structure. All of them represent how quality-
characteristic is changing from one sample to another.

A control chart when prepared would appear as follows:

A Control Chart When Prepared would Appear

Note: UCL = Upper Control Limit

LCL = lower control Limit

A process is considered out of control and an action to check and correct the process is taken;
when a plotted point falls outside the control limits.
Advantages of control charts:

1. They provide visual aids

2. They are easy to prepare.

3. They give early warning of trouble

(2) Acceptance Sampling:

Control charts are useful for process control. In case of receipt of materials and dispatch of
finished goods; a different method is used, that of acceptance sampling. Acceptance sampling
plans are of utmost value when the nature of the process used to manufacture products remains
unchanged.

In acceptance sampling, decisions [e.g. whether acceptable/not acceptable (rejection)]

about the quality of batches or lots are made after inspection of only a portion i.e. a sample. If the
sample of items conforms to requisite quality levels; then the whole batch from which the sample
is taken is accepted. If the sample does not conform to the requisite quality level; then the whole
batch is rejected.

An acceptance sampling is defined as:

Lot size (N)

Sample size (n)

Acceptance number (C)

Suppose N = 9000; n = 300 and C = 7; then this sampling plan means that a lot of 9000 items
has 300 units (sample size) inspected. If seven or less defectives are found in 300 units sample;
the lot is accepted. If eight or more defectives are found in the sample; the lot is rejected.
 A close study of acceptance sampling technique would reveal that there is likelihood that a lot
of satisfactory quality is rejected on the basis of sample result. This is technically called
producer’s risk. Similarly, the consumer (or buyer) has the risk of accepting a lot of
unsatisfactory quality, on the basis of sample results. This risk is called consumer’s risk.

Advantages of acceptance sampling:

(i) Less expensive than 100% inspection

(ii) Used where 100% inspection is not possible.

(iii) Useful when inspection may cause damage or complete destruction.

Advantages of SQC:

(i) Reduced Cost:

Since only a fraction of output is inspected; costs of inspection are greatly reduced.

(ii) Early Warning of Defects:

SQC gives an early warning of defects in the production process; so that these defects can be
detected and corrected at inception.

(iii) Simple Technique:

SQC techniques are simple and can be operated by semi-skilled operators.

(iv) Continuous Inspection:

SQC is a technique which provides a continuous inspection of the product at various stages of
the manufacturing process.

(v) Adherence to Specifications:

SQC enables a process to be held in a state of statistical control i.e. a state in which variability is
the result of chance causes alone.

UNIT - V

Consumer Rights and Responsibilities

Right to safety

Means right to be protected against the marketing of goods and services, which are hazardous
to life and property. The purchased goods and services availed of should not only meet their
immediate needs, but also fulfil long term interests. Before purchasing, consumers should insist
on the quality of the products as well as on the guarantee of the products and services. They
should preferably purchase quality marked products such as ISI,AGMARK, etc

Right to choose

Means right to be assured, wherever possible of access to variety of goods and services at
competitive price. In case of monopolies, it means right to be assured of satisfactory quality and
service at a fair price. It also includes right to basic goods and services. This is because
unrestricted right of the minority to choose can mean a denial for the majority of its fair share.
This right can be better exercised in a competitive market where a variety of goods are available
at competitive prices

Right to be informed

Means right to be informed about the quality, quantity, potency, purity, standard and price of
goods so as to protect the consumer against unfair trade practices. Consumer should insist on
getting all the information about the product or service before making a choice or a decision.
This will enable him to act wisely and responsibly and also enable him to desist from falling prey
to high pressure selling techniques.

Right to consumer education

 Means the right to acquire the knowledge and skill to be an informed consumer throughout life.
Ignorance of consumers, particularly of rural consumers, is mainly responsible for their
exploitation. They should know their rights and must exercise them. Only then real consumer
protection can be achieved with success.

Right to be heard

Means that consumer's interests will receive due consideration at appropriate forums. It also
includes right to be represented in various forums formed to consider the consumer's welfare.
The Consumers should form non-political and non-commercial consumer organizations which
can be given representation in various committees formed by the Government and other bodies
in matters relating to consumers.

Right to Seek redressal

Means right to seek redressal against unfair trade practices or unscrupulous exploitation of
consumers. It also includes right to fair settlement of the genuine grievances of the consumer.
Consumers must make complaint for their genuine grievances. Many a times their complaint
may be of small value but its impact on the society as a whole may be very large. They can also
take the help of consumer organizations in seeking redressal of their grievances.

As the markets are globalizing, the direct link between the manufacturer and the final user
getting distant, post purchase grievances have to be heard through a strong redressal system. For
this, Consumer disputes redressal agencies (popularly known as Consumer Forums or
Consumer Courts) are set up under the Act at District, State and National level to provide
simple and inexpensive quick redressal against consumer complaints.

The District forum deals with complaints where the compensation sought is less than 23 lakhs.
This limit is commonly known as the ‘pecuniary jurisdiction’ of the Consumer Redressal Forum.
The State Forum deals with the complaints where the value of the goods and services and
compensation claimed does not exceed rupees one crore and the National Forum entertains the
co mplaints where the value of the goods or services and compensation claimed exceeds rupees
one crore.
The Consumer Forum can order the company to take the following actions once it hears the
complaint and decides that the company is at fault:

• Correct deficiencies in the product to what they claim.

• Repair defect free of charges
• Replace product with similar or superior product
• Issue a full refund of the price
• Pay compensation for damages / costs / inconveniences
• Withdraw the sale of the product altogether
• Discontinue or not repeat any unfair trade practice or the restrictive trade practice
• Issue corrective advertisement for any earlier misrepresentation

Consumer Protection Act

“An Act to provide for better protection of the interests of consumers and for that purpose to
make provision for the establishment of consumer councils and other authorities for the
settlement of consumers' disputes and for matters connected therewith.”(According to Consumer
Protection Act, 1986).

Consumer Protection Act, 1986 seeks to promote and protect the interest of consumers against
deficiencies and defects in goods or services. It also seeks to secure the rights of a consumer
against unfair or restrictive trade practices. This act was passed in Lok Sabha on 9th
December,1986 and Rajya Sabha on 10th December, 1986 and assented by the President of India
on 24th December, 1986 and was published in the Gazette of India on 26th December, 1986.

CONSUMER RESPONSIBILITIES

Be Critically Aware

• The responsibility to be more alert and to question more – about prices, about quantity
and quality of goods bought and services used.
Be Involved

• The responsibility to be assertive – to ensure that you get a fair deal as a consumer.
Remember, if you are passive, you are likely to be exploited.

Be Organized

• The responsibility to join hands and raise voices as consumers; to fight in a collective and
to develop the strength and influence to promote and protect consumer interest.

Practice Sustainable Consumption

• The responsibility to be aware of the impact of your consumption on other citizens,

especially the disadvantaged or powerless groups; and to consume based on needs – not
wants.

Be Responsible to the Environment

• The responsibility to be aware and to understand the environmental consequences of our

consumption. We should recognize our individual and social responsibility to conserve
natural resources and protect the earth for future generations.

Consumerism

Consumerism is a social and economic order that encourages an acquisition of goods and
services in ever-increasing amounts. With the industrial revolution, but particularly in the 20th
century, mass production led to overproduction—the supply of goods would grow beyond
consumer demand, and so manufacturers turned to planned obsolescence and advertising to
manipulate consumer spending.

In 1899, a book on consumerism published by Thorstein Veblen, called The Theory of the
Leisure Class, examined the widespread values and economic institutions emerging along with
the widespread "leisure time" in the beginning of the 20th century.
 In it Veblen "views the activities and spending habits of this leisure class in terms of
conspicuous and vicarious consumption and waste. Both are related to the display of status and
not to functionality or usefulness."

In economics, consumerism may refer to economic policies which emphasise consumption. In

an abstract sense, it is the consideration that the free choice of consumers should strongly orient
the choice by manufacturers of what is produced and how, and therefore orient the economic
organization of a society (compare producerism, especially in the British sense of the term).

In this sense, consumerism expresses the idea not of "one man, one voice", but of "one dollar,
one voice", which may or may not reflect the contribution of people to society.

Consumer Protection Act, 1986 (COPRA)

The Consumer Protection Act, 1986 (COPRA) is an Act of the Parliament of India enacted in
1986 to protect the interests of consumers in India. It is replaced by The Consumer Protection
Act 2019. It is made for the establishment of consumer councils and other authorities for the
settlement of consumer's grievances and matters connected therewith it. The act was passed in
Assembly in October 1986 and came into force on December 24, 1986. The statute on the right
was made before this COPRA act

Contents

1 Significance of the statute

2 Consumer Protection Council

2.1 Various Consumer Organisations

3 Consumer Disputes Redressal Agencies

4 Objectives

4.1 Objectives of Central Council

5 Jurisdiction/Three Tier System of Council Courts

5.1 Jurisdiction of District Forum

5.2 Jurisdiction of State Commission

5.3 Jurisdiction of National Commission

6 References

7 External links

Significance of the statute

This statute is regarded as the 'Magna Carta' in the field of consumer protection for checking
unfair trade practices, ‘defects in goods’ and ‘deficiencies in services’ as far as India is
concerned. It has led to the establishment of a widespread network of consumer forums and
appellate courts all over India. It has significantly impacted how businesses approach consumer
complaints and have empowered consumers to a greater extent.

Consumer Protection Council

Consumer Protection Councils are established at the national, state and district level to increase
consumer awareness.

Various Consumer Organisations

To increase the awareness of consumers, there are many consumer organisations and NGOs
that have been established.

CONSUMER GUIDANCE SOCIETY OF INDIA (CGSI) was THE FIRST CONSUMER

ORGANISATION ESTABLISHED IN INDIA IN 1966.

It was followed by many others such as

(1) Consumer Education And Research Centre (Gujarat)

(2) Bureau Of Indian Standards

(3) Federation Of Consumer Organisation In Tamil Nadu

(4) Mumbai Grahak Panchayat

(5) Consumer Voice (New Delhi)

(6) Legal Aid Society (Kolkata)

(7) Akhil Bhartiya Grahak Panchayat

(8) The Consumers Eye India.

(9)United India Consumer's Association.

Consumer Disputes Redressal Agencies

District Consumer Disputes Redressal Forum (DCDRF):

Also known as the "District Forum" established by the State Government in each district of
the State. The State Governments may establish more than one District Forum in a district. It is a
district-level court that deals with cases valuing up to 2 million (US$28,000).

State Consumer Disputes Redressal Commission (SCDRC):

Also known as the "State Commission" established by the State Government in the State. It is
a state-level court that takes up cases valuing less than 10 million (US$140,000)

National Consumer Disputes Redressal Commission (NCDRC):

Established by the Central Government. It deals with matters of more than 10 million

.
Objectives

Objectives of Central Council

The objectives of the Central Council is to promote and to protect the rights of the consumers
such as:

• The right to be protected against the marketing of goods and services which are
hazardous to life and property.
• The right to be informed about the quality, quantity, potency, purity, standard and price
of goods or services, as the case may be to protect the consumer against unfair trade
practices;
• The right to be assured, wherever possible, access to a variety of goods and services at
competitive prices ;
• The right to be heard and to be assured that consumer's interest will receive due
consideration at appropriate forums;
• The right to seek redressal against unfair trade practices or restrictive trade practices or
unscrupulous exploitation of consumers
• The right to consumer education.

Jurisdiction/Three Tier System of Council Courts

Jurisdiction of District Forum

Subject to the other provisions of this Act, the District Forum shall have jurisdiction to
entertain complaints where the value of the goods or services and the compensation, if any,
claimed does not exceed rupees twenty lakhs.

A complaint shall be instituted in a District Forum within the local limits of whose
jurisdiction:-

a) the opposite party or each of the opposite parties, where there are more than one, at the time
of the institution of the complaint, actually and voluntarily resides or carries on business or has a
branch office or personally works for gain, or
 b) any of the opposite parties, where there are more than one, at the time of the institution of
the complaint, actually and voluntarily resides, or carries on business or has a branch office, or
personally works for gain, provided that in such case either the permission of the District Forum
is given, or the opposite parties who do not reside, or carry on business or have a branch office,
or personally work for gain, as the case may be, acquiesce in such institution; or

c) the cause of action, wholly or in part, arises.

Consumer courts do not have jurisdiction over matters where services or goods were bought for a
commercial purpose.

Jurisdiction of State Commission

Subject to the other provisions of this Act, the State Commission shall have jurisdiction:-

a) to entertain

i) complaints where the value of the goods or services and compensation, if any, claimed exceeds
rupees twenty lakhs but does not exceed rupees one crore (R10 million); and

ii) appeals against the orders of any District Forum within the State; and

b) to call for the records and pass appropriate orders in any consumer dispute

Jurisdiction of National Commission

(a) to entertain—

(i) complaints where the value of the goods or services and compensation, if any, claimed
exceeds rupees one crore; and

(ii) appeals against the orders of any State mayor; and

(b) to call for the records and pass appropriate orders in any consumer dispute which is pending
before or has been decided by any State Commission. However, the Supreme Court of India has
held that the jurisdiction of National Commission under Revision Jurisdiction is very limited and
can only be exercised when State Commission exceeds its jurisdiction, fails to exercise its
jurisdiction or there is material illegality in the order passed by State Commission

Benchmarking

Before more recent technology was invented, surveyors would chisel a horizontal mark in a
permanent structure, where a tool could be placed in the indention to help create a benchmark
with a level rod, helping them and future craftsmen to have a point of reference for building.

In the business world, companies use benchmarking as a point of reference as well. But
instead of having physical benchmarks carved in stone, they use benchmark reports as a way to
compare themselves to others in the industry. Benchmarking is the practice of a business
comparing key metrics of their operations to other similar companies.

You can also think of a benchmark report as a dashboard on a car. It is a way you can quickly
determine the health of the business. Much like a dashboard, where you can check your speed,
gas level, and temperature, a benchmark report can examine things like revenue, expenses,
production amounts, employee productivity, etc.

Benchmarking occurs across all types of companies, including private, public, nonprofit, and
for-profit, as well as industries e.g., technology, education, and manufacturing. Many companies
have positions or offices in the company that are in charge of benchmarking. Some of the
positions include:

• Institutional researcher
• Information officer
• Data analyst
• Consultant
• Business analyst
• Market researcher

Companies use benchmarking as a way to help become more competitive. By looking at how
other companies are doing, they can identify areas where they are underperforming. Companies
are also able to identify ways they can improve their own operations without having to recreate
the wheel. They are able to accelerate the process of change because they have models from
other companies in their industry to help guide their changes.

Different Types of Benchmarking

Best practices

This is a benchmark report where companies choose to look at a company or companies that
they aspire to be like. By choosing companies that are on the leading edge of the industry, they
can identify best practices that help improve their own company.

Peer benchmarking

This is a benchmark report where companies choose to look at other businesses very similar to
themselves. This allows companies to make sure they are staying competitive with similar
businesses.

SWOT

This is a type of benchmarking report where companies gather data by looking at strengths,
weaknesses, opportunities, and threats to help understand their climate.

Collaborative benchmarking

This is benchmarking as a part of a group. Many industries have as sociations they can join
e.g., The Association of Information Technology Professionals, and The National Education
Association. These collaborative associations allow for members to provide information to the
association. The association can then provide benchmarking and best practice reports for the
membership.

Three Primary Benchmarking Types

Benchmarking gained tremendous influence and currency in the Nineties. Correspondingly,

front- line employees and operating managers applied basic benchmarking skills in scores of
different business situations. Among these applications, three distinct types of benchmarking
proliferated. They include:
 • process benchmarking,
• performance benchmarking, and
• strategic benchmarking.

Process Benchmarking:

Process benchmarking focuses on discrete work processes and operating systems, such as the
customer complaint process, the billing process, the order-and-fulfillment process, the
recruitment process or the strategic planning process.

This form of benchmarking seeks to identify the most effective operating practices from many
companies that perform similar work functions. In recent years, process benchmarking has
grown in stature in the United States. Many of the most impressive American benchmarking
success stories refer to process benchmarking. Its power lies in its ability to produce bottom-line
results.

If an organization improves a core process, for instance, it can then quickly deliver
performance improvements. These performance improvements may be calculated through
increased productivity, lower costs or improved sales, but their net effect frequently translates
into improved short-term financial results. For this reason American managers, seeking
performance improvements that will show up on their quarterly score cards, embrace process
benchmarking.

Performance Benchmarking:

Performance benchmarking enables managers to assess their competitive positions through

product and service comparisons. Performance benchmarking usually focuses on elements of
price, technical quality, ancillary product or service features, speed, reliability and other
performance characteristics.

Reverse engineering, direct product or service comparisons and analysis of operating statistics
are the primary techniques applied during performance benchmarking. The automotive,
computer, financial services and photo copier industries, among others, regularly employ
performance benchmarking as a standard competitive tool.

Strategic Benchmarking:

In general terms, strategic benchmarking examines how companies compete. Strategic

benchmarking is seldom industry-focused. It roves across industries seeking to identify the
winning strategies that have enabled high performing companies to be successful in their
marketplaces. Numerous Japanese corporations are accomplished strategic benchmarkers.

A U.S.-based management consultant who specializes in working with Japanese corporations

operating in the United States tells this story: "My clients begin by asking, 'What companies are
really good?' Then we set up a trip in which the chairman or CEO of my client will go to visit
these really good companies. Unlike American companies that begin a benchmarking project by
determining what specific activity or process they want to examine, my Japanese clients are
interested in fundamental lessons and winning strategies.

They feel as if they already understand their processes." It is not surprising that Japanese
corporations, which characteristically focus on long-term time horizons, should be most
interested in strategic benchmarking. Strategic benchmarking influences the longer-term
competitive patterns of a company. Consequently, the benefits may accrue slowly. Organizations
seeking short-term benefits, such as those reflected in quarterly performance reports, usually find
that process benchmarking produces results more rapidly.

Applications and Benefits

Benchmarking is a remarkably versatile business tool. Roland Loesser, the chief financial
officer of the Sandoz Corporation's American operations, observes: "Benchmarking is powerful
because it can be applied to virtually every function in our companies." Moreover, front-line
managers are using it in many new and creative ways. Some of the more frequent applications
include:

Setting and refining strategy: Today's markets are in a dynamic state of flux. Consequently,
important insights can be gleaned by studying the experiences and competitive strategies of
others. Bath Ironworks, for instance, benchmarked the strategies and operations of 10 shipyards
in Holland when the Cold War's end rendered the 108-year-old shipyard's business strategy
completely out-of-date. Bath, the U.S.'s fourth largest shipyard and Maine's largest private
employer, had assumed that the country's need for combat vessels would remain strong for the
rest of the century.

The strategic lessons learned by other organizations and industries can help your own
company refine its strategy, project the possible outcomes of changing its present course, and
forecast potential cataclysmic shifts brought on by changing market circumstances.

Re-engineering work processes and business systems:

Benchmarking is a necessity for companies engaged in re-engineering their processes and

systems. Benchmarking gives you the ability to see things differently. It is like setting up a
satellite dish outside your offices. Suddenly, signals from throughout the world can penetrate
your organization.

Benchmarking enables a company to get outside its conditioned responses or customary

structures of thinking. When GTE re- engineered eight core processes of its telephone
operations, it examined the best practices of some 84 companies from diverse industries to help
the company re-think the rules of the game for each of its core functions

. Re-engineering without benchmarking is likely to produce flat 5- 10% improvements, not the
spectacular 50-75% performance improvements often seen with radical re-design. Benchmarking
enables true re-engineering. Through the study of outside best practices, a company can identify
and import new technology, new skills, new structures, new training and new capabilities.

Continuous improvement of work processes and business systems:

Not every benchmarking project or initiative will yield major-magnitude change and system
breakthroughs. Benchmarking also provides a potent source for incremental changes and
improvements. Benchmarking exchanges frequently yield "golden nuggets" that are weighed in
ounces rather than pounds. KPMG Peat Marwick, the Big Six accounting firm, borrowed the
concept of a supermarket's Express Checkout to start an express line in its word processing
pools.
 The change enabled work teams with minor document changes to go through an expedited
process. This small change was of great value to word processing departments that handled high
volume work orders. It solved the long-standing and nettlesome problem of work assignments
with small changes being stalled in long work queues. Moreover, this innovative adaptation of a
supermarket operating practice improved cycle time and boosted internal customer satisfaction.
Additionally, it can be applied to many other service functions, such as copying, graphics
production and research.

Strategic planning and goal setting:

The unexpected missteps of blue-chip organizations such as IBM, American Express,

Westinghouse and General Motors have provided the world an important lesson: In the 1990s,
market changes can be swift and powerful, economically hobbling even the most powerful
corporations. Consequently, a growing number of companies enable their strategic planning and
goal setting process through benchmarking.

Benchmarking helps organizations anticipate market changes and validate goals and targets.
One can only wonder how much sooner these battered giants might have responded to shifting
market realities if they used benchmarking as an integral part of their strategic planning and goal
setting process.

By reviewing the products, prices, practices, strategies, structures and services of competitors
and other industry front-runners, managers can validate the adequacy of their own goals, plans
and strategies.

For instance, Mutual Life Insurance Company of New York requires all executives to find
benchmarking information on their primary and secondary competitors as part of the company's
newly revamped planning process. Says MONY Quality Officer Jan Howard: "Planning without
awareness of what your competitors are doing is like flying a plane over the Alps in heavy fog
without any instrument controls."
Problem solving: Benchmarking frequently demonstrates its value in the problem-solving
process. Ironically, most corporate problem-solving processes do not methodically look outside
the team or organization for solutions.

Standard problem-solving processes provide a structure that make work groups more
effective; they also prompt teams to root their analysis in empirical data, which supports
management by fact -- rather than by fancy. But most problem-solving processes indirectly
encourage teams to reinvent the wheel because they seldom encourage work groups to consider
external experience in developing their solutions.

As an enabling tool for problem-solving, benchmarking frequently produces elegant answers

for thorny operating issues. Consider the following case from the Xerox Corporation, where
benchmarking has been deeply integrated into the organization's fundamental quality and
problem- solving efforts.

Plagued by high associate turnover in its corporate legal department, Xerox looked for
solutions both internally and externally. Internal analysis revealed various causes for the
problem; external analysis, however, turned up important insights. Xerox's benchmarking
partners shared the same recruitment and selection process and all suffered from the same high
associate turnover.

Once recognizing that its essential recruitment strategy produced sub-optimal results, Xerox
adjusted its recruitment strategy rather than trying to fine-tune the process. In retrospect, this
decision makes excellent sense because the best and brightest law students are usually geared to
work for high-paying and high-powered law firms -- not for corporate law departments. Many
fine lawyers decide to move to corporations after practicing for several years at a firm.

The common experience of all the benchmark partners gave Xerox confidence to move away
from traditional recruitment on law school campuses to a more radical strategy. This strategy
emphasizes recruitment of experienced lawyers, who wish to make lateral career moves away
from law firms and into corporate practices. Arguably, Xerox would never have gleaned this
insight if not for its benchmarking investigation.
Education and idea enrichment:

Benchmarking is a tool for achieving idea enrichment and general education. Each
benchmarking trip is a learning safari. Successful bench markers return to their organizations
with valuable trophies -- new ideas and approaches for accomplishing old tasks. By regularly
benchmarking critical functions, organizations ensure they remain open to new ideas, changing
trends and evolving technology.

If seeing is believing, then benchmarking is an effective process to ensure that managers and
front-line operators see other approaches to accomplishing the activities over which they preside.

Market performance comparisons and evaluations: Human nature encourages people to reflect
positively on the organizations and colleagues with which they work. Naturally, people want to
validate their efforts. Correspondingly, organizations and individuals frequently presume the
products and services they provide to customers are also of high quality. Yet without carefully
comparing them to competitor's offerings, they cannot fairly evaluate their relative standing.

However fancy gives way to fact when you benchmark your company's products, features
and performance against competitors'. This type of performance benchmarking is common in
many industries. Mortgage bankers, for instance, compare their interest rates, service fees and
product types on a weekly basis. Consumer Reports has long evaluated the features of various
products and J.D. Powers has "benchmarked" customer satisfaction levels among automobile
owners.

Financial World magazine rates the financial performance and management of America's top
cities. All these industry and professional ratings provide a fact-based market performance test
that employs the essential skills of benchmarking. By heeding these and other types of
performance benchmarks, organizations can assess the adequacy of their products, services,
features and performance. Such information can help them manage by customer- focused facts.

Benchmarking exposes people to new approaches, systems and procedures. It is first-person

experience that helps an employee visualize the final goal of prospective change. In this respect,
benchmarking demystifies change, making it more tangible and less threatening. Consequently,
benchmarking helps manage organizational change.
A Utilitarian Tool

Managers and employees are inundated with a series of highly abstract yet exceedingly
important challenges. These include general mandates to oversee such intangible concepts as
change management, innovation, creativity, organizational learning, speed or cycle time
reduction, process simplification and re- engineering.

For many managers concerned with such matters as serving customers, meeting daily
deadlines, reducing costs and growing revenues, these concepts seem perplexing. It's difficult to
get your thoughts and your hands around these high sounding but abstract concepts.

Consider the company that wanted to establish its position as the leading innovator in its
industry. To achieve this goal, it proposed performing an "innovation audit." The concept was
powerful: audit or assess the company's structure, culture, work processes, technology and
managerial systems to determine their positive or negative influences on innovation. The
magnitude of this task quickly grew daunting.

To avoid attempting to "boil the ocean" on its first foray into this field, the organization
refocused on the new product development process. If the company improved this process, it
would produce more successful product launches.

This success would advance the company in becoming the industry leader in innovation --
regardless of how it defined innovation." Benchmarking in the new product development process
provided an excellent, results-oriented approach to exploring the larger innovation theme. As the
company in the example, any benchmarker needs to focus its study. A focused study turns the
abstract concept into the concrete.

Benchmarking is an easily grasped, functional tool. As utilitarian as a fireplace poker, it can

test and probe the hottest management concepts. Benchmarking doesn't support abstract
postulations about arcane management concepts. It promotes the active discovery of systems that
embody the concepts in real-world situations. Don't sit in isolation, for instance, while
meditating how to compete through cycle-time reduction. Study the best practices of other
organizations that have learned to perform critical functions more quickly than your own
company.
 Benchmarking offers a kind of low tech "virtual reality" for organizations eager to simulate
operational experiences in their own environments.

A full list of benchmarking benefits cited by practitioners reaches as high as Everest.

Bottom-line summaries almost always suggest that benchmarking:

• Improves organizational quality,

• Leads to lower cost positions,
• Creates buy-in for change,
• Exposes people to new ideas,
• Broadens the organization's operating perspective,
• Creates a culture open to new ideas,
• Serves as a catalyst for learning,
• Increases front-line employees' satisfaction through involvement, empowerment and a
sense of job ownership,
• Tests the rigor of internal operating targets,
• Overcomes front-line employees' natural disbelief that they can perform better,
• Creates an external business view, and
• Raises the organization's level of maximum potential performance.
• Finally, benchmarking for best practices generates one more benefit that is arguably the
most important of all. It teaches organizations new lessons in competitiveness.

Principles of TQM

Total quality management can be summarized as a management system for a customer-

focused organization that involves all employees in continual improvement. It uses strategy,
data, and effective communications to integrate the quality discipline into the culture and
activities of the organization.

Total Quality Management consist a set of core values and principles on which the
organization is to operate.
 Total quality management is the continuous management of quality that includes all aspects
of an organization. It stems from the belief that mistakes can be avoided and defects can be
prevented. It leads to continuously improving results, in all aspects of work, as a result of
continuously improving capabilities, people, processes, and technology and machine capabilities.

A central principle of total quality management is that mistakes may be made by people are
due to faulty systems and processes. This means that the root cause of such mistakes can be
identified and eliminated, and repetition can be prevented by changing the process.

The main principles of total quality management are:

1. Delighting the customer. The term delight means bring the best of what really matters to the
customers

2. All the decisions relating to quality will be based on facts to ensure that the quality decisions
are meaningful

3. Continuous improvement in quality and for quality monitoring

4. Customer focused organization

5. Involvement of employees

6. TQM is supported by quality system

7. TQM is quality team work with team accountability

8. TQM is quality corporate culture

9. TQM focuses the need for strategic quality planning

10. TQM is led by senior quality managers with strong leadership to establish credibility.
The Essential Components of Continuous Quality Improvement

Safety & Quality Control in Business

Implementing a program of continuous quality improvement can increase customer

satisfaction, reduce production waste and improve company performance. To introduce such a
program, you have to make sure the essential components for success are in place. When all
employees are looking for ways to improve your processes, you can work to make sure your
quality program continues to function effectively.

Management Commitment

Continuous quality improvement requires an explicit commitment from management and a

continuous effort to improve company processes and output. All employees should be aware of
the importance of quality. Having key executives issue the applicable policies and procedures
and ensuring that they have approved the necessary resources demonstrates commitment.

Documentation Control

Document control is a key component of quality. Any business owner has to know who
approves documents, who receives them and which versions are valid. For continuous quality
improvement, such controls are even more critical because procedures change as problems are
identified and company processes become more efficient.

Employee Qualifications and Training

Monitoring employee qualifications and assigning training as necessary is an important feature

of quality assurance. When you want to continuously improve quality, the required qualifications
may change as work becomes more demanding. Documenting what qualifications are needed to
perform each job helps keep track of training requirements and lets you develop a training
program that supports improved quality.

Supplier Evaluation

Your suppliers have to deliver material of increasing quality as your own output improves.
Evaluate suppliers to make sure they have their own quality program in place. Inspect your
inventory as it arrives to ensure parts and materials satisfy the specified characteristics and the
deliveries correspond to what you ordered. Incoming inspections allow you to evaluate whether
your suppliers are performing to the level of quality you need and whether their quality programs
are effective.

Testing and Verification

You can make sure the level of quality of your output improves continuously by adjusting your
test procedures and verifying how your products improve. As you increase the relevant test
parameters, such as robustness, finish durability, component tolerances and time to failure, the
quality of your products changes. Customer surveys verify to what extent your products have
improved.

Identification of Non-Conformities

When employees don't follow procedures, incoming material fails inspection or testing reveals
defects, the exact nature of the problem has to be documented with non-conformity reports. The
idea behind this process is to document in a neutral manner what aspect of the quality program
was ineffective, which helps track problem areas and improve quality.

Corrective Action

Non-conformity reports identify the root cause of problems and corrective action changes
procedures, training and testing to eliminate those causes. For example, if an employee makes a
mistake, it could be because he lacked training, the procedure wasn't clear or the process was
badly designed. Corrective action addresses such issues in a positive, proactive fashion.

Professional ethics and codes of conduct

Professional ethics are principles that govern the behaviour of a person or group in a
business environment. Like values, professional ethics provide rules on how a person should act
towards other people and institutions in such an environment.

Unlike values, professional ethics are often codified as a set of rules, which a particular group
of people use.
 This means that all those in a particular group will use the same professional ethics, even
though their values may be unique to each person.

The Code is an example of a codified set of professional ethics for those who choose to enter
the immigration advice profession.

Ethical principles

Ethical principles underpin all professional codes of conduct. Ethical principles may differ
depending on the profession; for example, professional ethics that relate to medical practitioners
will differ from those that relate to lawyers or real estate agents.

However, there are some universal ethical principles that apply across all professions, including:

• honesty

• trustworthiness

• loyalty

• respect for others

• adherence to the law

• doing good and avoiding harm to others

• accountability.

Codes of conduct

Professional codes of conduct draw on these professional ethical principles as the basis for
prescribing required standards of behaviour for members of a profession. They also seek to set
out the expectations that the profession and society have of its members.

The intention of codes of conduct is to provide guidelines for the minimum standard of
appropriate behaviour in a professional context. Codes of conduct sit alongside the general law
of the land and the personal values of members of the profession.
 The primary value of a professional code of conduct is not as a checklist for disciplining non-
conforming members, although breaches of a code of conduct usually do carry a professional
disciplinary consequence.

Rather, its primary value is to act as a prompt sheet for the promotion of ethical decision-
making by members of that profession.

Professional codes of conduct provide benefits to:

• the public, as they build confidence in the profession’s trustworthiness

• clients, as they provide greater transparency and certainty about how their affairs will be
handled

• members of the profession, as they provide a supporting framework for resisting pressure
to act inappropriately, and for making acceptable decisions in what may be ‘grey areas’

• the profession as a whole, as they provide a common understanding of acceptable

practice which builds collegiality and allows for fairer disciplinary procedures

• others dealing with the profession, as the profession will be seen as more reliable and
easier to deal with.

Determine Your Key Result Areas

Your key result areas are those things that you absolutely, positively must do to fulfill your
responsibilities and achieve your business goals. There are seldom more than five to seven key
result areas in any job or in any business. Your job is to determine what the key result areas are
for your work, and then to develop a plan to complete them and continually improve in each
area.

Again, think on paper. If you are in charge of a business unit or department, why does it need
to do to justify its existence? What are you and your team expected to accomplish to fulfill your
responsibilities to the company? Do you know for sure? The natural tendency of many people is
to focus on the activities of each day instead of the end results expected of them. You can soon
become so busy with the daily activities of the job that you lose sight of the results required
altogether.

Be Clear About Your Key Result Areas

The best way to refocus on results and not activities is to determine your key result areas and
then make sure that everyone above you, at your same level, and below you is crystal clear about
what they are.

A key result area has three qualities:

1. It is clear, specific, and measurable. You can determine exactly if the result has been achieved,
and how well.
2. It is something that is completely under your control. If you do not do it, it will not be done by
someone else. If you do it, and do it well, it can contribute significant value to your business and
to your career.
3. It is an essential activity of the business. A key result is an important output that then becomes
an input to the next key result area, or to the next person.

For example, in selling, a key result area is prospecting—finding new, qualified, and
interested prospects to talk to about your product or service. Identifying and contacting new
potential customers is an essential key result area of the salesperson.
Once new prospects have been found, the next key result area is developing trust, rapport, and
credibility with those prospects so that they will be positive and open to learning about your
product or service.

These are additional key result areas in selling each one of which flows directly from
completion of the previous one and concludes with getting resales and referrals from happy
customers. There are key result areas in every job, and for the business as a whole. Your job is to
determine exactly what they are for you, set schedules and measures for their completion, and
then work on them every day.
As an individual, make a list of your key result areas. Your starting point, again, is determined
by your answers to the questions: “Why am I on the pay? What have I been hired to
accomplish?”

Set Clear Priorities

Many problems arise in a business for a variety of reasons. First, neither the individual nor the
boss is clear about the key result areas and the outputs required for the success of the business or
department. Second, people are not clear about the priorities among key results and are easily
distracted into doing things of low value. As management consultant Benjamin Tregoe once said

“The very worse use of time is to do very well what need not be done at all.”The definition of
key result areas is the critical determinant of managerial effectiveness. This is because 80% of
the value of what you do will be determined by 20% of your activities.

In some jobs and positions, it can be that 90% of what you do is represented by 10% of your
work. If you don’t know what the top10% or 20% of your activities are, there is no way that you
can perform to distinction. If you don’t know what your key result areas are, your natural
tendency will be to spend more and more time doing things of less and less value.

Find the Right People

For example, a key result area of the manager is recruiting and staffing; finding the right people
for the right jobs. As Jim Collins wrote in his book Good to Great, top managers are those who
“get the right people on the bus, get the wrong people off the bus, and then get the right people in
the right seats on the bus.”

Your ability as a manager to find the right people, to interview and select them carefully, and
then to put them into the key positions in your area of responsibility is something that only you
can do. If you don’t do it, or do it poorly, no one else can do it for you or change it. But if you
select the right people and put them together with others to form a right-performance team, you
can make an extraordinary contribution to your business.
Key Results for Staff Members

Once you have answered the question for yourself (Why am I on the payroll?), your next
question is, “Why are my staff members on the payroll?”
Again, think on paper. Make a list of each of the people who report to you. Then, under each
name, make a list of the key results they have been hired to accomplish, in order of importance,
if possible. It is amazing how few managers are really clear about the most important tasks and
activities required from each person who results to them.

Help Them to Get Important Results

You owe this information to your staff. You owe your staff members the opportunity to
achieve levels of elite performance and the chance to do their jobs to distinction.

This is only possible if they know exactly what their most important jobs are, and how you will
measure those jobs. When you give people a clear description of their job function, plus a
measure of performance, you allow them to focus and concentrate on getting the most important
results for themselves, and for the company.

So, give your employees a target to aim for, a standard toward which they can aspire. Only
when your staff members have clear goals and priorities on their activities can they perform to
distinction, and get you the results that you need to achieve at excellent levels yourself.

• Excerpted, by permission of the publisher, from Delegation & Supervision by Brian

Tracy. Copyright 2013, Brian Tracy. Published by AMACOM, a division of American
Management Association. For more information, visit amacombooks.org
• Interested in learning more about building organizational excellence? Sign up for our free
webcast to explore what it takes to spread better beliefs and actions throughout an
organization.
SETTING TARGETS AND KEY PERFORMANCE INDICATORS

Setting key performance indicators and targets for your business are an important way of
measuring your performance. Giving everyone in your business an idea of the targets they need
to aim for to help the business be successful.

1. Overview

Having a performance measurement system should give you reliable information to allow you to set
targets for implementing your growth strategies. You will should update your business plan with your
new strategy and make sure you introduce the developments you have noted.

This guide sets out the business benefits of performance measurement and target-setting. It shows you
how to choose which key performance indicators (KPIs) to measure and suggests examples in a number
of key business areas. It also highlights the main points to bear in mind when setting targets for your
business.

2. Benefits of reviewing your business

Strategic business reviews are useful if:

• you are uncertain about how well your business is performing

• you want to know how to get the most out of your business or market opportunities
• your business plan is out of date - eg you haven't updated it since you started trading
• your business is moving in a direction different to the one you had planned
• the business is becoming difficult or unresponsive to market demands

The benefits of performance measurement

Knowing how the different areas of your business are performing can help you to assess where your
business is strong, where it is weaker and factors you can change for the better.

You should focus on specific factors that are easy to measure and show the areas where your business is
successful when compared to the rest of the market. These are known as key performance indicators
(KPIs).
You should measure non-financial targets as well as considering financial ones. Some others areas you
could consider are:

• your customers - eg how many you have, how often they use you and how many customers
you have lost or gained
• customer service - eg waiting times for assistance, complaints, or reasons customers have
complained
• market share - eg whether your share of the market increased or decreased against
competitors
• your staff - eg satisfaction levels, work quality or attendance records

The benefits of target-setting

Your strategic visions can sometimes be difficult to communicate, but you can break your main
objectives down into smaller targets to make it easier to manage. By doing this, your smaller targets
become more like day-to-day operations which, once completed, move you closer to your final goal.

3. Assessing activities and identifying measures

It is a good idea to find the areas which make your business successful and then decide how best to
measure performance in those areas.

Make sure you find the correct measurements for the areas you want to assess. For example, a
manufacturer that produces and sells low-cost goods in high volumes might focus on production line
speed. Alternatively, another manufacturer that produces smaller quantities but uses high-cost
components might focus instead on reducing production line errors.

Assess your core activities

A good starting point for your business performance review is to evaluate what you actually do - your
core activities, the products that you make, or services that you provide. Think about what makes them
successful, how they could be improved and whether you could launch new or complementary products
or services.
For example, some of the things you could consider might be:

• How effectively are you matching your goods and services to your customers' needs?
• Which of your products and services are succeeding? Which aren't performing as planned?
• What's really behind the problems of a product or service?
• Are you conducting frequent financial management reviews? Are you keeping a close enough
eye on your direct costs, your overheads and your assets? Are there different ways of doing
things or new materials you could use that would lower your costs?

Answering these questions will give you the basis on which to improve performance and profitability.

Finding your specific measures

Once you have identified your key performance indicators (KPIs), you need to find the best way of
measuring them. You should focus on the areas and elements of your business performance that make
you successful or profitable.

For example, you may decide that customer service is a strategic priority for your business and start
measuring this. You might consider measuring:

• the proportion of sales by returning customers

• the number of customer complaints received
• the number of returned items
• the time it takes to fulfil an order
• the percentage of incoming calls answered within 30 seconds

None of these is necessarily better than any other. The challenge is to find which specific measure - or
measures - will enable you to improve your business.

This type of measurement unit is often called a KPI. A typical KPI is usually expressed as a number,
and it captures a key driver of the business.

Some businesses also use colour-coded systems of measurement, such as traffic lights. For example, red
can signify a problem while green can mean all is fine.
Using standardised measures

There are standardised performance measures that have been created which almost any business can
use. Examples include balanced scorecards and industry dashboards.

4. Choosing and using key performance indicators

There are a few things to consider when selecting key criteria that your KPIs should meet:

• They should be as closely linked as possible to the top-level goals for your business.
• Your KPIs should relate to aspects of the business environment over which you have some
control. For example, interest rates may be a crucial determinant of performance for a given
business, but you can't use the Bank of England base rate as a KPI because businesses have
no power to change it. By contrast, a business' exposure to fluctuations in interest rates can be
controlled and so this might make a useful KPI.

Getting the most from your KPIs

Your KPIs indicate trends in your business performance so you can use them to spot potential problems
or opportunities. For example, if the trends are moving in the wrong direction, you know you have
problems to solve. Similarly, if the trends move consistently in your favour, you may have greater scope
for growth than you had previously forecast.

You can also use your KPIs to set targets for departments and employees throughout your business that
will deliver your strategic goals.

5. Setting targets for your business

Setting performance targets can help you deliver the strategic changes that many growing businesses
need to make. The top-level objectives of your strategic plan can be implemented through departmental
goals, and setting targets based on KPIs is an ideal way of doing this.
 For example, a company seeking to expand on the basis of its product design capabilities might target
year-on-year increases in the number of patents it secures, new product launches, or licensing income.
The specifics will depend on which KPIs best capture the dynamics in the market.

Setting SMART targets

Your targets should be SMART - specific, measurable, achievable, realistic and time-bound:

• Using KPIs ensures your targets will meet the first two criteria, as all KPIs should, by
definition, be specificand measurable.
• Achievable- you need to set ambitious targets that will motivate and inspire your employees.
Look back at your recent performance to get a sense of what is feasible.
• Realistic- setting realistic targets means being fair on the people who will have to reach them.
Make sure you only ask for performance improvements in areas that your staff can actually
influence.
• Time-bound- people's progress towards a goal will be more rapid if they have a clear sense of
the deadlines against which their progress will be assessed.

Using your review to set your business goals

One you have obtained adequate research into your business, you should reconsider the following
questions:

• Where is the business now?

• Where is it going?
• How is it going to get there?

These questions should help you to refocus your goals and plan how you are going to reach them. At
the end of any review process it's vital thatwork plansare prepared to put the new ideas into place and that
atimetableis set.

Regularly reviewing how the new plan is working and allowing for any teething problems or necessary
adjustments is important too. Today's business environment is exceptionally dynamic and it is likely that
you will need regular reviews, updates and revisions to your business plan in order to maintain business
success.