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1-1
Module 01
The Strategic Role of Human Resource Development
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Outline
Strategic Planning and Strategic TrendsThe Basics of Strategic PlanningThe Strategic Planning ProcessBasic Strategic TrendsManagerial Consequences of the Basic Trends
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Outline
HR’s Strategic RoleHR’s Evolving RoleStrategic Human Resource ManagementHR’s Role as a Strategic PartnerHR and TechnologyHR and Employee Performance and CommitmentResearch Insight
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After Studying This Chapter, You Should Be Able To:
Utilize your understanding of Human Resources Management to better understand human resources development.Explain what human resource development is and how it relates to Human Resources Management.Explain how human resources development relates to the management process.Give at least eight examples of how HR management concepts and techniques can be of use to all managers.Illustrate the HR management responsibilities of line managers and staff (HR) managers.
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The Management Process
PlanningOrganizingStaffingLeadingControlling
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Management Process
PlanningGoals and standardsRules and proceduresPlans and forecasting.
OrganizingTasksDepartmentsDelegating Authority and communicationCoordinating
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Management Process
StaffingHiringRecruiting Selecting Performance standardsCompensationEvaluating performanceCounseling Training and developing
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Management Process
LeadingGetting the job doneMoraleMotivation
ControllingSetting standards Comparing actual performance to standardsCorrective action
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HRM Function
Human Resource Management is the process of acquiring, training, appraising, and compensating employees and attending to their labor relations, health and safety, and fairness concerns.
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HRM People Functions Include:
Job analysesLabor needsRecruitSelect candidatesOrient and trainWages and salariesIncentives and benefits
PerformanceCommunicateTrain and developEmployee commitmentEqual opportunityHealth and safetyGrievances/labor relations
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HRM is Important to all Managers. Don’t Let These Happen to You!
The wrong personHigh turnoverPoor resultsUseless interviewsCourt actionsSafety citationsSalaries appear unfairPoor trainingUnfair labor practices
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HR – It’s All About Results
“For many years it has been said that capital is the bottleneck for a developing industry. I don’t think this any longer holds true. I think it’s the work force and a company’s inability to recruit train and maintain a good work force that does constitute the bottleneck….” F. K. Foulkes
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Line and Staff Aspects of HR
AuthorityMaking decisions Directing workGiving orders
Line Managers Accomplishing goals
Staff Managers Assisting and advising line managers
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Line Manager’s HR Jobs
The right person OrientationTrainingPerformanceCreativityWorking relationships
Policies and proceduresLabor costsDevelopmentMoraleProtecting
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Staff Manager’s HR Jobs
Line authorityImplied authorityFunctional controlEmployee advocacy
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HR Department Organizational
Chart
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Strategic Planning and Trends
Strategy is the company’s long-term plan for how it will balance its internal strengths and weaknesses with its external opportunities and threats to maintain a competitive advantage.
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Recall Strategic Planning
There are three levels of strategic planning as shown below
CorporateStrategy
BusinessStrategy
BusinessStrategy
BusinessStrategy
BusinessStrategy
FunctionalStrategies
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The Strategic Planning Process
SWOT analysis - Strengths, Weaknesses, Opportunities, and ThreatsBest strategic plans balance a company’s Strengths and Weaknesses with the Opportunities and Threats the firm facesBasic strategic trends
GlobalizationTechnological advancesThe nature of workThe workforce
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Recall Importance of Globalization
010
20304050
607080
1920 1950 1970 2000
% fortune 500 with aglobal presence
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Technological Advances and the Nature of Work
Technology mandates and enables companies to be more competitiveKnowledge intensive jobs in industries such as aerospace, computers, telecommunications, and biotechnology are replacing factory jobs in steel, auto, rubber and textiles
Carrier
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The Workforce Itself is Diverse
AsianBlackHispanicMenWomen
US Department of Labor website
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Consequences of these basic trends
Technology
Global expansion
Strengths and Weaknesses
Uncertainty, Turbulence, Rapid Change, Changing power bases
Companies must be Fast,Responsive, andCost- effective
Improved competition
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HR’s evolving role
Protector and Screener
Strategic Partner
Change Agent
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Strategic HRM
Strategic human resource management: linking HRM with strategic goals and objectives to improve business performance and develop organizational cultures fostering innovation and flexibility.
Clarify the businessstrategy
Realign the HR functions and keypeople practices
Create needed competenciesand behaviors
Realization of businessstrategies and results
Evaluate and refine
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HR’s evolving role as strategic partner
HR operations
Corporate strategy
Corporate strategy
HR programsCorporate strategy
HR programsFedEx
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How HR helps strategy execution
Functional strategies should support competitive strategiesValue chain analysisOutsourcingStrategy Formulation
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How HR helps form strategy
Formation of a company’s strategy = identifying, analyzing and balancing external opportunities and threats with internal strengths and weaknessesEnvironmental scanning
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The Value Chain Approach
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HR and technology- End User Technology can be the Human Resources engine of change
Basic HR systems demand paperwork
70% of HR’s employees time = paperwork
Off the shelf forms from Office Depot/Office max
Online forms
Human Resource Information Systems (HRIS)
HR on the Internet
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* Thinking now of your most recent contact with the federal government, what was the method of contact?** Thinking about two years from now, what do you think will be your main method of contact with
governments? (June, 2002)
Trends: Increased Use of Internet54%
48%
42%
34%
16%
22%27%
33%
18% 18%21%
16%
9% 10% 9% 8%
0%
60%
Telephone Internet Mail In-person
Sep/Oct 00* Sep/Oct 01* Jun 02* Two years from now**
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HR portals
Employees can answer their own questions
HR moves from reactive to proactive
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Training and Development translates into performance
Can HR have a measurable impact on a company’s bottom line?Better HR Training translates into improved employee attitudes and motivation (e.g., working at home)Well run HR training programs drive employee commitment
TOYOTA
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Factors affecting the training structure:
Management PhilosophyOrganizational StrategyOrganizational StructureSizeTechnology RequirementsIndustry demands
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Role of Training in Organizations
Regardless of where training lies in an organization, its role is to improve the organization’s effectiveness by:
Providing employees w/ necessary KSAsProvide personal enrichmentIncrease competitive advantageRespond to specific organizational needsIncrease organizational strategic capabilityImprove qualityWhile staying within the budget!
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Implications of Business Strategy for TrainingImplications of Business Strategy for Training
StrategyHow
Achieved Key IssuesTraining
ImplicationsConcentration - improve
quality- current skills- developwork force
- team building- cross-training- people skills- on-the-job
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Implications of Business Strategy for TrainingImplications of Business Strategy for Training
StrategyHow
Achieved Key IssuesTraining
ImplicationsConcentration
Internal Growth
- improvequality
- current skills- developwork force
- team building- cross-training- people skills- on-the-job
- globalexpansion
- new products- joint ventures
- innovation- creating new
jobs & tasks
- cultural training- creativity training- communication- technical skills- conflict resolution
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Implications of Business Strategy for TrainingImplications of Business Strategy for Training
StrategyHow
Achieved Key IssuesTraining
ImplicationsConcentration
Internal Growth
External Growth(acquisition)
- improvequality
- current skills- developwork force
- team building- cross-training- people skills- on-the-job
- globalexpansion
- new products- joint ventures
- innovation- creating new
jobs & tasks
- cultural training- creativity training- communication- technical skills- conflict resolution
- acquire firms - integration- redundancy- restructuring
- integrate trainingsystems
- team building- identify capabilities
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Implications of Business Strategy for TrainingImplications of Business Strategy for Training
StrategyHow
Achieved Key IssuesTraining
ImplicationsConcentration
Internal Growth
External Growth(acquisition)
Disinvestment
- improvequality
- current skills- developwork force
- team building- cross-training- people skills- on-the-job
- globalexpansion
- new products- joint ventures
- innovation- creating new
jobs & tasks
- cultural training- creativity training- communication- technical skills- conflict resolution
- acquire firms - integration- redundancy- restructuring
- integrate trainingsystems
- team building- identify capabilities
- cost reduction- redefine goals- sell assets
- efficiency - stress management- time management- cross-training- outplacement
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Key Training Roles
ResearcherNeeds AnalystEvaluatorProgram DesignerMaterials DeveloperManagerMarketerCounselorChange AgentInstructorCommunicator
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TRAINING COMPETENCIES
Computer and data analysis skillResearch skillsUnderstanding of Adult LearningOral and Written Communication SkillsGoal settingUnderstanding how careers developAbility to coach and give feedbackCost/benefit analysisProject Management/Records ManagementDelegation skillsLogisticsStrategic PlanningNegotiationGeneral business and industry understanding
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A Training Process Model
Utilizing Input-Process-Output ModelNeeds Analysis/AssessmentDesignDevelopmentImplementationEvaluationFollow-up
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Ultimate Goal of Training:
To provide and facilitate effective and efficient organizational learning that improves organizational performance
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KSAs….
Knowledge - Info. we acquire & place into memory, how it’s organized into our structure & to our understanding of how/when it’s usedSkills - Capacities needed to perform a set of tasks developed from a training experienceAttitudes - Reflections of employee beliefs/opinions that support/inhibit behaviorAbilities - General capacities related to performing a set of tasks developed over time as a result of heredity and experience
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A Case Study
Dell’s dual HR roles
Deals with staff- benefits- compensation- call center
Deals with management- education- recruitment- planning- training- personnel needs
OPERATIONS MANAGEMENT
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Is There a “One Best HR Way”?
Follow a company’s operating and strategic initiativesAll companies can benefit from
Profit sharing programsResults oriented appraisalsEmployment securityFoster informal relationships- promote worldwide communicationsDevelop global executives
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Societal Trends, Work Place Changes, and Human Resource Challenges
Societal trends• Rapid Change• Globalization• Rise of Internet
• Legislation• Hyper competitiveness• Rise of the service sector
Work place changes• Competitive Position: Cost,
Quality, Distinctive Capabilities• Decentralization• Downsizing• Organizational Restructuring
• Self-Managed Work Teams• Small Businesses• Organizational Culture• Technology• Outsourcing
Human Resource Challenges• Ethical Dilemmas and Social Responsibility• Staffing, Development, and Productivity• Job Design and Empowerment• Brain Drain and Talent Shortage• Safety Net and Job Insecurity
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Human Resource Challenges in HK and China
Hong KongDeclining growth, a stagnant economyPrimarily service economyInflux of talents from mainlandUnclear competitive edge in global market
Chinese mainlandRapidly growth, especially private sectorCompetitive skilled & professional labor marketsEvolving business and labor lawsWTO and increasing competitivenessBusiness ethics
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A Hong Kong Company: Computime
28 years old30% annual sales growth in past 3 years 5% profit marginProduction plant in ShenzhenAdministrative and HQ offices in HK7 divisions – 4 functions and 3 business unitsAbout 500 staff employees and 3000 production workersISO objective but defective products due to rush
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Vision
To become a global leader in electronics supply chain services through establishing long-term partnerships based on integrity and ethical business practices.
Mission
We act as one responsive, flexible and innovative team with full commitment and dedication to exceed our customers’ expectations in quality, cost, delivery and service.
Value
Customer First
Zero Defect
Innovations
One Team
Business Ethics
Social Responsibility
Computime (VMV)
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Discussion Questions
What are the HR challenges facing Computime?What information do we need to identify the HRM challenges of Computime? How can Computime use HRM to stay competitive and sustain its rapid growth?
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An HRM Framework for analyzing HRM challenges of a company
BusinessStrategies
BusinessStrategies
OrganizationalCharacteristics
OrganizationalCharacteristics
OrganizationalCapabilities
OrganizationalCapabilities
EnvironmentEnvironment
HR Strategies And choices
Consistency
Consistency
Con
sist
ency
Consistency
ImprovedFirm
Performance
ImprovedFirm
Performance
FitFit
FitFit
FitFit
FitFit
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Influence of Business Strategies on HRM
BusinessStrategy
Common OrganizationalCharacteristics HR Strategies
Overallcostleadership
• Sustained capital investment
• Tight cost control • Low-cost distribution
system• Structured organization
and responsibilities
• Explicit job descriptions• Detailed work planning• Emphasis on technical
qualifications and skills• Emphasis on job-specific
training• Emphasis on job-based pay
• Product engineering• Strong capability in basic research
• Reputation for quality or technological leadership
• Broad job classes• Loose work planning• External recruitment• Individual-based pay• performance appraisal as
development tool
Differ-entiation
Focus • Combination of HR strategies above.
• Combination of business strategies above.
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The Importance of Organizational Characteristics on HRM
Overall management philosophyStructureCulture
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Influence of Environment on HRM
Degree ofUncertainty
Volatility
• Detailed work planning• Job-specific training• Fixed pay• High dependence on
superior
• Control emphasis • Efficient production• Job-specific training• Fixed pay
• Loose work planning• Generic training• Variable pay• Multiple inputs for
appraisals
• Flexibility• Innovation• Generic training• Variable pay
EnvironmentalDimension Low High
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Influence Environment on HRM (cont.)
Magnitudeof Change
Complexity
• Broad job classes• Informal hiring and
socialization of new employees
• “buy” skills• Customized appraisals
• Flexibility• External recruitment• Decentralized pay
decisions• Multiple inputs for
appraisals
EnvironmentalDimension
• Explicit job descriptions• Formal hiring and
socialization of new employees
• “make” skills• Uniform appraisal
procedures• Control emphasis• Internal recruitment• Centralized pay
decisions• High dependence on
superior
Low High
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Importance of Organizational Capabilities on HRM
Leadership – at all levelsTechnology – process and productManagement Systems – information and controlQuality – reliability and timelinessDistinctive competences?
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Human Resource Strategies and Choices
1. Determining HR needs– HR planning and job analysis (chapter 2)2. Importing HR – recruiting and selection (chapter 5)3. Preparing HR – socialization and training (chapter 8)4. Compensating HR – setting compensation (chapter 10)5. Evaluating HR – appraising and managing performance (chapter 7, 14)6. Incentives HR – rewarding performance (chapter 11)7. Appreciating HR differences – managing diversity (chapter 4)8. Developing HR – career development (chapter 9)9. Protecting HR – designing and administering benefits (12)10. Positive HR relations – developing employee relations (chapter 13)11. HR in global companies – international HRM (chapter 17)12. Exporting HR – separation, downsizing and outplacement (chapter 6)
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Questions to consider
1. How much responsibility does an organization have to shield its employees from the effects of rapid changes in the environment?
2. Does an employer have an ethical responsibility to train employees who lack basic literary and numerical skills? Why yes or why no?
3. In today’s increasing chaotic business and economic environment, does an employer have a responsibility to help employees prepare for these changes that may affect their jobs and careers?
4. All civil servants in HK will face a pay reduction of 1 to 5% this October. Is this fair to the employees? Why yes or why no?
5. Some European countries have laws barring organizations form using computer technology that invades employee privacy. Do you believe that similar laws should be developed in Hong Kong? Why yes or no?
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HRM and the Bottom Line
Research has shown consistently a clear link between progressive HR practices (e.g., High involvement HR systems) and
SalesProductivityRetention
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An Exceptional Company: Southwest Airline
31 years oldPost 9/11, SWA had no layoff, posted profits and
did not reduce flights
What account for the success of SWA? Can or how can SWA sustain its success?Can other companies imitate SWA’s approach to HRM? If not, why not? What can Computime learn from SWA?
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Continuum of Resources Sustainability
Low(Easy to Imitate)
Level of Resource Sustainability
Slow-CycleResources
Standard-CycleResources
Fast-CycleResources
Strongly shielded
Patents, brand name
Gillette: Sensor razor
•
•
•
Easily duplicated
Idea driven
Sony: Walkman
•
•
•
Standardized massproduction
Economies of scaleComplicated processes
Chrysler: Mini-van
•
•
•
Source:
Suggested by J. R. Wiliams, “How Sustainable Is Your Competitive Advantage?”
California Management Review
(Spring 1992), p. 33.
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Typical Value Chain for a Manufactured Product
ProductProducerFabrication Distributor RetailerRaw
MaterialsPrimary
Manufacturing
Source:
Suggested by J. R. Galbraith, “Strategy and Organization Planning,”
in The Strategy Process: Concepts, Contexts, Cases, 2nd ed., edited by H. Mintzberg and J. B. Quinn (Englewood Cliffs, N.J.: Prentice Hall, 1991), p. 316.
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Corporate Value Chain
SupportActivities
Primary Activities
ProfitMargin
Firm Infrastructure(general management, accounting, finance, strategic planning)
Human Resource Management(recruiting, training, development)
Technology Development(R&D, product and process improvement)
Procurement(purchasing of raw materials, machines, supplies)
InboundLogistics(rawmaterialshandling andwarehousing)
Operations(machining,assembling,testing)
OutboundLogistics(warehousinganddistributionof finishedproduct)
Marketingand Sales(advertising,promotion,pricing,channelrelations)
Service(installation,repair, parts)
Source:
Adapted/repri
nted with the permission of the The Free Press, an imprint of Simon & Schuster, from Competitive Advantage: Creating and Sustaining Superior Performance
by Michael E. Porter, p. 37. Copyright ©
1985 by Michael E. Porter.
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Basic Structures of Corporations: Simple and Functional
I. Simple Structure
II. Functional Structure
Owner-Manager
Workers
Top Management
Manufacturing Sales Finance Personnel
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Basic Structures of Corporations: Divisional
III. Divisional Structure*
Manufacturing Finance Manufacturing Finance
Top Management
Product Division A Product Division B
*Conglomerate structure is a variant of the division structure.
Sales Personnel Sales Personnel
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Engineering Perspective on QualityEngineering Perspective on Quality
IdeaGeneration
PreliminaryDesign
PrototypeDevelopment
Final Definition
ProductDesign &
EvaluationImplemen-
tation
Product Design Life Cycle
PrototypeIterations
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Operations Perspective on QualityOperations Perspective on Quality
The Systems View of Operation Management
Planning Organizing
Controlling
Inputs Conversion Process Outputs Customers
Feedback
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Operations Perspective on QualityOperations Perspective on Quality
An Operations Management Competence Model The Sand Cone Model
Quality
Dependability
Cost Efficiency
Speed
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Strategic Management Perspective on Strategic Management Perspective on QualityQuality
A Generic Strategic Planning ProcessFirm Mission
and Goals
Strategic Options
Conflict Politicsand Change
Strategic AlignmentBetween
Structure and Goals
Org. RewardSystems
OrganizationalDesign
InternalAnalysis
ExternalAnalysis
Business Level Strategy
Corporate Level Strategy
Operational Subplans
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OrganizationOrganization
Marketing Perspective on QualityMarketing Perspective on Quality
A Marketing System
IntermediaryIntermediary
CustomerCustomer
PaymentOffering
Offering
Offering
Payment
Payment
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Financial Perspective on QualityFinancial Perspective on Quality
The Deming Value Chain
ImproveQuality
ProductivityImproves
Capturethe
Market
Provide Jobsand More Jobs
Stay inBusiness
Cost decrease because of lessrework, fewer mistakes, fewer
delays, snags; better use ofmachine-time and materials
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Financial Perspective on QualityFinancial Perspective on Quality
Basic Economic Quality Level Model
Quality
Cost
Costs of Improving Quality
Losses due to poor quality
Total Quality Costs = Sum of Losses and Gains
Minimum Cost
Optimum Quality Level
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The Three Spheres of QualityThe Three Spheres of Quality
Quality Management
Quality Assurance
Quality Control