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In simple terms, an organisation can be illustrated as a systematically structured and constructed social unit of people who are managed with the aim of meeting a specific need or to pursue collective goals. It is an observable yet concrete association of individuals involved in collective activities for the achievement of common goals and objectives. Within this view, a service organisation may be best identified as an association of organised for their coordination, services of whom extend to the public. This assignment will discuss management of quality with respect to service delivery in a service organisation.
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In the current scenario, globalisation has exerted pressure on governments all over the world to incorporate the concept of minimum standards in every aspect of organisational management. This implies both in the field of human rights and other aspects of good management such as delivery of public services (Shadrach and Ekeanyanwu, 2003). One such organisation involved in service delivery in the UK is the Network Rail, engaged in public transportation. Network Rail’s commitment to its customers has been focused over years through their efforts to run trains safely, punctually as well as reliably. Britain’s rail infrastructure was entrusted to Network rail, almost a decade ago, with the objectives of improving quality, safety, reliability and efficiency of the railway. Since then, a massive, sustained programme for renewing track, signals, power and telecom equipment was run by the Network Rail with the support of Government, thus striving hard to restore the public confidence in the safety and punctuality of the railway networks in the UK. Emphasis was placed on ‘predict and prevent’ approach, rather than ‘find and fix’ and this required new standardised ways of working on the basis of technological support. Equal importance had to be attached to investing in their stake holders in order to sustain the developments and success.
Stakeholders may be illustrated as an individual, group of people or an organisation having direct or indirect responsibility and stake in an organisation as it can affect or be affected by the organisation’s actions, goals and policies. The stake holders of Network Rail consist of two sets of people. These include industry members and public members. Industry members comprise mainly of train operators, while public members implies people drawn from a cross section of the community who represent the public interest (Network, 2003). In addition, a third member, often referred to as the Special member has been added to the list of stake holders. This is the Strategic Rail Authority (SRA) of the UK. In order to prohibit the control of national rail infrastructure companies by train operating companies, industry members are made minority of the total stake holders, whereas public members make up the vast majority.
According to terms of network license of the Network Rail, stake holders are viewed as any person providing services relating to the railways; any person providing a railway facility or network, including one which is proposed for, or in the course of construction; any founder ; or any person who has provided in writing to the licence holder a credibility to provide finance for service relating to railways; The Railway Passengers’ Council and The London Transport users’ committee; and The Mayor of London and Transport for London, in respect for their services and functions relating to the railway services (Network Rail, 2004). The main funding bodies include Passenger Transport Executives, bodies who provide one off funding like local authority, Assembly Government, Transport Scotland and other regional bodies. Whether funding railway services or providing services or providing services and facilities, these stake holders rely on the Network Rail to realise their aspirations. Their primary expectation from this service delivery organisation is provision of highest quality of service, with an assurance of transparency in every action. This requires clear communication and streamlining of objectives and expectations through good relationship between the organisation and the stakeholders.
Quality may be broadly viewed as a magnitude of excellence (Shiba et al, 1993). There are several dimensions of quality which determine the concept of quality. One of these dimensions is the conformance to specifications which is determined by designers of the product or service. This relates to how well the service or the product meets the target. The other dimensions include fitness for the use value for price paid, support services and psychological criteria. While fitness for use measures performance of the product or the effectiveness of the service, value for price paid focuses on the usefulness of the service or the product with respect to the amount of money spent. Judgement of a product or service is made on the basis of support services, which determines the quality since the concept of quality is not confined to the product or service alone. It applies to the people, processes involved and the associated organisational environment. On the other hand, psychological criteria present a more subjective definition to the concept of quality since it focuses on the critical evaluation of the constitution of the product or service. Such an evaluation is influenced by many factors such as environmental factors, the prestige of the product as perceived by the customers (Reid and Sanders, 2003). Whether in product manufacture or in service delivery, quality and performance of the organisation affect stake holders.
The concept of quality has currently obtained priority in most of the organisations, including those involved in product manufacture as well as those related to service delivery, since they have realised the cost of poor quality. The most adverse consequence of poor quality is the creation of dissatisfied customers, loss of money invested and eventually loss of business. The cost consequences of poor quality may be broadly classified under internal failure costs and external failure costs. Internal failure costs are related to the identification of poor quality of service or product before it reaches the customer. This may include the correction of the defect or ‘rework’. This also includes material losses and the cost of labour and machine. On the other hand, external failure costs are linked to the problems with quality after the product or service reaches the customer. This may result in the loss of faith and loyalty of customers. This can eventually lead to customer loss (Reid and Sanders, 2005) and loss of business. With the aim of meeting the expectations of stake holders and ensuring the quality of service, the Network Rail has adopted a code of practice (Network Rail, 2004). Through this code of practice, the Network Rail responds to the requests of stake holders quickly and appropriately, thus listening and taking into account their views. Code of practice acts as a promise to act fairly, treating all stake holders equally and consistently without any discrimination, to establish contacts and allocate with managers with adequate expertise for providing necessary service and to provide complete, accurate and current information to the stake holders. This code of practice also attempts to resolve any enquiries, concerns or complaints without delay, thereby enhancing quality of service. These would also ensure the satisfaction of the stake holders, which is essential for the sustained development of the organisation.
Garvin (1988) suggested five principal approaches towards understanding quality and its related aspects. The transcendent approach views quality as a concept which is timeless that transcends changes in tastes or preferences, thus making quality absolute and universally recognisable. Product based view, however, suggests that quality is measurable and hence precise. On the other hand, user based definitions are based on the view that quality is more or less a subjective phenomenon. The need and wants of customers are satisfied through services or products having highest quality. Another approach to understand quality is the manufacture based view which places emphasis on the supply aspect, concerned with the manufacturing and designing practices. The final approach is value based view that adopts the ideas of other approaches, evaluating whether the product or service provide conformance to requirements at a reasonable price (Galvin, 1988). However it must be remembered that the concept of quality differs when considering service delivery and product manufacture. According to Reid and Sanders (2005), organisations involved in product manufacture produce products which can be seen, touched and measured. Thus, quality definitions with respect to product manufacture generally places emphasises on product features which are tangible. These definitions include conformance on the magnitude to which the product features meet the standards set by the organisation and the public, performance on the effectiveness of the functioning of the product; reliability or the expectations of the product to function without failure; and serviceability which implies how easily the product can be repaired or fixed. A complete contrast to this approach is the concept of quality in terms of service delivery. This difference rises out of the intangible nature of the product produced by service organisations. On the contrary, these can only be experienced. Hence, quality in service delivery is based on perceptions including responsiveness to customer needs, contrary and approach of staff, atmosphere and the promptness in solving issues and complaints (Reid and Sanders, 2005).
ISO 8402 (1994) defined quality management as “All activities of the overall management that determine the quality policy, objectives and responsibilities, and implement them by means such as quality planning, quality control, quality assurance and quality improvement within the quality system”. Quality management is ensured through continuous improvement, also called Kaizen, which encourages organisations to strive continuously to perform better through learning and problem solving. Continuous improvement maybe described as a quality philosophy that places emphasis on going efforts to seek improvements in products, services on processes, with the aim of enhancing quality and decreasing waste (Mc Kee, 2009). It requires an organisation to constantly measure the effectiveness of its performance and strive to meet more difficult challenges and objectives to satisfy stake holders and customers. It is the belief that further improvements are always possible, thus encouraging continuous evaluation of processes and implementation of improvements. No matter how satisfactory the present state of an organisation is, Kaizen is founded in the concept of dissatisfaction with the statuesque, which is necessary to ensure continuous improvement in every aspect.
Foundation of improvement is built on the quality standards, which have to be set and monitored in every organisation. According to Shiba et al (1993), quality is checked by making a comparison of output of an organisation and the specifications through standardisation, statistical quality control and inspection. Standardisation refers to a series of action taken for the product and process to be clearly identified. Benchmarking is another tool to measure and monitor the degree of improvement. An improvement part of continuous is the ability to examine and study how other organisations perform. Benchmarking, according to Reid and Sanders (2005), is the process of studying the performance and practices of other organisations which are considered the best for the purpose of comparison. In order to enable organisations to objectively document their quality practices around the world, the need for universal standards were recognised as necessary. This led to the creation of International Organisation for Standardisation, whose objective is to establish an agreement on international quality standards. The ISO 9000: 2000 ‘Quality Management Systems- Fundamentals and Standards’ provides a basis for understanding the system of standards. This standard set by ISO provides the terminology and specific definitions used in the standards. The standards used for the certification of an organisation’s quality management system is the ISO 9000: 2000 ‘Quality Management Systems- Requirements’. The guidelines for establishing a quality management system is given by ISO 9000: 2000 ‘Quality Management Systems- Guidelines for Performance’. These standards focus on meeting the customer requirements as well as on continuous improvement.
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Continuous improvement is an essential aspect in service delivery, especially in the case of organisations like National Rail, which are involved in public transport. Studies have revealed the sad state of public transport. Five case studies of bad customer service were examined by Dale et al in 2001. Zeithaml et al (1990) identified the four components of the gap between the expectations of the customers and the stake holders and the perception of the actual service by the customers and the stake holders. The understanding gap occurs usually when the management fails to perceive the expectations of stake holders and customers accurately. Design gap occurs when the management is unable to specify and design a service accordingly to their understanding of the stakeholders and customers. Due to the shortage of resources, lack of commitment, inadequate quality control or inadequate training, there might be a failure in the delivery of what is specified and this is recognised as a service delivery gap. A communication gap, on the other hand, occurs when what is specified and what is delivered are not accurately publicised. Several studies have identified these gaps in service delivery organisation and these points to the need for continuous improvement in these organisations. This could in turn improve the quality of services, enhance the loyalty and trust placed by customers as well as stake holders on organisations, improve retention of staff and ensure satisfaction of stakeholders and customers.
Several methods have been identified for the implementation of continuous improvement or Kaizen. One of the most popular systems this genre is Total Quality Management According to Tague (2005), Total Quality Management (TQM) can be described as “any quality management system that makes an effort to address all areas of an organisation, emphasizing customer satisfaction and using continuous improvement methods and tools”. TQM focuses on the identification of the root causes of quality defects and problems and correcting these at the source. It emphasis that quality is customer driven. TQM encompasses the organisation as a whole, attempting to embed quality in every single aspect of the organisation. Not only does it include the technical aspects of quality, but it is concerned with the involvement of people in quality including stakeholders (Reid and Sanders, 2005), thus making it an important method to ensure continuous improvement in service delivery organisations like Network Rail. The most prominent feature of TQM is the organisation’s focus on stakeholders including customers. This philosophy defines quality as meeting and exceeding the expectations of stakeholders, including customers. Thus the first and foremost objective of organisation adopting TQM will be the identified of needs of customers and stakeholders after which these have to be met appropriately. This will require continuous gathering of information. Berry (1991) suggested that TQM process is a total corporate emphasis on meeting and exceeding expectations of customers while significantly decreasing costs resulting from poor quality by adopting a novel management system and corporate culture. Dahlgaard et al., (1998) views TQM as a way of managing an organisation or an enterprise towards achieving complete excellence. The principles of TQM encompass numerous elements including management leadership and commitment, involvement of employees, continuous improvement, and supplier partnership and so on. Shea and Gobeli (1995) identified the motives behind the adoption of TQM by organisations; management philosophy and belief in the principle of stakeholder as well as customer satisfaction and employee empowerment, competitive nature arising out of the changing expectations of customers even for those organisations which are performing well; and to improve poor performance of organisations which are not performing well in order to ensure survival.
The seven QC tools were brought to organisational attention by Ishikawa, the Father of Quality Circles. His original seven tools included cause-and-effect diagram, check sheet, Shewhart’s control charts, histograms, Pareto chart, Scatter diagram and Stratification or Flowchart. Quality Function Deployment (QFD), the Baldrige Award, Six Sigma, theory of constraints and Lean manufacturing are the new tools or revitalisation and replacing of previous concepts and tools. Implementation and effectiveness are often assessed using PDSA cycle.
All these approaches are astonishingly compatible with one another and hence several enterprise are combining these tools for the successful implementation of continuous improvement since ISO 9000 focuses on consistency through standardisation it can be used by organisations to create a foundation for the development of continuous improvement through Six Sigma and Lean which focuses on quality through elimination of defects and speed and efficiency by elimination of waste respectively. The criteria set by MBNQA can act as a support and guidance for the senior management for the development and establishment of organisational systems and culture that support continuous improvement (Reid and Sanders, 2005). QFD, Total Quality Management, Theory of Constraints and Synchronous flow can be utilised to understand the wants and needs of customers while improving every phase involved in the process focussing particularly on the slowest phase. These approaches can be integrated with bench marking and other approaches of standardisation to evaluate the quality of service or product and to encourage continuous improvement within the organisation irrespective of present state. However, it must be noted that each of these approaches should be selected on the basis of requirement of the organisation (Tague, 2005).
For organisations, including those involved in product manufacture and service delivery, an important approach that help with continuous improvement is the Plan-Do-Study-Act (PDSA) cycle which illustrates never ending process of continuous improvement in its circular nature. The first step in this process is to plan, where the managers must evaluate and document the current system and develop plans based on the defects detected. The next step in PDSA cycle is the implementation of the plan (Do), during which the managers must collect adequate data for evaluation and document all changes made. Studying the data collected constitute the third step. On the basis of first three phases the final phase require the managers to act and the whole process is repeated (Reid and Sanders, 2005).
Success of continuous improvement approaches depends upon team approach. Quality must be viewed as an organisational effort. This may be achieved through techniques such as quality control tools, group discussions, and brain storming and so on. There for time must be set aside for team meetings. Importance must also be given to measures for employee empowerment to seek out qualities and rectify them, through workshops, employee educations and good communication. All these depend upon leadership and management structure of the organisation. Successful implementation of continuous improvement processes also requires effective workplace relationships and understanding of wants and needs of stake holders and customers. Adoption of these aspects is essential for the sustain success and development of organisations like Network Rail.
This assignment, thus, has attempted to study the influence of stake holders on organisation. Examining the aspect of quality improvement in Network Rail this assignment discuss the various approaches for improving quality in service delivery. It can be concluded that for ensuring a sustained development and benefit to organisations it is necessary to ensure that all improvements made satisfy all the stake holders. It has to be remembered that the ultimate goal of quality management is to satisfy the needs of stake holders including customers. Teamwork , effective leadership and communication within the organisation and efforts to understand the changing needs and wants of stakeholders and customers are the essential ingredients for the successful implementation of such a venture
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