January 2003
Volume 10 • Number 1

Contents

Executive Briefs

The Importance of Reliability and Customization from Goods to Services

Michael D. Johnson, University of Michigan Business School, and Lars Nilsson, Karlstad University

Although there is a substantial body of research on quality, there is still disagreement as to the effect of reliability, or things gone wrong, as opposed to customization, or things gone right, on customer satisfaction with goods and services. Service quality researchers argue that reliability is relatively more important for services because of the nature of service production compared to goods production. In contrast, customer satisfaction researchers argue that a service firm’s ability to customize its service to individuals makes customization relatively more important for services than for goods.

There is no broad-based evidence, however, of the relative importance of customization vs. reliability across the goods-to-services continuum. The authors’ goal is to provide a direct test of the relative impact of the different quality dimensions on customer satisfaction. They use American Customer Satisfaction Index (ACSI) data from up to 188 firms over a four-year period to test their hypotheses.

Service quality and customer satisfaction researchers have raised two very different arguments regarding the implications of service production vis-a-vis goods production for customization and reliability. The simultaneity of production and consumption combined with the greater ratio of human involvement creates more inherent reliability problems for services than for goods. Primary support for the importance of service reliability in the services quality literature comes from studies using the SERVQUAL survey methodology (Parasuraman, Zeithaml, and Berry 1985; 1988).

On the other hand, Huff, Fornell, and Anderson (1996) argue that reliability is likely to drive overall quality when there is meaningful variation in defects between competing products and customers are able to differentiate the variation. The intangible, subjective nature of service performance makes the customers’ ability to differentiate service variation more difficult.

This study and results show that customization and reliability play different roles in driving customer satisfaction along the goods-to-services continuum. Reliability becomes relatively more important when compared to customization when moving from pure goods to services. The authors’ findings are consistent with the argument that coproduction makes reliability inherently more important for services. The findings are inconsistent with arguments that customization is more important in a service context because of the one-to-one nature of service production.

 

The Quality of the Quality Consultants: An Empirical Study

Frederic Marimon Viadiu, Universitat Internacional de Catalunya, Marti Casadesus Fa, Universitat de Girona, and Inaki Heras Saizarbitoria, Universidad del Pais Vasco

In this article the authors analyze the quality of the service offered by consultancy companies, particularly those specializing in the implementation of the ISO 9000 standard, a market that has grown tremendously in recent years. The main objective is to analyze the benefits that these companies bring, as well as the possible relationship between these benefits and the quality of service as perceived by the client.

The authors carried out an empirical study with the aim of finding out what the benefits are and how companies feel about the quality of the service provided by external consultants involved in the implementation of the ISO 9000 standard. A sample was taken of companies in Spain that have used consultancy services for implementing quality assurance systems in keeping with the ISO 9000 standards.

The authors determined that there are three factors that define the perceived quality of ISO 9000 consultancy:

1. Personal quality of the consultant
2. Scheduling
3. Tangibles

From the authors’ study, they can draw the overall conclusion that the ISO 9000 advisory services are favorably regarded. However, clients expect even higher quality from the service than that which is actually provided. Also, the results of the study show that the performance of independent professional consultants is very different from that of small consultant companies. Independent consultants offer a high-quality service that lives up to the high expectations of their clients. It has also been noted that the quality offered by consultant companies that employ a staff of professionals varies according to the size of the consulting company.

 

Examining the Association Between Quality and Productivity Performance in a Service Organization

Constantine Kontoghiorghes, Oakland University

Given the perceived disparity between the productivity and quality improvement approaches, and the paramount need of today’s organizations to produce high-quality products and services in an efficient manner, the main purpose of this study is to examine the compatibility of productivity and quality management practices in a service organization. In doing so, the relationship between distinct quality and productivity indicators is assessed and described. Further, this study attempts to identify organizational variables that are important for quality and productivity performance and hence describe the extent to which the constructs are influenced by a set of common variables.

The main research questions investigated by this study are:

1. What is the relationship between the identified productivity and quality indicators?
2. Which of the quality indicators, quality management variables, and other organizational variables incorporated in the study can serve as key predictors of productivity performance?

To conduct this study, the author used a Likert-item questionnaire. The sampling frame of this study consisted of 256 employees of a large organization in the health-care insurance industry.

The strong correlations between quality and productivity indicators demonstrate the strong association between productivity and quality performance and suggest that investments in quality initiatives should result in productivity gains.

The following quality management variables were found to be the strongest predictors of productive, timely, and cost-effective performance:

• The extent to which work output by peers is consistently delivered in a complete fashion
• The extent to which employees are satisfied with the internal processes of the organization
• The extent to which product or service quality is measured at every step of the process
• The extent to which there is an emphasis on doing things right the first time
• The extent to which there is satisfaction with the quality of peer work output
• The extent to which the organization focuses on process improvement
• The extent to which employees are involved in the decision-making process

 

Self-Assessment Methodology: The Route to Business Excellence

A. M. Ahmed, Bradford University School of Management, J. B. Yang and B. G. Dale, Manchester School of Management

In recent years, there has been an increasing interest in the area of organizational self-assessment and an increasing number of companies have used the European Foundation for Quality Management (EFQM) business excellence model as the template for testing different business strategies as well as for measuring performance. There is little evidence, however, that any methodology can help organizations link the areas for improvement identified from the assessment to their business’ action plans at strategic, tactical, and operational levels.

This article is based on research conducted as part of an Engineering Physical Sciences Research Council funded project that examines measuring and assessing business performance through self-assessment and decision modeling. The research addresses the problems associated with the current methods of assessing organizational performance against the EFQM business excellence model. It also allows the application of the decision support system to the self-assessment process, which enables an independent assessor to improve the scoring accuracy of an organization’s self-assessment document against the model’s criteria, thus providing a more accurate scoring decision.

The authors’ proposed methodology provides an eight-level structured framework for self-assessment. Level zero represents the initial decision relating to the appropriateness of applying for the EFQM award. Level one illustrates the ingredients required for the assessment process. Level two indicates the understanding stage with reference to the EFQM criteria. Level three identifies which of the subcriteria requires a focus on planning, action, measuring, or improving. Level four concentrates on classifying organizations into seven categories and specifying the characteristics associated with each category. Level five focuses on the results, approach, deployment, assessment, and review logic, and level six provides a comprehensive guideline for assessing each element of the EFQM criteria. Level seven is designed to weigh the final scores of the self-assessment process.

The research findings show the mixed levels of understanding and experience of both business excellence and self-assessment within collaborating organizations. These organizations are doing self-assessment in different ways for different reasons. The general opinion on self-assessment is that it provides a useful tool for measuring organizational performance and identifying areas for improvement. In doing so it facilitates benchmarking internally and externally, provides a common language between those companies employing self-assessment, and prepares organizations for future competition.

 

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