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Chapter 3 Quality Planning

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Chapter Outline

SWOT analysis
Strategic planning

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Organizational culture

2
S
SWOT Analysis

W
O
!

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What is SWOT Analysis?

Acronym for
Strengths,
Weaknesses,
Strength Opportunities, and
s Threats.
Technique is credited to

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Albert Humphrey who
led a research project
at Stanford University

Oppurtuni
SWOT Weakne
in the 1960s and
1970s.
Planning tool used to
ty Analysis ss understand Strengths,
Weaknesses,
Opportunities, &
Threats involved in a
project / business.
Technique that enables
Threa a group / individual to
ts move from everyday
problems / traditional
strategies to a fresh
perspective. 4
What is SWOT?

SWOT is a business or
strategic planning technique
used to summarise the key

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components of your
strategic environments.

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Introduction

SWOT analysis (strengths, weaknesses,


opportunities, and threats analysis) is a
framework for identifying and analyzing the

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internal and external factors that can have
an impact on the viability of a project,
product, place or person.

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SWOT Analysis

SWOT is a summary of your

Strengths

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Interna
Weaknesses l
Opportunities
Threats Externa
l

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Internal vs. External

Strengths and Weaknesses are considered


internal factors---meaning you as the business
owner can control them. How you manage or
market the business controls whether it is a

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strength or weakness

Opportunities and Threats are considered


external factors---meaning you have little
control over them. It is your job as a business
owner to respond appropriately .

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SWOT analysis examines four elements

Strengths - internal attributes and resources that


support a successful outcome.

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Weaknesses - internal attributes resources that
work against a successful outcome.

Opportunities - external factors the project can


capitalize on or use to its advantage.

Threats - external factors that could jeopardize the


project.
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What is SWOT Analysis?

STRENGTHS
Characteristics of the business or a
team that give it an advantage over
others in the industry.
Positive tangible and intangible attributes,

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internal to an organization.

Beneficial aspects of the organization or


the capabilities of an organization, which
includes human competencies, process
capabilities, financial resources, products
and services, customer goodwill and brand
loyalty.
Examples -, Well-known brand name,,
Lower costs [raw materials or processes],
Superior management talent, Better
marketing skills, Good distribution skills,
Committed employees.

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What is SWOT Analysis?
WEAKNESSES

Characteristics that place the


firm at a disadvantage relative
to others.
Detract the organization from its
ability to attain the core goal and

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influence its growth.

Weaknesses are the factors which do


not meet the standards we feel they
should meet. However, sometimes
weaknesses are controllable. They
must be minimized and eliminated.

Examples - Limited financial resources,


Limited distribution, Higher costs, Out-
of-date products / technology, Weak
market image, Poor marketing skills,
Limited management skills.
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What is SWOT Analysis?
OPPORTUNITIES

Chances to make greater profits in the


environment - External attractive factors that
represent the reason for an organization to
exist & develop.
Arise when an organization can take benefit

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of conditions in its environment to plan and
execute strategies that enable it to become
more profitable.
Organization should be careful and
recognize the opportunities and grasp
them whenever they arise. Opportunities
may arise from market, competition,
industry/government and technology.
Examples - Rapid market growth,
Changing customer needs/tastes, New
uses for product discovered, Economic
boom, Sales decline for a substitute
product .

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What
SWOT is SWOT
ANALYSIS - THREAT Analysis?

THREATS

External elements in the environment


that could cause trouble for the

!
business - External factors, beyond an
organizations control, which could
place the organizations mission or

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operation at risk.
Arise when conditions in external
environment jeopardize the reliability
and profitability of the organizations
business.
Examples - Entry of foreign competitors,
Changing customer needs/tastes, Rival
firms, adopt new strategies, Increased !
government regulation, Economic
downturn.

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How to conduct SWOT Analysis?

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EXAMPLE
Tips & Exercise

Mc Donalds SWOT Analysis

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Tips & Exercise
Mc Donalds
SWOT Analysis INTERNAL

STRENGTHS WEAKNESSES

Community oriented High training costs due to high turnover.


Global operations all over the world Not much variation in seasonal products .

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Cultural diversity in the foods Quality concerns due to franchised
Excellent location operations.
Assembly line operations. Focus on burgers / fried foods not on
healthier
options for their customers.

OPPORTUNITIES THREATS
Opening more joint ventures. Marketing strategies that entice people
Being more responsive to healthier from
options. small children to adults.
Expanding on the advertising on being Lawsuits for offering unhealthy foods.
more socially responsible The vast amount of fast food
Expansions of business into newly restaurants that
developed are open as competition..
parts of the world. Down turn in economy affecting the
ability to eat
that much.
EXTERNAL
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Define the term strategy?

1. The science and art of using all the forces of a


nation to execute approved plans as
effectively as possible during peace or war.
The science and art of military command as
applied to the overall planning and conduct of

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large-scale combat operations.

2. A plan of action resulting from strategy or


intended to accomplish a specific goal.

3. The art or skill of using stratagems in


endeavors such as politics and business

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Strategy and Quality Planning

Many organizations are finding that strategic quality


plans and business plans are inseparable.

In order to understand the Strategic Planning, we

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need to understand quality statements of an
organization.

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Quality Planning TQM Implementation

Begins with Sr. Managers and CEOs


Timing of the implementation process
Formation of Quality council

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Union leaders must be involved with
TQM plans implementation
Everyone in the organization needs to
be trained in quality awareness and
problem solving

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Quality Council

The quality council includes CEO and Senior managers of the


functional areas -research, manufacturing, finance, sales
,marketing etc. and one coordinator and a union
representative.
Duties- To develop the Quality statements eg. Vision, Mission,

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Quality policy statements, Core values etc.
To develop strategic long-term plans and annual quality
improvement programme.
Make a quality training programme
Monitor the costs of poor quality.
Determine the performance measures for the organization
Always find projects that improve the processes and produce
customer satisfaction.
Establish work-group teams and measure their progress.
Establish and review the recognition and reward system for
the TQM system 20
The Quality Statements

Quality statements are part of strategic planning


process and once developed, are occasionally
reviewed and updated.

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The quality statements include:
Vision statement
Mission Statement
Quality Policy

The utilization of three statements varies from


organization to organization. Small organization may
use only the quality policy statement.

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The Quality Statements

Vision Statement :The vision statement is a short


declaration what an organization aspires to be tomorrow

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A vision statement, on the other hand, describes how the future
will look if the organization achieves its mission.

Successful visions are timeless, inspirational, and become


deeply shared within the organization, such as:

IBMs Service
Apples Computing for the masses
Disney theme parks the happiest place on the earth, and
Polaroids instant photography

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The Quality Statements

Mission Statement: A mission statement concerns


what an organization is all about. The statement answers the
questions such as: who we are, who are our customers, what
do we do and how do we do it.

This statement is usually one paragraph or less in length,

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easy to understand, and describes the function of the
organization.

It provides clear statement of purpose for employees,


customers, and suppliers.

An example of mission statement is:

Ford Motor Company is a worldwide leader in automatic


and automotive related products and services as well as
the newer industries such as aerospace, communications,
and financial services. Our mission is to improve
continually our products and services to meet our 23
customers needs, allowing us to prosper as a business and
VISION
The premier learning organisation that sparks curiosity, inspires
success and promotes responsibility.

MISSION

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We inspire students and staff to lead, share and serve.
We create a community in which learning, teaching, research and
publication are encouraged, enabled and enjoyed.
We encourage critical thinking, independent learning and creative
problem solving.
We nurture individuals to be ethical and responsible citizens.
We share our success with stakeholders and the community we
serve.

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The Quality Statements

Quality Policy Statement: The quality policy is a


guide for everyone in the organization as to how they
should provide products and services to the customers.

It should be written by the CEO with feedback from the

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workforce and be approved by the quality council.

A quality policy is a requirement of ISO 9000

A simple quality policy is:


Xerox is a quality company. Quality is the basic business principle
for Xerox. Quality means providing our external and internal
customers with innovative products and services that fully satisfy
their requirements. Quality is the job of every employee.

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Seven Steps to Strategic Planning
The process starts with the principles that quality and
customer satisfaction are the center of an organizations
future. It brings together all the key stakeholders.
The strategic planning can be performed by any organization.
It can be highly effective, allowing the organizations to do the
right thing at the right time, every time.

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There are seven steps to strategic Quality Planning:
1. Discover customer needs
2. Customer positioning
3. Predict the future
4. Gap analysis
5. Closing the gap
6. Alignment
7. Implementation

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Seven Steps to Strategic Planning
Customer Needs: The first step is to discover
Discover the future needs of the customers. Who will they
customer needs be? Will your customer base change? What will
they want? How will they want? How will the
organization meet and exceed expectations?
Customer Positioning: Next, the planners

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determine where organization wants to be in
Customer relation to the customers. Do they want to
positioning retain, reduce, or expand the customer base.
Product or services with poor quality
performance should be targeted for
breakthrough or eliminated. The organizations
needs to concentrate its efforts on areas of
excellence.
Predict the future: Next planners must look
Predict the into their crystal balls to predict the future
future conditions that will affect their product or
service. Demographics, economics forecasts,
and technical assessments or projections are
tools that help predict the future.

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Seven Steps to Strategic Planning
Gap Analysis : This step requires the planner
to identify the gaps between the current state
Gap Analysis and the future state of the organization. An
analysis of the core values and concepts is an
excellent technique for pinpointing gaps.

Closing the Gap: The plan can now be

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developed to close the gap by establishing
Closing the Gap goals and responsibilities. All stakeholders
should be included in the development of the
plan.
Alignment: As the plan is developed, it must
be aligned with the mission, vision, and core
values and concepts of the organization.
Alignment Without this alignment, the plan will have little
chance of success.
Implementation: This last step is
frequently the most difficult. Resources
must be allocated to collecting data,
designing changes, and overcoming
Alignment resistance to change. Also part of this step
is the monitoring activity to ensure that
progress is being made. The planning
group should meet at least once a year to
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assess progress and take any corrective
Organizational Culture

When organization chooses to

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make quality a major competitive
edge, it becomes the central issue
in quality planning-form mission to
supporting policies.

Therefore it is imperative to
develop an organizational culture
where every employee of the
company have clear idea that
product is customer value rather
than a physical product or service.

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Understanding What a Quality Culture Is

To understand a Quality Culture, one must first


understand a Organizational Culture.

An organizational culture has the following

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elements:
Business Improvement
Organizational Values
Cultural Role Models
Organizational Rites, Rituals and Customs
Cultural Transmitters

A quality culture is:


An organizational value system that results in
an environment that is conducive to the
establishment and continual improvement of 30
Quality Culture vs. Traditional Cultures

Organizations that develop and maintain a quality


culture will differ significantly from those with a
traditional culture in the following areas:

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Operating Philosophy
Objectives
Management Approach
Attitude towards Customers
Problem-Solving Approach
Supplier Relationship
Performance-Improvement Approach

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Activating Cultural Change

To attempt the implementation of total quality


without creating a quality culture is to invite
failure.
Several primary reasons cultural change must

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either precede or at least parallel the
implementation of total quality are:
Change can not occur in a hostile environment
Total Quality approach might be radically
different from what the management is
accustomed to.
Moving to Total Quality takes time
In a conversion to Total Quality, positive results
are rarely achieved in the short run.
It can be difficult to overcome the past
Employees might remember earlier fads and 32
Changing Leaders to
Activate Cultural Change

Cultural change is one of the most difficult


challenges an organization will ever face.
Leadership from the top is essential.
Sometimes, an organizations culture simply cannot

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be changed without a change in leadership.
Senior Executives who fail to comprehend the
need to change, who fail to create a sense of
urgency when needed and who fail to follow
through the changes they initiated are poor
candidates to lead an organization through a
major culture change.
Culture change requires support, ideas, and
leadership from employees at all levels.

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Laying the Groundwork for a Quality Culture

Establishing a Quality Culture is lot like


constructing a building.
According to Peter Scholtes,
Management should begin by developing an
understanding of laws of organizational

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change. They are:
Understand the History behind the Current
Culture
Dont Tamper with Systems Improve Them
Be prepared to Listen and Observe
Involve Everyone Affected by Change in
Making It

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Learning What a Quality Culture looks like

Part of laying the groundwork for a quality


culture is understanding what one looks
like.

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Any Executive team that hope to change
the culture of its organization should:
Know the laws of organizational change
Understand the characteristics of
organizations that have strong quality
cultures.

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Countering Resistance to
Culture Change - 1

Change is Resisted in any Organization.


Continuous Improvement means Continuous Change.
Why Change is Difficult?
Juran describes organizational change as

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Clash between Cultures

Fig 1. Two separate organizational


Cultures relating to change
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Countering Resistance to
Culture Change - 2

There are different perceptions to the same proposed


change in an organization.

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Fig 2. Different Perceptions of Same change
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Countering Resistance to
Culture Change - 3

How to Facilitate Change?


The responsibility to facilitate change
necessarily falls to its advocates.
Begin with a new advocacy Paradigm
The first step is to adopt a facilitating

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paradigm.
Understand Concerns of Potential Resisters
Understand the concerns of resisters like
fear, loss of control, uncertainty and more
work.
Implement Change Promoting Strategies
Involve Potential Resisters, Avoid Surprises,
Move slowly at first, Start Small and be
flexible, create a positive environment,
Incorporate the change, Respond Quickly
and Positively, Work with Established
leaders, Treat people with dignity & Respect,
Fig 3. Steps in
Be Constructive.
Facilitating
Change
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Establishing a Quality Culture - 1

Establishing a quality culture involves specific planning


and activities for business or department.
Phases of Emotional Transition:

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Fig 4. Emotional
Transition
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Establishing a Quality Culture - 2

Steps in Conversion to Quality:

Identify the Changes needed


Put the Planned Changes in Writing

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Develop a Plan for Making the
Changes
Understand the Emotional
Transition Process
Identify Key People and Make Them
Advocates
Take a Hearts and Minds Approach
Apply Courtship Strategies

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Maintaining a Quality Culture

Establishing Quality Culture is a challenging undertaking for


any organization. It is even more challenging to maintain it
over time.
In order to maintain Quality Culture, organizations must
foster the following behaviors:

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Maintain an awareness of Quality as a key cultural issue.
Make sure that there is plenty of evidence of
Managements leadership.
Empower Employees and encourage self-development and
self-initiative.
Recognize and reward the behaviors that tend to nurture
and maintain Quality Culture.

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End of Chapter 3

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