Do Controller Departments Measure Quality Costs?


Tyson, Thomas N.   (1987, ASQC)   Clarkson University, Potsdam, NY

41st Annual Quality Congress, May 1987, Minneapolis, MN    Vol. 41    No. 0
QICID: 3367    May 1987    pp. 684-687
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Article Abstract

Many organizations are now adopting quality improvement as their primary organizational objective. Effectively evaluating performance in quality improvement requires specific and regular measurement of activities underlying the quality area. The quality cost literature frequently and consistently calls for controller department participation in this measurement activity. Among other reaons, controller department participation lends validity, reliability, and credibility to quality cost numbers and generally increases the company-wide exposure of quality improvement programs.This study investigated a number of issues surrounding controller department participation in quality cost measurement among the 1985 Fortune 500 industrial corporations. One hundred and twenty-five corporations were randomly selected from this population of firms. Corporate controller department personnel were contacted by telephone and asked a variety of questions relating to the quality area and the measurement of quality costs. This group of firms was selected for study primarily because many articles that describe successful quality cost programs are written by quality managers of major industrial corporations. Thus controller department personnel in these firms should be most knowledgeable about the purposes and benefits of quality cost measurement.Telephone interviews were chosen as the mechanism for collecting data for a number of reasons. Since the study focuses on controller department participation among a large number of firms, the high costs of conducting face-to-face interviews necessarily limit the number of firms that can be contacted. Telephone interviews traditionally generate substantially higher response rates than mail questionnaires and lead to less biased results. This procedure also enabled the researcher to obtain insightful narrative comments from participants regarding the reasons measurement is or is not undertaken. The relatively high response rate attained in the present study and the request by over 90% of respondents to be furnished a summary of findings justifies the selection of this data collection technique.Data was analyzed to identify statistically significant factors that may differentiate measuring from non-measuring corporate controller departments. Information was generated regarding the nature, extent, and scope of this measurement activity by corporate controller departments. Controller department personnel are also asked to express their beliefs about the relationship of quality to profitability. Results of this tudy should interest those individuals seeking greater controller department involvement in the quality area.

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