Quality management evolution in service companies
Elisabeth Johansson, Linköping University, Sweden, [email protected]
Lars Witell, Linköping University and Karlstad University, Sweden
Åsa Rönnbäck, Viktoria Institute, Gothenburg, Sweden
Abstract
Purpose: This study investigates how a quality profile can evolve over time and how
different interventions can develop and change an existing quality profile.
Methodology/approach: Data was collected over a five-year period, including a
literature review, interviews, a document study and observations to capture the quality profile
and associated interventions. The study was carried out in a service organisation in the public
transportation industry.
Findings: This study shows that the quality profile can change over time due to the use
of specific interventions. If a company wants to emphasise a specific quality principle, it must
target the quality principle with one or more interventions. However, even if a quality
principle is supported by several interventions, there is no guarantee that the quality principle
will show improvement in the quality profile. Also, the quality profile becomes more even
over time. This can be explained by the internal consistency of the quality principles.
Research limitations/implications: This paper sheds light on the need to study the
adoption of individual quality principles and the design and evolution of a quality profile.
Practical implications: The results can provide insights for organisations aiming to
embark on a quality programme, specifically how to design and develop a quality profile.
Originality/value: This research implies that the quality profile is a recurring, general
phenomenon in all quality management improvement programmes. In other words, successful
implementation of quality management requires a cohesive quality profile.
Keywords: Quality management, Quality principles, Quality profile, Service
organisations
Paper type: Research paper
Introduction
The growth of the service sector has resulted in an increased focus on the
implementation of quality programmes in service organisations that are interested in
delivering high-quality service to customers (Schneider and White, 2004). Concepts such as
Lean Services (Swank, 2003) and Lean Six Sigma for service (George, 2003) have appeared
from the service sector. However, an organisation will only achieve a competitive advantage
through a quality programme if there is a match between the importance that the markets
assign to the individual quality principles and the organisation’s quality profile.
Some research suggests that successful implementation of quality management requires
a radical change (e.g., Dobyns and Crawford-Mason, 1991; Reger et al., 1994). According to
this view, a quality profile cannot simply be implemented based on the existing management
structures and systems; it may require the redesign of work, the redefinition of managerial
roles, the redesign of organisational structures, the learning of new skills by employees and
the reorientation of organisational goals (Grant et al., 1994). Some companies have stuck to
the same improvement programme throughout the last decade, while others have tried to
implement one improvement programme after another in order to change the underlying
quality profile of the organisation.
Market turbulence has caused customer requirements to change considerably (Jaworski
and Kohli, 1993). This makes it important for an organisation to shift its emphasis from
certain quality principles to others over time; that is, to change the quality profile. However,
research has shown that it can be difficult for an organisation to change its quality profile.
Ahire (1996) showed that the quality profile looks the same for organisations that have
worked for a long time with quality management as it is for those that are just embarking the
journey. In their investigation of 100 service organisations, Johansson et al. (2010) found that
organisations seem to stick to their quality profile and not make any dramatic changes in the
quality principles. In addition, their research shows that when an organisation becomes more
mature in their quality programme, the quality profile becomes more even, which means that
the organisation has widened its focus to emphasise more quality principles. If a quality
profile is so difficult to change, the question is what interventions an organisation can use to
develop specific quality principles to change their quality profile.
The purpose of the present study is to investigate how a quality profile can evolve over
time and, in particular, how different kinds of interventions can further develop or change an
existing quality profile. The study focuses on the implementation of a quality programme to
develop the quality profile of a service organisation in the public transportation industry.
Unlike previous research, the present study shows that it is possible to change the quality
profile over time and that it is the interventions that transform the quality profile.
A Conceptual Framework for the Development of a Quality Profile
Dean and Bowen (1994) viewed quality management as a philosophy that is
characterised by principles, practices and techniques. The quality principles are a set of
underlying assumptions of how to view the organisation and its relation to customers,
competitors and suppliers. Following Hackman and Wageman (1995), the principles are a set
of core values about people, organisations and change processes. Each principle is
implemented through a set of practices, which are activities designed to display and embody
the principles. The practices are, in turn, supported by a wide array of techniques to make the
practices effective. Hackman and Wageman’s (1995) point was that the values of quality
management are supported by interventions. In their view, the interventions are focused on
measurement of customer requirements, supplier relationships, cross-functional teams and
methods used to monitor performance.
An improvement programme can be defined as a purposeful and explicit set of
principles, practices and techniques adopted to generate ongoing, systematic and cumulative
improvement in the processes and output of an organisation (Nilsson-Witell et al., 2005). The
present paper’s view of improvement programmes emphasises the importance of the
principles of quality management as well as the need to put the principles into practice to
improve organisational performance. Ahire et al. (1996) proposed a quality improvement
programme that contained 12 different principles. Flynn et al. (1994) included seven
dimensions in their framework for quality management: top management support, quality
information, process management, product design, workforce management, supplier
involvement and customer involvement. Although a quality programme is built on a wide
range of quality principles, different improvement programmes emphasise different quality
principles. As an example, Six Sigma emphasises process orientation, leadership and base
decisions on facts, while Lean manufacturing emphasises process orientation, leadership and
employee involvement. However, it is important to enclose all principles in the improvement
programme because implementing quality principles in isolation can lead to failure in the
quality programme (Ahire et al., 1996).
The conceptual framework presented in this paper builds on the concept of a quality
improvement programme consisting of principles, practices and techniques (Dean and Bowen,
1994; Nilsson-Witell et al., 2005). The key to implementing a quality programme is to choose
what quality principles to emphasise in order to build the quality profile of the organisation.
The quality profile is built by performing different interventions to implement different
practices and techniques that enhance one or several quality principles, thereby further
developing the quality profile of the organisation (see Figure 1).
Techniques
Interventions
Practices
Quality profile
Principles
Figure 1: A framework for developing and changing a quality profile.
This framework for developing a quality profile is based on a number of assumptions
about the fundamental relationship between employees, managers and the organisation. The
first assumption is that employees naturally care about the quality of work they do and will
take the initiative in order to improve it (Hackman and Wageman, 1995). In addition, senior
managers create the organisational systems that determine how products and services are
designed and produced; the improvement process starts with management’s own commitment
to the improvement programme (Hackman and Wageman, 1995). In addition to management
attention, employees need techniques and training in order to participate in quality
improvement activities.
What is a Quality Profile?
Previous research has used the term quality profile in various ways over a period of 40
years. Zusman and Slawson (1972) used the term in a service context when operationalizing a
service quality profile as an agency’s scores on a number of dimensions. In this case, the
quality profile was used as guidance to allocate resources in a rational manner (Zusman and
Slawson, 1972). Farin et al. (2004) used quality profiles to assure quality in rehabilitation
conditions in health care services in Germany. The quality profile consisted of four principles:
(i) comprehensive measurement of all relevant quality dimensions, (ii) reporting on three
analysis levels and systematic comparisons of centres on the basis of risk adjustment, (iii)
agreement and further development of the assessment procedures with the co-operation of
clinical experts from the centres involved and (iv) use of generic and disease-specific
measurement instruments (Farin et al., 2004). While exploring the relationship between
psychosocial work environment and internal service quality, Edvardsson et al. (1997) used the
concept of a quality profile. In this study, the quality profile was based on SERVQUAL and
included dimensions such as public image, reliability, responsiveness, confidence, sensitivity
and empathy. However, the quality principles used in previous research are clearly related to
health care services and quality dimensions of the delivered services and are not applicable in
the present research.
However, previous research has used the concept of a quality profile in a similar
perspective as the present conceptualisation. In one case, the quality profile is a kind of
average for the whole organisation, in which the strengths and weaknesses of the various
aspects of the organisation are visualised (Dahlgaard et al., 1994). Jochem (2009) presented
the quality profile as a result of added quality indexes that were assigned to each process. The
profile in this context is used for weak-point analysis and internal or external benchmarking.
Motwani et al. (1993) based their quality profile on Deming’s 14 principles and used the
quality profile to determine an organisation’s quality position and quality improvements.
Their view makes it possible to investigate the quality profile in longitudinal studies of
quality, productivity and competitiveness. This approach corresponds rather well to the
present perspective on quality profiles. The view of quality profile adopted here also
corresponds with that of Johansson et al. (2010), which consists of the principles of
leadership, employee management, process orientation and customer orientation.
The present empirical investigation views the quality profile of an organisation as
patterns of performance of a set of quality principles. Accordingly, the principle/principles of
the quality profile on which the organisation focuses have higher performance levels than
other quality principles. The principles cannot be directly observed in an organisation, while
the quality profile is indirectly observed through the use of different practices and techniques.
With the principles visualised in a quality profile, it is easy to observe what principles are
emphasised in the organisation and, furthermore, identify the principles that the organisation
should focus on next. This simplifies the situation for an organisation that is striving to reduce
the gap between actual and ideal quality management (Benson et al., 1991). Furthermore, if
an organisation’s departments emphasise different things, this will be seen as different
patterns in the quality profile for each department. By studying the pattern of the quality
profiles, it becomes more straightforward to find these diverse behaviours or visions within an
organisation.
Developing and Changing a Quality Profile through Interventions
It can be difficult for an organisation to select a strategy with which to develop and
change its quality profile; that is, to know both what to do and how to implement quality
management (Sousa and Voss, 2002). There is no united framework for how to implement
quality management or what kind of principles to focus on, either in different kinds of
organisations or during different phases of the implementation process. An organisation must
find different interventions that can support the development of different principles. The
principles put different practices and techniques into work that can be implemented through
different sets of interventions. Examples of interventions include education, cross-functional
teams, use of external consultants, mentorship and Kaizen teams. Hackman and Wageman
(1995) argued that, at least in the early papers on TQM (1989 to 1993), as few as 4 percent of
studies took the interventions into account when evaluating the effectiveness of quality
programmes. In their view, there are four interventions at the core of quality management: (i)
a focus on work processes, (ii) analysis of variability, (iii) management by fact and (iv)
learning. Utilising the wrong interventions is perhaps the most frequent reason for failure
(Glover, 1993). Ahire (1996) pointed out that only one-third of all companies working with
quality management implementation accomplish anything at all, while the other two-thirds
ground to a halt.
Furthermore, Ahire (1996) found that organisations at the start of the quality
management journey implement quality management more efficiently than organisations that
are more mature in their quality management implementation. Ahire concluded that it is easier
to root interventions for less experienced quality management organisations and, in so doing,
achieve a higher operational performance sooner than those organisations that have longer
experience of quality management. On the other hand, Dooley et al. (2001) argued that,
together with increased maturity, project results such as project costs decrease and timeliness
increases. They also argued that when an organisation is more mature it will have fewer
problems in terms of improving its organisational performance.
Even at the start of an improvement programme, it is important to use the correct
interventions to support the quality principles the organisation wants to emphasise. This helps
managers and employees to be committed, which is a vital part of an improvement
programme (Dahlgaard et al., 1998). In a study of 44 leading companies in the United States,
the first principles associated with the start of quality management were leadership, training
and teams (Easton and Jarrell, 2000). This corresponds with the results of Johansson et al.
(2010) study of 100 Swedish service organisations. Ahires’ (1996) study showed that the
quality profile looks the same for organisations that have worked for a long time with quality
management as it does for those just embarking on the journey. Johansson et al. (2010) found
similar results when observing that the quality profile does not change formation. The
question is how an organisation needs to work to change its quality profile. The present
paper’s framework introduces and improves quality principles through practices and
techniques that are supported by interventions. The interventions are basically the strategy for
which practices and techniques to use when changing the principles in the quality profile. The
following section tests this framework through an empirical investigation in order to try to
identify possible interventions that can change the quality profile of an organisation.
Research Methodology
Data Collection and Analysis
The data was collected over a five-year period, from 2006 to 2010, through interviews,
a document study, a literature review and observations. Over this period, the main researcher
conducted 28 five-hour sessions with the management team, several cross-functional team
meetings, meetings with all employees of the firm, as well as meetings with the CEO and
other representatives of the organisation and its partners. Also, an interview study was
conducted in 2006/2007 that covered 26 managers and employees of both the case
organisation and its largest partner. An additional interview study was conducted in order to
investigate the role of quality in the public procurement process, covering eight participants
with different roles in the public procurement process. Parallel to these studies, participant
observations and interviews were conducted with the aim of exploring and describing the
design and evolvement of the quality profile.
The data analysis was performed in two stages. Firstly, the documentation from the
observations and interviews was studied in order to design the quality profile. This included
(1) the selected principles, (2) the order in which they had been adopted, (3) how the quality
profile had developed over time and (4) the role of different interventions. Secondly, in order
to capture the shape of the quality profile and how it has evolved over time, the analysis was
divided into two parts, where the first period included 2006–2008 and the second period
represented 2008–2010. Hence, the analysis focuses on the structure of the quality profile,
how it has evolved over time and also how different kinds of interventions have influenced
the quality profile. We identified a number of interventions used at Värmlandstrafik AB and
tried to describe the intervention, the period for which it was applied, the principles that were
targeted and other principles that created a secondary effect through a specific intervention.
The Case: Värmlandstrafik AB
The starting point
Värmlandstrafik AB appointed a new CEO in 2003 who decided to focus on quality
improvements. Each employee was given a work description, something they had not had
before. This was deemed necessary as the managers’ and employees’ roles and
responsibilities had been unclear. In 2004, a change management consultant was engaged to
work together with the management team and all employees. The first step was to decide on
the organisation’s business idea, vision, values and main tasks for the organisation. All
employees were also involved in a ‘SWOT analysis’ to identify strengths, weaknesses,
opportunities and threats. This work continued for one and a half years. As seen above, the
PTA’s history of working with quality management is not extensive, which meant that the
organisation’s starting quality profile was low on all quality principles.
The principles that were followed throughout the period at Värmlandstrafik AB were
leadership, process orientation, customer orientation, employee management and continuous
improvement. These principles have been adopted and developed in a stepwise approach at
Värmlandstrafik AB. The rationale for using a stepwise approach rather than a full
improvement programme was threefold. The first reason was the PTA’s low quality maturity,
not having had any previous experiences of working with quality management, which made it
necessary to begin with the basics of quality management and develop from there. Secondly,
it corresponded with the action research approach; that is, not having a predetermined view of
the following stages in the improvement programme. Thirdly, previous research has shown
that full total quality management programmes have a high failure rate (see, e.g., Harari,
1993; Brown et al., 1994; Senge, 1999). One of the researchers has been involved in the
development of the quality profile together with the managers and employees at the PTA and
the operator.
The first period (2006–2008)
Commitment by management is of decisive importance in the implementation and
sustaining quality management (Ahire et al. 1996; Dahlgaard et al., 1997; van der Wiele and
Brown, 2002; Hansson and Klefsjö, 2003). Accordingly, the first step in the quality
programme in October 2006 was to work with the management team. The managers’
knowledge of quality management was relatively low. As Beer (2003) noted, if the
understanding of quality management by senior management is low, commitment will also be
low and will lead to early abandonment. For this reason, it was important that management
increased its understanding of quality management in general and how it could benefit their
organisation.
Shortly after starting to work with management’s commitment to quality, the next step
involved focusing on the processes of the organisation (Nilsson et al., 2001; Rönnbäck and
Witell, 2008). As each process derives from the needs and expectations of a customer, the
principle customer orientation was developed parallel to process orientation. A consultant
assisted the main researcher between October 2006 and January 2007 in the work of process
orientation. Also, from early 2006 onwards, the PTA and operator held yearly seminars that
focused on improving their common processes.
In the first run, in June 2007, in order to make all employees involved in the
development project according to the principle of employee management (Nilsson et al.,
2001; Rönnbäck and Witell, 2008), 10 employees were trained in process management,
particularly in process mapping. These employees came from different departments within the
PTA’s organisation. The role of these cross-functional process teams (see, e.g., Lee and Dale,
1998) was to map and document the processes, assess performance and analyse deficiencies.
The next step was to select an improvement strategy together with management, propose
design changes, implement fixes and assess results. Another important role of the process
teams was to support employee empowerment (DeToro and McCabe, 1997).
The second period (2008–2010)
The second run of the training programme of employees was carried out in March 2008.
All employees at the PTA were educated in process orientation and process mapping. Every
employee at the PTA had the opportunity to map the processes they were working on and
suggest areas of improvement related to each process. This was the start of the process
improvement work according to the principle of continuous improvement. Also, a group was
arranged in 2008 to establish Key Performance Indicators (KPIs) (Kaplan and Norton, 2001;
2005) related to the common processes between the PTA and operator. In order to generate
more improvement ideas, an IT module for process improvement was implemented and
launched in 2009. The management team administered all of the submitted improvement ideas
on a weekly basis and made implementation decisions. Also, in 2010 the PTA engaged a
consultant who designs a customer satisfaction measurement system in order to increase the
focus on customers. The consultant works with members from both the PTA and the largest
operators in bus and train traffic.
The use of interventions at Värmlandstrafik AB
Värmlandstrafik AB started from a position of having very low experience of quality
management. From this position, it adopted and developed the following quality principles:
leadership, process orientation, customer orientation, employee management and continuous
improvement. Different kinds of interventions have been used for each principle, which have
influenced the quality profile of the organisation. Table I describes the interventions and how
the target and supported principles are related to each intervention. In this context, target
principle refers to the principle that was intended to be developed by the intervention.
Supported principles are those principles that, in addition to the target principle, were also
influenced by the specific intervention.
Table I. The interventions used in the five-year development project.
Intervention
Period
Target Principles
Also supported
principles
Education of
management team in
quality management.
2006–2010
Leadership
Process
orientation
Customer
orientation
Employee
management
Continuous
improvement
An external
consultant participates
in the education of
mangers in process
orientation.
Interorganisational
seminars
2006–2007
Process
orientation
Customer
orientation
2006–2010
Continuous
improvement
Crossfunctional teams
2007–2009
Education of
employees
2007–2008
Education of
operator’s managers
and employees
2008
Process
orientation
Customer
orientation
Leadership
Process
orientation
Employee
management
Continuous
improvement
Employee
management
Process
orientation
Continuous
improvement
Process
orientation
‘KPI group’
2008–2010
Implementation
of IT support
2009
Setting up a
customer satisfaction
measurement system
2010
Continuous
improvement
Process
orientation
Continuous
improvement
Process
orientation
Customer
orientation
Customer
orientation
Customer
orientation
Customer
orientation
Employee
management
Continuous
improvement
Customer
orientation
Employee
management
Employee
management
Continuous
improvement
As Table I shows, the nine interventions support several quality principles, all of which
showed improvements over time. Figure 2 visualises how the quality profile has developed
and includes three measurements: the starting point (T0), the first period (2006–2008 (T1))
and the second period (2008–2010 (T2)). Following Lascelles and Dale (1991), the
development rate of quality management is described on three levels: low, medium and high.
In T2, the PTA reached a medium level in the majority of quality principles. At the starting
point of the project, the principles of leadership, employee management and customer
orientation all displayed low levels. In T1, leadership, process orientation and employee
management showed improvements and rose from a low to a medium level. Also, customer
orientation showed minor improvements. Furthermore, systematic routines for working with
continuous improvement were introduced in T1. In T2, leadership, process orientation,
customer orientation and continuous improvement all improved but the principle of employee
management dropped compared to T1. The greatest improvements from T1 to T2 can be seen
in the principles of leadership and continuous improvement.
These results can be explained by the types of interventions that were used during this
five-year period. As Table I shows, process orientation is the most commonly targeted
principle, included in eight of the nine interventions. Like the cross-functional teams, all
employees had the opportunity to map the processes they worked in and to suggest process
improvements. Also, six managers and employees at the largest operator were educated in
process orientation and process mapping in 2008, with the aim of improving the common
processes between the PTA and operator. As shown, a number of practices and techniques
were used during this project, all of which embodied the principle of process orientation,
which showed positive development throughout the improvement programme (see Figure 2).
The second most common targeted principle is continuous improvement, which was
influenced in four out of the nine interventions. However, the emphasis on continuous
improvement came relatively late in the development of the quality profile (see Figure 2).
This can be explained by the focus in the early phases on educating managers and employees,
mapping processes and building a process structure. When the processes were in place, an
intranet application was launched in order to generate more ideas for process improvement.
The training of managers was given a high priority throughout the project in order to increase
management’s commitment to quality management (see, e.g., Beer, 2003). This included 28
five-hour seminars with the members of the management team. The practices and techniques
that have been used during these sessions included quality management systems and ISO
9001, self-assessment and the ‘Springboard’ model (Hellsten, 1997).
The reduced level of employee management in the quality profile during the last period
is noteworthy. This can be explained by the fact that the key person was absent during 2009
and did not work with the employees as they continued their training programme during that
year. The fact that the intervention of employee training was taken away during 2009 led to
the employees not being involved in the development and improvements to the same extent as
they had in previous years.
High level
Quality Profile evolvement
Medium level
Low level
Continuous improvements
Customer orientation
Employee management
Process orientation
Leadership
T0
Figure 2. Quality profile evolvement at Värmlandstrafik AB.
T1
T2
Conclusion
This empirical investigation of quality profiles in service organisations has highlighted
how specific interventions can be used to change and further develop a quality profile. In
general, the findings contribute to the discussions of quality management in service
organisations (Rönnbäck and Witell, 2008), the role of interventions in the development of
quality management (Hackman and Wageman, 1995) and quality profiles (Johansson et al.,
2010). The present empirical investigation has several implications.
Firstly, the study changes the emphasis from the specific quality programme, such as
TQM, Six Sigma or Lean, towards the quality profile of the organisation. The reason for this
is that companies often adopt one or more improvement programmes simultaneously and,
after failing with one improvement programme, try another type of improvement programme.
Nilsson-Witell et al. (2005) conducted a case study of Volvo in which the company works
with three improvement programmes simultaneously in the same organisational unit. Each
improvement programme emphasised specific quality principles that, together, built up the
quality profile of the organisation. Therefore, regardless of whether an organisation chooses
TQM, Six Sigma or Lean, the quality profile is a recurring, general phenomenon in all
programmes.
Secondly, the investigation of how a quality profile develops over time in a service
organisation shows that the quality profile can change over time. This contradicts previous
survey research, which claimed that companies stick to the same quality profile over time
(see, e.g., Ahire, 1996; Johansson et al., 2010). The present research highlights the fact that
the interventions a company chooses in its quality programme can help the company change
its quality profile. If a company wants to emphasise a specific quality principle, it must target
the quality principle with one or more interventions. However, even if a quality principle is
supported by many interventions, there is no guarantee that the quality principle will show
improvement in the quality profile. At Värmlandstrafik AB, the principle of customer
orientation was targeted by two interventions and supported by several interventions; despite
this, it has only shown a modest improvement over time. This suggests that a quality profile
must include appropriate interventions that are customised to fit the organisation’s quality
maturity, culture, the overall management process and whether the production process
considers services or goods (see also Glover, 1993; Povey, 1996).
Thirdly, with regard to what quality principles to emphasise in the quality profile, the
present case follows a specific pattern. Leadership shows a higher level than the other quality
principles over all time periods covered in the study. This concurs with previous research that
organisations that are immature in their quality initiative tend to emphasise leadership
(Johansson et al., 2010). The focus then turned to internal aspects such as process orientation
and employee management (Rönnbäck and Witell, 2008). Ettlie and Johnson (1994) found
that internal aspects, such as processes and employees, have a negative impact on customer
orientation in low and medium-level organisations. Also, Johansson et al. (2010) found that
the relative emphasis on customer orientation is low in early initiatives of quality
management, although it increases for medium level organisations. This concurs with the
results of the present study.
Fourthly, the research supports the findings of previous research that the quality profile
often starts out uneven and then becomes more even over time (see, e.g., Johansson et al.,
2010). However, the present study extends the previous research by identifying the
mechanisms that make the quality profile more even. The main explanation is that most
interventions, in addition to improving the targeted quality principle, also support the
improvement of several other quality principles. As an example, when Värmlandstrafik AB
wanted to improve process orientation by educating operator’s managers and employees, they
also achieved improvements in customer orientation, employee management and continuous
improvement. This internal consistency of the quality profile is a strength of quality
management and partly explains the success of quality management throughout different
industries and countries.
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