Intangible Benefits - Quality Management

Many benefits are difficult to quantify in purely financial terms but are nevertheless relevant to organizational competitiveness.These will be introduced here, but will be treated in much more detail later.

Increased Customer Satisfaction

Fewer defects, more reliable products, reduced lead times and products better matched to customer requirements should all be the natural consequences of an effective Quality Management system.This should, in turn, lead to more satisfied customers (York and Miree, 2004; Ahire and Dreyfuss, 2000). Satisfied customers are more likely to buy from the organization again, to pay more for the products they buy and to recommend the organization to others.The converse is true of dissatisfied customers, only more so! It is, for example, estimated that unhappy customers will tell 10 people, whereas happy customers will tell only two.

Increased Workforce Satisfaction and Motivation

Deming (1990) suggests that ‘all people want is the chance to do a good job, and to know when they have done it’.The ability to take pride in the work you do is increasingly seen as a motivating factor for workers, and clearly quality improvement efforts contribute to this. Motivated workers are seen as much more effective in delivering good quality and customer satisfaction. Richard Branson is quoted as saying:

“If you look after your internal customers you don’t have to worry about your external customers.”

Additional benefits from a happier workforce will include better teamwork, lower absenteeism rates and more flexibility in difficult times.

Improved Environmental Impact

Reducing waste will allow organizations to reduce the environmental footprint of the organization. This will help to generate a positive corporate image in addition to cost avoidance associated with lower material and energy usage and a reduced burden in respect of costs of environmental impact such as ‘polluter pays’ initiatives and carbon taxes.

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