What is quality?

Quality management is an organisation-wide approach to understanding precisely what customers need and consistently delivering accurate solutions within budget, on time and with the minimum loss to society. Quality management will ensure the effective design of processes that verify customer needs, plan product life cycle and design, produce and deliver the product or service. This also incorporates measuring all process elements, the analysis of performance and the continual improvement of the products, services and processes that deliver them to the customer. Quality management is also referred to as business management or integrated management. The CQI defines quality in terms of innovation and care:

Why manage quality?

The effective management of quality not only creates value for an organisation and its sta eholders but also manages its e!posure to ris and can ma e the difference between success and failure. " properly implemented and effective business management system identifies and manages organisational ris s to ensure that:

the organisation consistently delivers the products and services that customers want, when they want them and to the quality they e!pect customer satisfaction and loyalty is improved organisational goals and ob#ectives are achieved organisational ris is identified and effectively managed products, services and the processes that deliver them to customers are continually improved through innovation waste throughout the organisation is identified and eliminated partnerships and the supply chain deliver value to the parties involved

If your business management system is not delivering these benefits then it is underperforming and may need a service. $hich of these ris s are relevant to your organisation%

failure in the quality of your product or service not identifying trends in customer needs not meeting customer, legal or industry requirements your product, service or facilities harming an individual, society or the environment suppliers compromising your product or service quality, or delivery losing customer data or property your product or service becoming too e!pensive for the target mar et

&usiness management addresses ris by identifying and quantifying the ris s, determining the li elihood of occurrence and thus the level of threat and providing appropriate approaches to mitigate these treats. $hether your focus is on improving business efficiency, managing ris or understanding customer needs, the application of the fundamental principles of quality can help.

The principles of quality

Quality is everybody's business, but cannot be left to #ust anyone. To get the best out of quality approaches and tools, organisations must ma e an investment to develop or employ the e!pertise of a quality professional.

Quality - the fundamentals

Customer focus

(elivering customer value while anticipating future needs and potential mar ets
Leadership and business results

)roviding vision and direction, gaining commitment and achieving collective results
People and organisational culture

(elivering ma!imum value through development and involvement of individuals wor ing in a productive organisational culture
Systems thinking

*anaging interrelated processes with an integrated approach

Business process management

(elivering results through business processes to increase efficiency

Fact-based decision making

+nsuring good decision ma ing by using accurate data and facts

Continual improvement

*a ing performance improvement a perpetual ob#ective

Suppliers and partners

*aintaining mutually beneficial relationships to enable value creation

The approaches to managing for quality

The modern quality professional has not only inherited an array of effective approaches for managing quality but has also developed new and innovative approaches for the ,-st century. .isit the CQI &ody of Quality /nowledge portal to find out more.

Module 1 - Concepts of quality, its history and development

This section of the nowledge centre, corresponding to module one of the &ody of Quality /nowledge, loo s at the development of quality through history, the e!perts who have driven that development and the contemporary situation. 0ub#ects include: The history and tradition of inspection, quality control and quality assurance up to c-123 &enefits4 systemic and corporate improvement4 tools and methods. The evolution of quality thin ing, post c-123 The development of systems thin ing4 new approaches to quality management4 quality management standards4 definitions of quality and quality assurance4 the introduction of thirdparty certification schemes. Continual improvement &enefits4 systemic and corporate improvement4 tools and methods. Quality infrastructure 5overnment, accreditation bodies, certification bodies, standards bodies, regulatory bodies, professional bodies, customers, consultants4 interfaces.

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1.1 The history and tradition of inspection, quality control and quality assurance up to c19 !
Introduction
It is difficult to try to pin down the origins of quality control or quality assurance. 6ne would first have to identify the start of what we might call 'quality' before deciding when it progressed to organised systems for ensuring this quality was maintained - the control element. 0imilarly, quality assurance was the ne!t step of designing quality into manufacturing processes. "lso, before supporting processes for delivering products 'right first time', quality had individual brea throughs through the course of history. Quality control as a practice has been around ever since man has been ma ing things. There is even a school of thought that evolution itself is a form of quality control. 6ne favoured term is 'survival of the fittest.' Charles (arwin summarised what might be a mantra for the CQI's quality professionals:
'As natural selection works solely by and for the good of each being, all corporeal and mental endowments will tend to progress towards perfection.' Charles Darwin 1809-1882

" difficulty in charting the course of quality control over the years is to separate developments in quality control from changes in production efficiency. This efficiency has been driven by a mar et need for more or cheaper product. Quality control has evolved as the need for increased quantities of goods, reductions in cost to satisfy a new mar et or the mar et e!pectation for quality has increased. 7or the purpose of this article we will not attempt to identify the point of the 'big bang' for the respective births of quality control and quality assurance. Instead, we confine ourselves to presenting some edited highlights of organised control and management of quality-in-action through history. These will be presented chronologically. The detailed information that follows is available to CQI members only. Information on membership

1." The evolution of quality thin#ing, post c19 !

This sub#ect area is one which, perhaps more than most, relies on the meaning, use and interpretation of words and phrases used to define concepts, and which suffers as a result from a degree of misunderstanding and confusion. 7or e!ample, there is huge difference between 'quality' management and 'quality management'. &oth terms rely on an understanding of the meaning of both 'quality' and

'management', which will vary depending on the conte!t in which they are used. 0imilarly, quality thin ing could be 'quality' thin ing or 'quality thin ing', ie thin ing about 'quality' or a 'better and more effective way of thin ing'.

What is quality
The following responses to this question show how varied our ideas can be:

'a measure of excellence' 'the characteristics of a product or service that bear on its ability to satisfy stated or implied needs' 'better than you would, or could, have ever expected' 'what the customer perceives it to be' 'doing the right thing right, every time' 'the degree to which an item or process meets or exceeds the customers' requirements and expectations' 'how closely a product or service meets its design specification' 'surpassing customer needs and expectations throughout the life of the product' 'a product or service free of deficiencies' 'reducing the variation around the target' 'a state of mind' 'the extent to which products, services, processes, and relationships are free from defects, constraints, and items which do not add value for customers' 'never having to say you're sorry' 'an ever-evolving perception by the customer of the value provided by a product. It is not a static perception that never changes but a fluid process that changes as a product matures innovation! and other alternatives competition! are made available as a basis of comparison' 'peace of mind' 'never an accident' 'the inherent features possessed by a product or service' 'when what comes back is the client, not the product' 'no surprises"' 'not achieved by doing different things. It is achieved by doing things differently'

What is the answer

The replies include quite a mi! of options, from the 'product characteristics' view on the one hand, through meeting design specification and reducing variation and achieving 8at least9 customer satisfaction and other outcomes, to hints about how quality can be achieved. If all of these factors have to be managed, it is clear that we are tal ing about process quality management rather than #ust product quality management. "nd the emphasis has moved from '#ust' meeting requirements to 'achieving e!cellence'. *oreover, terms such as 'sustainability', 'social responsibility' and 'integration' are now as prevalent 8if not more so9 than 'quality' in its traditional sense. The quality of goods or of a service 8or at least a customer's perception of it9 can be significantly influenced by the customer's e!pectations from the product, which in turn can be founded on a number of assumptions. &oth these factors can be influenced 8and manipulated9 significantly by the supplier as well as by a number of other factors. This sub#ect is e!plained in much more detail in )eter &owbric 's boo The Economics of Quality, Grades and Brands. *yron Tribus, former director of the Centre for "dvanced +ngineering 0tudy at *IT, puts it another way: 'There is no such thing as an immaculate perception. $hat you see depends upon what you thought before you loo ed.' *any assumptions made by customers are based on redundant nowledge or on ignorance, yet they have a ma#or impact on how quality is perceived. 6n the other hand, a supplier can do much to manage e!pectations and anticipate assumptions, so that the same product is viewed totally differently under different circumstances. There is a growing realisation that quality is multi-dimensional - things do not get done as a result of random acts and events but rather as a sequence of interrelated actions which depend on resources being available and which are affected by a variety of influences. There is also a time element in all of this - company culture, e!perience and nowledge, reputation and e!pectations can all ta e years to develop.

Quality management standards

(uring the 0econd $orld $ar, a number of bombs e!ploded in factories during assembly. "s a result, factories were required to document their procedures and to provide records to show that they were followed. They were then inspected to prove conformity to defined procedures. In the -123s some ma#or organisations such as the *inistry of (efence 8*o(9 and 7ord developed their own 'quality' management standards which and required their suppliers to define how they operated and provide evidence that they 'conformed' to the defined procedures - with an implied quality of product as an outcome. In -121, &0:2:3 was developed as a national standard on what constituted a quality system. In the -1;3s, the International 6rgani<ation for 0tandardi<ation was persuaded by the &ritish government to adopt &0 :2:3 as an international standard, and it became I06 1333.

I06 1333:-1;2 had the same structure as &0 :2:3, with three 'models' for quality management systems: I06 133-:-1;2 *odel for quality assurance in design, development, production, installation, and servicing I06 133,:-1;2 *odel for quality assurance in production, installation, and servicing I06 133=:-1;2 *odel for quality assurance in final inspection and test 6ther relevant standards during this period included the (+7 0T"> 3:?,3 series 8*o(9. (+7 0T"> 3:?,- covered the design, production and service of hardware functions and was broadly equivalent to the -1@1 >"T6 quality management specifications 8"Q")9. The A0 did not impose "Q") specifications for their defence contractors but introduced *IB-Q1;:; in its place. The emphasis of I06 1333:-1;2 remained on inspection to ensure conformance with procedures. I06 1333:-11C emphasised quality assurance by means of preventive actions instead of '#ust' chec ing the final product, but it still required evidence of compliance with documented procedures. 0o companies still created volumes of procedure manuals which at times made it more difficult to change and improve. I06 133-:,333 was a more significant update, combining 133-, 133,, and 133= into one standard. It also introduced the concept of 'process management'. TC-2@, the I06 133technical committee is currently drafting the ne!t release 8I06 133-:,33;9, which is not e!pected to have substantial changes. "long the way, a variety of sector-specific standards and guidelines 8such as Tic IT for software development9 were produced since it was felt that the generic standards did not translate easily or that a specific industry sector had special requirements. The car industry is another sector which has developed its own standards. This despite the fact that the international standards were designed for all si<es of organisation and for service companies as well as manufacturing. In truth, the manufacturing origins of I06 133- have remained one of the ey factors for many managers who have to interpret the standard and relate it to their ways of wor ing. 7or the same reason, it has also been a stumbling bloc in the adoption of the process approach which the year ,333 edition itself promotes. "nd there remain two other ma#or issues, namely the belief that 'quality' is separate from 'business management' and that producing a 'management system definition' is in some way a substitute for a system by which to manage the business. D0ee *anagement system standards for more details of other standardsE

!ew" approaches to quality management

6ther initiatives and approaches to quality management which have appeared in recent times include TQ* 8total quality management9. "ccording to I06, TQ* is 'a management approach for an organi<ation, centered on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organi<ation and to society'. It dates bac to the -1:3s, but was particularly widespread in the -123s and -1;3s.

The &usiness +!cellence *odel of the +7Q* 8+uropean 7oundation for Quality *anagement9, established in -1;; in +urope, and the *alcolm &aldrige >ational Quality "ward, established in -1;2 in the A0, both give organisations a guideline to achieve and measure their success. 0i! sigma is a methodology developed by *otorola to improve its business processes by minimi<ing defects. Bean manufacturing 8lean production9 is the optimal way of producing goods through the removal of waste and implementing flow, as opposed to batch and queue. D0ee +!cellence models and awards for more detailsE In reality, the latter two methodologies are aimed at 'process effectiveness' and 'process efficiency' respectively. The first two 'models' focus on ey areas against which performance is assessed. The &aldrige criteria are:

leadership strategic planning customer and market focus measurement, analysis, and knowledge management workforce focus process management results

The 8recently revised9 +7Q* headings are:

results orientation customer focus leadership and constancy of purpose management by processes and facts people development and involvement continuous learning, innovation and improvement partnership development corporate social responsibility

D0ee *anagement systems for more details of other system assessment toolsE It is interesting to note that in almost every case, the ey elements relate to:

the ob#ectives which the organisation is trying to achieve the resources required to ensure that processes can function the factors that can influence how well! the processes operate

the processes themselves the outcomes of the processes

The fact that all these elements are included in each model serves to emphasise the complete 'system' which enables an organisation to operate. The ey to process management, and to 'systems thin ing' 8see later9, is to appreciate all the factors and component parts which need to e!ist and to wor together - or at least to be managed.

The process of managing

Fou might assume that 'the process approach' promoted in I06 133-:,333 was an innovation in 'quality' thin ing, but it was fundamental to (eming's wor last century. "s (r Genry >eave 8)rofessor of leadership and management in the &usiness 0chool of the >ottingham Trent Aniversity until ,33C9 pointed out in an article that introduced (r $alter 0hewhart's wor on variation and control charts, which effectively launched (eming's wor in the -1,3s: " fundamental property of all but the most trivial of processes is that there will be some undesirable variation in outputs, and the foundation of (eming's guidance on process improvement is the understanding of that variation, so that it can be reduced. +ach time you do your wor there will be some variation. Things are never e!actly the same. $hile variety in products and services can enrich life, variation prevents your customers from en#oying the full benefit. .ariation is associated with 'bad quality'. 5ood quality implies reliability, trustworthiness, no nasty surprises. +ssentially, a feature of bad quality is too much variation, while a feature of good quality is little variation. (eming used the e!ample of the $estern +lectric Company which developed telephone and related equipment and invested to increase its understanding and ability. This was successful initially, but gradually ran out of steam. (eming later e!plained:
$he harder they tried to achieve consistency and uniformity, the worse were the effects. %hen any kind of error, mistake, or accident occurred, they went to work on it to try to correct it. $here was only one little trouble - their worthy efforts did not work. $hings got worse - they were failing to understand the difference between common causes and special causes, and that mixing them up makes things worse.

In essence, 0hewhart's brea through was to recognise these two very different types of variation - and their very different types of implications as regards improvement efforts, 'control', capability, and so on. $hat (eming later called common-cause variation is the routine variation to be e!pected because of what the process is, and the circumstances in which it e!ists and operates. 0pecial-cause variation is anything noticeable beyond that routine variation. Hvery different actions are called for depending on whether something is routine H or e!ceptional. &ut how can we distinguish between the two types of variation in practice% &y using the tool that 0hewhart created for the purpose: the control chart.

D0ee C.= )roblem diagnosis and improvement tools for more detail on control charts and how they are usedE Hit follows that, while we continue to obtain such outputs, it is illogical and impractical to claim that anything specific 'caused' any one particular result: for any such result is the ind of result we now can be produced by the whole system of common causes 8(eming simply called it the 'system'9. Hprocess monitoring is #ust fire-fighting, and this is nowhere near good enough. If process monitoring is all you are using the control chart for, you are missing out on the main purpose for which 0hewhart created it: process improvement. )rocess monitoring merely aims to reach and maintain a state of statistical control. &ut that's only the beginning. The ne!t issue is: is the process capable% That means that, when it is in control, it is capable of providing outputs that meet the customers'stated requirements%

The introduction of third-party certification schemes

(uring the -123s, suppliers to the >orth 0ea oil and gas industry found themselves being increasingly audited by every oil ma#or they supplied, with a view to ensuring that the goods and services they were buying were of a suitable 'quality'. This in turn meant that the oil companies themselves found that they were carrying out more and more audits of their suppliers. In the early -1;3s, they got together to divide up their supplier base and wor with them to 'encourage' them to obtain third party certification to I06 133-. Their ob#ective was to avoid multiple assessments of the same firms by getting a third party to provide independent evidence that the supplier had an established 'quality system' which met an agreed standard 8I06 133-9. The thin ing was that this would enable them to rely on the supplier to deliver a consistent product - and thus to obviate the need to carry out an increasing number of audits themselves. There remains a ma#or doubt about the success of this policy - second party audits are still carried out 8even on suppliers certificated to I06 133-9, and there has for some years been a ma#or concern that the quality of product 8goods or services9 provided by such suppliers is no better than those without a certificate. 0o, the time and effort e!pended does not appear to have been #ustified, either for the 'customers' or indeed for the suppliers who implemented the required systems 8see later9.

An increasing rate of change

"s with most aspects of modern life, the rate of change in management thin ing in general, and in quality matters in particular, has increased e!ponentially in the last =3-C3 years. 'Quality' thin ing has in the past focused on the reduction of variation and the production of a standard product which meets specifications. >owadays, however, there is a requirement to find different and better ways of producing better and different products, so the encouragement and support of innovation has become a differentiator for many businesses. 0ervices are delivered by processes which are not predetermined since the customer demands cannot always be anticipated, and the quality of the service is determined by how well the

supplier 8ie their staff9 and the delivery process itself is able to react and respond. Ieduced variation is not always the measure of customer satisfaction. The current status of the 'quality' profession reflects in many ways the evolution of the concepts and application of 'quality' thin ing over the past :3 years. 6n one hand, our own Institute gained chartered status last year, which reflects its professionalism and the contribution it has made to A/ business over the years. "nd yet debate suggests that some members are questioning some fundamental aspects of the very reasons for its e!istence. 0ome of the relevant questions being as ed are:

what is quality& how do you measure quality& what is the role of the 'quality manager' and is there a future for him'her& are other organisations and institutes developing their focus in a way that encroaches on the ground traditionally covered by the ()I, and the I)A before it& should the institute maintain an independent position& should it even consider merging with another professional body&

The confusion in some people's minds 8both within and outside the quality profession9 is not helped by the fact that the 'independent' custodian of international standards in the A/ not only provides certification services against these standards, but also promotes and sells consultancy advice and training to organisations which are see ing to develop and define management systems to address these standards. It even promotes and sells software which can be used to support certain aspects of systems development and process definition. "lthough other certification bodies maintain a strict independence from product suppliers, the whole certification 'industry' has become so competitive that the value of an I06 133certificate has been seriously questioned by some observers for a considerable number of years. The perception of the buying public as an entity, and of customers involved in an individual transaction, is affected not only by their particular e!perience on a specific occasion, but also by their overall perception of a supplier's ability to address a wider range of sta eholder requirements at the present time as well as to meet future demands.

#easure for measure

"s an e!ample, patients 8as 'customers' of the >G09 may be concerned with an overall reduction in waiting times, but they are more li ely to be concerned with the attitude and concern shown by their 5) on a specific visit. This may be a better assessment of the health of the >G0 than how well 'targets' are met. Anfortunately, such 8sub#ective9 customer opinions can be very difficult to measure although they are very important to the individuals concerned. The ability to identify and improve the important elements of an organisation 8its processes, performance and products9 can differentiate a 'quality' company from a run-of-the-mill

company. $hen defining their management systems, all too many companies still get bogged down in the detail of process definitions and procedures, and feel that they have to set measures for everything that moves 8or doesn't move9, and they lose sight of the important factors which they need to manage to move the company forward. 0ome online discussion forums have e!tended and sometimes heated debates on questions such as:

should corrective and preventative action be one procedure or two& how many sentences does your quality policy contain& are goals and ob#ectives the same&

$hile such topics may be significant for some, they are often based on a fundamental misunderstanding and lac of informed advice and are unli ely to contribute greatly to the development of quality thin ing in the ,-st century 8and may even contribute to the way in which the quality profession is viewed from the outside9. " much more radical approach is needed if the profession is to provide a positive contribution to management capability and development, to operational and organisational performance and to business success.

#easurable or immeasurable damage

Gow something is presented can ma e a ma#or difference to how it is perceived, and this does not apply only to product pac aging. The presentation can detract from the message or the product, and in e!treme cases can all but destroy the original ob#ective. &roadcast news selects one aspect of a news story as a headline and can thus influence how the personalities involved are perceived. In politics, an event will be presented differently by different political parties to support their own point of view. In too many cases, the 'pac aging' can become so overbearing and unrelated to the substance of what is being delivered that the 'product' loses value and the pac aging becomes an annoying distraction. +!amples of this include the way in which weather presenters act more li e performers in the local dramatic society4 news programmes are preceded by some seconds of moving images, strange symbols and flashing lights, and the presenter is then barely visible amongst a sea of coloured bac grounds, more strange symbols and quir y furniture4 many website designers have yet to appreciate the need to separate meeting user requirements from giving vent to their more creative tendencies, and there seems to be an almost universal need to accompany any visual presentation with a piece of pop music or other noise. $hen selecting software, it can be difficult for a potential user to specify requirements if they do not now what is available from e!isting products in the mar et, and they have based their requirements on what they have seen in the past or what a particular supplier has put forward as a feature, whereas some un nown features of other software may give them benefits they did not even now they wanted.

Conversely, software pac ages which change radically from one version to another, and add features which were not in fact wanted by the ma#ority of users, can cause customer dissatisfaction on an alarming scale.

The advent of systems thinking

'0ystems thin ing' is a way of thin ing. It is an approach for developing models which can aid understanding of events, the patterns of behaviour resulting in the events and the underlying structure and relationships responsible for behaviour. In Computing &usiness maga<ine 8"ugust?0eptember ,33@9, )rofessor Jim >orton tal s of the need to align people, process and business need. Ge said: 'In too many organisations, the business processes and the people who operate them are not fully aligned with the mission and values of the organisation. 6ver time, some processes have failed to ad#ust to the development of the business and now destroy rather than create value. " ma#or concern for both e!ecutive and non-e!ecutive directors is to ensure that the ey processes in a business are documented clearly, and that those who wor with them understand their importance to collective success. 0uch processes often cross organisational boundaries and are vital to the sharing of nowledge.' The ob#ectives for such processes should always be derived from the organisation's mission, performance must be reviewed against these ob#ectives and there needs to be a way to determine whether these ob#ective remain relevant. 0ystems thin ing is 'thin ing in terms of systems' rather than in terms of individual components of a system - and the same principles as apply to process management can be applied. 0ystems thin ing can 8and should9 be used when deciding on the best way to achieve an ob#ective, to respond to an event or to solve a problem. Dsee 0pecifying, designing and developing processes, products and servicesE It uses the same logic as root cause analysis and its absence e!plains the 'law of unintended consequences'. It applies to decision ma ing at all levels. It is also multi-dimensional, in that you will follow a process or processes to achieve an ob#ective, but you will also have policies which shape how you operate and which therefore will affect a number of those processes. Fou need to appreciate the interaction of components over time rather than a linear cause and effect relationship. "n organisation's effectiveness and efficiency is influenced not only by your own efforts but also by the e!ternal environment and events outside your control. Identifying ris s to how you operate and anticipating how your operations may impact on others, are all part of systems thin ing. The same logic applies at all levels, from ma ing a statement during a conversation up to declaring war at the other e!treme. 0ystems thin ing is an essential requirement for management success, from the initial assessment of your current situation through planning your business strategy to designing, managing and improving the processes and products you deliver. 0o many factors now affect an organisation's operations, future success and even its continuing e!istence that the concept of 'quality' and how it is applied must e!pand and change to reflect the reality of business life today.

$urther information
The member pages cover:

*urther discussion of the definition s! of quality +ew approaches to quality management, and in particular the development of systems thinking

7ind out more about membership.

%ources
0enge, )eter 8-1139 The Fifth Discipline and The Fifth Discipline Fieldbook 8(oubleday, -1139. 0enge was the originator of the concepts of 'systems thin ing' and 'the learning organisation'. "merican )roductivity and Quality Center 8")QC9. 7ounded in -122, ")QC is a memberbased non profit organisation serving appro!imately :33 organisations worldwide in all industries. http:??www.apqc.org? &owbric , )eter: The Economics of Quality, Grades and Brands 8Ioutledge -11,9. www.bowbric .eu 'Anderstanding variation - the springboard for process improvement', Genry >eave 8edited by *itch &eedie9, formerly available on the A/ (eming websit

Continual improvement
This article describes why continual improvement is needed, what it is, and e!plores the foundations that have to be laid for it to progress from desire to reality. Continual improvement is referred to in countless annual reports, corporate policies, and value statements, but it is often hard to define. It sometimes seems to be the same as si! sigma or total quality, but these terms are also ill-defined. /ai<en is another term that literally means continual improvement, but even this single word has such variation in application that it is best to confirm its meaning before accepting its use.

Why is continual improvement needed

&ecause in its absence things will get worse. "nyone with children, a garage or a garden nows that tidiness is not a natural state. It ta es a lot of effort to establish, and more to eep it that way. 0ome organisations are run as if they don't need continual improvement. *anagement may thin its customers are satisfied, competition may be ineffective, or there are enough resources to do the #ob without compromise. &ut e!perience shows that organisations may thrive 8or survive9 as long as these conditions prevail, but will struggle to respond as soon as the environment changes.

What is continual improvement

Continual improvement is an approach that enables operators and managers to understand the operation of ongoing processes, learn from the data and outcomes, and thin about process changes. It must include the capability of testing and validating proposed changes and incorporating the improvements in the standard operating procedures. It also demands good two-way communications with others in similar processes, in order that learning can be shared and to ensure that people do not have to rediscover the same solutions. Continual improvement is not wor ing harder. This is the whole point. Improving processes systematically is the opposite of cries for longer hours. Gard wor usually means that people are stretching an incapable system to try and get acceptable results.

&enefits
The benefits of continual improvement include:

being able to make the most of existing facilities and resources with minimal capital investment enabling employees to achieve the goals of their #obs without having to fight fires and engage in rework all the time keeping up with or overtaking one's competitors

improving staff motivation by helping them to contribute to the organisation's wellbeing

%ystemic and corporate improvement

If the organisation is to thrive, continual improvement needs to be far more than local. It is acceptable and laudable to generate local improvements, but not enough. If changes are not standardised as part of the everyday operations they will decay as entropy ta es over. "nd if the standardisation is not e!tended across the organisation, the opportunity for learning is lost. This presents many challenges and demands a systemic approach - a system for continual improvement. (r (eming described a system as: '" networ of interdependent components that cooperate in order to achieve the aim of the system' 8The >ew +conomics, -11=9. The aim of a continual improvement system is to ensure that everyone is engaged in continually developing processes to achieve their potential within the overall organisational goals. Those intending to practise continual improvement need to understand the purpose of their processes and to be able to apply some disciplines of learning and the tools of analysis, testing and implementation.

Continual improvement principles' methodologies and tools

This is a very big sub#ect, as any business boo shelf will demonstrate. In this feature we describe the big picture, so that the reader can prioritise their future study.
(rinciples) study-plan do study act

Continual improvement can only be a by-product of learning. It is implicit that, if people now how to operate a well optimised process they would the doing so. >ew nowledge is needed.

The best model for learning is (r (eming's )(0" Cycle. (eveloped in the early -1:3s from the scientific or e!perimental method, it forms the foundation of all improvement activities, whether incremental and continual or one-off ma#or brea throughs. The members' pages enlarge upon the )(0" cycle as the underlying theme for continual improvement.

#ethodologies

*ethodologies are structures 8processes9 which lin the principles to the tools. They enable you to see which tool would help in your particular circumstance 8using a tool in the wrong circumstance can be counterproductive9. "ppreciating the methodology structure is therefore more important than learning lots of tools and in fact one can ma e a lot of progress with the most basic of tools, providing the principles are ept in mind. The members' pages describe the original model for all the improvement methodologies4 the Japanese QC story. There are many proprietary methodologies, applicable to departmental improvement, strategic programmes, supplier development, new product development and so on. They are aimed at resolving critical problems of whole system issues, which demand process reengineering, continual improvement not being able to ma e the impact needed in the timescale, or resource scope.
Continual improvement tools

The quality world has always been attracted to tools. 0tarting with the control chart in the -1,3s the toolset has grown and grown. It's relatively easy to identify more than -:3 different tools, too many for the average person to remember, never mind master. 7or local continual improvement activities it is sufficient to be able to use about -3 basic tools and these are listed on the members' pages.

%ummary
Continual improvement is the result of a system that:

develops a mindset trains the relevant people encourages the use of a simple but robust methodology and tools shares the learning across the organisation.

The tools of continual improvement help people to understand and improve processes, and are relevant to changes affecting the wider organisational system. Continual improvement leads to benefits which at the point of implementation often loo low ey and are sometimes free, but which collectively may build to profound changes. 6rganisations that successfully embed continual improvement can maintain the capability of their system even though natural disorganisation ta es its toll. It is e!pensive and time consuming to develop the capability for continual improvement across the whole organisation, and it demands persistence over many years from top management, but all who practise it see it as worth the trouble. The alternative is to be continually repairing the consequences of deterioration in process performance, and that is much more e!pensive and bad for customer relationships and staff morale.

The quality infrastructure - roles of the different $odies

The quality infrastructure provides the underpinnings that enable A/ businesses to compete nationally and internationally, meet customer requirements and manage ris .

Introduction
A/ businesses need to:

create and enter markets in a timely manner meet customer requirements, including legislative requirements manage risks, including risks to financial investment, product introductions, market exclusion, etc.

Anderpinning these activities is the need to demonstrate conformance to standards 8whether specified by regulators, the mar et or the industry9 in order to gain mar et access and gain mar et confidence in their products and services. The 'quality infrastructure' supports these aims and comprises the physical facilities and the interrelated systems of organisations, structures and people that help organisations to implement quality practices and improve performance. The principle parts of the infrastructure relate to:

regulation - government, regulators standards - documentary, physical' reference, other codified intellectual property conformity assessment and accreditation economic operators and their collective representatives consumers

*verview
The A/ quality infrastructure is concerned with the relationships between:

legal requirements contained in regulation and legislation voluntary standards which define the quality of products and services and the methods of their production industry practice and the actual solutions provided by business the market, where the confidence and will to trade is promoted the accreditation and conformity assessment regimes that provide the evidence and confidence

The A/ quality infrastructure is principally made up of a number of separate bodies, each with separate remits but which impact the following:

,arket access and international trade - facilitating the removal of technical barriers to trade, evolving common language and practices that promote trade and gaining access to overseas markets Industrial policy - enabling the -. to take advantage of its strong science base and capacity for innovation to compete in global markets /egulation - either supporting regulation where there are significant risks to health, safety or the environment, or through market self-regulation 0roviding confidence, evidence, information and assurance to purchasers, suppliers and customers regarding the quality of products, services or their supply. 0romoting awareness of and providing training and assistance in quality tools, methods, practices and culture.

The following diagram shows some of the primary interfaces in the A/ quality infrastructure. &odies shown in blac are sponsored by 5overnment and receive some funding for their activities. &odies shown in blue are self-funded and independent of 5overnment. 8>ote: The &ritish 0tandards Institution is an e!ception, in that the &0I 5roup comprises the A/'s >ational 0tandards &ody - &0I &ritish 0tandards, which does receive funding, also a certification body - &0I *anagement 0ystems and a testing operation - &0I )roduct 0ervices9.

7igure -: The A/ quality infrastructure

+oles of the different bodies

+egulation - ,overnment and +egulatory bodies

5overnment, principally through the (epartment of Trade and Industry, has a ey role in providing consumers and business with the support and mechanisms to encourage trade and competitiveness and ensure that the public good is maintained, e.g. through regulation and provision of fair mar ets. 5overnment is directly responsible for maintaining elements of the quality infrastructure, as illustrated. +nsuring effective wor ing of the infrastructure by government is particularly important, since many of the activities concerned are 'pre-competitive' and would not be supported by individual business contribution. The role of regulators, who are ultimately responsible to )arliament, is to regulate business decisions and promote the public good. Iegulation can be divided into three areas:

economic - aimed at controlling the abuse of monopoly power public goods and external effects - such as environmental and safety regulation social - such as pensions and benefits

Iegulators, according to the &etter Iegulation Tas 7orce 8now the &etter Iegulation +!ecutive9, see to change the behaviour of groups or individuals by giving people rights 8e.g. equal opportunities9 or by restricting behaviour 8e.g. compulsory seat belts9.
%tandards - documentary' physical- reference' other codified intellectual property

0tandards are at the hub of the quality infrastructure, facilitating the other areas by:

supporting or replacing regulations providing the basis for trade policy negotiations, leading to mutual acceptance and recognition of accreditation, certification and audit or test results giving weight to individual firms' design specification activities, including their intellectual property rights

The ey bodies in this area are:

National Standards Body (BS British Standards! 12I is an independent non profit distributing body, accountable to government for operating under its /oyal (harter. 12I works with representatives of business, government and consumers to facilitate the production of documentary standards. 2tandards 3evelopment will contain details about this activity link!. As the -.'s national standards body, 12I represents -. interests in formal 4uropean and international standards developing organisations and through their committees.

12I also works internationally with other countries and their standards bodies, providing $echnical Assistance, for example. $his activity complements government's activity to promote -. products and processes overseas.

National "easurement System (N"S!

The >*0 is the A/'s national infrastructure of measurement laboratories, measurement science and technology and traceable standards of measurement for use in trade, industry, academia and government.

$he ma#ority of work is carried out through -. measurement institutes, primarily +ational 0hysical 5aboratory physical metrology!, +ational %eights and ,easures 5aboratory legal metrology!, 56( 5imited chemical and biological metrology!, $-7 +45 5imited *low metrology! $he institutes support industries quality ob#ectives in many ways, including8
o o o o

research and development of primary standards for new applications international inter-comparisons and acceptance of -. standards and methods measurement services and #oint pro#ects with industry technical helpline, best practice guides, consultancy, training, workshops, etc.

#$ Patent %ffice

Ieference to The )atent 6ffice is included here for completeness since quality criteria or good practice may be held within a protected intellectual property regime. $here an organisation is able to protect its Intellectual )roperty Iights 8I)I9, it may choose to do this as an alternative to or in tandem with standards. " useful guide on this sub#ect is '0tandards and Intellectual )roperty Iights: " )ractical 5uide for Innovative &usiness 8* Clar e, ,33C, &0I9
Conformity Assessment and Accreditation

*anufacturers and suppliers employ conformity assessment bodies to help them provide assurance to purchasers or customers that the quality of their products or services meets specified requirements. Certification bodies in particular help businesses demonstrate that their products, processes, systems or persons conform to defined standards, including customer's requirements. Conformity assessment bodies fall into two categories 8I06?I+C -23339:

those concerned with assessment, e.g. testing laboratories or inspection bodies those concerned with third-party attestation i.e. assurance that specified requirements are fulfilled! of product conformity, management systems conformity or fulfilment of requirements for personal competence - known collectively as certification bodies

"ccreditation by the Anited /ingdom "ccreditation 0ervice 8A/"09 demonstrates the competence, impartiality and performance of a conformity assessment body to provide certification, testing, inspection or calibration services to internationally agreed standards.

A/"0 is recognised by government as the sole A/ body for the accreditation of certification, testing and inspection bodies to specified standards. " listing of accredited certification bodies and their registered companies the Anited /ingdom Iegister of Quality "ssessed Companies is published by the 0tationery 6ffice. Q" Iegister website The Q" Iegister website is also the place to chec whether or not a company has I06 133- certification.
&usiness and its representatives

&usiness and its customers ultimately bear the cost of standards development, conformity assessment 8certification, tests, audits9 and attestation 8mandatory mar ing, 'quality mar s', licenses, etc.9. Through standards they are able to gain production efficiencies, operate in industry supply chains and differentiate their products. Bicensing their own technologies, particularly when lin ed to accepted standards, can also be a considerable source of revenue. Trade associations and professional bodies collectively represent the interests of their industry?business members in sector or specialised functional areas, they:

participate in the affairs and policy-making mechanisms of the other bodies in the quality infrastructure, thus ensuring that their sector or specialist areas' needs and good practices are brought to the attention of other fora. play an important role in the consensus-making process, e.g. standards development, where they may have committees or other mechanisms dedicated to the task. *or example, the ()9 has many such groups ranging through standards development, professional development, medical devices quality, etc.

Informal standards developers wor is often driven by commercial considerations. Their outputs define many products, services and even technical infrastructure found in everyday use by consumers, e.g. the internet, (.(s, etc. 0ome of the standards, relevant to the quality practitioner, defined by informal mechanisms, gain considerable acceptance, e.g. Investors in )eople. Consultants 8i.e. e!ternal consultants9 are usually employed by organisations when a particular set of s ills is required and they do not have the resources or e!pertise to address a situation by themselves. Consultants specialise and help their clients in many areas, including:

strategic planning - defining vision and direction management disciplines, e.g. marketing and finance training and people development quality-related disciplines, e.g. process reengineering, management systems, etc. areas of the quality infrastructure, e.g. standardi:ation, certification, regulatory and voluntary compliance

The CQI holds a register of management system consultants with a variety of discipline s ills and sector e!perience - lin
Consumers

The quality infrastructure provides benefits to consumers, through competitive mar ets and in the goods and services that they purchase:

promoting clear choice and providing product information enabling comparison and aiding choice helping to enforce rights and health and safety protection providing assurance of reliability and quality

$urther Information
The CQI member only content covers:

,ore information about the roles of the bodies comprising the -. quality infrastructure Interface of company processes with -. infrastructure

Information on membership

%ources
)rimary sources for those requiring more details about individual bodies: 5overnment - www.direct.gov.u Iegulators - Gouse of Bords 0elect Committee on Constitution 0i!th Ieport, available at www.publications.parliament.u The )atent 6ffice - www.patent.gov.u >ational *easurement 0ystem - www.dti.gov.u ?innovation?nms?inde!.html >ational 0tandards &ody - www.bsi-global.com?>0& Anited /ingdom "ccreditation 0ervice 8A/"09 - www.u as.com Certification &odies - www.u as.com?about-accreditation?accredited-bodies? Consultants - http:??www.mca.org.u ?members or http:??www.ibconsulting.org.u ?BandingK)ageK-.asp!%idL-3::;31 Consumers - www.dti.gov.u ?consumers?inde!.html

Customers
Internal and e!ternal customers4 purchasers, end-users and consumers4 managing customer relationships4 customer needs and e!pectations.

What are customers

The chief current sense of the word customer 8according to the 6+(9 is a person who purchases goods or services from a supplier. Turning this around, one might say that a customer is someone who receives goods or services from a supplier and therefore may not be the person who made the purchase. There has to be intent on the part of the supplier to sell the goods and services and intent on the part of the receiver to buy the goods and services 8a thief would not be classed as a customer9. This customer-supplier relationship is still valid even if the goods or services are offered free of charge but in general the receiver is either charged or offers something in return for the goods or services rendered. There is a transaction between the customer and supplier that has validity in law. 6nce the sale has been made there is a contract between the supplier and the customer that confers certain rights and obligations on both parties. Customers are one of an organisations sta eholders. Customers provide revenue in return for the benefits that ownership of the product or service brings but may demand refunds if the product does not satisfy the need and are free to withdraw their patronage permanently if they are dissatisfied with the service.

Who are customers

The word McustomerN can be considered a generic term for the person who buys goods or services from a supplier as other terms are used to convey similar meaning such as:

(lient - $he customer of a professional service provider such as a law firm, accountant, consultancy practice or architect. 0urchaser - $he customer of a supplier that places the order and authorises payment of the invoice. $he purchaser may not be the end-user and so acts on his'her behalf. 1eneficiary - $he customer of a charity. (onsumer - $he customer of a retailer. 4nd-user - $he person using the goods or services that have been purchased perhaps by someone else. $his maybe the person for whom the goods and services were intended but may not be known at the time of purchase.

It is relatively easy to distinguish customers and suppliers in normal trading situations but there are other situations where the transaction is less distinct. In a hospital the patients are customers but so too are the relatives and friends of the patient who might see information or visit the patient in hospital. In a school the parent is the customer but so too is the pupil unless one considers that the pupil is customer supplied propertyO

$ithin any organisation it is important that everyone nows who the customers are so that they can act accordingly. $here individuals come face to face with customers a lac of awareness, attention or respect may lead to such customer ta ing their business elsewhere. $here individuals are more remote from customers, nowledge of customers in the supply chain will heighten an awareness of the impact they have on customers by what they do. >o organisation can survive without customers. Customers are one of the sta eholders but unli e other sta eholders they bring in revenue which is the life blood of every business. Consequently the needs and e!pectations of customers provide the basis for an organisationPs ob#ectives, whereas the needs and e!pectations of the other sta eholders constrain the manner in which these ob#ectives are to be achieved. It follows therefore that the other sta eholders 8shareholders, employees, suppliers and society9 should not be regarded as customers as it would introduce conflict by doing so.

Can there be internal customers or should we simply call them co-workers

Iosenberger defined an internal customer as Manyone you count on or rely upon to complete a tas or a function or to provide you with information so that you can get your #ob doneH and anyone who counts on you to complete a tas or function or to provide them with information so that they can get their #ob done.N (onna +arl 8article about what is internal customer service%9 defines an internal customer or internal service provider as anyone in the organisation. "n internal customer can be a co-wor er, another department, or a distributor who depends upon us to provide products or services which in turn are utili<ed to create a deliverable for the e!ternal customer. The term Minternal service providerN is more appropriate but using the word McustomerN in this conte!t is flawed. 8see also the discussion on the I06 1333 definition of QcustomerP below9 "s internal receivers of product, employees are not sta eholders 8they are part of the process9 therefore they are not strictly customers but partners or co-wor ers. >ormally the customer is e!ternal to the organisation supplying the product because to interpret the term customer as either internal or e!ternal implies that the internal customer has the same characteristics as an e!ternal customer and this is simply not the case as is indicated in the table below:
Characteristics 0laces an order for product or service <as an interest in the performance of the organisation /ecieves product (an re#ect nonconforming product 0rovides payment for the output Is external to the organsiation supplying the product 3efines requirements the product has to meet (an change requirements External Customer ;es ;es ;es ;es ;es ;es ;es ;es +o ;es ;es ;es +o +o 2ometimes 2ometimes Internal Customer

4nters into a legal contract in which there are laws protecting both parties Is able to take custom elsewhere if not satisfied

;es ;es

+o +o

In the table above, there is only a =3R match between the characteristics of internal and e!ternal customers and therefore it would be unwise to use the same term for both parties as misunderstanding could ensue. Gowever, if we consider for a moment the notion of an internal customer, the operator who receives a drawing from the designer would be regarded as a customer in an internal supply chain. &ut the operator doesnPt pay the designer for the drawing, has no contract with the designer, does not pass the output of his wor to the designer, does not define the requirements for the drawing and cannot choose to ignore the drawing so is not a customer in the e!cepted sense but a user of the drawing. The operator may pass his output to another operator in the internal supply chain but this second operator is not a customer of the former, he?she is merely a co-wor er in a process. If we consider this second operator as a customer, he has no choice but to ta e the output as he canPt go elsewhere. The only thing he can do is to return the output if it does not meet the input requirements for that stage in the process but that does not ma e him a customer. "nother flaw in the argument is the notion that there are internal supply chains. In some cases there are chains where " passes output to & and & passes output to C etc but there are also loops where " passes output to & and & passes output bac to ". 7or e!ample if an operator provides a test piece to a laboratory and receives the test results, one might regard the operator as the laboratoryPs customer but once again, there is no contract and no money passing between the two parties. The operator, the designer and laboratory all have the same customer S the person or organisation that is paying for the organisationPs output and specifying the requirements the organisation must satisfy. The notion of internal customers and suppliers is illustrated in the diagram. In the upper diagram requirements are passed along the supply chain and if at each stage there is some embellishment or interpretation by the time the last person in the chain receives the instructions they may well be very much different than what the customer originally required. In reality each stage has to meet the e!ternal customer requirement as it applies to the wor performed at that stage not as the person performing the previous or subsequent stage wants. This is shown in the lower diagram where at each stage there is an opportunity to verify that the stage output is consistent with the e!ternal customer requirement. In a well-designed process, individuals do not impose their own requirements on others. The requirements are either all derived from the customer requirements or from the constraints imposed by the other sta eholders. If organisations want to encourage their employees to behave "0 I7 they were both customers and suppliers in an internal supply chain then there might be some benefit as it might engender:

0ride in ones work 6reater vigilance 6reater accountability

1etter control 6reater cooperation

&ut it might also lead to some problems:

%orkers start imposing requirements on their co-workers that are more stringent that the external customer requirements %orkers start re#ecting input from co-workers for trivial reasons %orkers become adversarial in their relationships with co-workers %orkers refuse to release resources to co-workers thus causing bottlenecks in the process 3epartments set up service level agreements that create artificial internal trading conditions 3epartments begin to compete for resources, bid for the same external contacts and generally waste valuable resources

If instead of the label internal customers and suppliers, individuals were to regard themselves as co-wor ers in a team that has a common goal, the team would achieve the same intent. In a team, every co-wor er is #ust as important as every other and with each co-wor er providing outputs and behaving in a manner that enable the other wor ers to do their #ob right first time, the team goal would be achieved. The observation by )hil Crosby that quality is ballet not hoc ey is very apt. In hoc ey, the participants do not treat each other as customers and suppliers but as team members each doing their best but the result on most occasions is unpredictable. In ballet, the participants also do not treat each other as customers and suppliers but as artists playing predetermined roles that are intended to achieve predictable results. 6rganisational processes are designed to deliver certain outputs and in order to do so individuals need to perform specific roles #ust li e ballet. I06 1333 contains the definitions of terms used in the I06 1333 family and it defines a customer as an organisation or person that receives a product. There is also a note in which is stated that M" customer can be internal or e!ternal to the organisationN. Gowever, in all cases the term customer is used without qualification. The term internal customer cannot be found in either I06 133- or 133C and therefore one might conclude that wherever the term customer is used either e!ternal or internal customer is implied but this would ma e nonsense of many of the requirements. 7or e!ample if every person in the organisation was a customer every error would have to be treated as a nonconformity and the outputs sub#ect to the nonconformity controls of clause ;.=. Top management would have to ensure that the requirements of internal customers were determined and met with the aim of enhancing internal customer satisfaction S clearly not the intent of I06 1333 at all. " much better way than adopting the concept of internal customers is for managers to manage the organisationPs processes effectively and create conditions in which all employees can be fully involved in achieving the organisationPs ob#ectives. 0ee diagram of internal customer-supplier chain

Where are customers

Customers can be buyers in the local community or as far away as the other side of the world. It all depends on the effectiveness of an organisationPs mar eting efforts and the scope of appeal for its products and services. It also depends on transport technology. $ho would have thought ,3 years ago that we would find flowers, fruit and vegetables from the far east on western supermar et shelves. The containerisation of goods has made it possible to ship almost any product to anywhere in the world within a few hours. 6n-line electronic trading has also broadened the field and enabled suppliers to find customers for specialised items in almost every country in the world. The net result is an increasing demand for transport by land, sea and air with consequences for the environment. 7or organisations that are environmentally conscious, this means ta ing a hard loo at their customer base and lower their carbon footprint. Customers are not always the most obvious ones. )roducts designed for one purpose may well find customers using them for an entirely different purpose and so it pays to continually analyse who is buying what as it may reveal new undiscovered mar ets and potentially even greater sales.

What do customers want from the organisation

6rganisations are created to achieve a goal, mission or ob#ective but they will only do so if they satisfy their sta eholders. Their customers, as one of the sta eholders, will be satisfied only if they provide products and services that meet their needs, requirements and e!pectations. They will only retain their customers if they continue to delight them with superior service and convert wants into needs.
Needs

>eeds are essential for life, to maintain certain standards, or essential for products and services, to fulfil the purpose for which they have been acquired. 7or e!ample a car needs a steering wheel and the wheel needs to withstand the loads put upon it but it does not need to be clad in leather and hand stitched for it to fulfil its purpose. +veryonePs needs will be different and therefore instead of every product and service being different and being prohibitively e!pensive, we have to accept compromises and live with products and services that in some ways will e!ceed what we need and in other ways will not quite match our needs. To overcome the diversity of needs customers define requirements, often selecting e!isting products because they appear to satisfy the need but might not have been specifically designed to do so.
&ants

&y focusing on benefits resulting from products and services, needs can be converted into wants such that a need for food may be converted into a want for a particular brand of chocolate. 0ometimes the want is not essential but the higher up the hierarchy of needs we

go4 the more a want becomes essential to maintain our social standing, esteem or to realise our personal goals. In growing their business organisations create a demand for their products and services but far from the demand arising from a want that is essential to maintain our social standing, it is based on an image created for us by media advertising. $e donPt need spring vegetables in the winter but because industry has created the organisation to supply them, a demand is created that becomes an e!pectation. 0pring vegetables have been available in the winter now for so long that we e!pect them to be available in the shops and will go elsewhere if they are not. &ut they are not essential to survival, to safety, to esteem or to realise our potential and their consumption may in fact harm our health because we are no longer absorbing the right chemicals to help us survive the cold winters. $e might want it, even need it but it does us harm and regrettably, there are plenty of organisations ready to supply us products that will harm us.
'e(uirements

Iequirements are what we request of others and may encompass our needs and wants but often we donPt fully realise what we need until after we have made our request. 7or e!ample, now that we own a mobile telephone we discover we really need hands-free operation when using the phone while driving a vehicle. "nother more costly e!ample is with software pro#ects where customers eep on changing the requirements after the architecture has been established. 6ur requirements at the moment of sale may or may not therefore e!press all our needs. Iequirements may also go beyond needs and include characteristics that are nice to have but not essential. They may encompass rules and regulations that e!ist to protect society, prevent harm, fraud and other undesirable situations. "nything can be e!pressed as a requirement whether or not it is essential or whether the circumstances it aims to prevent might ever occur or the standards invo ed might apply. Iequirements are often an imprecise e!pression of needs, wants and e!pectations. 0ome customers believe they have to define every characteristic otherwise there is a chance that the product or service will be unsatisfactory. 7or this reason parameters may be assigned tolerances that are arbitrary simply to provide a basis for acceptance?re#ection. It does not follow that a product that fails to meet the requirement will not be fit for use. It simply provides a basis for the customer to use #udgement on the failures. The difficulty arises when the producer has no idea of the conditions under which the product will be used. 7or e!ample a producer of a power supply may have no nowledge of all the situations in which it might be used. It may be used in domestic, commercial, military or even in equipping a spacecraft. .ariations acceptable in domestic equipment might not be acceptable in military equipment but the economics favour selection for use rather than a custom design which would be far more costly.
)*pectations

+!pectations are implied needs or requirements. They have not been requested because we ta e them for granted S we regard them to be understood within our particular society as the accepted norm. They may be things to which we are accustomed, based on fashion, style, trends or previous e!perience. 6ne therefore e!pects sales staff to be polite and courteous, electronic products to be safe and reliable, policemen to be honest, coffee and soup to be hot,

etc. 6ne would li e businessmen to be honest but in some mar ets we have come to e!pect them to be unethical, corruptible and dishonest. "s e!pectations are also born out of e!perience, after frequent poor service from a train operator, our e!pectations are that the ne!t time we use that train operator4 we will once again be disappointed. $e would therefore be delighted if, through some well focused quality initiative, the train operator e!ceeded our e!pectations on our ne!t #ourney.
+esires

Customers e!press their requirements but as we have seen above these may go beyond what is essential and may include mandatory regulations as well as things that are nice to have S what we can refer to as desires. 0ometimes a customer will distinguish between those characteristics that are essential and those that are desirable by using the word MshouldN.
ntent
Behind every want, need, requirement, expectation or desire will be an intent. What the customer is trying to accomplish as a result, the reason for the requirement. In many cases clarifying the intent is not necessary because the requirements express what amounts to common sense or industry practice and norms. But sometimes requirements are expressed in terms that clarify the intent. A good example can be taken from I ! "##$ where in clause %.& it states' The organisation shall ensure that product which does not conform to product requirements is identified and controlled to prevent its unintended use or delivery The phrase to prevent its unintended use or delivery signifies the intent of the requirement but not all requirements are as explicit as this. (or example in clause ).).$ of I ! "##$ it states' Top management shall ensure that responsibilities and authority are defined and communicated within the organisation *here is no expression of intent in this requirement i.e. it does not clarify why responsibilities and authority need to be defined and communicated. Although in this example it might appear obvious, in the $""+ version of the standard it also required responsibilities and authority to be documented without stating why.

What factors are critical in managing customer relationships

It is desirable that suppliers sustain a good relationship with their customers, although in mar ets where a particular customer is unli ely to return suppliers are apt to be less accommodating. There can be a Mta e it or leave itN mentality. "ccepting the old adage that the MCustomer is always rightN whilst not always true is good for business. It is often better to accept mista es whichever party actually made them than stand ones ground with the customer. 6bviously if there is a lot at sta e and the prospect of legal proceedings, admitting mista es might be foolish but on trivial matters it is often the wiser thing to do. 0uppliers need to manage their customers. This might appear an odd thing to say, but if you let your customer run rings around you, you will be left the poorer party. 0everal factors are critical in managing customer relationships:

.nowing who your customers are and where they are is perhaps the first thing you should do. Anticipating and understanding customer needs, expectations and requirements is very important. It is not enough simply to read the contract or order but to get beneath the words and clearly understand the intent behind these words. It is not the customers= responsibility to tell you want he wants but your responsibility to find out

what he needs and then satisfy those needs. If you comply with the written requirement but fail to satisfy the customer=s needs and expectations you might get paid but you might not get another #ob.

5istening to the customer and not simply reading the words. $his is not merely listening at meetings but reading the signals from the customers= actions and decisions, the body language and silences. %hat was not said or done may be #ust as important to what was said and done. ;our customer might not have responded to a communication not because he was too busy but because your message broke the protocol, was critical, was unrepentant or simply arrogant. As indicated previously, requirements can be rather imprecise means of conveying needs and so customers will use other ways to express what it is they really want from you so you have to listen. (o-operating with customer preferences. 2ome customers want you to use certain reporting procedures or conventions that might cause you extra effort. *ind ways of accommodating their needs that cause least disruption to your systems. (ustomers may want you to hold shipment until they are ready. Ignoring such requests because there is no provision in the contract might be foolhardy but if it will reduce your effectiveness to comply, you need to begin a dialogue. $alk is cheap and an idle workforce is costly. 1uilding confidence with your customer. 2ome customers recognise their suppliers as the experts, which is why they selected them in the first place but others impose their solutions and practices on their suppliers regardless. It pays to build confidence with your customers by going out your way to explain the way you do things, demonstrate the capability of your processes and explain those features, benefits and advantages of your products and services they may not be aware of. A customer who really appreciates what he is getting in return for payment is likely to return.

$urther resource
+elated sections To what is it related $he history and tradition of inspection, quality control and quality assurance up to >?@A. $he evolution of quality thinking, post c. >?@A $he influence of D)uality 6urusD How is it related $he history of quality management has been about a relationship between customers and suppliers (ompetition from Bapan in the >?@As-CAs made customer focus a driving force within organisations $hese have been consistent in emphasising the importance of the customer

It was the pursuit of increasing levels of 3evelopment of formal quality systems into customer satisfaction that spurred these the service sectors, professions and other organisation into considering formal quality non-manufacturing! businesses systems (ontinual improvement $his is demonstrated through evidence of increasing customer satisfaction

,arkets 2uppliers 2takeholders 2atisfaction and loyalty 2tandards and ethics /oles and responsibilities of corporate management (ommunication

$hese are what customers populate $hese are customers of other organisations (ustomers are one of the stakeholders 0rimarily it is customer satisfaction and loyalty that is addressed $hese are often set by customers 9ne of these is understanding customer needs $his vital between customers and suppliers

5eadership, empowerment, motivation and Awareness of customer requirements is crucial teamworking here Awareness raising E 5earning, $raining and Awareness of customer requirements is crucial ,entoring here 2pecifying, designing and developing processes, products and services 0rocess analysis and improvement 0roblem diagnosis and improvement tools (ustomer requirement influence the ob#ectives which such processes, products and services should achieve (ustomer focus is important here (ustomer focus is important here

,easurement, assessment, monitoring and (ustomer focus is important here control ,anaging continual improvement 5egislation 2tandards development ,anagement system standards (ompliance management and enforcement 4xcellence models and awards Audit, self assessment and appraisal 2trategic management (orporate governance /elating improvements to customer needs is important here $his will sometimes be invoked in contracts with customers $his is done through pressure groups and user groups which will include customers $hese are often imposed in contracts with the aim of giving customers an assurance of quality $his is done to give assessments credibility in the eyes of the customer (ustomers feature strongly in this (ustomer representatives often do this -nderstanding customers is vital in this area (ustomer are lost of this is not done well

4lements of (orporate 2trategy ,anagement systems

Alignment between customer needs and organisational goals is important here $hese are often strongly focussed on enabling achievement of customer requirements

,anaging quality across the global! organisation, its stakeholders, suppliers and (ustomers are in all parts of the world customers (orporate social responsibility An expectation of consumers

+elated publications and websites Managing Customer Relationships: A Strategic Framewor !"ar#co$er% 3on 0eppers ,artha /ogers. "an#&oo o' CRM: Achie$ing ()cellence through Customer Management: Achie$ing ()cellence *hrough Customer Management Adrian 0ayne.

Deli$ering Customer Ser$ice: A +ractical ,ui#e to Managing Success'ul Customer Relationships !1999% 2heila 0ayne. -ualit. is Free >?@?! (rosby 0hilip 1. ,c6raw <ill. (ustomer relationship management http8''en.wikipedia.org'wiki'(ustomerFrelationshipFmanagement. (ustomer relationship management http8''www.cimaglobal.com'cps'rde'xbcr'2I3AAAA(GHH-H4GA3IJ>'live'(/,FtechrptFAKA>.pdf $he (hartered Institute of ,anagement (I,! has a lot of good information on this topic.

%nteractions of organisations and people

This section of the &ody of Quality /nowledge loo s at the interface between people and organisations, and how it can be managed to achieve organisational aims. 0ub#ects include: Corporate structure and culture The importance of corporate structure, values and culture in an organisation. 5lobal cultural differences. Communication Communication theory4 methods of communication and their effectiveness. Iole of the individual Job design and specification4 responsibility4 authority and accountability4 competence levels4 professional bodies and institutions. Beadership, empowerment, motivation and teamwor ing Beading and managing teams4 leadership styles4 motivational theory4 team selection4 team building4 delegation of authority4 setting targets4 facilitation. "wareness raising - learning, training and mentoring Training specialists and non-specialists4 self learning4 continuing professional development 8C)(94 mentoring4 coaching4 validation4 nowledge theories4 training effectiveness. )erformance management 0taff supervision4 reviews4 competence4 personal development plans4 promotion4 setting ob#ectives4 financial and motivational reward. Quality consultancy - its variety and roles Internal?e!ternal consultancy role4 advantages?disadvantages to organisations4 management of or involvement in consultancy activities4 selection of the most appropriate consultant.

Corporate structure and culture

What do we mean by corporate structure
.ecoding the term

The term 'corporate structure' refers to the way the various parts of an organisation are arranged and related as opposed to the arrangement of buildings. In contrast, business structures refer to the many forms of commercial legal entities such as sole trader, partnership. public or private limited company, cooperative or corporation. The term corporate in this conte!t simply refers to the body as a whole rather than its individual parts. The word corporate comes from the Batin corpus meaning body. Its use is not limited to 'corporations' 8a group of people authorised to act as an individual and recognised in law as a single entity9
The classic view

The classic view of corporate structure is as a chart showing the arrangement of divisions, units, departments and other components of an organisation and the hierarchy of the ey positions. $hat is being described is the division of wor and labour and this is but one view of the structure. In large international corporations, the structure might be represented geographically on a map of the world. Gowever the classic view of the structure as the configuration of the division of wor and labour has its limitations and should not be thought of as representing all aspects of the structure.
The systems view

The essence of any structure is that all parts are interconnected so as to form a coherent and functioning whole and that it e!ists to fulfil a particular purpose. In the case of an organisation structure, it e!ists to fulfil the mission. Chec land, "c off and 0hannon reach similar conclusions that a system is a set of components interconnected for a purpose and therefore when (eming as s in his boo 6ut of the Crisis, 'Is your organisation a system%', he is suggesting that organisations behave li e systems in that their components wor together to accomplish an aim. &y way of a contrast, )irsig in his boo , Ten and the "rt of *otorcycle *aintenance, refers to the motorcycle as not #ust a structure of assembled parts but a system 8all parts wor ing together to perform the function of the motorcycle9. 0ystems thin ing is one of )eter 0enge's disciplines for building a learning organisation. The others are:

0ersonal mastery ,ental models

2hared vision $eam learning

0enge argues that the essence of the discipline of systems thin ing lies in a shift of mind:

2eeing interrelationships rather than linear cause-effect chains 2eeing processes of change rather than snapshots

Therefore when we tal of loo ing at an organisation as a system it means we are ta ing a particular view or perspective of the organisation. There are many other perspectives we could ta e such as how nowledge is utilised or we could loo at the political forces in the organisation and their impact on behaviour. " systems view of the organisation could ta e the form of several models each representing a distinct aspect of the organisation's comple!ity. These models might include:

*unctional model showing the division of work and labour with the lines of responsibility and accountability 0rocess model showing the arrangement of business processes and the pathways along which work flows and the corresponding results are produced (ommunications model showing the network of internal and external communications with the stakeholders 5ocation model showing the disposition of physical resources such as the buildings, plant and facilities where the organisation functions (ultural model showing the factors influencing the organisational culture and the way they are channelled through the organisation as values and principles that impact behaviour

"ny model of the organisation that is produced in an attempt to understand and manage its comple!ity can be considered as a representation of the corporate structure. "nother advocate of systems thin ing is Iussell "c off, associate of $ +dwards (eming, http:??news.bbc.co.u ?,?hi?business?@==;:,2.stm " comprehensive treatment of systems thin ing is at http:??www.open,.net?systems? +!tending the *etaphor U0ystemU by "t inson and Chec land, -1;;, The Tavistoc Institute http:??hum.sagepub.com?cgi?content?abstract?C-?-3?231 6nce *ore unto the 0ystem 0. 5laser, -1;C, The Tavistoc Institute http:??hum.sagepub.com?cgi?content?abstract?=2?@?C2=

What is the purpose of the structure

The way wor and labour is organised is unique to each individual organisation and to be effective this is carried out only after the strategy has been determined. "s (ruc er points out, 'structure follows strategy'. "nd: 'If an organisation does not now where it is going there is no intelligent basis for organising human effort and material resources.'

The structure needs a clear aim as it is formed in order to implement the strategy. The strategy therefore becomes the purpose of the structure. Its measure of success is how well it e!ecutes the strategy which is why companies are continually re-organising, searching for the right structure to achieve the business goals. &ut if the same processes are employed to achieve the organisation's goals, no amount of rearranging the division of wor and labour will improve performance. *ore often than not these changes are made for financial reasons to try and ta e cost out of the enterprise because either the strategy has failed or the circumstances changed. &y ta ing out costs without process redesign, the processes often malfunction. " more prudent approach is to apply systems thin ing in any cost reduction programme. 6ften it is not the division of wor and labour that is at fault at all but the strategy or the business processes. &y viewing the division of wor and labour through an organisation chart, firms become blind to the causes of failure. $hat they fail to realise is that all wor is a process and that it is the processes that deliver the results not the bo!es on the organisation chart - hence the importance of viewing the organisation as a system of processes rather than a structure of functions.

Why is structure important

(ruc er observes that the best structures will not guarantee results and performance, but the wrong structure is a guarantee of non-performance. Ge recognised that the right structure does not evolve and is not intuitive4 organisation structures have to be designed. "n organisation regardless of the number of employees can function without structure providing the processes are capable. Just as a tree must have structure to grow, when the small organisation wishes to add diversity or comple!ity it needs a structure. Gowever, the wrong structure impedes process efficiency and effectiveness as it contributes to bottlenec s, duplication of effort, inter-department rivalry, turf wars and a host of issues that arise from the interaction of people within an organisation. $ith modern structures li e networ s and virtual organisations these inds of problems don't arise but they are not appropriate for e!ecuting all strategies. (avid )ac ard remar s in his boo the G) $ay, an organisation's structure affects individual motivation and performance so if people are placed in positions for which they are unsuited or allocated wor for which they are not competent there will be a detrimental effect on motivation and performance. &ut even when people are placed in the right positions and allocated wor they are competent to perform, there are other factors that effect motivation and performance such as the corporate values, culture, management style, pay and conditions. Just as in a building where the structural components dictate its form and have hidden properties, the result producing components of an organisation dictate corporate structure but

hide the inner strength upon which its success is built. These properties are commonly referred to as the organisational culture which is covered in the ne!t section.

Corporate culture
$hat characterises a corporate culture% If we as people to describe what it is li e to wor for a particular organisation, they often reply in terms of their feelings and emotions that are their perceptions of the essential atmosphere in the organisation. This atmosphere is encompassed by two concepts, namely culture and climate. Gofstede 8-11C9 defined culture as 'the collective programming of the mind which distinguishes the member of one group or category of people from another'. Ge implies it can be learned ie it does not form part of the human nature and it is distinct from individual personality, however it is shared by the members of one group. Culture provides a code of conduct that defines acceptable behaviour whereas climate tends to result in a set of conditions to which people react such as political, economic, social and technological 8)+0T9. Culture is more permanent whereas climate is temporary and is thought of as a phase the organisation passes through. +dgar 0chien )rofessor of *anagement at *IT defines culture as the shared tacit assumptions of a group that it has learned in coping with e!ternal tas s and dealing with internal relationships. Ge conceptualises culture as a layered phenomenon that has three interrelated levels of meaning:

artefacts and creations such as rites, ceremonies symbols, taboos, myths and stories. language and norms of behaviour values and beliefs such as integrity, the basis of reward and punishment, employee control, decision making, concern for people, suppliers, customers, management contact and autonomy basic assumptions such as respect for the individual, responsibility for actions and decisions, internal cooperation and freedom

http:??web.mit.edu

/ow are values' culture and structure related

7rom the above brief overview of culture, it can be seen that values are one aspect of culture. "lthough structure is the arrangement of parts, as was indicated previously, culture will influence how these parts interact. It will certainly discriminate between effective and ineffective structures. Two organisations in the manufacturing sector may have the same organisation structure on paper but function very differently, indicating that it is the white space on the organisation chart that is more significant. This white space is occupied by the business processes as

observed by Iummler in his boo Improving )erformance: Gow to *anage the $hite 0pace in the 6rganisation Chart. "s values maybe one of the factors that determine the position of units in a hierarchy, 8see members' pages9 the structure can be a good indicator of the alignment between values and structure. If the natural environment is something the organisation values, its position on the organisation chart might indicate whether this is true or false. Gowever, this is not to say every value should warrant a dedicated organisational unit, but when it is everyone's responsibility it often arises that no one is held accountable and hence no one manages it.

/ow do corporate cultures differ

There are several ways of loo ing at corporate culture. Ta ing a simple approach we can classify organisations as either being rules based or values based. 5eert Gofstede, a (utch organisational anthropologist and writer on the interactions between national cultures and organisational cultures, demonstrated that there are national and regional cultural groupings that affect the behaviour of societies and organisations, and that are very persistent across time. In his research primarily addressing national cultures conducted in the -123s, Gofstede identified four dimensions of culture:
>. power distance J. individualism'collectivism I. masculinity'femininity H. uncertainty avoidance G. long-term orientation <ofstede added a Gth dimension in >??A!

*ore on Gofstede's dimensions of culture is given in the members pages.

+ules-based culture

In a rules-based culture 8or command and control culture9 people will follow the rules or procedures regardless of the consequences but assume the rules are imposed for the general good. Command and control cultures are used in the military because of the nature of the #ob and the si<e of the units. The strategy is wor ed out at &rigade GQ and orders issued down the line. If everyone on the front line was free to question the orders and ta e a different action, the battle would be lost. &attles are one-off events in which command and control structures are proven effective. 6ther one-off events li e hurricane disasters, fire fighting, air, road and rail accidents all require people to follow orders without question as time is of the essence. *anagement disciplines grew out of the military and the early industrialists followed the military models. This has been perpetuated over the decades and attracted the type of managers who feel in control in such an environment. 6ften military commanders would find #obs in management when they finished their military career and would manage their staff in the same way with disastrous results.

0alues-based culture

In a values-based culture there is less prescription of rules because from an understanding of the ob#ectives and applying the corporate values, people will wor out the right things to do, weigh up the circumstances and apply their s ills and nowledge. These organisations are quite rare. The values held by the founder have a profound effect on the nature of the organisation he or she builds. 0uch people surround themselves by others who share these values and rituals are developed to emphasis them. The selection process ensures only people who share these values are recruited and it is often difficult for those steeped in command and control to feel comfortable in such a culture. "lthough these organisations have often been forced through mar et pressure to see I06 133- certification, they see it as superfluous to their operations, adding no value. Gence certification body auditors have difficultly understanding how the systems achieve results without prescriptive documentation. +!amples are:

2erco ,ars AstraLeneca <ewlett 0ackard

!ational cultures
In a trading relationship there are other differences that run deeper than organisational culture and mirror national cultures. Iesearch by "ccenture in July ,33@ found that cultural differences are one of the ma#or reasons why offshore outsourcing arrangements fail http:??newsroom.accenture.com?articleKdisplay.cfm%articleKidLC=2@ 0ome of these are differences in:

communication styles, both verbal and non-verbal approaches to completing tasks attitudes toward conflict decision-making styles sets of values styles of management

" study conducted in ,33- showed that the organisational cultures of one firm in one country can influence the organisational culture of affiliated firms in different countries, even where the national culture of the affiliate is substantially different from that of the parent. 0ee http:??www-rohan.sdsu.edu?dept?ciber?--3Chow.pdf 8nb )(7 document9

What are corporate values and what effect do they have

Corporate values are confirmed by top management e!pressing what they believe are the fundamental principles that guide the organisation in accomplishing its goals, what it stands for such as integrity, e!cellence, innovation, reliability, responsibility and fairness. 5ood leadership strives to bring about a set of shared values. .alues are not actions to ta e or decisions to ma e. They condition behaviour so if one of our values is integrity when ta ing an action or decision we would as ourselves, where is the integrity in that, or how would I ensure the integrity of that #udgment% 6ften they become instinctive so in a customer focused culture, the sales person would not even thin of deceiving the customer into buying something that would later be discovered unsatisfactory.

Why are values and culture important

Culture has a strong influence on people's behaviour but is not easily changed. It is an invisible force that consists of deeply held beliefs, values and assumptions that are so ingrained in the fabric of the organisation that many people might not be conscious that they hold them. Anless the recruitment process recognises the importance of matching people with the culture, maveric s may well enter the organisation and either cause havoc in the wor environment or be totally ineffective due to a lac of cultural awareness. )eople who are oblivious to the rites, symbols, customs, norms, language etc, may not advance and will become demotivated. There is however, no evidence to suggest a right or wrong culture. $hat is important is that the culture actually helps an organisation to achieve its goals - that it is pervasive and a positive force for good.

/ow does culture impact structure

The organisational structure should be designed to enable it to function effectively whilst it is pursuing a certain mission. If the mission changes, the structure may need to change. Gowever, the prevailing culture will influence that structure and it will reflect the core beliefs in the purpose and driving force eg if profit is ing, the accounting function will be dominant, if the mar et is ing, the mar eting function will be dominant. If there is scant regard to quality, safety or the environment, they won't be visible in the high level structure. This often arises due to ignorance rather than a deliberate policy. $here it is believed that quality, health, safety or environment are important to business success there will be a strong quality, health, safety or environment culture and you may detect this in the structure by there being senior positions dedicated to these functions. Gowever, you will need to loo more closely than the organisation chart. )ositions with the word quality in the title might indicate leadership in quality or it might indicate delegation to a supernumerary. Gowever, a structure without positions dedicated to quality, health, safety or environment is not necessarily one that is ignorant of their importance. There might be robust processes that ta e due account of all relevant factors and rather than separate these into discrete functions, prefer to integrate them into process design.

In 6rganisation the 7ramewor of *anagement &rech points out the lin between morale and control and the responsibility of top management to create a suitable form of organisational structure and maintain it as a sound framewor of management action. It must also ensure that the wor ing of management accords with these intentions and that there is proper coordination within the framewor established. In this connection arises its very important responsibility for attaining and maintaining high levels of morale and human relationships throughout the organisation.

/ow does culture impact change

7or many people, the culture in an organisation has to be discovered - it is not something that is necessarily articulated by the managers. 0tatements of the vision and values help but the rites, symbols and taboos are all learnt mainly by observation. Therefore if the culture is one where innovation is encouraged and rewarded, managers will recruit innovative people and once employed will continually see new ways of doing things. "lternatively, if the culture is one where change is resisted or unwelcome, managers will recruit people who are unli ely to challenge the status quo, people who crave stability and security and once employed these people will follow the routines and defend the status quo. &oth types of culture have a role in society. The armed services need obedience and change in policy and a practice needs to be difficult although changes in the tools used to do the #ob needs to be encouraged. "lternatively in an innovative organisation li e *icrosoft, &) or Gewlett )ac ard the one constant is change for without it they die. In many successful companies the culture is set by the values bestowed by the founders and their successors. They have propagated their ideas through a culture of discipline to mission statements, policies, operating procedures and systems thin ing. 6r in the case of Toyota a series of boo s collectively called the Toyota $ay. This culture is carried forward by an acceptance?discipline to follow them and an integrated system of mentors or sensei 8a Japanese title for a person of respected stature9. The source of Toyota's current problems around the world is their inability to find 8or hold on to9 sufficient mentors to match their e!pansion.

/ow does culture impact performance

0tephan (ahl suggests that it is possible to describe culture as a shared set of basic assumptions and values, with resultant behavioural norms, attitudes and beliefs which manifest themselves in systems and institutions as well as behavioural patterns and nonbehavioural items. $e can therefore suggest there is a strong relationship between values, behaviours and results. &ehaviours are e!pressions of shared values and assumptions with results the product of behaviours. Therefore when the behaviours align with the stated values, we can say that the results produced will be those e!pected by the group. The corollary being, when the behaviours don't align with the stated values, we can say that the results produced will not be those e!pected by the group. It follows therefore that in an organisation with a well defined culture, it drives performance, whereas in an organisation with no discernable culture or one that is multicultural, performance may be patchy and unpredictable.

(ahl points out that although all members of a group or society share their culture, e!pressions of culture-resultant behaviour are modified by the individuals' personality, and therefore culture does not predict individual behaviour. In the -1@3s (ouglas *c5regor at the *IT 0loan 0chool of *anagement developed two theories of human motivation. These were:

$heory M - a label given to a belief that workers inherently dislike and avoid work and must be driven to it $heory ; - a label given to a belief that work is natural and can be a source of satisfaction when aimed at higher order human psychological needs

6rganisations where theory V prevails is li ely to have a different performance than those where theory F prevails. 0ee also http:??en.wi ipedia.org?wi i?TheoryKVKandKtheoryKF In contrast, the Japanese management style has been labelled theory T which is a belief that organisations should focus on increasing employee loyalty to the company by providing a #ob for life with a strong focus on the well-being of the employee, both on and off the #ob. 7or the Japanese this style of management led to great improvement in performance but it is debatable whether this theory can be applied successfully in the $est due to the different approach ta en towards employment. "t the end of world war II, there were still #obs for life in the A/ and A0 but through the boom and bust years of the -123s and -1;3s this situation has almost disappeared. 6rganisations can no longer sustain the same structure for decades as they once did. 0ee also http:??en.wi ipedia.org?wi i?TheoryKT 7urther resources

(rominent people
0ome of the more prominent people who have influenced and developed theories on organisation structure and culture include:
+iccoli ,achiavelli >HK? - >GJ@! Italian writer and statesman, conceived four principles or maxims of leadership. 5eaders must8 obtain mass consent, strive for cohesiveness, have a will to survive and must set an example to the people they lead.

Adam 2mith >@JI->@?A! 2cottish philosopher. In the >Cth century Adam 2mith saw advantages in specialisation, breaking down work into simple tasks and developing skills http8''www.adamsmith.org'dr-adam-smith-NJC>@JIN>>>@?ANJ?'

4li %hitney >@KG - >CJG!

American inventor, mechanical engineer, and manufacturer, best remembered as the inventor of the cotton gin a machine to clean the green-seed cotton! but most important for developing the concept of mass-production of interchangeable parts in >CA> http8''www.cottontimes.co.uk'whitneyo.htm

(harles 1abbage >@?> - >C@>! 4nglish mathematician, economist and inventor who is credited with conceiving the first automatic digital computer. In his book 9n the 4conomy of ,achinery and ,anufacturers, he argues that by dividing work into different processes, each requiring different skills, or effort, the employer may purchase only that which is necessary for each process. %hereas if the whole work were executed by one workman that person must possess sufficient skill or effort to perform the most difficult or laborious of tasks, and would therefore be more costly. http8''www.pro#ects.ex.ac.uk'babbage'rosenb.html

<enry *ayol >CH>->?JG! *rench engineer. <is idea in >?JG of unity of command, which stated that an employee should receive orders from only one supervisor, helped to clarify the organisational structure of many manufacturing operations.

*redrick %inslow $aylor >CGK->?>G! American engineer known for defining the techniques of scientific management which is the study of relationships between people and tasks for the purpose of redesigning the work process to increase efficiency.

<enry *ord >CKI - >?H@! American industrialist who revolutionised factory production with his assembly-line methods http8''www.makingthemodernworld.org.uk'people'16.AACJ'

*rank 6ilbreth >CKC - >?JH! and 5illian 6ilbreth, nee ,oller >C@C - >?@J! 0ioneered time and motion study as a means of developing the best way of working.

Alfred 0 2lone >C@G - >?KK!

American corporate executive and philanthropist who headed 6eneral ,otors as president and chairman for more than a quarter of a century.

#ember pages
Corporate structure different kinds of work and labour organising work

the pros and cons of different kinds of structure creating a corporate structures changing a corporate structure

Corporate culture different types of culture problems with culture

changing an organisational culture

+elated elements
To what is it related /ole of the individual 5eadership, empowerment, motivation and teamworking 0erformance management 0rocess analysis and improvement ,anaging continual improvement ,anagement system standards 4xcellence models and awards 2trategic management (orporate governance 4lements of corporate strategy How is it related $his arises from the corporate structure and culture $hese attributes arise from the corporate structure and culture $he way this is done arises from the corporate structure and culture $he way this is done arises from the corporate structure and culture $he way this is done arises from the corporate structure and culture $he way these are approached arises from the corporate structure and culture $he way these are approached arises from the corporate structure and culture $his is what develops corporate structure and culture $he way this is done arises from the corporate structure and culture $he way these are approached arises

from the corporate structure and culture ,anagement systems Impact of corporate strategy on people $he way these are approached arises from the corporate structure and culture $he way this is done arises from the corporate structure and culture

,anaging quality across the global! organisation, $he way this is done arises from the its stakeholders, suppliers and customers corporate structure and culture

+elated publications and websites

0trategy and 0tructure: Chapters in the Gistory of the "merican Industrial +nterprise by "lfred (upont Chandler &eard &oo s -11@ The G) $ay by (avid )ac ard. Collins4 Ieprint edition ,33@ The )ractice of *anagement, )eter 7 (ruc er &utterworth-Geinemann, ,nd Ievised editions, ,332 International *anagement: Culture, 0trategy, and &ehavior by Iichard *. Godgetts *c5raw-Gill @Iev +d edition ,33@ Improving )erformance: Gow to *anage the $hite 0pace in the 6rganisation Chart 5eary ". Iummler and "lan ). &rache Jossey-&ass4 -11:. 6rganisational Culture and Beadership, +dgar G. 0chein, )feiffer $iley4 = edition 8,- 0ep ,33C9 Culture - several theories, article and lin s http:??www.onepine.info?mcult.htm 5eert Gofsted gathered e!tensive data on the world's cultures and generated impressions of that data into charts and graphs that help better understand the many sublet implications contained in his raw data http:??www.geert-hofstede.com?geertKhofstedeKresources.shtml 6n dimensions of social cultural http:??www.scn.org?cmp?modules?emp-cul.htm 6n dimensions of social cultural http:??changingminds.org?e!planations?culture? luc hohnKstrodtbec Kculture.htm " good study of various writers on culture that includes characteristics of each type of culture and measures that tease out the culture http:??www-rohan.sdsu.edu?dept?ciber?--3Chow.pdf 8nb )(7 document9 " general overview of 6rganisational Culture with many useful references http:??en.wi ipedia.org?wi i?6rganisationalKculture

The 7ifth (iscipline )eter 0enge published by Iandom Gouse &usiness &oo s. "n e!cellent e!planation of systems thin ing and its importance in building learning organisations 6rganisation the 7ramewor of *anagement + 7 B &rech published by Bongmans 5reen and Co 8-1@:9

&eadership, empo'erment, motivation and team'or#ing

The leader within an organisational conte1t
6rganisations are made up of individuals brought together to enable it to achieve its mission. The organisation's structure will determine how these individuals wor together in teams and how they relate to one another. 7or an organisation to be successful, it is important that every individual in the organisation is wor ing towards the same goal. Beaders have an important role to play in co-ordinating and integrating the activities of these individuals and teams, ensuring that they are aware of the institution's priorities and that they are wor ing towards them. Beaders achieve this not only through the authority delegated to them within the organisation's hierarchy, but also by being charismatic, nowledgeable and respected leaders who inspire and motivate. This section outlines:

the qualities of a leader and variables which impact upon the success of a leader how a leader inspires and motivates why empowerment is important the importance of teamworking

#anagers and leaders

There is much debate about the difference between a manager and a leader. 0ome argue that there is no real difference and that leadership is #ust one aspect of the role of a manager, while others say that there is a significant difference between the two. " leader is someone who has vision and drives change whereas a manager maintains stability through planning, control and monitoring activities. In the modern world with organisations facing many challenges, there is an emerging debate that managers need to be both managers and leaders, and apply the combined s ills to enable the survival and success of an organisation.
#embers" pages

Theoretical debates on the differences between a leader and a manager are further developed in the *embers )ages section.

2eadership qualities
Beadership is concerned with the influencing of the actions and attitudes of others ensuring that everyone is following a common goal. $ithin an organisational setting, the power of a leader to influence others is established within the organisational structure. Gowever,

positional power does not necessary mean that others will follow or that they will follow willingly. It is therefore important that the leader has certain characteristics and abilities. D"uthority and power are further discussed in Iole of the individual.E
3nowledge and e1pertise4

$e are more li ely to follow someone if we admire and respect his?her e!pertise and nowledge.
%ocial skills

Beaders channel the efforts of individuals into team efforts. This builds an organisation into a community of people wor ing together to achieve a shared vision and goals. In order to achieve this, effective wor ing relationships have to be built. The leader has a ey role to play to developing this sense of team spirit.
0ision

$ithin an organisational setting, it is not surprising that individuals will view their wor , the organisation itself and the people they wor with in different ways. It is the role of the leader to manage this diversity and to reconcile the needs and values of the individual with the needs and values of the organisation to encourage creativity and vision and minimise frustration and conflict. Beaders need to inspire and motivate their wor force to achieve the organisation's goals. It is important to clarify the organisation's vision so that everyone understands his?her place in achieving it and e!actly what is required. Beaders need to then ensure that the necessary systems, resources and processes are in place to enable the vision to be achieved. DIndividual differences are e!plained in Iole of the individual.E
(roblem solving and 5udgement making skills

+ffective leaders have an ability to solve problems and to ma e ob#ective decisions in a timely manner.
%elf-knowledge

/nowing and understanding our strengths and wea nesses is important if we are to develop and grow. 0uccessful leaders build on their self- nowledge and encourage their teams to do the same.
Quality focus

Beaders aim to achieve their personal best and help their teams to continuously improve in all aspects of performance. This involves setting demanding yet achievable targets, sponsoring improvement in the organisation's processes and striving for total quality in all areas.

2eadership success
There are a number of variables that impact upon the success of the leader within an organisational conte!t.
+elationship with the team

Teams are made up of individuals brought together to enable the organisation to achieve its mission. It is the role of the leader to integrate the activities of individuals, ensuring that they are aware of the institution's priorities and that they are wor ing towards them. If individuals are pulling in different directions, then this will have a detrimental impact upon the organisation achieving its mission. Beaders need to be respected by their teams. They can achieve this by building effective wor ing relationships and trust within their teams. This means dealing with issues of interteam conflict and being proactive in dealing with instances of bullying or harassment. Beaders must also lead by e!ample.
The style of the leader

This needs to be consistent with the needs of the organisation and the needs of the team. The most effective leadership style is an approach that is both considerate and compassionate to the wor force and focused on achieving organisational ob#ectives by getting the #ob done, to the right specification and within the correct timescales.
The culture of the organisation

Beaders do not operate in a vacuum and consideration needs to be given to the conte!t in which they are leading. 0ome leadership styles may be more successful in certain situations and therefore leaders may need to adapt their style to meet the needs of the organisational culture and conditions.
Communication skills

0ome leaders are #ust better at communicating than others and have a greater ability to encode and decode messages. This is because they have developed their communication s ills based on their nowledge and e!perience of what wor s well. DCommunication s ills are further e!plored in CommunicationsE.
Attitude to learning

+ffective leaders are always learning and they encourage their teams to do the same. D"wareness raising, learning, training and development are further developed in the Iole of the individualE.

,oal setting

Beaders must set clear goals. Beaders should involve their teams in this process and ensure that the goals are demanding and yet achievable and realistic within the required timeframe. 5oals should be communicated effectively to the team. The ey leadership theories are e!plained in the *embers )ages.

6mpowerment
>owadays, we e!ist in an environment of rapid change and technological advances and an increasingly competitive environment. In order to compete in this environment, organisations need to successfully tap into the nowledge and s ills of their wor force and use this to enhance the organisation. In addition, there has been a shift in individual e!pectations and we now e!pect more control over what we do and a greater say in the decision ma ing process. 7eeling unable to control and influence what you do is a ma#or factor contributing to wor place stress. +mpowerment centres on giving people a greater say in what they do for the benefit of both the individual and the organisation. It is important that if we claim to believe in the values of empowering our wor force that we actually ta e proactive steps. This can be achieved in a number of ways.
Communication

$e can involve the wor force directly in the communication process, as ing them for ideas and suggestions on how the organisation can be improved and also getting feedbac on the success of new initiatives. This ma es greater use of the nowledge and s ills of the wor force.
.ecision-making

This involves allowing the wor force greater freedom and autonomy in the design of their wor and greater responsibility for ma ing decisions that directly impact upon them.
%tructure

The structure in place within the organisation needs to represent and enable empowerment. " flatter structure will not only reduce operational costs but will also enhance empowerment. It is important however, that there is clarity about where responsibilities lie or there will be confusion regarding who does what.
Culture

7or individuals to develop their nowledge and to ta e on a broader perspective to their wor , they need to operate in an environment where they feel safe to ta e intelligent ris s. 6perating in a blame culture will stifle innovation, creativity and the willingness to accept responsibility.

7nderstanding the bigger picture

In order to now your value to the organisation, you need to now where you fit in. Beaders can ensure that their teams now how they contribute to the overall effectiveness of the organisation to encourage ownership, responsibility and entrepreneurial thin ing. DThe lin between empowerment and stress is further developed in the *embers )ages section.E

#otivation
" motivated wor force will be more focused and productive and will ensure an organisation achieves its business ob#ectives. It is important therefore that leaders are aware of what drives and motivates their staff in order to facilitate this process. Gowever, wor place motivation is a comple! issue. *otivation is a very individual and multifaceted concept. In addition, within the wor place, leaders may have direct influence and control over some motivating factors and none over others.
The psychological contract

The psychological contract is the term used to describe the set of implied individual and organisational needs and e!pectations that do not form part of any formal agreement. "s an individual, when we ta e on a position within an organisation we usually now our salary, role and responsibilities, position within the organisation's hierarchy and an indication of our level of authority. Gowever, in addition, we have a set of unspecified e!pectations about our role. 7or e!ample we e!pect to be shown respect, to be treated fairly and to be enthused by our wor . 6ur organisation also has a set of unspecified e!pectations outside of those outlined in the #ob description, contract of employment and person specification. There is an e!pectation for us to act with integrity, be honest, strive for perfection and to uphold the ideology of the organisation. )roblems e!ist when these sets of e!pectations are at variance with one another, or when either the individual or the organisation does not feel that their needs are being met.
#otivating factors

"s individuals, we are all different and we are driven by different desires and wants. 0ome desires are tangible S more money, a better car, a bigger house - while others are intangible S a sense of achievement, a challenge, positive recognition. 6ur needs and desires do not e!ist in a vacuum. They are often interrelated and interdependent. They are also sub#ect to change and refocus. 6ur desires and needs are not fi!ed will change throughout our lives.
$inancial rewards

7inancial rewards are usually decided at an organisational level and are often outside the immediate control of an individual manager. )roblems can e!ist when at an individual level, we compare how much financial reward we get compared to others doing the same type of wor , or wor ing at the same grade. If we feel that they are getting more for the same or less

effort, then we feel a sense of inequity in our situation. This can then impact upon our satisfaction and performance.
A sense of security

&eing in regular permanent wor with a contract of employment and conditions of service is the driving force for many. In some occupations and industries this sense of security can be difficult4 short-term contracts, part-time wor ing and seasonal wor are the norm for certain industry sectors. "gain, these factors are often organisational issues and outside of the direct control of managers.
A sense of belonging

*anagers have a ey role to play ensuring that the team are wor ing well together and that conflict is dealt with.
A sense of achievement

This will mean different things to different people and it is important that managers are aware of how influential they are in cultivating this. &y setting realistic targets, clearly defining their requirements, giving encouragement, praise and recognition, managers can directly influence motivation within their team.
$rustration

7ailure to achieve our needs and desires, because of a barrier, leads to frustration. This barrier can be either real or perceived. 7rustration impacts upon our behaviour and we can act in a positive, constructive manner or in a negative manner. 7actors that influence our frustration include: the level and potency of need4 the degree of attachment to the desired goal4 the strength of motivation4 and the personality characteristics of the individual. )ositive action may include problem solving a solution around the barrier or re-thin ing our desires and goals to ma e them more realistic and achievable. >egative action can include aggression, regressing to childli e behaviour or withdrawing from the situation. DIndividual personalities are further developed in the Iole of the Individual.E DThe ey motivational theories are e!plained in the member pages.E

Teamworking
Teams e!ist within organisations in order to bring together the collective s ills, abilities and creativities of individuals. There are a number of variables which impact upon the success of the team and how close the team feel as a group of individuals. These include:
2ocation and distance

"dvances in communications technologies and the globalisation of the economy, have changed our wor ing practices. *ore people are wor ing from home, wor ing fle!ibly, or

wor ing across the globe. Individuals may not feel that they belong to a team but that they are wor ing in isolation. It is important to consider how these modern wor ing practices can impact upon the cohesiveness and success of the team. 6rganisations need to put systems in place so that the wor force does not feel alienated from one another. This may include regular team meetings where members of the team 'physically' come together and communication structures that enable day-to-day discussion and interaction.
2eader

The style of the leader has a significant impact upon the team. The leader is responsible for bringing together all of the individual s ills and abilities for the collective benefit of the team. The leader must ensure that the team are clear about their roles and responsibilities and deal with any conflicting situations as they arise. The leader must be fair to all the individuals that ma e up the team so that the team will have respect for the leader and feel that all members are treated equally.
#embers

$e are all different with different e!periences, bac grounds and s ills. Therefore, we can all bring different ideas and qualities to the team. " successful team ma es the best of these differences with each member of the team complementing each other. 0ome teams however do not ac nowledge difference and a situation of 'groupthin ' develops where challenges to new ideas are stifled because of in-group pressures to conform. $ithin an organisational setting, it is not surprising that individuals will view their wor , the organisation itself and the people with whom they wor in different ways. It is the role of the leader to manage this diversity and to reconcile the needs and values of the individual with the needs and values of the organisation to encourage creativity and vision and minimise frustration and conflict.
#aturity

Teams develop and grow. The stage of development of the team will therefore impact upon how comfortable the team feel together, how well they now each other and how well they can wor together.
/armony and conflict

7eeling part of a team can be a significant motivating factor for many individuals. $e need to wor in a positive wor ing environment in which issues of conflict and unacceptable behaviour are dealt with. Gowever, if the group is in conflict, the situation can lead to members becoming frustrated and stressed. The role of leader is to ensure that all conflict situations are resolved quic ly and fairly to restore harmony to the group. The leader must ensure that there is a culture of trust and not of conflict, encourage good communications and positive wor ing relationships, and deal with any incidents or bullying, harassment or unacceptable behaviour in-line with the organisation's policies. DThe ey teamwor ing theories are further developed in the *embers )ages.E

#embers" pages section

The *embers' )ages are only available to CQI members:

the difference between a manager and a leader empowerment and stress key motivational theories key leadership theories 1elbin E teamroles team conflict and stress

+eferences
Te1ts

&oddy, (. 8,33:9, Management and Introduction, 7inancial Times )rentice Gall. This is an e!cellent introductory te!t for anyone who is new to management or who wants to develop their nowledge and understanding of management issues. *ullins, B. 8,33@9, Essentials of rganisational Beha!iour, 7inancial Times )rentice Gall. This is a summarised version of the fuller Baurie *ullin te!t S *anagement and 6rganisational &ehaviour. It is an e!cellent reference source for anyone who wants to develop their nowledge and understanding of how organisations behave and the role of the manager in co-ordinating team and individual behaviour.
Websites

www.managers.org.u Chartered *anagement Institute This is a useful website which has free access to a number of research reports on various management issues. www.i-l-m.com Institute of Beadership and *anagement This is a useful website which has free access to a number of articles on a variety of management topics. www.bbc.co.u &&C website. "s well as news, this site include sections on motivation, stress, an!iety, confidence and health. The site has a number of interactive qui<<es to assess individual responses. www.acas.org.u The website for "cas. This website has lots of useful information on managing wor place relationships.

(ole of the individual

This article loo s at the ways in which individuals differ, how to wor with individual differences to enable organisations to reach their goals, and how #obs are defined and designed.

Introduction - The individual within an institutional conte1t

6rganisations are made up of individuals brought together to enable the organisation to achieve its mission. The organisation's structure will determine how these individuals are brought together and how they relate to one another. The success of the organisation is dependent on each individual wor ing together to achieve the common goal. If individuals are pulling in different directions, this will have a detrimental impact upon the organisation achieving its mission. It is the role of the manager to integrate the activities of individuals, ensuring that they are aware of the institution's priorities and that they are wor ing towards them. *anagers achieve this through the authority delegated to them within the organisation's hierarchy. This section of the &ody of Quality /nowledge will outline:

%ays in which individuals differ and the role of the manager in harnessing individual differences within an organisational context <ow individuals are structured within an organisation to enable it to achieve its mission and how authority is legitimised through the structure <ow #obs are defined and designed within an organisation

Individual differences
$e are all different. $e differ in many ways, some of them visual 8age, gender9 some of them non-visual 8personality, abilities9. These differences mean that we often have different values and attitudes on certain issues and individuals will perceive situations in different ways.
.ifferent perspectives

It can be interesting and rewarding to discuss a topic from another point of view and to gain insight into other perspectives. &ut diversity can also be challenging and it can sometimes be difficult to understand things from a different point of reference. 7rom an individual perspective, it is important to understand and appreciate that not everyone will see things or value the things that you do, nor agree with your opinions. Issues of different perspectives and how these influence how we communicate are further discussed in Communications.
(ersonality

$e all have a number of characteristics that influence how we behave. $e classify people by their personality and often tal about them being strong, a good laugh and dependable or shallow, moody and insecure. $e e!pect that people remain constant in their personality and therefore changes in characteristics can be observed. 7or e!ample we tal about someone

acting 'out of character' or 'not being his?herself'. This can often be as a result of frustration or stress. These aspects are developed later in this section. $ithin an organisational conte!t, this stability in characteristics is important. $e would e!pect people to behave in a stable way to ensure continuity in meeting business ob#ectives. "dditionally, certain characteristics will be more suited to a particular #ob than others. $e will have been chosen for our #ob because of certain characteristics we display. 7or e!ample, we would not want to employ a manager who is withdrawn, unable to communicate or ma e decisions. )ersonality can therefore be an important factor in the recruitment and selection process. )ersonality traits required for a #ob will often be outlined in a person specification and our personality will be observed and evaluated through the interview process and may be assessed using psychometric testing. There are two main approaches to the study of personality. 6ne approach, nomothetic, centres on personality as a collection of identifiable and measurable characteristics. This approach identifies personality as consistent, largely inherited and resistant to change. Therefore it is possible to predict the way in which a certain personality type will behave in a certain situation. The other approach, idiographic, centres on personality development as a dynamic process. $e respond to our environment and this influences our personality. Gow we react will depend on the individual so we cannot study and predict how people will behave in certain circumstances. Theoretical perspectives on personality differences and their use in the recruitment and selection process are further developed in the members pages section.
Competency and ability

(ifferent #obs require different abilities, s ills and competencies. $hen we assign someone to a #ob that does not match their abilities, because the #ob is either not sufficiently demanding or too demanding, the result can be frustration and stress for both the individual and their wor colleagues. In a situation where an individual's abilities do not match the requirements of the #ob because they are in some way lac ing, then the individual will feel out of their depth. This has an impact on the individual who feels unable to complete their tas s to the required and e!pected levels of performance. The team will also be affected by the situation. They will often have to ta e on e!tra wor and duties in order to support their colleague. In a situation where an individual's abilities e!ceed those required for the #ob, then the individual may find the #ob too easy and become bored. This leads to a lac of enthusiasm and care for the #ob and a sense of frustration for the individual feeling unable to achieve their potential. "gain this frustration impacts upon the rest of the team and ultimately their performance. Competency, ability and performance management are all further e!panded in )erformance management.

*otivation and frustration are further developed in Beadership, empowerment, motivation and teamwor ing.

+esponses to stress
0tress is a very individual concept and our responses to it can vary considerably. $e all find different situations stressful and we all react to them in a variety of ways. 0ome people are stress victims. They perceive almost every situation in life as a threat and they respond negatively to situations causing them an!iety, anger, self-doubt or frustration. 6thers view situations more positively. They assess situations and channel their energies into a proactive response spurring them on to achieve their goals. 6ur response to stress depends on a balance between how demanding a potentially stressful situation is perceived to be and our ability to cope with it. Too big an imbalance and we will suffer negative stress. This ability to cope with stress is influenced by our outloo on life, our health and our support system which includes friends and relatives. Therefore, a situation that may be stressful to one individual, may be e!hilarating and e!citing to another, and indeed our reactions to stressful situations and how we cope with them varies throughout our life. (ifferent things can cause us stress. These are defined as stressors and include:

Lifestyle stressors. $hings that happen in our day-to-day life can cause us stress. $hese can include family relationship difficulties, money worries, constantly sitting in traffic #ams or standing in a long queue at the bank. 4ven seemingly insignificant lifestyle stressors can build up over time and cause stress. Thought stressors. $he way we think about things influences our ability to cope with stress. *eelings of inadequacy, constantly striving for perfection and a disposition to worry all impact on our thought processes and how we perceive and cope with stress. Body stressors. $he state of our physical condition has an impact on how able we are to cope with stress. %hen our physical defences are weakened, we are more vulnerable to the physical impacts of stress. Work stressors. 9ur working environment, attitude to work, the type of #ob we do and how 'happy' we are in our work all impact on our stress levels. Change stressors. (hanges in our circumstances also cause us stress. 6etting a new #ob, finding a new partner, getting divorced, having children, the death of a friend or relative. 2ome can cope with these changes better than others. <owever, when we have to deal with a number of changes within a short period of time, this puts a strain on us and can make us vulnerable both physically and emotionally.

0tress impacts on us in a number of ways and can show as:

physical signs such as headaches, backache, stomach problems, allergies psychological signs such as impatience, anger, frustration, difficulty sleeping behaviour changes including taking time off work, avoiding situations or being with certain people, eating'drinking'smoking more or less than usual

0tress in the wor place is now a significant factor impacting upon individual, team and organisational performance. It is therefore important that as individuals we are aware of the things that cause us stress and how we react. It is also important that managers are aware of the sources of wor place stress and the measures they can put in place to alleviate wor place stress. 7actors impacting upon wor place stress are further developed in the members pages section.
#anaging individual differences

$ithin an organisational setting, it is not surprising that individuals will view their wor , the organisation itself and the people they wor with in different ways. It is the role of the manager to manage this diversity and to reconcile the needs and values of the individual with the needs and values of the organisation to encourage creativity and vision and minimise frustration and conflict. Beadership and management are further developed in Beadership, empowerment, motivation and teamwor ing.

Individual authority' responsibility and accountability4

*rganisational structure

6rganisations co-ordinate and control the activities of individuals through an organisational structure. This structure influences the #obs that people do, the roles they perform, how information flows through the organisation, how different #obs relate to one another and who has authority within the organisation. Two important aspects of structure are span of control and chain of command.
%pan of control

The span of control refers to the number of subordinates who directly report to a single manager and for whose wor that manager is responsible. If the span is too broad then the manager will have too many subordinates reporting directly to him?her ma ing it difficult for the manager to co-ordinate their efforts effectively. If the span of control is too narrow, then subordinates may feel that there is too much direct involvement and contact with their manager.
Chain of command

This is the number of different levels of authority to be found in an organisation - the organisation's hierarchy. "n organisational hierarchy with few levels is considered a 'flat' structure and one with many levels is considered a 'tall' structure.
Authority

"uthority is the legitimate right to direct and control the actions of others. $ithin an organisation, authority is delegated to positions within the organisational structure. "uthority flows from the top of the structure to the bottom with subordinates at each level accepting and complying with requests because they understand that the authority holder has a

legitimate right to e!ercise this authority. "uthority therefore, travels down the chain of command with those at the top of the chain having more authority than managers below them. 7or this reason, lower level managers will have to request permission from managers further up the chain to perform certain actions.
+esponsibility

Iesponsibility is the obligation placed on us within the organisational structure to perform a specific tas , function or assignment. +ach position within an organisation will have assigned responsibilities and it is the duty of the position holder to discharge these responsibilities satisfactorily. *anagers also ta e on the responsibilities of their subordinates.
Accountability

+ach level of subordinates within the hierarchy has an obligation to feedbac truthfully to their managers on the discharge of their responsibilities. $e are accountable for performing our duties satisfactorily within the scope of our responsibilities. *anagers are ultimately accountable for the performance of their subordinates.
+ole

$e all ta e on a number of different roles. 0ome of these are personal and others are wor related. $ithin each of these roles, we interact with a number of different people. This is nown as our 'role-set'. 6ur role-set will have a number of e!pectations about how we should behave, what we should do, what rights we have and how much authority we have. In addition, we also have a self-perception about the same e!pectations based on our values, our beliefs and our e!periences. Bet us ta e the e!ample of a female quality manager within an organisation. 0he would ta e on a number of wor -related roles such as pro#ect manager, company ambassador, administrator, figurehead for the quality department and line manager. $ithin each of these roles she would interact with a number of others such as customers, suppliers, subordinates, directors and other departments. These are her role-set and each of these will have e!pectations about how she performs her role. 7or e!ample, as a senior manager within the organisation's hierarchy, she would be e!pected to ma e decisions, be organised, lead by e!ample and have integrity. 0he would also have a self-perception of how she is e!pected to behave. In addition to this she will assume a number of personal roles such as parent, child, sibling and friend. Iole conflict occurs when our actual situation and behaviour is not consistent with either our or our role-set's e!pected behaviour and this can lead to role stress. Asing the e!ample above, this could occur when the quality manager cannot carry out all of the roles effectively because she has too many roles, she finds that she cannot meet everyone's e!pectations because they are so different, or because the role turns out to be not as she had e!pected. These concepts are further developed in the members pages section. 0ources of power and how we react to power are further developed in the members pages section. Issues of role conflict are further developed in the members pages section.

8ob design
.efining 5obs

In order for an organisation to operate and function effectively, there are a number of tas s that the organisation needs to perform. It needs to produce, sell, manage its human resources and comply with legislation. These ey tas s can be bro en down into a number of sub-tas s that can then be allocated to individual #obs and the #ob allocated to a position within the organisational hierarchy. This process generally results in the production of a #ob description. The specialisation of wor tas s and their division into #obs will be dependent on the si<e and the nature of the organisation.
8ob description

Job descriptions outline the purpose, scope, responsibilities and tas s for a specified #ob. The level of detail required for a #ob description is a question of balance. 6n the one hand, there is an argument for a vague and fluid #ob description that allows the #obholder to develop the #ob as required. 6n the other hand, it is important that the #obholder is clear about their responsibilities and therefore the #ob description needs to be detailed.
(erson specification

6rganisations will usually outline the abilities and s ills they require for a particular #ob by producing a person specification. There are a number of different formats for person specifications but usually they will outline the qualifications, e!perience, personal attributes and disposition required for a particular #ob. This is usually split between essential characteristics and desirable characteristics. Candidates can then be ob#ectively measured against this specification with the most suitable candidates being invited for interview. 0ome professions specify the s ills, abilities and competencies required for certain occupations in a competency framewor against which occupations can be measured. *any professional bodies also specify a competency framewor against which they can measure their members.
8ob design and the organisation

Job design is important for both the organisation and the individual. 7rom an organisational perspective, it is important that all #obs are designed in an efficient and effective way. This will ensure that the organisation is getting optimum performance from its wor force. There are a number of factors to consider in #ob design:

Does the jo fit in with the rest of the organisation! 9verlaps in #ob design or gaps in design can lead to conflict and confusion within an organisation. If there is overlap, then conflict will occur between #obholders. $his is also not an efficient use of the organisation's resources. 6aps in design will lead to key tasks not being fully achieved and will impact on the organisation's performance and reputation. Is the jo sufficiently demanding! If a #ob is routine and boring with little challenge or opportunity to develop, it is unlikely that the #obholder will feel fulfilled in such a

role. $his may lead to feelings of frustration and stress. It is important that #ob designers consider the nature and variety of the #ob.

Is the jo too demanding! At the design stage, it is important that the amount of work being required is considered. It is also important to consider the position within the hierarchy. If a #ob is too demanding then the #obholder may not be able to cope with the amount of work and will suffer frustration and stress. Does the jo holder ha"e sufficient control o"er what they do! 5ack of control is a key workplace stressor. It is important that we have some control over the work that we do.

8ob design and the individual

7rom an individual perspective, the way in which #obs are designed impacts upon how satisfied the #obholder will feel with the wor that they do and also how motivated they are to achieve their full potential. Individuals also need to consider if there is a match between the #ob and the individual's lifestyle. $ith the introduction of fle!ible wor ing practices, more and more organisations and individuals are considering how #obs are designed and how wellmatched the #ob is with the individual and their circumstances. 7le!ible wor ing and wor life balance are further developed in the members' pages section.

(rofessional institutes
)rofessional bodies play an important role in society in developing their individual members, providing support for organisations and in developing the s ills of the sector they represent.
The individual

)rofessional bodies promote the lifelong development of their members by helping to eep members up to date with changes and developments in their specialised field and encouraging nowledge transfer and the e!change of ideas through education, training and networ ing. Individuals also benefit from the social networ ing and the feeling of belonging to a specialist 'club'.
The organisation

*embers of professional bodies adhere to a code of professional practice that sets standards of conduct, integrity and competence. 7rom an organisational perspective, specifying membership of a relevant professional body as part of the recruitment process, can give the organisation an ob#ective measure against which to 'measure' candidates. *embers will have a certain standard of nowledge and competence and will act with integrity. 6rganisations can also promote membership of professional bodies to ensure their wor force is up to date with the latest developments in their specialist fields.
Industry sector

)rofessional bodies ma e a contribution to the development of >ational 6ccupational 0tandards in their area of wor . They promote the professionalism of the sector and influence employers and policy decision ma ers in the sector.

The benefits of membership of the CQI are outlined here: http:??www.thecqi.org?membership?

$urther developments in the members pages section

The members pages section of the &ody of /nowledge is only available to members of the CQI. This section further e!pands on the following:

theoretical perspectives on personality and how personality is assessed through the recruitment and selection process sources of workplace stress sources of organisational power and reactions to power role conflict flexible working practices and the work'life balance debate

+eferences

I have selected a number of te!ts and websites that I feel will give useful and additional information on the topics outlined in this section.

Te1ts
&oddy, ( 8,33:9 Management an Introduction, 7inancial Times )rentice Gall. This is an e!cellent introductory te!t for anyone who is new to management or who wants to develop their nowledge and understanding of management issues. *ullins, B 8,33@9 Essentials of rganisational Beha!iour, 7inancial Times )rentice Gall. This is a summarised version of the fuller Baurie *ullin te!t - Management and rganisational Beha!iour. This is an e!cellent reference source for anyone who wants to develop their nowledge and understanding of how organisations behave and the role of the manager in co-ordinating team and individual behaviour. >eedham, " 8,33,9 "tress Management #it, +ddison 0add +ditions Btd. This is a useful stress reference boo and rela!ation tape for those who want to learn more about managing stress.
Websites

www.managers.org.u The website of the Chartered *anagement Institute This is a useful website which has free access to a number of research reports on various management issues. www.i-l-m.com The website for the Institute of Beadership and *anagement This is a useful website which has free access to a number of articles on a variety of management topics.

www.bbc.co.u The &&C website. This site includes sections on motivation, stress, an!iety, confidence and health. It also has a number of interactive qui<<es to assess individual responses. www.eoc.org.u The website of the +qual 6pportunities Commission. This is a very useful website for chec ing out the legislation regarding wor place diversity. It also has some useful free downloadable resources.

)erformance management
The art of management is achieving e!traordinary results through the use of ordinary people. There are #ust too few e!traordinary people to go round to rely on attracting them all into your organisation.

What is performance management

In simple terms, performance management is the achievement of performance targets through the effective management of people and the environment in which they operate. )erformance management permeates the organisation. It is integral part of every business process rather than being a separate process as it is activated wherever targets are set and resources allocated for their achievement. )erformance management is both a strategic issue and a tactical issue. "t the strategic level it is concerned with setting achievable goals for the organisation and developing the competence and capability to achieve these goals. 7or if the goals are not matched to the organisation's capability, no amount of employee ca#oling will achieve them. "t the tactical level it means creating an environment in which people are motivated to e!cel and e!ercise their talents. It involves managing relationships, monitoring and reviewing performance, ta ing action to improve it and finding better ways of getting the best out of people. *anagers have to be able to handle the tactical issues without ta ing their eye away from the strategic issues and vice versa. 8*ore on this in the members pages.9 "s declared by the CI)( at http:??www.cipd.co.u ?sub#ects?perfmangmt?general?perfman.htm performance management is a process and not an event. )erformance management is not another term for personal appraisal. It is a process that brings together and manages all the factors that affect performance, treating the individual as a vital component but not the only component in a multifaceted aspect of management.

What are the key elements of performance management

"s with any process the ey elements are:

the level of performance to be achieved the competences needed to achieve this level of performance the activities and resources needed to motivate and empower people the monitoring and review mechanisms that measure performance and compare results with targets the measures taken to improve performance and attain best practice the measures taken to ensure the planned targets and competences are the right ones for the organisation and its stakeholders

What are the key characteristics of effective performance targets

The level of performance

)erformance itself is a variable. )erformance can be poor, average, good, or e!cellent but these are sub#ective terms. $e need to now what we mean by poor, average, good, or e!cellent especially if we intend comparing the performance of one individual, one group or one organisation with another with a view to reward or penalty. The level of performance required is often referred to as a target. " target is the criteria that will indicate whether performance is acceptable for a particular quality characteristic. If a process ob#ective is 'on-time delivery' the target might be '11R of all deliveries to be complete within : days of acceptance of order'. Bi ewise, if the ob#ective is to grow the number of customers the target might be as simple as 'measurable growth in ey account spending' 8note that it is not simply the number of customers9.
.istinguishing targets from aims' goals and ob5ectives

0ometimes the terms target, aim, goal and ob#ective are treated as though their meaning is identical. They are synonyms but in the conte!t of management they have acquired distinguishing characteristics. The term goal tends to be used to e!press an intended destination for an organisation and may encompass its vision, mission and business ob#ectives. The term aim can be used to e!press a direction for something so whereas the goal is the destination, the aim signals the direction ta en to get there but this is not always the case as evident here http:??www.hm-treasury.gov.u ?strategicKob#ectives.htm The aim of an organisation may be an e!pression of its function or role or indeed its mission. 5oals, ob#ectives and targets can therefore have aims. They also have a purpose ie the reason why they have been established, set or defined. The term ob#ective can be used to e!press anything that is to be achieved at any level in an organisation. It is therefore more of a generic term and can used in reference to a vision, mission, strategy, goal, target or indeed a tas or activity although when used so hapha<ardly, it leads to confusion as to what is really required. $e tend to label what an organisation wishes to achieve as a goal, whereas we use the term ob#ective for what an individual or process is required to achieve. $hen we treat an activity or tas as an ob#ective, we can lose sight of its intent S the outcome the activity or tas is supposed to produce. In the e!ample here http:??www.glam.lon.ac.u ?about?aimsKob#ectives.shtml the ob#ectives read more li e a list of actions than outcomes. In the e!ample from G* Treasury above, the ob#ectives are e!pressed as outcomes. The term target can be used to e!press what is aimed at.

3ey factors in setting performance targets

0ome of the ey factors in setting performance targets are as follows:

$argets should be expressed in a manner that establishes a clear focus for all actions and decisions $argets should be traceable to and consistent with organisational goals thus enabling the degree of achievement to be measured relative to stakeholder satisfaction. $argets should be agreed by those teams whose performance will be measured against them $argets should be set for process outputs rather than individual performance so as to encourage team effort and avoid isolating individuals $argets should always be focused on purpose rather than activity as in the example aboveO. growth in number of customers is an activity-focused target whereas, growth in spending is a purpose-focused target!

Through the chain of measures from corporate ob#ectives to component dimensions there should be a soundly based relationship between targets, measures, ob#ectives and the purpose of the organisation, process or product. 8Gence the purpose of the organisation would not be to have a large number of customers regardless of the revenue they bring in9
%etting targets

" realistic method for setting targets is to monitor what a process currently achieves, observe the variation, then set a target that on an ;3:,3 basis the process can deliver. +ach process has a capability that produces results somewhere in the range between 'all output fails to meet requirements' to 'all output meets requirements'. 6nce a process is under control, ie common cause variation has been removed, targets can be set. 0etting a target does not change process capability, it merely serves to establish an acceptable level of performance that is attainable when the process runs as planned. There is clearly no point in setting a target well above current performance unless the managers are prepared to redesign the whole process. (eming writes in 6ut of the Crisis on the -3th of his -C points 8or principles of transformation9 that we should eliminate targets for the wor force that urge them to increase productivity. This is often paraphrased as simply 'eliminate targets' when that was not what (eming meant. Ge was only advocating the abolition of management by ob#ectives in unstable systems. Ge was saying that before setting targets, ma e sure the process is capable of achieving the target. Targets imposed on wor ers in an unstable system are imposed on the wrong people. It is good practice to manage by ob#ectives in a stable system as it avoids management interference and encourages empowerment. "n obsession with numbers tends to drive managers into setting targets for things that the individual is powerless to control. " manager may count the number of designs that an engineer completes over a period. The number is a fact, but to ma e a decision about that person's performance on the basis of this fact is foolish, the engineer has no control over the

number of designs completed and even if she did, it tells us nothing about the quality of the designs. +ach design is different so the time to complete each one varies.
7se of targets

"greed targets should be used as a basis for reviewing results otherwise the review becomes sub#ective and emotional. Targets don't motivate people to achieve them. Fou can raise the bar as high as an elephant's eye, but if the conditions aren't conducive to getting the best out of people, the staff won't be motivated to #ump over the bar. It is not uncommon for managers to command their staff to meet targets that have been set on the spot in an attempt to eep them wor ing hard. The manager who tells an employee to get a report on his des by 1:33am, then fails to arrive at wor the following morning due to a previous appointment, is setting false targets. "nother e!ample is the A/ government imposing targets on waiting lists in the >G0 in reaction to public pressure. This diverted resources with the result that the overall outcome was not improved. $aiting times for operations may well have been cut but the time the patient remained in the process was unacceptable even with operation waiting times reduced to <ero. This is setting targets based on activities not on outcomes. "n interesting debate on performance measurement between Iobert /aplan 8pioneer of the balanced scorecard9 and Thomas Johnson professor of quality management at )ortland 0tate Aniversity in 6regon is reported by "rt /leiner at http:??www.well.com?user?art?s R,&b-,33,.html
Challenging the targets

0tandards are targets to aim for but are also targets to change. If an organisation had not managed to lower its product defect rate below ,R for many years, ,R defective becomes the norm and is built into budgets and estimates. Quality improvement ta es place when the standard is challenged and a new level of performance achieved.

What is meant by competence

The quality of process outputs is directly proportional to the competence of the people, including their behaviour, and is also directly proportional to the capability of the equipment used by these people. Therefore there is a dependency between competence and capability. "lthough it is often said that a poor wor man blames his own tools, it is on the basis that the wor man had freedom to choose the right tools for the #ob. Competence is the demonstrated ability to achieve the desired results. &ehaviours are embraced by the word 'ability' thus recognising that two equally qualified individuals may have the same s ills and nowledge but by the manner in which they behave towards their fellow man, they achieve quite different results.

In contrast I06 1333 defines competence as 'the demonstrated ability to apply nowledge and s ills'. Gowever, the wea ness with this definition is that the frame of reference is not present as there is no reference to the results required for the #ob. " person may have the required nowledge and technical s ill but remain not competent:

due to exhibiting inappropriate behaviours the expert who knows everything but whose interpersonal skills cause friction with staff to such an extent that it adversely affects team productivity! due to a temporary loss of physical or mental ability the footballer who cannot play because of a leg in#uryO the musician who suffers epilepsy!

Anfortunately the terms competent and incompetent produce an emotional reaction unli e the terms qualified and unqualified. To be unqualified is generally not disparaging but the term incompetent tends to belittle anyone regardless of their true abilities. Consequently the term competence is not always used in its correct conte!t. The following e!pressions serve to place the term competence in conte!t so as to overcome differences in meaning and thus distinguish competence from other measures of ability. " competent person demonstrates the s ills, behaviours, attributes and qualifications to the level required for the #ob.

(ompetence is more than a list of attributes. A person may claim to have certain ability but proof of competence is only demonstrated if the desired outcomes are achieved. $herefore competence is concerned with outcomes rather than attributed abilities (ompetence is an ability to meet standards that apply in the particular #ob, not #ust specific tasks and not in a classroom or examination but in the real working environment with all the associated variations, pressures, relationships and conflicts. (ompetence unlike qualification, is not a probability of success in the execution of one's #obO it is a real and demonstrated capability. $herefore academically qualified personnel may not be able to deliver the desired results

/ow do terms like skilled' qualified' competence and performance differ

$ords li e s illed, qualified and competent are often used to e!press a level of performance as though they each have the same meaning. &ut s illed and qualified, qualified and competent, and performance and competence are not the same. $hen you underta e a course of study for a particular #ob, acquire the necessary nowledge and pass an e!amination at the end of the course, you may be considered qualified. Gowever, only applying the nowledge gained in a classroom suggests you would not be s illed. "fter applying the nowledge for some time you are able to produce useful outputs and can therefore be said to have acquired the s ills needed to underta e a particular #ob. Fou can now design widgets, machine precision components, manage a team or play football. Gowever, the level and quality of the output may be far less than required to be left unsupervised so performance may remain low to average.

"fter underta ing further coaching and development you reach a level of ability to achieve certain results. This we call competence. 7or as long as you are able to deliver the required results, you can be classed as being competent. 0o there is a progression of ability starting with an inability to do something and ending with being competent to achieve e!pected results in doing something. "long the way we can e!press an individual's current achievement in terms of performance. $hatever the nowledge, qualifications, s ills or competences of a person, we can #udge their performance. Therefore nowledge, qualification, s ill and competence are attributes an individual possesses whereas performance is what an individual currently achieves as a result of possessing such attributes. "n e!ample may help clarify the concepts. Joe can play football. This is a s ill he has acquired through education and training but it does not mean he is a qualified or competent footballer. Ge performs well in the local team. Joe's potential is spotted by a football scout who as s if he would li e to be considered for selection to the City Team. Ge passes the trials and thus becomes a qualified footballer but has not yet demonstrated any particular competences. Through effective coaching he develops a particular ability to score goals and becomes the team's top player and thus attains a specific competence in football. 6ther players possess different competences. If he scores many goals he delivers an e!cellent performance. If he scores few goals he delivers a poor performance but is still a competent footballer. 6n one occasion he in#ures his nee and cannot play for two months and thus is no longer competent. Joe is still a qualified and s illed footballer but temporarily cannot demonstrate his s ills. If he scores no goals but ma e several attempts to score he is no longer competent but is still a s illed footballer.
What strategies can be used to develop competence

$hen assigning responsibility to people we often e!pect that they will determine what is needed to produce a good result and perform the #ob right first time. $e are often disappointed. 0ometimes it is our fault because we did not adequately e!plain what we wanted or more li ely, we failed to select a person that was competent to do the #ob. $e naturally assumed that because the person had a college degree, had been trained in the #ob and had spent the last , years in the post, that they would be competent. &ut we would be mista en, primarily because we had not determined the necessary competence for the #ob and assessed whether the person had reached that level of competence. 0hirley 7letcher provides useful guidance in developing a suitable strategy by as ing some pertinent questions:

what must be achieved& ie the results or outcome required what must be done for this to be achieved& ie the units of competence how well must this be achieved& ie the performance criteria or standards to be achieved how should assessment be conducted& ie the assessment method what evidence should be collected& ie the evidence requirement

what methods will be used to bridge the competence gap& ie the formal and informal training and development programmes how will we guide employees from the state of not yet competent to competent& ie the tutors, mentors and coaches

Two distinct competence-based systems have emerged. The &ritish model focuses on standards of occupational performance and the A0 model focuses on competency development. In the A/ the standards reflect the outcomes of wor place performance. In the A0, the standards reflect the personal attributes of individuals who have been recognised as e!cellent performers, but what individuals achieved in the past is not necessarily an indication of what they will achieve in the future as their physical and mental abilities change. *ethods of setting standards of competence and their evaluation have only been developed over the last -: years or so. It was believed that education, training and e!perience were enough, but the recent cases of malpractice particularly in the medical profession have caused the various health authorities to loo again at clinical competence. 7urther information is also available here http:??www.cipd.co.u ?sub#ects?perfmangmt?competnces?comptfrmw .htm +mployee development and competence development is basically the same thing. $hatever education, training and coaching is given as part of an employee development programme it should be done for one purpose, that of producing a desired level of competence. "ny education, training and coaching underta en outside a formal competence development programme is futile and a waste of resources. If the action is not intended to improve the individual's ability to deliver the desired results, it serves no useful purpose. Gowever, this does not rule out training or study in a sub#ect outside the present role. This may be the first steps to developing a new competence that will be further developed later in a different role.

What strategies can be used to motivate and empower people

$actors affecting human performance ndividual level

The performance of a tas is almost always a function of three factors:

environment ability motivation

To ma!imise the performance of a tas , personnel need not only to have the necessary ability or competence to perform it but also need to be in the right surroundings and have the motivation to perform it. *otivation comes from within. " manager cannot alter employees at will despite what they may believe is possible. 87or more info on motivation see Beadership, empowerment, motivation and teamwor ing9.

,eam level

"t the team level, the factors affecting performance are similar to those affecting the individual. " poor environment can affect all team members equally and conditions may be such that the whole team become demotiovated. In fact demotivation can spread li e a disease if the sensitive one complains a lot and convinces the others of the cause. Gowever, there is one additional factor for team performance and that is synergy. " team has the capacity to produce results that far e!ceed those of separate individuals if the members all get along together and complement each others s ills and nowledge, and share their e!periences. 8*ore info on team building in Beadership, empowerment, motivation and teamwor ing9.
%rganisational level

"t the organisation level, the factors affecting performance are similar to those affecting the individual and a team but the influences and impact are much greater. The environment in this case is not so much the surroundings within the organisation but the e!ternal environment. The ability is not so much individual or team ability as the capability of the whole organisation. " shortage of ey competences will be detrimental to performance perhaps resulting in staff wor ing more hours or multi-tas ing, consequently ma ing mista es and becoming demotivated. *otivation of the whole organisation requires s ilful leadership in setting goals, developing an effective strategy and acquiring the necessary resources to achieve those goals and the creation of an environment in which the whole wor force will be motivated to achieve these goals. 8*ore info on team building in Beadership, empowerment, motivation and teamwor ing9
The importance of the front line manager-supervisor

*anagers are often accused of ignoring the human factors of the wor place but such factors are not easily identified or managed. $ith physical factors you can measure the light level and ad#ust it if it's too bright or too dim. Fou can't measure ethics, culture, climate, occupational stress - all you see are its effects and the primary effect is employee motivation.
#otivation

*otivation comes from:

understanding an individual's pattern of personal needs and expectations then satisfying them recognising and appreciating the effort made by people and including them in discussions recognising that results often arise from a team effort and rewarding that effort accordingly rather than specific individuals satisfying employees desire for psychological rewards from the work experience

6mpowerment

+mpowerment is said to motivate employees because it offers a way of obtaining higher level of performance without the use of strict supervision. Gowever, it is more theory and rhetoric than a reality according to Iollinson and +dwards. To empower employees, managers not only have to delegate authority but to release resources for employees to use as they see fit and to trust their employees to use the resources wisely. If you are going to empower your employees, remember that you must be willing to cede some of your authority but also as you remain responsible for their performance, you must ensure your employees are able to handle their new authority. 87or more information on empowerment see Beadership, empowerment, motivation and teamwor ing9.

What are the key factors in measuring performance

7or many years line managers treated the annual staff appraisals as a chore, conducted simply to satisfy the personnel department. They often too the form of a meeting between the manager and a member of his staff where there would be praise for #obs well done, reprimands for #obs not done or not done well and a possible future course outlined. This often resulted in the manager requiring some remedial action by the individual concerned with a plan to develop s ills and nowledge for the individual to progress up the promotion ladder. "fter the appraisal, life continued as usual. The results were not supposed to be lin ed to pay but it was difficult to separate the two in the mind of the individual. The development plans were not always carried through, being abandoned as changing circumstances brought in higher priorities. Bittle account was ta en of the environment in which the individual wor ed or any adverse influence the manager may have had. It was often one sided and therefore did not address the real factors that affected the ability of the organisation to achieve performance targets or the factors that affected performance of the individual. These defects led to a more rounded concept of performance management 8see http:??www.cipd.co.u ?sub#ects?perfmangmt?general?perfman.htm9 The integrity of the performance measurement depends on the method of measurement. If crude measurement methods are used such as gut feel, perceptions or hearsay evidence, the results will be suspect. Iesults need to be obtained using soundly based measurement methods that e!tract facts from the process. 0ome thought needs to go into:

installing sensors at an appropriate point to measure the prescribed aspect of performance taking measurements at predetermined intervals collecting data pertinent to the aspect of performance measured transmitting the data to appropriate locations for analysis analysing data to reveal meaningful information presenting the results to the decision makers in a format that displays with the required accuracy and precision a true measure of performance relative to the desired results

These aspects are fundamental to all measurement and apply equally to measurements of individual performance. In additional, as with all measurement, there will be variation in measurement due to bias, repeatability, reproducibility, stability and linearity. 87or more information see D*easurement, assessment, monitoring and controlE9. In measuring individual performance there are some ey factors that need to be ta en into account:

derivation of the measures alignment between the ob#ectives of the individual and those of the team alignment between the priorities of the individual and those of the team awareness of key drivers, dependencies and barriers in delivering required results awareness of the adages, 'what gets measured gets managed' and 'you can't manage what you don't measure' stability E not changing the measures after commencing performance measurement awareness of the phenomena that you can't measure something without affecting in some way what you are measuring

*ore information can be found on the Cranfield Aniversity site.

What are the key factors in reviewing and improving performance

There are several factors that influence the effectiveness of performance measurement, review and improvement:

3iscriminating between performance measurement and personal criticism, the former being about work done not about apportioning blame 2eparating review from control 2eparating development planning and performance review 2eparating personal ob#ectives from organisational ob#ectives Agreement on the ob#ectives and measures of success before reviewing performance $he efficacy of the approach and tools used to measure performance $he validity of the criteria used to collect the evidence 1ias between the reviewer and the sub#ect 9b#ectivity in the reporting mechanisms 9penness in the review process (oaching for getting the best out of people www.mattsomers.com

/ow do individual goals relate to corporate goals

The question whether targets are still valid is important, so we as : 'Gow do we now this is the right thing to do%' >ew targets have to be planned targets as e!ceeding targets sporadically is a symptom of out-of-control situations. Targets need to be derived from the organisation's goals but as these change the targets may become disconnected. Targets that were once suitable become obsolete and we need to as : '"re these targets still relevant to the sta eholder needs%'

+elated articles
To what is it related 2takeholders (ommunication /ole of the individual 5eadership, empowerment, motivation and teamworking 2pecifying, designing and developing processes, products and services 0roblem diagnosis and improvement tools ,anagement system standards 4xcellence models and awards 2trategic management (orporate governance ,anagement systems Impact of corporate strategy on people How is it related 0ersonnel are stakeholders who are the sub#ect of performance management $his is key to managing the performance of human resources effectively $his is key to managing the performance of human resources effectively $his is key to managing the performance of human resources effectively $his applies to the process by which performance is managed $his applies to the process by which performance is managed $hese apply to the process by which performance is managed $he criteria embedded in these models is applied in the process by which performance is managed $his sets policy governing the process by which performance is managed $his sets policy governing the process by which performance is managed $he process by which performance is managed is part of this $his is cascaded down through the process by which performance is managed

+eferences
*anaging )erformance *anagement in "ction *ichael "rmstrong and "ngela &aron

Competence &ased "ssessment 0hirley 7letcher $or and *otivation .G .room 6rganisational &ehaviour and "nalysis ( Iollinson and ( +dwards )erformance *anagement and "ppraisal Terry 5illen http:??www.cipd.co.u ?&oo store?Kcatalogue?GI)ractice?-;C=1;-23V.htm The performance prism "ndy >eely and Chris "dams http:??www.som.cranfield.ac.u ?som?research?centres?cbp?products?prism.asp +ffects of an 6rganisational Control 0ystem on *anagerial 0atisfaction and )erformance John C. "nderson Charles ". 6'Ieilly, III -1;- the Tavistoc Institute http:??hum.sagepub.com?cgi?content?abstract?=C?@?C1-

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Corporate strategy
This section of the &ody of /nowledge loo s at corporate strategy, and its impact on sta eholders within and without the organisation, and across the world. 0ub#ects include: 0trategic management .ision, values and mission4 business environment4 quality planning within the corporate strategy4 goals, ob#ectives and principles4 customer focus strategy4 business plans4 sta eholder concerns. Corporate governance 5overnance structures and accountability4 ethics4 "5*s4 audits4 management reviews4 committees and reporting structures4 corporate citi<enship. +lements of corporate strategy Corporate structure4 operational processes and systems4 learning from success and failure4 managing introduction of new technology4 assessment and management of ris 4 managing corporate business change4 initiative fatigue. *anagement systems (esigning, installing and maintaining management systems to meet organisational needs4 application of management system models4 integrated management systems 8holistic approach9: quality, environment, health W safety, finance, human resources, IT, data protection, nowledge management. Impact of corporate strategy on people (ifferent management styles4 different corporate cultures4 quality of wor ing life4 involvement of the whole wor force4 performance management.

*anaging quality across the 8global9 organisation, its sta eholders, suppliers and customers 5lobal considerations4 impact of different cultures4 international partnerships4 wor ing relationships with 8global9 sta eholders, suppliers and customers4 global communication. Quality in its total business concept *odels and value chains4 sustaining the quality drive4 contribution from supporting functions4 corporate vs. departmental management4 departmental vs. process management4 business process change4 decision ma ing4 benchmar ing4 fitness for purpose4 future quality developments.

*trategic management
Why organisations e1ist
The management of business strategy is not the same to all people and one obvious ey influence on this is the nature of the organisation. Traditionally, most organisations could simply have being placed in one of these categories:

not-for-profit commercial governmental

Gowever, as the business environment became more comple!, we now find some governmental organisations with revenue targets, commercial organisations setting up welfare foundations and not-for-profit organisations operating with slic commercial operations. The reasons a commercial organisation might have a not-for-profit foundation as part of its corporate structure are e!plored in the members' section. In general however, we can differentiate the three as follows:
#ector 0rivate 0ublic $wners 2hareholders 9wned'funded by government %ur&ose %ealth-creation +ational'local'public well-being *ocused on particular cause'issue'sector

+on-for-profit 7oluntary trust

The approaches and methodologies discussed in this article were conceived for the private sector but aspects can be ad#usted if desired to suit the variations in the other two sectors. Commercial organisations invariably start out with one or two individuals, perhaps college friends, wor colleagues or family members, getting together. In the A/, family-run businesses comprise over 2:R of all businesses and employ in e!cess of :3R of the A/ wor force. Gowever, less that ,:R survive to the second generation and less than -:R to the third.

What causes this decline

0uccession planning is one of the ey success factors of a family-owned business, and one that is often hoped for by the founder but not the descendants. &y the third generation, many companies have either folded or been ta en over. This is most commonly seen when a s illed trade is involved such as pottery, #ewellery ma ing or farming. The problem here is loss of 8or lac of9 shared values.

0alues
.alues are principles or standards that are considered worthwhile or desirable. .alues can be seen as what we thin , and when applied, the way we behave. In an organisation, the values often drive the mission 8and therefore S almost everything else9, so it is important the management team have shared, or common values. 6ne category of organisation where the original values were propagated down the generations is Qua er companies. These were founded on Qua er principles and had strong moral ethics both towards customers and employees, unique in the -;th century when wor houses were the norm. "ll of the following organisations were founded on Qua er principles: Cadbury's, Iowntree *ac intosh, J0 7ry and 0ons, Terry's, &arclay's, 7riends )rovident, Clar s, "mnesty International, &ryant and *ay, Guntley and )almers, BloydsT0&, 6!fam. Interestingly, the Qua er 6ats Company 8now a division of )epsico9 is not a Qua er company. It never had a connection with the Qua ers, but simply chose its name because Qua ers have a reputation for honesty.

%urvival is not compulsory

There is no law to say organisations, governments or even nations must continue indefinitely. The heading of this paragraph, a quotation from Genry 7ord, is a simple reminder that it ta es real effort to ensure business continuity. 0o what ma es an organisation want to survive into the future% The answer is something a in to the animal survival instinct. "nd it is the owners, directors or senior management of a company that need this trait.

%ome basic definitions

" lot of valuable management time is wasted arguing the difference between vision, mission, targets, plans or ob#ectives, and different organisations use different words to describe the same thing. Iather than list several different definitions of each, here is one simple list that can be built upon and adapted by the reader:
7alues $he way the organisation behaves, either derived from the founder or agreed collectively by top management. 7ision

An organisation's vision is the concept of a new and desirable future reality based on its values E what it wants to become known for or become. ,ission 0ut simply, the mission is the purpose for which the organisation exists. 2trategy $his is the roadmap of the #ourney detailing how the organisation will achieve the above. 2everal strategies might co-existO for example, in the home market there might be one to maximise returns and maintain income whilst in a newly opened market there might be one to work up to a top three position by sales within five years. 9b#ectives $hese are quantifiable milestones to aim for, enabling outputs and progress to be measured. $hey are often grouped into short, medium and long-term periods such as >, I and G years.

What is strategic management

It is to do with ma ing decisions about the future direction of the organisation and then putting them into action. There are two main aspects:
%trategic planning

This is absolutely vital, whether we are considering a sole trader or a multinational company. " simple way of loo ing at it in the planning stage is by as ing three basic questions:

where are we now& where are we going how are we going to get there&

%trategic implementation

This involves developing the appropriate organisational structure and processes that can realise the strategy, and then monitoring the progress and effectiveness of the action plans.

Where are we now

6ften called situation appraisal, it is a snap-shot of the organisation from two aspects:
61ternal

This comprises an appraisal of the environment that the organisation is either operating within at present or in the future 8care must be ta en not to mi! these up9. There are several models and tools that can be employed such as force-field analysis, )+0T analysis or competitive benchmar ing etc 8see the members section for more details of these9. "s well as

the general environment, it is useful to perform competitor analysis, possibly for each and every ey competitor. "lthough covering broadly similar issues such as values, ob#ectives and strategies, this must also include assumptions made and predictions S bearing in mind it is a perception of another organisation and the data probably will be incomplete, inaccurate and possibly erroneous.
Stakeholder analysis

" well- nown and useful tool is sta eholder analysis which serves to identify and prioritise who might have an interest in the organisation, what that interest might be, and how much influence they can e!ert 8see 0ta eholders9. To arrive at the current e!ternal strategic position, the following :-step sequence can be conducted:

assess environmental natures identify key environmental forces assess environmental influences identify competitive position define key opportunities and threats 9$!

Internal

This is a health-chec of the current?e!pected capabilities of the organisation, whether using a well-established reference tool such as the +7Q* e!cellence model 8see +!cellence models and awards9, or a more informal approach. The aim is to identify what the organisation does well or not, what resources and competencies are available, how well the processes are wor ing and if internal targets are being achieved. 6nly when the organisation has profound nowledge of its current abilities, will it be able to gauge what it might be capable of in the future. 0ome I06133-:,333 certificated organisations use their internal audit resource for this critical step, as opposed to simply getting their internal auditors to perform low-level repetitive tic -bo! audits. Topics that are reviewed include: ob#ectives, strategy, leadership, structure, systems, financials, processes, resources, capabilities, culture and constraints. The output of this is a perception of strengths and wea nesses 80$9. )ut together with the opportunities and threats 86T9 from the e!ternal assessment, we get the well- nown 0$6T model. >ote: $hen conducting a 0$6T analysis, many organisations #ump straight to filling in a four-bo! template. "s can be seen from above, this is actually the last step.

Where are we going

There are no rules here. 6rganisations in a competitive environment should be continually striving to differentiate themselves from the competition4 either on price, service, response or some other success factor. "n interesting approach is to analyse where the organisation

would be if nothing changes, and also where it needs to be. 6f course the larger the gap the larger the need for change. Irrespective of the strategic options open to the organisation there are three fundamental steps:
*ption generation

This involves proposing various routes either at strategic or product level including:

continue as-is acquire a competitor open up regional offices develop new products for current markets develop new markets for current products penetrate more into existing markets reposition the product in terms of price or value abandon certain, products'services, markets, approaches etc

*ption evaluation

This is an impartial stress-test review of each option, weighing up the ris s versus rewards. The ob#ective is to propose one or two options that are feasible, sustainable, implementable and in-line with the values, and are within the capabilities of the organisation.
%trategy selection

The organisation does not operate in a vacuum. It is a dynamic playing-field and allowances must be made for reaction from the competition. 0o if a new product is launched, e!pect the opposition to possibly follow suite 8patent issues aside, of course9. Bi ewise, if prices drop, e!pect the same. The strategy is not cast in stone and might need refining in the early days of roll-out in light of these foreseeable reactions and also unforeseen changes 8such as a new competitor or technological or legislation changes9.

/ow are we going to get there

This involves defining the route-map 8including allowances for events as mentioned above9 and is often best run as a pro#ect. Considerations might include:

(hanges to organisational structure including roles and responsibilities Infrastructure changes opening'closing'redevelopment of facilities, plant, buildings and locations +on-human resource planning such as investment in equipment and new technology 3evelopment of new processes or redesign'realignment of existing ones

(ontingency plans *unding requirements .ey milestones and associated ob#ectives defined to measure progress towards the goal ,otivation methods to overcome the fatigue factor associated with potential continual change

6ften the above is captured in a concise document such as a strategic or business plan so interested parties can critically review both the options presented and the route selected. 6ften the ob#ectives 8being the cascaded 'output' of this part of the strategic planning process9 are ill-conceived. Thus when they cannot be met, frustration sets in. " common cause of this unfortunate situation is unbalanced goals S too much emphasis on one target at the e!pense of others. 7or e!ample, pressure on short-term profit targets and ignoring longer-term investment or total focus on financial targets and ignoring non-financial ones. 5etting the balance is an art in itself. '&usinesses must be run at a profit, else it will die. &ut when anyone tries to run a business solely for profitH then also the business must die, for it no longer has a reason for e!istence.' Genry 7ord

Is a strategy really necessary

*any organisations do indeed do very well without grand strategic plans. They seem to prosper by being in the right place at the right time and appear to get more than their fair share of luc . Indeed, there is a school of though that says strategic plans only serve to constrict the free development of an organisation and actually hold it bac . The argument is that when things are going well, grand plans are unnecessary, and it is only when things are not going well that plans are needed. $hilst this might be true for a small number of organisations, the ris of getting it wrong is so great that a more conservative approach might be prudent for the ma#ority. 0hort-term success without grand plans is common in all wal s of life4 the tric is to sustain it over the medium to long term.

Are targets needed at all

0ome might argue against the need for business ob#ectives?targets along the following lines:

$hey can make the organisation narrow-minded It becomes easier for competitors to understand the organisation and where it is going *lexibility and responsiveness can become limited 2ome say ob#ectives are only needed in times of survival or change

6n balance, most people are actually more comfortable with targets and performance measures than without S even in our private lives. $e compare our available ban balance to our monthly spend, we compare our actual speed with that indicated on the roadside

8especially near speed cameras9, and we live our daily lives by referring to the time. It is not the presence of a target that ma es people uncomfortable, but is often an issue when the target appears unrealistic, misaligned with personal aims or has not been well communicated.
',en never plan to be failuresO they simply fail to plan to be successful.'

$illiam %& $ard '()*(9

A healthy company
In law, a company is a non-living entity. Gowever, a modern, yet unusual management view is to perceive the organisation as a living organism. 6rganisations are not immune to humanli e tendencies such as sic ness and growing old or infirm. 0olid performance now or in the past is not guaranteed into the future. .alues grow stale, people get #aded with the same old message, customers fancy a change of supplier, employees leave or retire. $hat wor ed once may not be appropriate in a few years. This point was well illustrated soon after Tom )eter's boo In 0earch of +!cellence: @3R of the C= organisations commended in the boo for best-practice were in financial difficulties -3 year later.

(lanning or wishful thinking

+veryone, it seems, wants to grow their business by -:3R, be number one in their mar et or the A/'s leading provider of V. Clearly in a limited mar etplace it usually isn't possible. $hat constraint can be applied to stop wild imagination ta ing over from reality% 6ne possible approach for consideration is the resource-based strategy 85rant, -11-9. This involves defining the organisation in terms of what it is able to do more than what it wants to do. The approach argues that organisations are more successful when they concentrate on their capabilities and internal resources and not when they are led by ad hoc mar et opportunities. Gowever, it is not the resource as such, it's the distinct competence that it confers on the organisation. 0o whether the resource is financial, physical, human, technological or reputational - it is how it is applied that matters.

The customer is king

This common business clichX is a pertinent aspect of what is nown as a customer-focused strategy. This involves putting the customer at the heart-and-soul of the operation and subsequently designing the processes around the needs and e!pectations of the customer. 6f all sta eholders, the customer is the only one that brings in revenue, therefore it is imperative that customer needs are met in a manner that will satisfy the needs of the other sta eholders. $ith the sta eholder analysis already conducted, it is interesting to see to what degree the various sta eholders are aligned. If alignment is high, the chances of success will be significantly greater than if they are at odds 8see 0ta eholders9. 6ne difficulty some businesses face is the problem of understanding the implied needs of the customer as well as the stated ones. $ith no systematic approach, nown or visible needs are easily captured but leave the more intangible un nown ones un-acted upon. $ith this as a

prime source of subsequent customer complaints, the smart organisation needs to devote some time to thin ing about this issue. 6ne useful tool that can be employed is qualityfunction deployment 8Q7(9 which is a technique to identify and capture customer requirements and convert them into internal specifications.

Competitive advantage
Traditionally, organisations strove to develop competitive advantage with aspects such as:

si:e scale experience power

These aspects are all insular S it is the organisation itself that benefits directly and not the customer. Gistorically, some organisations grew so big that, whether they reached monopolystatus or not, they began to stagnate and eventually decline. *odern competitive advantage is more customer-centric. 0i<e alone does not ensure continued survival, and organisations now often position themselves to compete on aspects such as:

innovation quality flexibility service speed

5rowth nowadays can therefore be measured in other ways, such as growth in pervasiveness or influence. "nd with ever-growing awareness of resource sustainability, it is becoming clear that bigger is not always better.

Critical success factors 9C%$s:

0ometimes organisations ma e the error of trying to be 'all things to all men' and get pulled in too many directions. Critical success factors are vital for a strategy to succeed and need to be clear to all involved. )orter argued that the two main C07s are price and differentiation and an organisation should focus on one or the other. Gowever, he went on to point out that many get muddled and end up 'stuc -in-the-middle'. 6thers feel that a bas et of several might be more realistic and representative.

%takeholder concerns
)eople rarely are comfortable with change and sta eholders are no e!ception. 0trategic plans invariably cause upset to one or more of the sta eholder groups and managing this conflict is important. 7or e!ample if an organisation wants to close down a loss-ma ing plant, this will

benefit the shareholders but employees are upset due to the loss of wor . Conversely, an environmental pressure group might oppose the opening of a new plant whereas the local community would welcome the #ob opportunities. There are several approaches an organisation might ta e in dealing with pressure groups:

ignore E hope the media will lose interest fight E mount a legal defence accommodate - compromise comply E give in to demands get out E exit the arena totally

0ee 0ta eholders for more detail on managing sta eholder relationships and conflicts.

&usiness plans
" business plan crystallises all of the above strategic thin ing into a stand-alone document. 0uch plans are either for internal use S as a reference aid for management, or for e!ternal use - to secure funding or to attract a business partner. "s such the format varies with the purpose, but there are several important points when developing them:

$alk is cheap, doing is harder $hose that prepare the plan often don't have to implement it $ake off the rose-tinted spectacles when preparing the plan E be brutal 2ales and revenue forecasts are often wildly optimistic .nowing the critical numbers is essential E break-even point, return-on-capital, market si:e etc 9ne prepared, the plan is immediately out-of-date E periodic updating is essential Assume competitor reaction will be hostile at best It is the planning process with its associated studies, discussions, reflections and decisions that is important. $he plan is #ust the output. It is not cast in stone E things change, so should the plan

"s an illustration, a business plan for the development and launch of a new product is discussed further in the members section.

Corporate governance
What is it
Corporate governance 8C59 is all about how well organisations 'behave' with respect to the various concerns of their sta eholders S especially shareholders 8both public and private9 and governments.

Why is it a hot topic right now

"lthough being ethical in business is not a new principle. The recent A0 corporate scandals involving +nron and $orldCom have brought the topic into the public spotlight and resulted in changes to corporate law as a result. In ,33,, the 0arbanes-6!ley "ct was introduced in the A0. This law, often referred to as 06V, is now mandatory for all A0 organisations 8refer to the members section for a brief summary of its contents9 and non-A0 organisations listed in the A0. In the A/, corporate governance has evolved more as a voluntary code, but of late there are signs that this is being replaced by legislation.

Who does it affect

"lthough intended for public-listed companies, the prominence of corporate governance related scandals has brought the issue of business ethics and good governance to the forefront of the business world in general. )rivately-held companies may also wish to implement some of the concepts as this may well help them position themselves better for possible future initial flotation or business continuity when the organisation needs to raise further capital for acquisition or growth.

An overview of recent high profile 7% corporate failures

"lthough the +nron and $orldcom scandals have brought corporate governance issues into the public forum, these are merely the tip of the corporate distress iceberg. In the past few years alone, there have been over :3 cases of A0 public corporations malfeasance. " comprehensive list, including the ey points of each scandal is presented in the members section. " fundamental aspect of A0 legislature is the system of lobbying. The issue of political involvement between big business and political parties is e!emplified by the lin between +nron and the $hite Gouse-. )resident &ush's difficulty in accounting for the fact he accepted Y,,3,233 from +nron though campaign donations in -111 typifies the delicacy of the issue,. Characterised by large donations, parallels might be drawn with the recent 'cash for honours' allegations here in the A/. 6f the cases in the A0 where share price change has been available, the average drop in the immediate years after each case was a staggering 2-R. Clearly, whatever the cause of the scandal, the mar etplace reacts very negatively to adverse governance news. 0hould A/ institutional investors begin to use adherence to corporate governance principles as an investment criteria, this could have a potentially significant impact on share price performance and this issue should be high on the concerns list of a board of directors.

.ifferences between the 7% and 73 corporate governance structures

Antil recently, the A0 and A/ approaches have been quite different. Gere, the emphasis over the past few decades has been on building up a voluntary code, and morphing that into the self-declaration approach of 'comply-or-e!plain'. Corporate governance in the A/ came to

the fore with the publication of the Cadbury report in -11,, which was prompted by the late -1;3s collapse of the *a!well group=. Gowever, perhaps in response to the increasingly severe scandals in +urope, the A/ is now tending to follow the A0 lead of introducing mandatory and punitive measures. Jill Treanor, commenting in the 5uardian on this change of directionC stated that A/ company directors ris ed criminal charges in the future if they attempt to hide information from their auditors. Citing comments by Jacqui 0mith 8then (TI *inister for Industry and the Iegions9, she elaborated by surmising this is the first step of wider, comprehensive changes to company law, which were planned to be introduced in due course. 0ome parallels with 06V can thus be drawn and aspects of recent and current amendments to A/ law include:

(ompany directors will have to state they have not withheld information from auditors 3etails of non-audit services provided by their auditors will have to be declared Immunity for whistleblowers 6reater power to investigators to uncover information on companies E including access to company premises without a warrant

There has also been pressure for change from the +A in &russels. "ccounting directives collectively nown as the *odernisation (irective: have recently been issued which became mandatory in all member states and focuses on harmonising accounting practices. $ith corporate governance not yet reaching maturity, many individuals, organisations and even nations are still getting to grips with it4 not only what it is and how to implement it, but also how to measure its success. "s an evolving topic that has not yet stabilised, CQI members might wish to eep abreast of +uropean developments. " good way to do this perhaps is to regularly review the portal of +uropean law at the +uropean Anion's website. The Combined Code@ is widely regarded as the definitive corporate governance reference in the A/. )ulling together several related studies, it contains most ey governance aspects that have developed over the years, both as a result of, and in anticipation of corporate malfeasance. 7or e!ample, the recommendations contained in the Giggs report2 on the role and contribution of non-e!ecutive directors and the activities of audit committees have been included, as was the issue of internal control. .arious sector-specific e!amples of self-regulation have emerged recently. "s an e!ample, following recent friction between the individual voluntary arrangement sector and the ma#or ban s, ,2 companies have founded the debt resolution forum to establish best practice in their industry in an attempt to placate both the ban s and the financial sector regulator. Gowever, minor corporate governance compliance issues continue to emerge within the A/. 0ome e!amples include:

Alpha Airports was suspended from the stock exchange in JAAK due to corporate governance issues

<ealthcare <olding had its floatation cancelled due to the resignation of its nominated advisor a sector specialist recognised by the stock market, similar to a non-executive director! <21( plc received criticism when it planned to appoint its chief executive as chairman, which runs contrary to one of the basic corporate governance guidelines C

7ull 06V compliance in the A0 is very e!pensive and a trend has started where A0 start-up companies prefer to list in Bondon on the alternate investments mar et 8"I*9 where regulations are looser and listing costs are much lower. $ith more money now being raised on initial public offerings in Bondon than in >ew For for the first time since ,333, it does appear that A0 organisations not willing or able to meet 06V regulations are ta ing the easy route and moving to Bondon. 6ne A0 company that floated here on "I* instead of in the A0 said it would have ta en -; months longer and cost an e!tra Y-m because of 06V compliance regulations1. 6n a positive note, many organisations are now publicly emphasising their commitment to corporate governance issues. 7or e!ample, "etna, one of the world's largest insurers, recently announced that it, 'has earned top quartile ratings for its corporate governance practices from Institutional 0hareholder 0ervices 8I009, an independent provider of pro!y voting and corporate governance services'-3.

&oardroom structure - committees and reporting structures

The various corporate governance codes are converging on what can be viewed as 'bestpractice' boardroom composition. In a well-structured organisation, reporting to the board are three committees, each with an appropriate number of non-e!ecutive directors to ensure an independent approach is maintained. These are:

/emuneration committee E setting the levels and conditions of executive director's salary and other benefits +omination committee E selecting and appointing board members in the best interests of the organisation and its stakeholders Audit committee E ensuring the robustness and integrity of the financial reporting channels including liaising with the external auditors to prevent undue adverse influence from the board

The role of the non-e1ecutive director

It has become apparent that the role of the non-e!ecutive director 8>+(9 plays a pivotal role in successful corporate governance implementation. This rise in prominence over the last few years is due, in no small part, to the influence of the Cadbury report. "ccording to the Io(--, the >+('s purpose is to provide: '" creative contribution to the board by providing ob#ective criticism. >on-e!ecutive directors are e!pected to focus on board matters and not stray into Me!ecutive directionN,' thus providing an independent view of the company that is removed from day-to-day running. >on-e!ecutive directors, then, are appointed to bring to the board: independence4 impartiality4 wide e!perience4 special nowledge4 personal qualities.' This has evolved from the original >+( role, which is actually not a new one. In the -1th century it was normal for companies to be run by part-time ie non-e!ecutive directors. 6nly

when the business environment became more comple!, did the non-e!ecutive boards begin to nominate full-time 8e!ecutive9 directors to manage the companies on their behalf. Gowever, the presence alone of >+(s does not guarantee good governance. "reas of concern include:

A less rigorous selection process where the +43 is selected from network contacts and not on merit (ontribution criteria weakly defined resulting in the +43 acting more like a lessinformed executive director Insufficient number and variety of +43s on the board to make a useful impact /esistance by the full-time directors to 'prying eyes' monitoring and commenting on their performance 5imited time allocated for +43 activity often set at only several days per year!

0tudies have analysed the limited time a typical >+( has available to wor for the company, and recommended at least -33 hours per year-,. $ith some directors around the world shown to be involved with up to ;3 companies it is no surprise that guidelines on this issue are being generated. 0o, with a situation where a >+( is active only for a limited number of days per year it is clear that roles and responsibilities need to be absolutely clear. The >+( should not get involved in the daily operations of the company and equally, cannot be e!pected to be directly held accountable for poor company performance S that is the function of e!ecutive directors. They can however, most certainly be held accountable for not challenging the decisions, directions, plans and appointments of the e!ecutive group. "ccordingly, emphasis needs to be placed on the >+( appointment process, and care to be ta en to ensure the >+( is not a pro!y voice for the appointer. Anfortunately in the past, this has been less than ideal. In a study it was found that 13R of >+( appointments were already nown to the C+6 prior to the appointment-=4 a result that is in line with earlier wor that found that C-: of A/ boards contained retired e!ecutive directorss who were bestowed a >+( position-C. In the A/ and other countries where the structure of the company board is not legally defined, as it is in 5ermany, it seems the >+( position will continue to grow in prominence over the e!ecutive role as it is perceived, in the short-term, as the torch bearer for good governance. Gowever, this is against a legal bac drop where directors are #ointly and severely liable for the activities of the company they direct4 whether or not they are aware of the activity. "lthough +nglish law recognises the roles of the chairman of the board and of the managing director, it does not differentiate between other types of director. Gence, from the legal standpoint it appears that both e!ecutive and non-e!ecutive directors have the same statutory duties, responsibilities and liabilities. This does not support the need for greater >+( activity in the A/ and it would be prudent for ad#ustments in the relevant laws such as the Companies "ct, to allow for some reduction in liability in line with the involvement of the >+(. "reas where the >+( could ma e a real impact on corporate governance performance are listed in the members section.

$hilst the Combined Code elaborates on performance evaluation, to paraphrase Bord /elvin, 'if it cannot be measured, it cannot be improved'. 0o, to quantifiably demonstrate improvements, it would be necessary to define clear performance measurement indices. "lthough there is much data on company financial performance, the causal lin s to board performance has not yet been fully e!plored.

The annual report

Traditionally this was relied on by smaller investors as the main source of official financial and non-financial information published by a listed company. In attempt to overcome the problem of lac of transparency, the A/ government had planned to introduce a requirement to include defined reporting rules and formats called an operating and financial review. Gowever in a surprise move, 5ordon &rown dropped this requirement from the latest proposed changes to company law. There are reports of growing frustration-: with the traditional printed annual report as it sometimes only becomes available many months after the "5*. Commenting on these often huge documents, it was reported that the )ost 6ffice refused to deliver the G0&C ,33@ annual report on health and safety groundsO 0o a possible move in the near future to an online annual report as standard, might well save in e!cess of Z:3m for listed companies but will it come at a greater price for the small investor% .ery often, it is not what is disclosed that is important but what is not.

+eferences and useful links

>. 11(, JAAH, /0hite "ouse re$eals (nron #ocuments/1 available from http8''news.bbc.co.uk'>'hi'business'JAJH>G@.stm J. (entre for responsive politics, JAAH, general editorial, available from http8''www.opensecrets.org' I. 2(CD1 20031 /2(CD countries agree new corporate go$ernance principles', http8''www.oecd.org'document'JJ'A,JIHA,enFJKH?FI@HI?FI>GGC>AJF>F>F>FI@HI?, AA.html and 'Sur$e. o' corporate go$ernance #e$elopments in 2(CD countries' available from www.94(3.org H. $reanor, B, general commentary, $he 6uardian newspaper, *ri, 3ec Gth JAAI edition G. 3irective JAAI'G>'4( of the 4uropean 0arliament and of the (ouncil of >Cth Bune JAAI, http8''www.dti.gov.uk'cld'accountdirec.htm K. $he (ombined (ode on (orporate 6overnance, Buly JAAI @. $he <iggs review is available at http8''www.berr.gov.uk'files'fileJIA>J.pdf C. 4xamples and commentary on comparison between -2 and -. listing costs are extracted from 4n$estors Chronicle, a *inancial $imes 1usiness maga:ine, editions between 2ept JAAK and Ban JAA@ ?. Aetna corporate comms., April @th, JAAI, +;24 0ress release, <A/$*9/3, (onn, -2A >A. (ommentary on Institute of 3irectors website, http8''www.iod.co.uk >>. ,onks, /obert A.6. P ,inow, +ell., >??G, (orporate 6overnance, (ambridge, ,ass, 9xford8 1lackwell

>J. (harkham B., >??H, 5eeping ,oo# Compan., (larendon 0ress, 9xford >I. ,ills, 6eoffrey, >?C>, 2n the 6oar#1 6ower in association with the Institute of 3irectors, Aldershot >H. 6eneral editorial comment >G *eb. JAAH, *inancial $imes followed by an article on the changes to the annual report, JJ *eb. JAA@, *inancial $imes

Management systems
#anagement systems) purpose and benefits
" 8business9 management system should be a means to:

achieve business ob#ectives increase understanding of current operations and the likely impact of change communicate knowledge demonstrate compliance with the requirements of the $urnbull report, 2arbanes9xley, sector-specific and international standards etc! establish 'best practice' ensure consistency set priorities change behaviour

.ifferent types of system

The term 'system' has a variety of meanings in different conte!ts. 7or e!ample, it is used in relation to the 'nervous system' or the 'digestive system', but this usage is different from its use in relation to business and the management of an organisation. +ven in a business conte!t, the term 'management system' is used in a number of ways, depending on the conte!t and the ob#ective. It can mean:

a system to manage a particular activity or a specific type of asset - for example, customer relationships (/,!, preventive maintenance 0,,!, materials ,,! the means to manage all relevant areas of operation, often in relation to a specific aspect - for example, quality, environment, information security the way in which every aspect of an organisation is managed, ie its 'business management system'

" software application is, nowadays, often intrinsic to how a business management system is managed, but this is not what we are considering here. The traditional approach has been to address individual aspects separately. There is now a move towards 'integrating' management systems, especially when see ing combined

certification against more than one e!ternal standard, based on an e!ternal assessment of a single system description. &ut the word 'integrated', which suggests that you ta e discrete systems and somehow combine them, can obscure the fundamental principles involved in running a business. 'Integrated management' should be synonymous with 8good9 'management' S you must manage your operations, resources, staff, impacts, and a myriad of ris s which can cause more problems to fi! than to avoid.
.efinition of a management system

6ne definition of management is 'the guidance and control of action', and a system is defined as a 'set of components interconnected for a purpose'. 0o you could argue that a management system is: '" set of components, interconnected for the guidance and control of action'. This suggests that the 'interconnection' has been planned for a reason, and that the purpose would not be achieved without the 'interconnection'. In other words, the separate components would not independently achieve the same results. I06 1333:,333 defines a management system as a 'set of interrelated or interacting elements to establish policy and ob#ectives and to achieve those ob#ectives'. +!panding on this definition, perhaps the clearest interpretation of this is that a business management system is: 'The structure, processes and resources needed to establish an organisation's policy and ob#ectives and to achieve those ob#ectives.' This view implies that an organisation has one management system 8even if it needs, or chooses, to comply with a number of e!ternal standards9. )"011 8see below9 uses the following definition: '" management system comprises the elements of policy, planning, implementation and operation, performance assessment, improvement and management review.' "lthough the formulation of strategy and setting of ob#ectives could usefully be added to the start of the list, this definition also emphasises the lin between where you want to get to and how you will get there. 6wnership of the system will by implication lie with those who will be held accountable, ie top management. )ut another way, running an organisation requires ob#ectives and strategy to be defined, processes put in place, resources allocated and ris s identified, all of which are the basic building bloc s of implementing a business plan. They are also required for successful process improvement.
.ifferent types of management systems

Traditionally, separate management systems were developed to address issues such as quality, environment, health and safety, finance, human resources, information technology and data protection. 6ther aspects of running an organisation which need to be managed include corporate social responsibility, data security, ris management and business continuity.

0ustainability, reputation management and brand management are given more prominence nowadays, and supply chain management is a sub#ect in its own right, with university courses and chairs now well established. "lthough there is no universal definition of nowledge management, it too is an area given increasing attention.
$inancial management

This is driven by a legal requirement, although an organisation obviously needs to control its available resources. This is an area where a clear division of responsibilities, specific controls and the need for detailed records may be more e!tensive than for other areas where there may be more sub#ective decisions allowed and individuals are given more leeway to ma e their own #udgements. 6ver the years, computer systems have become more established and sophisticated 8accounts and payroll were among the first functions affected9, and the automation of many parts of the relevant processes has introduced an automatic control over many of the tas s.
/uman resource 9/+: management

GI management would typically involve such processes as recruitment, induction, appraisal and the processing of leavers, but when it is fully integrated into the strategic planning for an organisation it should perhaps also include succession planning, performance management, shadowing and mentoring. Anfortunately, many GI departments perform a function which is little more than a recruitment agency with an added responsibility for dealing with terms and conditions and holiday entitlements. " well designed management system should allow GI managers to gain a better understanding of actual operations and the demands of a particular role.
Information technology 9IT:

The IT manager role has moved from being focused on the provision and maintenance of physical hardware and software to include comple! communications networ s and data management. In all cases, however, there is a requirement to manage resources and to ma e them available where they are required to ma!imum effect, to be aware of developments e!ternally and to decide what is relevant and cost effective for the organisation to adopt. This can generate pro#ects to introduce new technology, which may entail changes to current ways of wor ing which can radically change e!isting business processes. +ven if organisational ob#ectives have not changed, the development and availability of new technology can often enable the ob#ectives to be achieved in different ways, and the significance of technology throughout an organisation needs to be managed in the same way as the involvement of people. There is, however, an increased ris involved in the use of technology S while it can ma e specific tas s easier 8or even possible9, the organisation will become more and more dependent on the technology being available, so that there is a need to build and test contingency plans in case of failure.

3nowledge management

/nowledge management is the way in which an organisation generates value from its intellectual and nowledge-based assets. 5enerating value from such assets involves codifying what staff, suppliers, partners and customers now, and sharing that information among staff, departments and partner organisations with a view to developing 'best practice'. $hile nowledge management is often facilitated by IT, technology by itself is not nowledge management. /nowledge management is becoming more important given the impact of an ageing wor force, short term contracts and more career changes over the past few years. The accumulated nowledge about #obs, organisations and mar et sectors will be lost unless companies ta e measures to retain it. Bessons learned are few and far between even in industries which recognise that they are not good at doing #ust that. 6utsourcing, especially to other countries, is another trend which has compounded the problem.
All cases

In each of these cases there is a common theme, namely the need to manage a specific factor which may influence the performance of the organisation. This may be something which affects the quality of its output, its consistency of performance or even its ability to operate.
.escription of a management system

" common starting point for an organisation when it defines its management system has often been to do it in relation to how it complies with the requirements of an e!ternal standard. 0o it would define, for e!ample, a 'quality management system', or an 'environmental management system', based on the structure of the relevant standard, rather than on a logical definition of how the organisation operates. The resultant multiplicity of systems is now recognised as wasteful and confusing, and there is a welcome recognition that such standards should have a common format. I06 133-:,333 is now being used as the model for a number of other standards, but there is still an unfortunate tendency to use the layout of a standard itself as the starting point for describing and structuring a management system. It should always be remembered that these standards specify the requirements for a system to enable compliance to be assessed S they do not mandate a particular format for the description of the system. 87or use of these standards see :.= *anagement system standards9. " more constructive and pragmatic approach is to focus on the organisation's mission, its sta eholders and their needs, to define how the organisation will satisfy these needs 8ie its processes9 and to be clear about what it needs to do to ensure that these processes are effective. 80ee 0pecifying, designing and developing processes, products and services, 0trategic management and +lements of corporate strategy9. " case might even be made for a management system to be called a 'management and operational system', since it describes how things are done as well as how they are managed,

whether by the planning and design of processes, the imposition of controls or the allocation of resources. In practice, these two elements are intertwined. It is also worth stressing that the 'system' e!ists whether or not it has been defined 8in the same way as a process e!ists even if it has not been described in narrative or flowchart format9. +specially in very small organisations, people now what to do 8and do it9 without having to refer to forms, chec lists or written procedures. $hen instructions and guidance are written down in a formal system, some people may refer to this description of the system as 'the management system'. &ut there is a danger in this as the system description may not reflect actual practice, and in many situations, especially when there are manuals full of unwieldy narrative procedures, this can be the case. $orse, by referring to the description as 'the system', the perceived purpose is changed from being an enabler of results 8cause and effect9 to a repository of policies and rules for managing the organisation. 0o even though the term 'management system' is sometimes 8misleadingly9 used to mean a 'description of how things are done', rather than 'how things are 8or should be9 done', we will concentrate on the latter. (eming tal ed of 'operational definitions', where there may not be one absolute definition of a term, but it is important that everyone shares a common understanding of what a term means in a given conte!t.
What the system might look like

5iven the diversity of organisational type and si<e, in both the private and public sectors, it is no surprise that there is no standard for a management system structure. "ny system is, however, li ely to have certain ey components. 7or e!ample, )"0 11 identifies the common elements required by management system standards 8based on I06 5uide 2, D-E for standards writers9 as:

policy planning implementation and operation performance assessment improvement management review

" strong case could be made to include 'ob#ectives' as the first item in this list, since the other elements would otherwise lac a point of reference. 0ome ey ob#ectives of 8defining9 a management system might be to achieve compliance, to encourage standardisation and reduce variation and to help staff to understand what they have to do and how they fit into the organisation. It should also provide a sound basis for managing change and ma ing improvements. The best way to define the system needs to be given due consideration, with the over-riding aim of using a simple, clear and comprehensive approach and format which helps you to

focus on the ey elements which you need to plan, implement and manage to accomplish your mission.
(.CA

6ne common approach is to use (eming's management system model of plan-do-chec -act at a higher level than #ust for issues such as environmental 8eg I06 -C33-9 and quality 8eg I06 133-9 compliance. In summary, the elements are:

0lan - by defining clear ob#ectives your misson!, defining your strategy to achieve the ob#ectives, formulating the policies to which you will adhere, and identifying factors that can influence how you will operate 3o - what you do and how do you do it organise, get work, do work! ' what you need to manage to ensure that these core processes are efficient structure, resources, people etc! (heck - monitor and measure how you are performing against your plan. 3eming preferred 'study' rather than 'check', since it implied a more considered review and assessment of the situation rather than mere reference to selected facts Act - ad#ust and refine what you do in the light of the 'check' stage, to achieve improvement

(rocess classification framework

The process classification framewor 8)C79 was developed by the "merican )roductivity and Quality Center 8")QC9 and member companies as an open standard to 'facilitate improvement through process management and benchmar ing regardless of industry, si<e, or geography'. The )C7 organises operating and management processes into -, enterprise level categories, including process groups and over -,:33 processes and associated activities. The ")QC says that: '+!perience shows that the potential of benchmar ing to drive dramatic improvement lies squarely in ma ing out-of-the-bo! comparisons and searching for insights not typically found within intra-industry paradigms. To enable this benchmar ing, the )C7 serves as a high-level, industry-neutral enterprise model that allows organisations to see their activities from a cross-industry process viewpoint.' The model can be useful for an organisation which see s to ensure that it has considered all aspects of its operation to ensure that it achieves a sustainable business and delivers sta eholder satisfaction.
$urther information

The members' page covers:

$ypical components of a management system 2ystem models 2ystem development guidelines Implementing and assessing a system

6nly available to CQI members. find out more about membership.

%ources

0enge, )eter 8-1139 The 7ifth (iscipline and The 7ifth (iscipline 7ieldboo 8(oubleday, -1139. 6riginator of the concepts of 'systems thin ing' and 'the learning organisation'. )ublicly "vailable 0pecification 8)"0 11:,33@9 &0I. 0pecification of common management system requirements as a framewor for integration. CQI 0mall &usiness 0tandard. The A/'s first quality standard, tailored specifically to 0*+s. http:??www.thecqi.org?downloads?smallKbusinessKstandard.pdf 8pdf document9 "merican )roductivity and Quality Center 8")QC9. 7ounded in -122, ")QC is a memberbased non profit organisation serving appro!imately :33 organisations worldwide in all industries. http:??www.apqc.org? Goyle, (avid: I06 1333 Quality 0ystems Gandboo 8&utterworth - Geinmann9 Iummler and &rache, Improving )erformance S Gow to *anage the $hite 0pace on the 6rganisation Chart 8Jossey &ass -11:9. " practical guide to management systems and business process development. The 6pen Aniversity, Bearning 0pace S 0ystems thin ing and practice

%mpact of corporate strategy on people

Corporate strategy and organisational redesign
$hen strategic decisions are made within an organisation, then the people are, almost by definition, affected in some way. $hilst traditional approaches to strategy often put people low down on the scale of importance, the effect that this can have indicates that the impact on people should be considered as an integral part of strategising. $ithin strategy, there are a number of decisions that are made and a way of understanding the impact on people is to e!amine these decisions one by one.
.ecisions around strengths and weaknesses

Corporate strategy is the means by which an organisation chooses its overall intent in response to the opportunities and threats in the mar etplace and in consideration of its internal strengths and wea nesses. This contrastive understanding is often derived from such as 0$6T analysis 80trengths, $ea nesses, 6pportunities and Threats9. Corporate strategising often ta es a position that ma es very limited consideration of the human needs of the people in the organisation, focussing first on the needs of shareholders and 8as a means to satisfying these9 the needs of customers. The needs of the people in the organisation are considered lower down the thin ing order, even though a small change in

motivation can result in a step change in organisational performance. 0trategy thus can easily end up having a greater negative effect on motivation, with resultant negative impact on human performance. To some practical e!tent, the importance of wor er motivation depends on the cost of replacing them. If a person does not perform up to scratch or fit in with strategic needs, then there are costs associated with their termination and replacement. &eyond the financial cost of pay-offs and recruitment, however, there are also indeterminable intangible costs such as the cost of lost nowledge and the motivational impact on co-wor ers.
The growth decision

In strategic decision-ma ing, the company may well ma e decisions to grow in some areas as well as cut bac in other areas. The matri! defined by Igor "nsoff is #ust one tool that is commonly used to help strategic focus in the area of choosing combinations of products and mar ets. >ew products and new mar ets both required additional s ills. 5rowth leads to changing demands on people that can be both positive and negative. 6n the positive side, it offers opportunity to develop in new areas and to climb the corporate management ladder. It may well result in new people being brought into the organisation, providing opportunity for social growth and new wor ing relationships. 6n the other hand, change in any form is difficult for laggards and those who prefer the status quo. "s wor changes it may well also e!pand, putting further demands on people in terms of nowledge and s ills as well as the basic hours that must be wor ed. )romise of reward tomorrow for hard wor today does not suit everyone and does not always benefit everyone, as in all change there are winners and losers.
The make or buy decision

In selecting strategy, a critical decision that a company ma es is whether to 'ma e or buy' for any parts of the design-to-service continuum. $hen choosing the 'buy' decision, the company elects to pay another company to perform the action or service, whether this is product design, manufacture or after-sales service. This outsourcing choice may also be applied to infrastructure services, from cleaning to management of compensation and benefits. In selecting the 'ma e' decision, the company decides to do a thing itself. This decision means either that the company can perform the function retained more efficiently than an outsource supplier or that there is strategic rationale for retaining this function in-house. 7rom a company viewpoint, outsourcing is a logical move. Gowever, the emotional scarring that can result gives reason to pause and also consider these potentially damaging effects. +ven those who are not outsourced are affected and may go through grief cycles as they mourn the loss of their colleagues and their loyalty may decrease sharply as they wonder whether they will be ne!t for the hatchet.
The process-redesign decision

" common strategic decision for an organisation is to redesign its operations and processes in some way. The underlying principle is that organisations are sets of processes that deliver

goods and services, and operational hierarchical structures that are imposed on these tend to result in misalignment and waste within the processes. )rocesses may also reach out into suppliers, where further mismatch and distortion can lead to problems. 7or e!ample, a product-delivery process may cut across sales, mar eting and shipments departments, in which different priorities and processes may result in problematic interfaces and miscommunication. +ven within one department, processes may evolve over time and fragment as they are turned to address varying issues and problems. 6utsourcing of shipment can also cause problems where, for e!ample, a cost-cutting contract leads to unreliable deliveries to important customers. $hen processes change, then people who wor in the processes must also change. "ny given process includes particular roles in which certain nowledge and s ills is required. Changes in these roles requires that the people involved change, which may or may not be good news for them.
The reorganisation decision

$hen processes are redesigned or other strategic change ta es place, there may well be a reorganisation of some ind, with changes in the hierarchical reporting structures and people gaining and losing responsibility and budgets. (one well, a change in organisational structure will ta e account of human s ills and motivations, better fitting people into #obs that they can do well. Consideration of team dynamics can also result in well-balanced teams, for e!ample with good mi! of &elbin team types. (one badly, these are not considered and people may end up in difficult #obs with people with whom they find difficult to wor . $hatever happens, when teams changes, they go through the establishing routine of '7orm, 0torm, >orm, )erform' as they meet, argue over roles, agree ways of wor ing and eventually settle into a wor able routine of activity and relationships.
The relocation decision

The location of many companies is often driven by history and accident than any current strategic reason. This rationale may be e!plored at any time and the decision to relocate any part or all of the company may be made. Ieasons to relocate include:

,oving closer to customers, to better serve them. ,oving closer to suppliers, to reduce cost and improve management. ,oving to a more economic location, where rents are cheaper ,oving to a development :one, where grants enable expansion ,oving to areas where good staff are more plentiful or less expensive

$hen the company moves, the people who will not move includes e!perts who can easily find another #ob, ta ing their e!pertise with them. 6lder people with a deep understanding of the corporate culture and customers may also prefer not to uproot. These are people whose tacit nowledge is often subtly important and whose loss will be eenly felt.

Managing quality across the +glo$al, organisation, its sta#eholders, suppliers and customers
International partnerships - working relationships with global stakeholders' suppliers and customers
"lthough many organisations are happy to remain as domestic entities, others have ambitions to move onto the international stage. $hether this is due to ambition or business pressures, there are some common aspects. >ot every one of the following steps are required, but for a goods-based organisation, the evolution to full internationalisation may be:

passive exporting direct exporting agencies'distributors sales subsidiaries manufacturing subsidiaries

(assive e1porting

$here goods are e!ported without direct involvement. 7or e!ample, a domestic wholesaler buys the product and finds an international customer. "s this is outside the control of the manufacturer it could act either for or against its interests.
.irect e1porting

$here the organisation actively ships overseas, perhaps to customers met at international trade fairs. This is more within the organisation's control as shipping dates, quantities, pricing and warranty periods can be dictated. 7or many organisations this level is satisfactory, however continual remote communication can place a high resource demand internally.
Agencies-distributors

$hen the volume of shipped goods becomes too great to manage, or local relationships are desirable, due to language difficulties for e!ample, it may be advantageous to have a representative in a region or country.

%ales subsidiaries

"gencies and distributors may have their own interests at heart, and not fully serve the needs of the supplying organisation. 7or e!ample, they may even stoc alternative 8competing9 goods.
#anufacturing subsidiaries

In some cases, such as where labour rates form a significant percentage of the unit costs or there are government incentives 8or high import?tariff duties9, it may be feasible to manufacture overseas. &ut despite the possible savings, the significant management and other internal resources required, plus a possible lac of management e!pertise ma es moving to this stage a high ris proposition. 7orces that may act against an organisation progressing through these steps include:

internal systems not up to challenge - particularly funding, human resource and management experience protectionism - moving into other markets may be hampered at government or competitor levels where barriers are raised to hinder such moves. $hese can range from tender requirements requiring that only the local language be used, to a requirement of a certain local partner equity percentage variations in salary and logistics costs E detailed cost-benefit studies need to be made, comparing for example where to make products, shipping'storage costs or currency fluctuations

)orters' competition of nations

Impact of different cultures

6rganisations that deal internationally will invariably have personnel traveling to other countries for meetings, secondments or even e!patriate postings for e!tended periods. " critical issue here is cultural etiquette. +tiquette dictates the way we are supposed to act in the public or business world. The way we act in our private lives may be different to our public 8or business9 lives. 7or e!ample, putting your feet up on the coffee table at home is acceptable. (oing this during a meeting in someone else's office would obviously be considered e!tremely rude. The same can be said of dress code. $hen representing their organisation, whether a person dresses formally or not conveys a certain impression. )eople from different cultures can be highly offended by inappropriate actions or behaviour. " gesture in one country may be quite inconsequential, but e!tremely insulting in another. This is often a worry for those new to international business trips. Gere are some e!amples of common cultural variations:

<andshakes are common and expected in most western countries as a sign of greeting - to refuse a handshake can indicate a sign of aggression or disdain.

<owever, in some ,iddle 4asten counties, the shaking of hands is not the normal method of greeting and would be refused if offered. 4mphasis on punctuality sometimes varies between cultures. *or example, if a meeting was due to start at >Aam in the -., the attendees will arrive at the meeting room at that time, whereas in Bapan this would already be considered late - the attendees would usually be in their seats at ?8GA ready to start. 3ifferent cultures place varying emphasis on the presentation and handling of business cards. *or example, in Asia it is often done with the name on the card facing the recipient and both hands used to present the card - indicating the card is a representation of the person. $hus it is expected that the recipient would take it with both hands, read it carefully and place it neatly on the meeting desk or safely away. In western countries the card has less meaning and is often #ust regarded as a reminder of contact details. If being entertained at a meal in some countries such as (hina, to finish all the food can be taken as a mild insult to the host, as it implies insufficient quantity was provided. In others, to not finish all the food implies it was somehow substandard. In cultures where religion has a significant impact on life and business, religious festivals are dominant in dictating the sequence and pace of life. *or example, in ,uslim countries during the ninth month /amadan! of the Islamic year devotees fast between the hours of sunrise and sunset. $hus out of respect, it may be inappropriate to eat or drink in front of them. *urther, small religious ceremonies may take placeO for example meetings may usually open with a prayer.

It is not necessary that the international business traveller becomes an e!pert in diplomatic relations. "ll that is necessary is to be alert, sensitive to your surroundings and, if in doubt, follow the lead of the host.

International standards
$hen trading internationally, there are many government-sponsored activities such as the availability of information on various countries, specialist import?e!port agencies, trade missions and departments based in embassies and consulates to assist both buyers and sellers operating in foreign countries. 7rom a quality-perspective, the International 6rganisation for 0tandardi<ation 8I069 e!ists to coordinate and reach agreement on standards that are acceptable across all the member nations, currently standing at -:: countries. $hen such consensus is reached by interested parties4 agreement has been made on definitions, specifications, acceptance criteria and testing methodology, etc. $ith this common reference point, international trade is facilitated, as all parties, irrespective of their domicile, are spea ing the same language. The most well- nown international standard is probably I06 133-:,333, which defines requirements for a quality management standard, but it is in fact only one of nearly -2,333 international standards. 6nce a standard such as I06 133-:,333 is in the public domain, certification bodies offer independent verification that the organisation conforms to the relevant requirements. $ithin individual countries, respective governments set up accreditation bodies to oversee the organisations that offer certification, testing, inspection and calibration services.

"ccreditation is not mandatory in most countries, but the certifying body applies to be accredited. To ensure consistent interpretation globally, the various national accreditation bodies have #oined together to form the International "creditation 7orum 8I"79 which then acts as an umbrella organisation. It then ensures that its accreditation body members only accredit bodies that are competent to do the wor they underta e and to establish mutual recognition between its accreditation body members. This is intended to reduce the ris to customers by ensuring that an accredited certificate may be relied upon anywhere in the world. Thus it is important for a buyer to understand therefore, that #ust because a potential overseas supplier can produce a certificate claiming their management system conforms to I06133-:,3334 unless it can be demonstrated that the certificate has been issued by a bonafide certification body, e!tra care must be ta en.

,lobal communication
Time-;one issues

"s international trade becomes easier, the issue of time <ones and wor ing hours becomes an issue. In practice, this means an office based in the A/ dealing with both "merican east coast customers and Japanese customers would need ,C hour telephone manning if they wished to maintain real-time communication. This simple matter alone can be a great burden for a small company.
2anguage issues

The issue of language is an obvious one and does not need to be e!plained in detail. +rrors in communication and understanding are obvious when holidaying abroad, but business ris is significant if there are contractual misunderstandings due to this. "ccordingly, the prudent business may engage either lawyers in the overseas country or ta e other similar action to clearly understand the legal, business, political and language issues involved in the business negotiations.
Technology

The ability to deal effectively in real-time has of course being facilitated by improvements in communication technology. "s facsimile machines overtoo the tele! networ in the -113s, so has email rapidly developed as increased bandwidth allows the attachment of everincreasing file si<es. Coupled with the advantage of a record of the communication being produced, and even the development of translation software, email has now become the communication medium of choice for many organisations. Gowever, there are occasions where face-to-face communication simply cannot be replaced. Antil recently, aside from physically travelling to the meeting venue4 the only way of satisfactory conducting remote meeting was via the purchase or leasing of tele-conferencing equipment. "lthough quite e!pensive, it was invariably cheaper than the cost 8and lost-time9 of employees travelling overseas for meetings.

In recent years however, the development of voice-over internet protocol 8.oI)9 technology has enabled real-time streaming of video data over the internet to such an e!tent that the quality that can be produced on a des -top computer rivals that of professional teleconferencing equipment. $ith the growth in providers of such services, it is now possible to conduct teleconferences via office computers with no e!tra investment apart from a headset completely free-of-charge. 0uch a brea through has resulted in many organisations using this to hold daily meetings with their overseas operations, customers or suppliers S radically speeding up international communication.

-uality in its total $usiness concept

0ir (avid &rown, founder president of the CQI, has an ambition to change the role of quality, from its historic role as a 'spotlight on part of the organisation' aimed at ensuring the tangible characteristics of what it produces, to 'becoming a floodlight on all of it, to help transform its performance.' Thin ing about this we need to be clear about what the word quality actually means. $hat relevance does it have for the future of leading and managing whole organisations% If we are to understand quality as a total business concept it helps to accept the definition of the word 'quality' in a quite different way from that in common use. It is the one word which can unite management professionals in +urope, the far east and the "mericas in describing the transforming efforts to improve efficiencies, effectiveness, fle!ibility and environmental impacts. Gowever, 'quality' is also a dangerous word, because so many badly planned and e!ecuted quality improvement programmes have disappointed those who participated in and paid for them. This has led to new names for such efforts, for instance business process reengineering, lean and si! sigma as well as total quality management. *any of these programmes were poorly planned and e!ecuted, so some thin ers have reverted to quality as the one word to unite the field. It carries the potential to be truly global since, as well as the Chartered Quality Institute in the A/, there is the Japanese 0ociety for Quality Control, the "merican 0ociety for Quality, and do<ens of other national or regional associations. "ttendance at any quality conference, particularly in "sia, will present opportunities to listen to hundreds of presentations on the application of quality to every conceivable part of society. Quality is the umbrella term4 si! sigma and lean are seen as aspects of it. 0o let us not blame the word for the programmes that carry its name. The same, incidentally, should apply to other programme names - they need understanding before #udgement. Instead, let's see how to bring discipline and constructiveness to the quality improvement arena, as was always intended by the movement's founders. Quality in its total business or organisation conte!t was defined by 5enichi Taguchi in the early -1@3s as: '6n target with minimum variation'. These five words provide the basis for defining what you are trying to accomplish, how you will now if a change is improvement, and implementing changes that will produce the improvement 8>olan and )rovost -11C9

The business concept - models and value chains

(r $ +dwards (eming described a system as 'a networ of interdependent components that co-operate in order to achieve the aim of the system' 8>ew +conomics -11=9. "s part of his system of profound nowledge 8described in the >ew +conomics9, he contended that all organisations should be seen as a system, whether the aim is the continuing production of a product or service, or the development and implementation of change such as a capital investment pro#ect, or the improvement process itself. (eming first proposed models for representing the organisation as a system in -1:3, and many methodologies have been developed since. 0uffice to say it is essential to be able to represent and communicate the components, their interactions and dependencies. Beaders and participants need to be able to see what part of the system creates value for the customers, what is necessary to enable those parts to function effectively, and what research, development and leadership processes will direct and develop it. Quality methodologies have been shown to be effective in addressing all aspects of defining and transforming these systems.

%ustaining the quality drive

The quality drive started in the late -1,3s when 0hewhart conducted his wor at $estern +lectric. It has built momentum over the decades, based entirely upon the evidence of its effectiveness as e!perienced by leaders and practitioners who have been close to the methods. The best nown demonstration of organisation-wide quality is Toyota, which applies quality principles and methods across every part of the system. Its leadership has been dedicated to the 'Toyota way', as they call their quality system, for over five decades S a truly strategic theme and business concept. Quality in the west, however, has generally been seen as a tactic rather than a strategy. It has been characterised by a series of programmes that have been dominated by training 8TQ*, si! sigma9 or local activities 8lean9. In many cases there has been a reluctance to learn from previous e!perience. >ewness is the appeal, not wisdom.

In spite of the intermittent nature of such quality programmes, there is a continuing inherent momentum toward the goal of customer delight, capable processes, and the use of improvement tools. This is because of the e!perience of many participants in the programmes. Those who participate in good programmes appreciate the tools if they are well taught and supported. The question for the early ,-st century is 'how to build upon the e!perience of success and disappointments and create a sustained effort that produces improved business results and becomes unstoppable%' The answer to sustaining the quality drive lies in responding to these questions:

what has been the experience& %hat has worked in our environment, what has been less successful& what are the results that need improving& <ow will we know if any effort is leading to improvement& what results are we getting& <ow can we ensure that everyone, from owners to staff, knows what the payback is and what the other benefits are&

Implicit in all of these questions is the application of the )(0" cycle 8more of which later9, which demands study, followed by planning and prediction, and a dispassionate reading of the evidence in order to challenge one's assumptions. $hen participants in a programme see that the organisation is engaged upon a systematic and applied learning process, the drive can be sustained, the feedbac becoming constructive and positive. Gowever, sustaining this drive will always call for efforts and resources from the very top management. "ll organisations owe their culture and performance to their leaders, and if there is a need to improve performance then line leaders will have to lead the changes in culture and operations.

The conte1t - contribution from supporting functions

The quality of goods or services is a consequence of the quality of the processes of the whole system. This includes all of the support or enabling functions or processes. "ll of them can be improved or transformed through the same methodologies, principles and philosophies that have applied to the value-adding, or core, processes. +!amples of support functions that have strong, if indirect, impact on the customer include:

recruitment and development of staff, which controls the competence of employees in carrying out their roles forecasting sales and capacity needs, which enables good work to be done in a planned way managing the databases of customers and staff, which are essential for effective communication and record keeping

0upport functions have suffered in the last few years. 0ome of them have grown too much as the need for control has dominated, for instance in accounts or conformance. In this case they can thin the world has to move at their pace. 6thers have shrun under pressures to reduce

central overheads, for instance training and product or mar et research, and may now be under-resourced. Quality improvement programmes must therefore address every support function. 0ome may be holding bac core process performance, others may have the potential to ma e core processes much more effective and thus radically improve the customer e!perience. "nalysis of any system of support functions will produce a list of up to C3 distinct enabling processes, far too many to be directly and rapidly addressed by an improvement programme. The programme team should approach the development of enabling processes in several ways:

prioritise to understand those processes that have ma#or impact and whose performance is poor provide exemplary support and training to the improvement teams on such pro#ects use this small number of key pro#ects to demonstrate how the organisation is ready to adopt change in the centreO usually the most resistant functions are the most central ensure that good people from support functions are integrated with improvement activity in core, customer-facing, processes

Integrating the improvement programme in these ways brings many benefits, not least in demonstrating the real meaning of 'total' quality. The more that central function directors e!perience the reality of process transformation or improvement on their own wor , the more ready they are to support it elsewhere.

A quality transformation struggle

Corporate vs4 departmental management

Quality programmes and attitudes, under whatever label they are promoted, should lead to a more process-focused approach to management and Beadership. )eople in every wal of life, and every level of seniority, come to appreciate that what should be important is how things are done in order to please customers, rather than how a story is told to the bosses or owners. Thus the programme management, and ultimately the organisation's leadership, will find themselves as ing new questions about the role of corporate offices. 6n the one hand will be increased resistance to meaningless planning and reporting, whilst on the other will be the realisation that an effective corporate resource should include many processes currently not done well. These can include development of standards for operation and for such matters as health and safety, engineering, mar et research and personnel management. Beaders should therefore ta e every opportunity to review the balance between the centre and outlying parts of the organisation. It is not enough to target some arbitrary percentage of cost or employment, or compare with others and try and copy. +very organisation needs a different balance of s ills and approaches. The benefit of the quality programme that addresses the whole organisation as a system is that choices can be made in a meaningful and public open way. If innovation is seen to be vital, then nowledge and s ills development

will need a systematic effort that only ma es sense if it is led and coordinated from the centre.
.epartment vs4 process management

+very new organisation starts by #ust doing things, whether it is repairing lea ing roofs or writing computer games software. They may not e!press these actions in quality terms, but actually, they are developing processes. The quality of what is done - how much value is added - will determine the future of the organisation. If this activity is seen to be useful by its customers, and the organisation grows, departments become necessary. They are an inevitable price to pay for si<e, and to enable people to recognise each other as individuals, to ma e basic arrangements abut pay, holidays and so on. Gowever, the department often assumes too high a role in people's lives in comparison with the distant customer. Quality programmes frequently demonstrate that departmental management has itself become the ey factor in too many people's lives, their functional manager the focus for attention, the customer un nown or forgotten about. " ma#or part of any quality improvement programme is therefore to ma e the processes the focus of the organisation. )rocesses must be optimised in the conte!t of the whole system. This will demand a new role of the process owner, with overall accountability for the capability, standardisation and improvement of a process, and with authority to resist pressures for undisciplined change. 0uch people have to learn new s ills in process understanding and improvement, and in how to e!ert their influence in a collaborative and supportive way, often without e!ecutive authority. (epartments still have a role to play in a process focused organisation, but they must see their contribution in terms of adding value for their customers rather than defending their turf in competition with others.

&usiness process change

)rocesses are the way that things get done, so improvement programmes are always about changing processes. 0ince the late -123s in >orth "merica and +urope, quality programmes have been used to try to create these changes, but with very mi!ed success. Anderstanding the lessons from this e!perience is fundamental in planning and implementing business process change and transformation. Gere are some of the lessons of business process change, in the conte!t of quality - you may care to compare them with your own e!perience. Improvement programmes wor when, and only when:

they are seen as the means to achieve the business goals line leadership is really engaged there is a coherent change plan'strategy

appropriate people are selected for the roles involved sponsors, leaders, facilitators, and experts, as well as team members! systematic, consistent, methods are used all training, no matter who for, is meaningful for the work that people are required to do at the time or in the near future pro#ects are properly selected leaders feel accountable but supported achievements and learning are recognised and communicated

"ll of these sub#ects need to be addressed by developing processes with clear purposes, e!plicit inputs, and deliverables, and recognition of the interdependencies. It is the #ob of top line leadership to drive these processes. They cannot be delegated without loss of the essential commitment that enables change. *any leading organisations around the world have researched the best ways to drive strategic business process improvement and transformation. +!amples from eynote conference presentations include Toyota 8-1119, Gonda 8-11@9, 5+ 8,33C9 and *otorola 8,33C9. $hilst some of the western organisations use names such as si! sigma, and the Japanese tend to use acronyms or long standing proprietary labels such as the Toyota way, the common theme is the quality methodology. The best model for those see ing to lead or understand business process change and transformation remains (r (eming's 0ystem of )rofound /nowledge 8-11=9 8see below9

.ecision making

The quality approach is a great help in decision ma ing. $e can define this as the process of arriving at the best option for the system as currently understood. " reliable concept that can improve decision ma ing is the )(0" cycle. The first stage in )(0" should always be study. Boo carefully at whatever the particular issue you're tac ling is, how wide-reaching the effects of it are and who and what it impacts upon. 6bviously, the length of time devoted to this will depend on the scale of the problem you see to address, but it creates the foundations for ta ing action. 7ollowing the study, the ne!t stage is to ma e sense of the data and information, in the planning stage. The individual leading the pro#ect must as some ey questions:

what are we trying to accomplish&

how will we know that any change is an improvement& what changes shall we make that will result in an improvement& what resources will it require, in terms of people, time and money&

These questions form a sensible basis for decision ma ing at every level, from the boardroom to the local team. )roviding initial answers helps to prioritise amongst the alternatives. 6nce they have been addressed, a test should be arranged on a small scale to see if the proposed changes will be as effective as desired, rather than ris ing the changes throughout the organisation. Carry out the test and gather data and observations on the results. This brings the circle bac to study again. Compare what actually happened with what was predicted or e!pected. If the results correspond with predictions, then it is safe to put the changes into full-scale effect. If, however, the results differ from e!pectations, the original theory did not hold water and it's time to go bac to the drawing board. 0o, depending on how the test turned out, the ne!t step is to implement the changes in full, loo again at the original theory and adapt it, or perhaps even abandon the pro#ect if it doesn't appear to merit further attention

&enchmarking
$hen a team or an individual has developed a thorough understanding of the system or processes they are wor ing on, and has implemented some changes, it may be useful to compare with other organisations. In these circumstances they could be see ing to avoid ma ing the same mista es as others, to appreciate that radically different approaches may be available, or that there may be some prior solution that could be transferred. &enchmar ing is a word that has been adopted for this ind of approach. Gowever, it is another word in the improvement field that means different things to different people. It should mean the study of other systems that may offer insight into the improvement of one's own system. It should not mean visits to organisations that may be e!ceptional performers in order to see what can be copied. Copying without theory invites disaster, as countless initiatives in business and government bear testimony. It can be salutary for leaders to e!perience radically better performance than their own system is providing, but it is rarely very useful from a practical point of view. 0uch performance may well have deep roots that cannot be easily transplanted. Improvement programmes should not start with e!ternal benchmar ing. The resources at that stage are much better spent on understanding the current system, the customer e!perience, and learning how to plan and implement improvements. $hen the team has developed this capability it will be able to select from a wide variety of opportunities to learn from others, including:

other parts of the organisation suppliers customers

competitors perhaps through trade associations! professional organisations, chambers of commerce etc conferences

The quality methodologies and tools provide a reliable discipline for these studies. Asing process flowcharts to assess what is happening, and as ing strcutured questions about customers, results and process measures, and how problems are addressed enables people to create theories on which to #udge what they see, and which are essential in getting beyond the superficial impressions.

$itness for purpose

Gere is yet another term that sounds sensible but can be dangerous. Consider Taguchi's definition of quality: '6n target with minimum variation'. There is no specification in this concept, no point at which the acceptable becomes unacceptable. Taguchi's definition has underpinned the great wor of the best Japanese companies, across their whole system. +ngineering drawings may have no ma!imum and minimum dimensions - the supplier is e!pected to wor with its customer to determine the current possibilities and technology and process, and optimise their production accordingly, whilst continually wor ing to improve. The Toyota way see s to provide one unit at a time, synchronised with customer demands - <ero inventory is the goal, they are constantly see ing ways to improve what is done in order to get closer. 7itness for purpose on the other hand, is another way of tal ing about conformance with requirements, within specification - right first time. 7itness for purpose sounds customer focused, however, as with any specification, it can be arbitrary and may not stand up to open discussion on both sides. 7urther, it can either limit ambition by being too easy and generalised, or it may demoralise people by seeming unrealistic and impossible. /ano's model of customer satisfaction provides the e!planation 8reference: http:??en.wi ipedia.org?wi i?/anoKmodel9.
>. Assumed quality describes those characteristics that we don't think to ask for, but must be provided. 3oing them well is not recognised, doing them badly causes complaints. A recent example of a luxury hotel whose water heating failed, and thus became the talk of the rest of the holiday, illustrates this point. It is the suppliers' #ob to understand what these features are, and provide them reliably, and expect no credit for doing so. J. 4xpected quality describes those characteristics that customers ask for. If the supplier responds to the requests effectively, the customer appreciates them. $his is fitness for purpose in apparent action. <owever, after a depressingly short time such characteristics fall into assumed quality and are not appreciated. (ountless consumer features from airbags in cars to central heating in homes illustrate this point. *itness for purpose does not enhance reputations in the long term. I. 4xciting quality is a special term to summarise those characteristics that drive customer delight. $hey include characteristics that the supplier anticipated on behalf of the customer, thanks to a thorough knowledge of the customer's application. %ith this knowledge suppliers can identify a hidden want or need. %ell known consumer

examples include text messaging and the 2ony %alkman. 4xciting quality features tend to move into the expected category, and eventually into the assumed one.

0o beware those who spea of fitness for purpose. "long with many phrases it sounds li e common sense, but can turn out to betray limited thin ing, and disappointment for those who pursue it.

$uture quality developments

The quality movement holds the potential to be the fulcrum on which the world is transformed into a better place. Beaders need to have desire, persistence and energy, but the quality movement is the only way to build truly customer focussed and capable organisations. 7rom the most trivial technique to the most profound principle, the quality concept is universal:

the quality tools can be applied to every process across the organisation, from sales to delivery, from development to accounting, from manufacturing to teaching improving processes improves results, nothing else does this system thinking enables leaders to optimise their whole system - for the customer, for safety, for the environment, for the owners. (ompromise will always be needed, but no other approach brings the scientific method to bear in generating theories and providing the evidence to validate them the quality movement is, at its heart, an honest movement. $he philosophy demands involving people who know about the process being worked on, as the tools only work in an open environment where data is made visible and is not distorted leading one's organisation to create capability to serve its customers, and reducing its impact on the environment, is an activity amongst the most noble of human endeavours. $hose who lead and participate in such efforts find fulfilment in the work and in the achievements. $his is not #ust hype, it is the reason that the quality movement has so many enthusiasts who have learned about its potential over many years

7uture quality developments need to focus upon the motivations of leaders, and on ways to get alongside those who will need to change, not to confront them and threaten them. It demands that practitioners develop a broad s ill set in:

understanding their system learning how to learn and describe their world accurately involving and motivating those who are in the system getting the processes on target with minimum variation in the cause of innovating and optimising the whole system

This is (r (eming's system of profound nowledge, developed in the late -1;3s after a lifetime of theory and practice around the world over the whole history of mass production and the start of globalisation. Together with the many methodologies developed by Japanese and western academics and practitioners, the quality professional has in his or her hands the approach that can improving service, reducing the impact on the environment, reducing costs and building satisfaction in the wor force. "ll we have to do is learn how to apply itO