Improving Service Quality in the Global Economy: Achieving High Performance in Public and Private Sectors, Second Edition

427 Pages·2005·1.6 MB·English

by  Michael Milakovich

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Improving
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Au3819 _title 6/16/05 4:09 PM Page 1
Improving
Service Quality
GGlloobbaall
in the
EEccoonnoommyy
Achieving High Performance
in Public and Private Sectors
Second Edition
Michael E. Milakovich
Boca Raton London New York Singapore
Published in 2005 by
CRC Press
Taylor & Francis Group
6000 Broken Sound Parkway NW, Suite 300
Boca Raton, FL 33487-2742
© 2005 by Taylor & Francis Group, LLC
CRC Press is an imprint of Taylor & Francis Group
No claim to original U.S. Government works
Printed in the United States of America on acid-free paper
10 9 8 7 6 5 4 3 2 1
International Standard Book Number-10: 0-8493-3819-0 (Hardcover)
International Standard Book Number-13: 978-0-8493-3819-9 (Hardcover)
Library of Congress Card Number 2005043912
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Library of Congress Cataloging-in-Publication Data
Milakovich, Michael E.
Improving service quality in the global economy : achieving high performance in public
and private sectors / Michael E. Milakovich.-- 2nd ed.
p. cm.
Rev. ed. of: Improving service quality. 1995.
Includes bibliographical references and index.
ISBN 0-8493-3819-0 (alk. paper)
1. Industrial management. 2. Service industries--Management. 3. Quality control. I.
Title.
HD31.M435 2005
658.5'62--dc22 2005043912
Visit the Taylor & Francis Web site at
http://www.taylorandfrancis.com
Taylor & Francis Group and the CRC Press Web site at
is the Academic Division of T&F Informa plc. http://www.crcpress.com
Contents
1 Introduction: The Need for Impr oved Global Service
Quality ........................................................................................... 1
From the Industrial to the Knowledge Revolution........................................4
Quality Improvement (QI) Strategies.........................................................6
Quality Awards and Incentives for Change...............................................8
The Internet and Beyond: www.customerservice.com..................................8
Demanding Total Quality Service (TQS)......................................................11
Learning Customer-Driven TQS.....................................................................17
Redefining TQS...............................................................................................20
Key Terms.......................................................................................................23
Notes................................................................................................................23
2 Applying T otal Quality Service Concepts to Public
and Nonpr ofit Organizations .................................................... 33
Origins and Evolution of TQS.......................................................................36
Changing Perspectives on Quality and Control...........................................39
Benchmarking for Service QI........................................................................43
TQS: A Working Definition............................................................................44
Developing a TQS Culture........................................................................45
CFM, Teamwork, and “Delayering”..........................................................45
Strengthen Customer–Supplier Relationships...........................................48
Empower Employees to Meet Customer Quality Requirements............51
Understand Systemic Relationships..........................................................53
Carefully Monitor Results..........................................................................56
Implement CQI...........................................................................................58
Reduce the Costs of Poor Quality............................................................59
Summary and Conclusions.............................................................................60
Key Terms.......................................................................................................61
Notes................................................................................................................62
v
vi (cid:2) Contents
3 From Quality Contr ol to Continuous Impr ovement .............. 73
Evolution of Quality Control Concepts.........................................................74
Masters of Total QI.........................................................................................78
W. Edwards Deming (1900 to 1993)........................................................79
Joseph M. Juran (1904 –)..........................................................................84
Armand V. Feigenbaum (1920 –).............................................................88
Kaoru Ishikawa (1915 to 1989)................................................................89
Philip Crosby (1926 to 2001)....................................................................94
Selecting QI Strategies....................................................................................96
Summary and Conclusions.............................................................................97
Key Terms.......................................................................................................98
Notes................................................................................................................99
4 People Power: T otal Quality Human Resour ces,
Participation, T raining, and Empower ment .......................... 107
Total Quality Human Resource Management.............................................109
Total QI Guidelines......................................................................................111
Guideline No. 1........................................................................................112
Implications of Guideline No. 1........................................................113
Guideline No. 2........................................................................................114
Implications of Guideline No. 2........................................................114
Guideline No. 3........................................................................................115
Implications of Guideline No. 3........................................................116
Guideline No. 4 and Guideline No. 5...................................................116
Implications of Guideline No. 4 and Guideline No. 5....................117
Guideline No. 6........................................................................................118
Managing Fear in the Workplace.......................................................120
Implications of Guideline No. 6: Creating a Stimulating
Environment.........................................................................................120
Suggested Strategy...............................................................................122
Guideline No. 7........................................................................................122
Implications of Guideline No. 7........................................................123
Guideline No. 8........................................................................................123
Implications of Guideline No. 8........................................................123
Pinches, Detecting Devices, Measurement, and
Information Lines................................................................................124
Guideline No. 9........................................................................................125
Implications of Guideline No. 9........................................................126
Guideline No. 10......................................................................................126
Implications of Guideline No. 10......................................................127
Human Resources Topics Offered under a TQS Perspective...................127
Summary........................................................................................................129
Key Terms.....................................................................................................130
Notes..............................................................................................................130
5 Monitoring Pr ocess, Costs, Quality, and Pr oductivity ..........139
Measuring and Adding Value to Processes.................................................139
Contents (cid:2) vii
Understanding Process Variation and Control Techniques.......................142
Variation Due to Common and Special Causes.........................................144
Statistical Process Control.............................................................................145
Six Sigma.......................................................................................................146
Reducing the Costs of Poor Quality...........................................................147
Measuring Poor Quality: Getting Below the Surface.................................149
Controlling Direct and Indirect Quality Costs............................................151
Defining Improvement Opportunities and Raising the Productivity
Ceiling............................................................................................................154
Merging Costs, Quality, and Productivity Definitions................................155
Summary and Conclusions...........................................................................158
Key Terms.....................................................................................................160
Notes..............................................................................................................160
6 Rewar ding Service Quality Impr ovement .............................. 173
The Need to Improve Performance............................................................175
International Charters, Quality Awards, and Standards.............................177
Florida Power and Light Company and the Deming Prize......................184
Encouraging Innovation and Rewarding Performance..............................188
State and Local Quality Awards...................................................................192
Conclusion: A 21st Century Trend or Passing Fad?...................................195
Key Terms.....................................................................................................198
Notes..............................................................................................................198
7 Managing Per formance in the Public Sector ......................... 207
Assessing Alternative Performance Management Strategies......................208
Reinvention, Service Standards, and Results Orientation..........................210
Restoring Faith and Trust in Public Service...............................................212
Rebuilding Confidence and Trust...........................................................213
Bureaucratic Empowerment and Citizen Relationship
Management.............................................................................................215
Accountability, Ideology, and Bureaucratic Mobilization.....................217
Alternatives to Public Management.............................................................218
Balancing Public and Private Strategies......................................................222
Restoring Faith and Trust by Improving Service Quality..........................226
Key Terms.....................................................................................................229
Notes..............................................................................................................230
8 Preserving the Futur e: Impr oving Quality in Education .....239
Defining Quality Education..........................................................................240
Improving Quality Processes and Outcomes.............................................243
Teacher Education and Classroom Instruction......................................243
Fiscal Policy and Resource Management...............................................246
Quality of Curriculum..............................................................................247
Measuring Quality of Results in Education................................................248
Rewarding Educational Quality Reform......................................................253
Summary and Conclusions...........................................................................255
Key Terms.....................................................................................................256
viii (cid:2) Contents
9 Implementing Continuous Quality Healthcar e
Improvement ............................................................................ 265
Increasing Costs and Shifting Priorities for Healthcare.............................266
What Is Total Quality Healthcare Improvement?.......................................270
Implementing Total Quality Healthcare Improvement..............................273
Changing Attitudes, Globalization, and Managed Healthcare
Competition...................................................................................................275
Strategies for Measuring Patient Satisfaction..............................................278
Implementing Organizationwide Healthcare Quality.................................284
Conclusions and Action Steps.....................................................................287
Key Terms.....................................................................................................288
10 Leadership for Service Quality Impr ovement ....................... 305
Implementing TQS for High Performance..................................................307
Barriers to Achieving TQS...........................................................................313
Action Strategies for Service Quality Improvement...................................316
Leadership Challenges..................................................................................319
Appendices
A The Eternally Successful Or ganization Grid .......................... 325
B Deming’s 14 Points .................................................................. 329
C Crosby’s 14 Steps ...................................................................... 331
D 2004 Criteria for Per formance Excellence —
Item Listing ............................................................................... 333
E Are We Making Pr ogress? ........................................................ 335
F State Quality A ward Programs ................................................ 341
G Bibliography ............................................................................. 345
H Glossary and Acr onyms ........................................................... 361
Index.................................................................................................. 387
Preface
Responding to customer demands for improved service quality is essential
for entering and surviving highly competitive domestic and global service
markets in the 21st century. Better design, execution, and daily manage-
ment of customer-focused quality improvement (QI) strategies are vital
for all types of organizations, especially those providing services or prod-
ucts to market leaders in the business, nonprofit, and public sectors (key
terms are listed at the end of the chapter and defined in the glossary).
Doing business in decentralized, individualized, and geographically distant
markets requires mastery of technical skills, managing knowledge and
information, motivating employees, and the control of complex processes.
To remain competitive, market leaders must constantly meet (or exceed)
higher external, customer-driven performance standards and internal qual-
ity requirements.
Sound theory and careful strategic analysis are always necessary when
deciding — among many alternatives — which QI strategies to adopt.
Matching appropriate theory with the specific service delivery environ-
ments is critical for success. Moreover, it is increasingly apparent that
producers of goods or services who fail to adapt to the changing global
environment are less likely to succeed in the 21st century (see Chapter 2
and Chapter 3 for details). Manufacturing-based quality improvement
systems such as Total Quality Management (TQM) have been applied for
decades to guide customer service and internal organizational change
processes.1 For manufacturing industries there is no option: either they
have already deployed some variation of quality improvement or TQM,
or they no longer exist.
In sharp contrast, service industries employ larger numbers of people
(85 percent of all U.S. workers), impact a far broader range of agencies,
companies, firms, institutions, and organizations, and are increasingly
subject to the vagaries of global markets. If those working in manufacturing
ix