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Challenges of quality management
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Challenges
of quality management
edited by
Tadeusz Sikora and Paweł Nowicki
Cracow 2012
Cracow University of Economics
The Departament of Quality Management
Challenges of quality management
edited by
Tadeusz Sikora and Paweł Nowicki
Cracow 2012
Reviewers:
prof. dr hab. Wacław Adamczyk
prof. dr hab. Tadeusz Sikora
prof. dr hab. Tadeusz Trziszka
prof. dr hab. Tadeusz Wawak
© Copyright by Uniwersytet Ekonomiczny w Krakowie
Cracow 2012
PTTŻ Publishing House

Balicka 122, 30-149 Cracow
ISBN 978-83-935421-0-9
Digital Printing KSERKOP, Cracow
2

This book is issued

on the occasion of 40th anniversary of
the Department of Quality Management
of Cracow University of Economics.
1972 - 2012

Contents
PREFACE .........................................................................................................................................9
Slavko Arsovski, Zora Arsovski
MANAGEMENT'S CHALLENGE FOR QUALITY IMPROVEMENT ......................................11
Tomasz Hermaniuk
LEVEL OF QUALITY OF EDUCATION SERVICES ON EXAMPLE OF UNIVERSITIES
FROM RZESZOW..........................................................................................................................31
Martin Mizla
SELECTED IMPACTS OF QUALITY COSTS DURING THE ECONOMIC CRISIS ...............49
Tomasz Nitkiewicz
THE DETERMINANTS OF ENVIRONMENTAL MANAGEMENT SYSTEM
IMPLEMENTATION IN POLISH COMPANIES .........................................................................56
Paweł Nowicki, Tadeusz Sikora
HACCP SYSTEM DOCUMENTAION PROCESS ACCORDING TO THE OPINION OF THE
EMPLYEES OF BISTRO BARS....................................................................................................77
Rodica Pamfilie, Elena Roxana Stan
MANAGING QUALITY COSTS – A MUST FOR GROWING ORGANIZATIONAL
PERFORMANCE (A CASE STUDY ON ROMANIAN BUSINESS HOTELS) ..........................90
Jan Rewilak, Tomasz Tokaj
RISKS OF MAKING NON-OPTIMAL DECISIONS RELATED TO QUALITY
IMPROVEMENT BASED ON PARETO ANALYSIS ................................................................102
Beata Starzyńska
THE SELECTION OF QUALITY TOOLS FOR IMPROVING MANUFACTURING
PROCESSES IN PRODUCTION COMPANIES .........................................................................120
Miladin Stefanović, Slavko Arsovski, Zora Arsovski
THE KEY ISSUES IN QUALITY ASSURANCE OF ENGINEERING EDUCATION AND
PREPARATION FOR INTERNATIONAL ACCREDITATION ................................................141
6
Amalia Venera Todorut

THE IMPORTANCE OF ORGANIZATIONAL CULTURE TOWARDS QUALITY IN THE
SOCIETY BASED ON KNOWLEDGE.......................................................................................150
Ada Mirela Tomescu
STUDY REGARDING THE CULTURE OF QUALITY IN BIHOR COUNTY FIRMS ..........160
Grzegorz Wróbel
INTEGRATING OF SIMULATION MODELING METHOD WITH THE CONCEPT OF LOW-
COST PROCESS IMPROVEMENT ............................................................................................171
Bożydar Ziółkowski
THE ASPECTS OF QUALITY IN ECO-MANAGEMENT AND AUDIT SCHEMES OF GREAT
BRITAIN ......................................................................................................................................191
Radmila Živković, Milena Ilić, Jelena Miljković, Zoran D. Živković
QUALITY MANAGEMENT OF PUBLIC SERVICES IN THE CITY OF BELGRADE -
ASPECT OF CUSTOMER SATISFACTION..............................................................................200
6
PREFACE
In a constantly increasing competition on the market, companies are look-
ing for niches, which could attract new customers and make a profit, while diver-
sifying activities. In order to build competitive advantage and satisfy customer
demands more effectively, the increasing number of organizations implement
quality management system. It allows them to gain customer trust and a better
market position.
The companies who decide to implement quality management system
compliant with the standards, consider it as a guideline to build efficientlty and
effectively functioning organization. The implemented quality management sys-
tem in the organization requires continuous improvement, which is a big chal-
lenge for both top management and all employees. Skillful management of the
enterprise as well as intuition and creative approach to quality, simplifies running
a business.
This book is dedicated to all the people who are interested in different as-
pects of quality. One of the main objectives of this book is to outline the direc-
tions of the research and entrepreneurship development in the area of quality.
We would like to express our gratitude to all the Reviewers, who prepared
the reviews and contributed to the final shape of the book. We also thank to the
Authors of the chapters, for their valuable contribution to the research and practice
of quality management.
Paweł Nowicki Tadeusz Sikora
Cracow, June 2012 r.

Slavko Arsovski
Zora Arsovski
University of Kragujevac, Serbia
MANAGEMENT'S CHALLENGE
FOR QUALITY IMPROVEMENT
Key words: quality, management, quality improvement, quality of management
ABSTRACT
In the new globalisation era, a management is changing because new needs, preasures for higher
quality, agility, efficiency, effectiveness, resilience, etc. In this way classical management
approach is not sufficient. Quality as new paradigm has a lot of requests for management. This
circumstance could be challenge for management in view introduction new concepts, relation to
other paradigm and using opportunities for higher efficiency.
There are given results of investigation of quality request on management as challenge for quality
improvement in this paper.
INTRODUCTION
A view on quality is changing, from period before year 1980 to today.

Quality management is changing, too. This is related to management, as process.
Question is how much management reacts on changes of quality requests and
needs of stakeholders. That could be assessed as quality of management. Between
quality management according quality paradigm1,2,3,4,5,6 and quality of
management is very complex relation7,8. Sometimes in organisations exists high
1
Aikens H., Quality Inspired Management: The Key to Sustainability, Prentice Hall, 2011.,
2
Arsovski S., Menadžment ekonomikom kvaliteta, Centar za kvalitet, Mašinski fakultet, Kragu-
jevac, 2002, ISBN: 86-80581-48-8,
3
Arsovski S., Menadžment procesima, Centar za kvalitet, Mašinski fakultet, Kragujevac, 2006,
ISBN: 86-86663-00-1,
4
Bahtijarević – Šiber F., Management ljudskih potencijala, Golden marketing, Zagreb, 1999,
ISBN: 953-6168-77-4,
5
Chaffey D., E-Business and E-Commerce Management, FT-Prentice Hall, 2007.,
6
De Witt B., Meyer R., Strategy: Process, Content, Context, 3nd Edition, Thompson, London,
2004, ISBN: 1-86152-964-3,
7
Foster T., Managing Quality: An Integrative Approach, Pearson & Prentice Hall, 2004, ISBN: 0-
13-123018-3,
8
Foster T., Managing Quality: Integrating the supply chain, Prentice Hall, 2010, ISBN: 978-0-13-
507819-8.
level performance of management and low level performance of quality
management, and vice versa. On the other side, in many organisations have high
level performance of quality management and low level of management. In first
case organizations have good product portfolio, management by objectives and
mission9,10,11, performance management12,13, strategic management14,15,16, and
management view quality is only one of business performance.
In second case, specially in small and medium enterprise, quality
management is developed and established according quality principle, but
business performances are not sufficient17,18,19,20.
Management's quality and quality management is not always on the
opposite sides. Using the new approaches as Total Quality Management (TQM),
Business Excellence (BE), Six sigma (SS), Lean Production (LP), Kaizen, Just – In
- Time (JIT) at many other, this dillema is resolving and we have possibility to
implement management's challenges as driver for quality management.
In the new globalisation era a management is changing because new needs,
preasures for higher quality, agility, efficiency, effectiveness, resilience etc. In this
way classical management approach is not sufficient. Quality as new paradigm
has a lot of request for management. This circumstance could be challenge for
9
Goetch D., Davis S., Introduction to Total Quality, Prentice Hall, Upper Saddle River, New Jer-
sey, 1997,
10
Hur M., The influence of total quality management practices on the transformation of how orga-
nizations works, Total Quality Management and Business Intelligence, Vol. 20, Numbers 7-8, p.
847 – 683,, ISSN: 1478-3363,
11
Jacka M., Keller P., Business Process Mapping: Improving Customer Satisfaction, John Wiley
& Sons, Hoboken, NY, 2008, ISBN: 0-471-07977-4,
12
Juran J., Managerial Breakthrough, Mc Grow Hill, New York, 1995,
13
Kaplan R., Norten D., Strategy Maps: Converting intangible assets into tangible outcomes,
Harvard Business School Press, Boston, 2004, ISBN: 1-59139-134-2,
14
Krkač K., Uvod u poslovnu etiku i korporacijsku društvenu odgovornost, Mate, Zagreb, 2007,
15
Merna T., Al-Thani F., Corporate Risk Management, 2nd Edition, John Wiley & Sons, Hobo-
ken, NY, 2008, ISBN: 978-0-470-51833-5,
16
Modrinić Z., Menadžerska kompetentnost, BMD – MEGA, Beograd, 2006, ISBN: 86-909329-0-
9,
17
Nast Dž., Mapiranje ideje, Sezam Book, Zrenjanin 2007.
18
Rao et all., Total Quality Management: A Cross Functional Perspective, John Willey & Sons,
New York, 1996.
19
Stefanović N., Stefanović Ž., Liderstvo i kvalitet, Centar za kvalitet, Mašinski fakultet, Kragu-
jevac, 2007, ISBN: 86-86663-01-X,
20
Stefanović Ž., Menadžment, Ekonomski fakultet, Kragujevac, 2003, ISBN: 86-82203-29-4,
12
management in view introduction new concepts, relation to other paradigm and
using opportunities for higher efficiency.
1. NEEDS FOR QUALITY IMPROVEMENT
Quality concept has its history, presence and future. In order to observe the
future of the quality in a better way, it is necessary to analyze the previous period,
starting from the 20th century. There are three periods:
− before 1980,
− from 1980 until today, and
− the presence of quality.
The first period is characterized by the stress on micro-aspects of quality,
mostly in the field of measurement, administration and detection with products
and services, especially services for quality control and internally focused
programmes of quality improvement. Solutions to the problems referred to the
technical sphere, without connection-making with interested parties. By the work
of Shewhart in the 30’s of 20th century begins the application of statistical
methods, and later with Deming work in the 50’s in Japan, this process enriched
the management with principles, firstly for the analysis of production systems,
and then for the statistical monitoring and improvement. Deming’s mantra was
that the workers are not responsible for the mistakes of the superiors, which
resulted in his famous system of 14 points of quality management21.
In USA, in 1949., Wareman published first paper in journal Fortune about
the principles of quality, language that all managers at operational level
understand.
Parallely with these activities that were initiated by Deming, Juran has, in
the 50’s in USA and especially in Japan, strengthened the impact of quality
development through the trilogy: planning, management, improvement and
attitude that it should be acted in the direction of management on the spot, better
training of employees and constant improvements.
Quality development was strongly influenced by Feigenbaum, with the
book Quality Controls: Principles, Practice, and Administration (1951) in which
he set the foundations of total quality, shaped later on through the published book
Total Quality Control (1991). His papers have become a basis for the
development of TQM concept. When he was asked what refers to the word Total,
he replied both with Quality and Management.
21
Aikens H., Quality Inspired Management: The Key to Sustainability, Prentice Hall, 2011.,
13 13
Later on, Crosby also joined the movement for quality with the concepts
Cost of Quality (CoQ) and Zero Defect (ZD), which have become the basis for
later concept of Six Sigma (SS).
Quality Assurance (QA) programmes developed starting with these
theoretical assumptions of the quality guru, in the 70’s, in contrast with the quality
control programmes. That partially facilitated the prevalence of the first oil crisis
in Japan in the end of 70’s.
The second period (after 1980) characterizes the recognition of quality
significance as universal mantra. Quality was increasingly becoming the cure to
all diseases. Particularly significant progress in the creation of quality represented
the connection of quality-business performance, through the concept of high-
performing work organizations. In this period, the need for quality standards
grows, usually in strong swing of ISO quality standards primarily, development of
national and other rewards for quality and business excellence, research in the
field of quality. A new dimension to this period gives the development of TQM
concept, with the integration of SPC-Statistical Process Control concept,
leadership, significance and role of stakeholders, Six Sigma, Leon Production,
Kaizen (Imai Masaaki), Company-Wide Quality Control (Ishikawa), Just-In-Time
etc. All of this has led up to the strong swing in organizations in the aspect of
quality improvement.
Third period (presence) in the evolution of quality is characterized by
understanding the quality as strategic driver of management in entire organization.
That requires re-examination of business strategies, especially the ones of
stakeholders and shareholders with the aim to achieve business excellence and
competitiveness and sustainable development. Quality becomes the connective
issue between the entities of organization, starting from the phase of defining the
strategy and operational plans, to monitoring and improvement of all business
processes. For this, the application of appropriate information and communication
technologies (ICT) is unavoidable22.
Future(s) of the quality can be obtained by extrapolation of trends (figure
1) of the level of knowledge about the quality.
22
Arsovski S., Menadžment ekonomikom kvaliteta, Centar za kvalitet, Mašinski fakultet, Kragu-
jevac, 2002, ISBN: 86-80581-48-8,
14
Figure 1: Future of the quality
Some of the concepts, such as SPC, JIT, Kanban will be developed rather
slowly (1), others such as Lean Production, ZD somewhat faster (2), third ones
even more faster such as SS (Six Sigma), Kaizen, CWQC (3), and the fourth more
faster (e.g. Hoshrin in combination with ZD, Lean Production, TQM), which is
represented by line 4 in Figure 1.
It remains to identify the elements of the future of quality23. That is based
on three views:
− quality must also include the environment of organization,
− quality must also be a tool in case of business disorder and
− the quality must integrate the requirements of all interested parties.
The first view is based on the requirements of standard in the aspect of
environmental management, analysis of risk from the environment etc. In
conditions of the limitations of natural resources, the quality needs to provide
sustainable development of organization, which means that the aspects of stable
input need to be included, as well as the aspects of input prices increase, input risk
increase, process development risk increase (e.g. due to water supply, electricity
23
ISBN: 86-86663-00-1,
15 15
supply, etc.). Quality standards will be extended with standards related to risk,
vulnerability, resilience, etc.
The second view refers to the situation of organization that is in crisis,
both financial and programme. That is the future of all organizations – operating
in terms of constant and less expected disorders, i.e. crisis, becomes a synonym
for business. Quality is expected to increase the capacity of organization and
society for rapid resilience, which is already expressed through American national
standard ASIS SPC. 1-2009 and ISO 22399:2007 (Societal Security – Guidelines
for incident preparedness and operational continuity management), BS 25999-
1:2006 (Business Continuity Management). In specific fields, specific knowledge
and techniques will be created for acting in case of great disorders and
strengthening of the ability of organization and society to confront it (adaptive
capacity).
The third view refers to integration of the requirements of all stakeholders
and practically the development of integrated management systems, based on
standardized systems, such as the systems that are based on ISO 9000, ISO 14000,
ISO 18000 etc. Even today, there are organizations, for e.g. from the field of
telecommunications with 9 integrated standardized management systems.
Integration is performed through the processes and/or PAS 99 or other
recommendations. What is new here? Those are primarily new requirements of
the existing or new stakeholders, such as the requirements of future standards,
especially branch standards, requirements of supply chains, virtual organizations
and companies etc. satisfaction of the requirements of all stakeholders should
provide a higher level of life quality (Fig. 2).
Figure 2: Connection between quality of life and organization quality, process

and products
16
In this model, quality of life is in the centre, while concepts and practice of
quality are inputs and outputs of the quality of life (QoL). In that way, the quality
becomes „roof“ term for every paradigm of management that is holistically
supported by every stakeholder, contributing to the increase of human values and
achievement of excellence. Such a view comes from Aikensa (Quality: A
Corporate Force), on whose basis, according to24, the concepts of Quality
Inspired Management (QIM) and meta management (Foley, Kevin in the book
Meta Management: A Stakeholder/Quality Management Approach to Whole – of
– Enterprise Management) are developed. The quality becomes value attitude and
perception of the quality becomes more significant than the reality. The quality
becomes transparent and a matter of confidence. Mapping of the future becomes
reality25.
Future is a puzzle. In their egocentric world, the people will still have their
expectations and needs. Quality as a level of satisfying the same will depend on
the achievement of various „positive“ and „negative“ scenarios:
− positive scenarios (P):
− increase of the share of renewable energy sources,
− growth and integration of knowledge,
− conquest of life in cosmos,
− conquest of life in seas and oceans,
− restriction of demographic growth, etc.
− negative scenarios (N):
− faster exploitation of world resources reserves,
− political instability and wars,
− natural and artificial disasters,
− further alienation of man, etc.
Which scenarios, or the combination of scenarios will dominate in the fol-
lowing period? This cannot be foreseen by anybody, but there are some specific
positive and negative scenarios that can be expected for the next 10 years:
P1 – increase of the share of renewable energy sources,
P2 – growth of knowledge, primarily in the field of genetic engineering,
artificial intelligence, matter structure, etc.
24
ISBN: 86-86663-00-1,
25
Bahtijarević – Šiber F., Management ljudskih potencijala, Golden marketing, Zagreb, 1999,
ISBN: 953-6168-77-4,
17 17
N1 – a growing problem of providing drinking water, energy and some
materials.
N2 – impact of natural disasters on business (e.g. hurricanes, earthquakes)
N3 – impact of unintentional damages and diversions.
Model of the quality of future has to take these possible situations into ac-
count (Fig. 3). Each of the relations in this general model has the intensity that is
evaluated (pessimistic, medium, optimistic). Optimistic scenario is to keep or in-
crease positive impacts on quality of life. The situation with negative scenario is
reverse.
Figure 3: Basic model of the quality of future
Depending on the intensity of impact within basic model of the quality of

life and connections between Ai and Bi, different levels of the quality of life, as a
measure of the quality of the future, are obtained (Fig. 4).
18
Figure 4: Quality of life in the future – quality of the future
In variant 1, positive impacts prevails and we can expect „bright future“;

while in variant 2, after the initial positive trend, there are increasingly expressed
negative impacts and the quality of future becomes uncertain. Variant 3 refers to
the strategy of keeping the quality in future, and in variant 4, negative impacts are
dominant. In variant 5, after the initial negative impacts through the growth of
knowledge, the growth of the level of quality of life can be expected.
Each of the scenarios mentioned is uncertain. View that the future has al-
ready begun is connected with the increase of awareness of the danger with all
stakeholders, necessary for the increase of the capacity for changes.
2. MANAGEMENT'S CHALLENGES IN THE NEW ERA
According the Theory of Systems on enterprise (organization) is viewed as

an open system in continuos-communication with its business invironment. The
components of the open system business model are:
− boundaries (with interfaces to organisation: carefully managed, and
redesigned),
− purpose (mission), vision, policy, and goals,
− inputs and outputs (or outcomes), with managing its,
− the value stream [Competitive Advantage, Porter], as the system's
transformation process, with the tasks, skills, and knowledge required
19 19
to convert a system's inputs into desirable outputs (Fig. 5). Individual
attributes are related to the skills and humantraits that contribute to
making each member of workforce unique, and include education,
expirience, phisical capabilities, preferences, intelligence etc.
Figure 5: Value stream
Core processes is related to creation of the new value. Group Work

represents the employee's ability to work together, i.e. cooperate, coordinate, and
delegate:
− enviroment, as everthing out of boundaries,
− feedback, as possibility to provide information on outputs before
continnuing previos steps.
In management, viewed as process, a strategic planning process becommes
a key role, as business process management, organisation structures, and
knowledge management.
Impact of the management on quality wasn’t recognized before the 90’s of
th
the 20 century, which resulted in the standard ISO 9000:2000, in which the re-
sponsibility of management and management resources are defined. In the version
20
of the same standard from 2008, within the clause 5 (managers’ responsibility),
the requirements in the aspect of obligations and activities are defined (5.1), focus
on the user (5.2), policies of quality (5.3), planning (5.4), responsibility, authority
and communication (5.5) and review from the part of the management (5.6). The
requirements of standard clauses to narrowed approach is directly related to the
establishment of quality management system (QMS). In "classical" literature in
this field, the views of Juran, the one guru of quality, are rather significant; he
observed quality management and the quality of management process more
broadly, from the aspect of TQM26, 27, 28, 29, 30, 31, 32, 33, starting from the goals and
policy, strategy, organization for quality assurance, as well as the control at the
operational, tactical and strategic level.
In contemporary literature in the field of quality management, the proc-
esses of management are mostly described and analyzed from the aspect of the
requirements of various standards. Quality of these processes is treated from dif-
ferent aspects in different studies34, 35, 36, 37, which does not provide a complex
observation of the quality of management process.
The third group of information sources is the literature in the field of man-
agement, organization, strategy. In this literature, especially more recent38, 39, 40, 41,
26
Foster T., Managing Quality: An Integrative Approach, Pearson & Prentice Hall, 2004, ISBN: 0-
13-123018-3,
27
Krkač K., Uvod u poslovnu etiku i korporacijsku društvenu odgovornost, Mate, Zagreb, 2007,
28
Merna T., Al-Thani F., Corporate Risk Management, 2nd Edition, John Wiley & Sons, Hobo-
ken, NY, 2008, ISBN: 978-0-470-51833-5,
29
Rao et all., Total Quality Management: A Cross Functional Perspective, John Willey & Sons,
New York, 1996.
30
Stefanović N., Stefanović Ž., Liderstvo i kvalitet, Centar za kvalitet, Mašinski fakultet, Kragu-
jevac, 2007, ISBN: 86-86663-01-X,
31
Stefanović Ž., Menadžment, Ekonomski fakultet, Kragujevac, 2003, ISBN: 86-82203-29-4,
32
Summers D., Quality Management: Creating and Sustaining Organizational Effectiveness, Pear-
son International Edition, 2009.,
33
Thompson A., Strickland A., Strategic Management: Concepts and Cases, Mc Grow Hill, Bo-
ston, 2003, ISBN: 0-07-244371-5,
34
Juran J., Managerial Breakthrough, Mc Grow Hill, New York, 1995
35
36
9,
37
Nast Dž., Mapiranje ideje, Sezam Book, Zrenjanin 2007.
38
Chaffey D., E-Business and E-Commerce Management, FT-Prentice Hall, 2007.,
39
2004, ISBN: 1-86152-964-3,
21 21
42, 43
, management is treated as a process, but the approach of the quality of this
process is missing.
The fourth source is author’s practice in more than 150 organizations,
where he spent the last 20 years facing different solutions and practice of man-
agement, and some of them were his own creation.
Having in mind the breadth of the process of management, it is necessary
to define the scope of research. Author has decided to start with the broadest
model of management, to define its structure and to test the same model on one
characteristic model that is closely related with QMS. In this study, we started
with the following hypotheses:
− H1: Management process significantly affects the achievement of quality
goals.
− H2: Strategic aspect in management process in Serbia is not significantly
used.
− H3: Competence of managers in Serbia has no significant impact on the
competitiveness of organization.
In order to confirm these hypotheses, the author analyzed the responses
obtained through a questionnaire, on a sample of 90 organizations of various sizes
and sectors in Serbia (approximately to their structure). Methodological approach
is based on strategic approach of Kaplan and Norton44, adapted approach to proc-
ess management45, 46, and all of that for the purpose to determine the performances
of management process47, 48, and thus evaluate the quality of management proc-
esses.
40
507819-8.
41
Goetch D., Davis S., Introduction to Total Quality, Prentice Hall, Upper Saddle River, New
Jersey, 1997,
42
847 – 683,, ISSN: 1478-3363,
43
44
Jersey, 1997,
45
46
9.
47
507819-8.
22
More than 100 years ago, Fayol laid the foundations of management and
pointed to four main groups of roles in management. More recent papers in the
second half of the 20th century49, 50, 51 have laid the foundation of the management
science in which, regardless of differences, the structure of macro-process of
management can be determined:
− Planning processes,
− Organization processes,
− Processes of management (leadership) and
− Control processes.
These processes are interconnected. The arrows indicate the direction of
relations within the first (context) level. Studies are needed to determine the
strength of these relations, their reliability and risk in appropriate conditions of the
development of management process and other processes.
Each of the processes mentioned has the structure and relations between
component sub-processes.
Process P1 can be decomposed into sub-processes:
− P.1.1 – objectives planning,
− P.1.2 – drafting strategic map,
− P.1.3 – development of strategic plans,
− P.1.4 – strategy implementation.
The second group of processes refers to the processes of organization. Ac-
cording to De Witt and Meyer52, these processes are a part of business and organ-
izational system. For the needs of research in this paper, author used the definition
of business system in form of a description „how the organization creates money“,
and organizational system was defined in the form „how is the organization or-
ganized“, where three components of organizational system are particularly
stressed, i.e. three sub-processes that refer to:
− P.2.1: organizational structure,
48
49
Jersey, 1997,
50
847 – 683,, ISSN: 1478-3363,
51
Juran J., Managerial Breakthrough, Mc Grow Hill, New York, 1995,
52
507819-8.
23 23
− P.2.2: organizational processes and
− P.2.3: organizational culture.
Organizational processes refer to regulating, procedures and paths that are
used for management and coordination of the work of people and organizational
units. Some of them refer to the entire organization, some are limited, wider or
narrower part of organization.
The third group of processes are the processes of management (leader-
ship). Within these processes, the following sub-processes are emphasized:
− P.3.1: participation in decision-making,
− P.3.2: management,
− P.3.3: motivation,
− P.3.4: decision-making,
− P.3.5: improvement of personal skills,
− P.3.6: encouragement of teamwork.
Control, as a part of management process consists of four coupled sub-
processes:
− P4.1: setting the standards for control,
− P4.2: measurement of achieved results and comparisons,
− P4.3: identification of measures and procedures for the elimination of
irregularities,
− P4.4: creation of revised plans.
Subject of this paper is the process P1: Process of strategic management.
3. QUALITY IMPROVEMENT AS CHALENGE

FOR MANAGEMENT
A sistematic approach to continuos quality improvement is provided by

four generic steps:
− record data,
− use data,
− analyse data, nad
− act based on results.
In this approach very frequently is used some basic tools and techniques, as:
− check sheets,
− histograms,
− scatter diagrams,
24
− stratification,
− Pareto analysis,
− cause and effect diagram analysis (CEDA) or
− analiysis with addition of cards (CEDAC),
− nominal group tecnniques (NGT),
− control charts,
− statistical process control (SPC),
− additional tecnniques for process design and improvement,
− Taguchi method.
− Six sigma,
− the "Drive" framework for continuous improvement,
− Lean,
− World Class Production,
− Hochrin concept,
− CMMI, etc.
Model of quality of the strategic management process includes the upper
part of strategic map. Having in mind that macro-process of management is de-
composed into four processes, model of quality includes each of these processes,
which are in relation with other processes (Fig. 6).
In the model of quality of management process in this paper, the process
P1: process of strategic management was separately analyzed. Basis for the devel-
opment of this process is the perspective of growth and learning. Determination of
the level was defined through questionnaire (the first ten questions in question-
naire).
Competence of managers53 is expressed through:
− Mental competence and
− Educational competence.
Mental component of managers’ competence includes:
− Ability to solve problems,
− Readiness for business risk,
− Competitive orientation,
− Self-confidence in business activities,
− Adaptability to business changes,
− Communicative,
53
2004, ISBN: 1-86152-964-3,
25 25
− Being realistic in evaluation of phenomena,
− Orientation towards the future,
− Ability to recognize business opportunity,
− Tendency towards business cooperation,
− Resistance to stresses.
Figure 6: Strategic map
Educational component of managers’ competence includes the knowledge from

the field of:
− Economic legislation,
− Functioning of economic system,
− Market effect,
− Competitiveness of participants in the market,
26
− Marketing analyses,
− Business economies,
− Applied technologies,
− Service stations,
− Organization of business,
− Business informatics,
− Business administration,
− Quality,
− Risk and capacity for the recovery of organization.
Processes of strategic management are within the framework of internal
perspective. Evaluation of the quality level of these processes, as well as the
evaluation of the strength of relations with other component processes of man-
agement and other processes, is defined through the questionnaire (the other 20
questions).
Perspective of customers is analyzed from the aspect of quality (the next
10 questions), as well as the strength of the connection with previous and future
perspectives.
Financial perspective in this model is defined through competitiveness and
productivity. This was especially analyzed in the questionnaire through the fol-
lowing 10 questions.
By the analysis of responsibly from 35 organizations, it was determined
that the mean evaluation of process’s impact is as in the table (Table. 1).
Table 1: Synergic effect of management process

Mark of Impact on:
the Quality: Price: Image: Total
process: impact:
P1 5.4 6.5 - 6.9
P2 6.1 4.1 - 6.5
P3 6.6 5.4 4.5 7.5
P4 4.3 4.0 5.6 6.1
P0 7.0 7.5 4.5 8.0
27 27
Figure 7: Model of the relations of the process P1 with other processes
Total (synergic) effect was determined on the basis of expert opinions. In the
next phase, it will be determined on the basis of the application of simulation
software based on the application of extended Petri nets.
CONCLUSIONS
From the above-mentioned, we can draw the following conclusions:

− In its development, quality had the phases of evolutionary and abrupt de-
velopment in the 20th century,
28
− Business conditions have significantly changed in the 21st century, so the
trend of quality improvement and the quality of life were brought into
question,
− Future of the quality and the quality of the future are becoming increas-
ingly pervasive and mutually conditioned,
− Scenarios of quality in the future are increasingly dependent on global fac-
tors,
− Based on the application of suggested model of management process, the
hypothesis H1 (Management process significantly affects the achievement
of quality goals) is confirmed, because overall evaluation is about 7.5 on
the scale 1-10,
− Impact of the process P1 (strategic management) on quality is evaluated to
5.4, which confirms the initial hypothesis H2 about insufficient presence
of strategic management, which is measured through its impact on the
quality,
− By analyzing the responses about the competence of managers (questions
1-4 in the questionnaire), it was determined that operations managers are
the most competent (7.2), then medium level managers (6.5), while the
competence of top management is the lowest (5.1), which confirms the
hypothesis H3.
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[2] Arsovski S., Menadžment ekonomikom kvaliteta, Centar za kvalitet, Mašinski fakultet,
Kragujevac, 2002, ISBN: 86-80581-48-8,
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0-13-507819-8.
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Jersey, 1997,
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[10] Hur M., The influence of total quality management practices on the transformation of how
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Wiley & Sons, Hoboken, NY, 2008, ISBN: 0-471-07977-4,
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[15] Merna T., Al-Thani F., Corporate Risk Management, 2nd Edition, John Wiley & Sons,
Hoboken, NY, 2008, ISBN: 978-0-470-51833-5,
[16] Modrinić Z., Menadžerska kompetentnost, BMD – MEGA, Beograd, 2006, ISBN: 86-
909329-0-9,
[17] Nast Dž., Mapiranje ideje, Sezam Book, Zrenjanin 2007.
[18] Rao et all., Total Quality Management: A Cross Functional Perspective, John Willey &
Sons, New York, 1996.
[19] Stefanović N., Stefanović Ž., Liderstvo i kvalitet, Centar za kvalitet, Mašinski fakultet,
Kragujevac, 2007, ISBN: 86-86663-01-X,
[20] Stefanović Ž., Menadžment, Ekonomski fakultet, Kragujevac, 2003, ISBN: 86-82203-29-4,
[21] Summers D., Quality Management: Creating and Sustaining Organizational Effectiveness,
Pearson International Edition, 2009.,
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Boston, 2003, ISBN: 0-07-244371-5,
30
Tomasz Hermaniuk
The University of Rzeszów, Poland
LEVEL OF QUALITY OF EDUCATION SERVICES

ON EXAMPLE OF UNIVERSITIES FROM RZESZOW
Key words: quality, higher education, quality of services
ABSTRACT
In today's reality the phenomenon of competition occurs in almost all areas of human
activity. Usually associated with the business, it is expanding continuously its reach to include new
spheres. These include inter alia the sphere of education, especially higher education, which
represents one of the last stages of human learning, equipping graduates with the knowledge and
skills necessary in their future life. On the quality of learning in higher education depends to a
great extent the fate of people who begin their working lives. Higher education institutions have to
fulfill an important mission connected with the preparation of their graduates to take on the
challenges of the contemporary economy. This is strongly connected with the necessity of
providing in the process of learning knowledge and skills and the shaping of certain characteristics
and attitudes that determine the effectiveness of future operations and mobility necessary in
today's world.
The paper presents results of research conducted at four universities in Rzeszow. Their
object was the level of provided quality of educational offer perceived by the students.
INTRODUCTION
Providing high quality educational services means the need to focus on the
recipient and fulfillment of expectations, desires and preferences of students who
are customers and consumers of educational services. Therefore, it is crucial to
analyze the needs and expectations of customers and continuous improvement of
curricula and other services provided by universities.
Most representatives of the service sector are under increasing pressure to
demonstrate that their offer is customer-focused and that they pay proper attention
to continuous performance improvement. To perform better than competitors, it is
essential that customer expectations are properly understood and measured and
that any problems in service quality are identified and eliminated as soon as it is
possible. Once they are identified, then right people work on identifying cost-
effective ways of closing service quality gaps and of prioritizing crucial gaps that
should be closed first.
While there have been numerous efforts to study service quality, there has
been no general agreement on the methods of measurement of them. The majority
of the work has attempted to use the SERVQUAL method in order to assess ser-
vice quality. This is an instrument that can be used in effort to ascertain gaps be-
tween customer expectations and perceptions of the service delivered.
Service quality is a concept that has aroused interest and debate in the lit-
erature because of the difficulties in both defining and measuring it with no over-
all consensus. There are a number of different definitions of service quality. One
that is commonly used takes into consideration marketing approach defines qual-
ity of services as the extent to which a service meets customers’ needs and expec-
tations. This means that service quality can be defined as the difference between
customer expectations of service and perception of experienced service. If expec-
tations are on the higher level than performance, then perceived quality is below
the satisfactory line and hence occurs customer dissatisfaction. This easily could
lead to loss of customers and eventually to disappearing of the organization from
the market.
Measurement of the level of perceived service quality is a very useful
source of information. It allows the comparison before and after undertaken
changes, for the location of quality related problems and for the establishment of
standards of performance for service delivery. The starting point in developing
quality in services is analysis and measurement. The SERVQUAL approach,
which is studied in this paper is the most common and popular method for meas-
uring service quality. Its simplicity makes it the most commonly used tool.
1. HIGHER EDUCATION IN POLAND
Higher education institutions have to fulfill an important mission con-

nected with the preparation of their graduates to take on the challenges of the
modern economy. This is connected with the necessity of providing in the process
of learning knowledge and skills and the shaping of certain characteristics and
attitudes that determine the effectiveness of future operations and necessary in
today's world mobility.
Starting from the nineties of the twentieth century, the higher education in
Poland is undergoing a significant transformation. In addition to the already exist-
ing public schools were created and developed numerous private colleges. Previ-
ous master system was varied by introducing a two-stage study education system,
which gives the possibility to continue education at the undergraduate engineering
studies or at second degree.
These changes favour the adaptation of the Polish educational system to
world standards and, in particular to European standards. Already some of the
universities offer regular studies in foreign languages. Students are also able to
choose an individual course of study.
32
In the academic year 2010/2011 in 460 colleges and universities of all
types 1841,3 thousand students were learning. The largest academic center in Po-
land is Warsaw, the largest university - the University of Warsaw educating 54,3
thousand students. The largest academic centers are located in cities with large
numbers of inhabitants. Very dynamic growth in the number of university stu-
dents was seen in the last decade of the twentieth century and in the first five
years of the XXI century weakened in recent years. While the number of universi-
ties in the academic year 2010/2011 compared to the academic year 2000/2001
increased by 48,4%, in comparison with the previous year decreased slightly1.
At the beginning of the academic year 2010/2011 there were 328 non-
public schools educating 580,1 thousand students (31,5% of all students), includ-
ing 135,1 thousand students of the first year of study. In comparison with the pre-
vious year a slight decrease in the number of private colleges can be seen, more-
over, the number of young people studying there fell by 8,4%2.
The public universities were the dominant form of full-time education, in
which 67,5% students were taught, while private colleges and universities - part-
time studies in which students represented 83,1% of learners at all.
Since the academic year 2005/2006 - when the number of students reached
a historical record level of 953,8 thousand - number of students is steadily de-
creasing. In last five years it fell by 5,8%, and in the last year the decline was
3,1%. In the academic year 2010/2011 the number of full-time students amounted
to 949,5 thousand persons, i.e. 51,6% of total enrollment, while in the part-time
mode studied the 891,8 thousand people (48,4% of all students). The proportion
of women among all students in the academic year 2010/2011 impact was 58,8%.
Among those enrolled full-time programs was 57,2% of women, the part-time
women students constituted 60,5% of all students3.
1
Higher education institutions and their finances, GUS, Warsaw 2011, p. 24.
2
op. cit., p. 27.
3
op. cit., p. 38.
33 33
Table 1. Students and graduates of universities.
Academic year Number of students Number of graduates
1990/1991 403 824 56 078
1991/1992 428 159 59 046
1992/1993 495 729 61 424
1993/1994 584 009 64 201
1994/1995 682 200 70 295
1995/1996 794 642 89 027
1996/1997 927 480 115 868
1997/1998 1 091 841 146 318
1998/1999 1 273 955 174 771
1999/2000 1 431 871 215 423
2000/2001 1 584 804 303 966
2001/2002 1 718 747 342 138
2002/2003 1 800 548 366 141
2003/2004 1 858 680 384 029
2004/2005 1 926 122 391 465
2005/2006 1 953 832 393 968
2006/2007 1 941 445 410 107
2007/2008 1 937 404 420 942
2008/2009 1 927 762 439 749
2009/2010 1 900 014 478 916
2010/2011 1 841 251 -
Source: Higher education institutions and their finances, GUS, Warsaw 2011, p. 25.
Many private universities offer education at undergraduate only. These

schools are often located in smaller centers, where the only and cheaper than
studying in the university city of opportunity for education.
2. THE IMPORTANCE OF QUALITY IN HIGHER EDUCATION
According to most experts, the future belongs to a knowledge-based econ-

omy, and the driving forces of modern economies are the intellectual capital and
ability to innovate. This facts force the need to adapt education to the new needs
and challenges. Without proper education it is difficult or impossible to build hu-
man capital, so necessary in stimulation of the developmental processes. Invest-
ments in this type of capital raise productivity, generate higher incomes of work-
ers, enterprises and the state, foster inclusion of the national economy to the
global trend of development of a new economy based on modern technologies.
The concept of quality in higher education in Poland had its beginnings in
the mid nineties of the twentieth century and was due to economic changes that
resulted in a growing number of students, opening up new fields of studies,
34
changes in the curriculum and an increasing number of private universities, as
well as the extension of cooperation with foreign universities4.
Until recently, as the primary cause of insufficient quality of educational
services, among others factors were commonly pointed5:
• low level of preparedness of scientists to teach classes,
• low level of technology supporting the teaching process,
• little own contribution of students in conducting classes,
• low level of technical equipment of the universities.
Fortunately, most of these problems were partially resolved, mainly
through the use of European Union funds that supported polish education signifi-
cantly. There are significant changes in the activities of a growing number of uni-
versities. Growing awareness of pro-quality makes increasingly more popular
formal quality management systems, enabling to provide services at the level ex-
pected by customers and to maintain once established standard unchanged.
The issue of forming an appropriate level of quality of educational services
is determined by several aspects. These include, among others: the expectations of
employers towards graduates, current and future needs of students, collaboration
between research institutions and businesses, changes in educational standards
and the growing competition between universities.
The quality in case of universities and their educational offer takes the
specific form. In this context, quality can be defined in five basic dimensions6:
• quality as the uniqueness (high standard of teaching),
• quality as the convergence (no procedural defects),
• quality as the fit to the needs (meeting the requirements of students),
• quality as the value in money dimension (efficiency resulting in high
wages of graduates)
• quality as the transformation (continuous improvement and adaptation
to the needs of the market).
Poland's accession to the European Union has completely changed the per-
spective of education and range of possible actions of the universities. The open-
ing of borders has created learning opportunities for students and researchers
working in almost all countries of united Europe. National universities have
gained new partners and potential students outside Polish borders. Also gained
4
Dobrzański L. A., Roszak M. T., Quality Managent in University Education, Journal of
Achievements in Materials and Manufacturing Engineering, 2007, vol. 24, issue 2, p. 224.
5
Rocki M., Jakość kształcenia ekonomicznego, PTE, Warszawa 2009, p. 145-146.
6
Becket N., Brookes M., Quality Management Practice in Higher Education - What Quality Are
We Actually Enhancing? Journal of HLS&T Education, 2009, p. 42-43.
35 35
access to methods and standards of the EU in building a quality system in higher
education. Their selection should include the following7:
• the formal requirements resulting from legal regulations,
• strategy of development adopted by university and faculties,
• the degree of harmonization of policies with available resources,
• current level of information culture and management culture of univer-
sity,
• level of awareness of work quality of staff,
• the requirements of the customers and other interested parties.
The aim of implementation of internal and external quality systems in uni-
versities is to improve the quality of education. This should lead to improvement
of the quality of competencies of graduates by creating with him learning out-
comes with identification of necessary work.
The basis of all quality management systems, including those implemented
in higher education is the Deming cycle. It provides a foundation for a system that
is used in all organizations. Four steps to an endless cycle:
1) plan - identifying the possibilities and opportunities, planning changes,
2) do - the implementation of planned changes,
3) check - an analysis of the results of implementation, identification and
documentation of system weaknesses,
4) act - implementation of changes.
The concept of TQM in higher education should be based on the following
postulates8:
• all activities of university should be focused on the needs of students,
• common strategic objectives of the authorities and staff,
• commitment to quality of education in all organizational units of the
university,
• to motivate researchers to raise their qualifications,
• implementation of educational activities as a process,
• system approach to management of the university and its computeriza-
tion,
• university's self-improvement based on the Deming cycle,
• the right college team atmosphere.
The socially responsible university should be aware of the liability in-
curred by itself related to the impact on the society and economy, dependent on
7
Stalewski T., Jakość kształcenia na kierunku zarządzanie i marketing, Difin 2005, p. 11-12.
8
Rocki M., Jakość kształcenia ekonomicznego, PTE, Warszawa 2009, p. 36-37.
36
the ability of graduates to adapt to market and promote their economic competi-
tiveness. Such an institution should have: awareness of the social role, care about
employment prospects of graduates, delivering knowledge to problem-solving
skills shaping the economic, social, political, market-based approaches to teaching
and research. Ensuring high quality products and services will result in better and
more practical professional competence of graduates, which will translate into an
increase in the university's reputation and thus attract better and more ambitious
group of students.
3. APPLICATION OF THE SERVQUAL METHOD
Clearly from a best value perspective the measurement of service quality

in the service sector should take into account customer expectations of service as
well as perceptions of service. However it is apparent that there is little consensus
of opinion and much disagreement about how to measure service quality. One
service quality measurement model that has been extensively applied is the
SERVQUAL model. As the most often used approach for measuring service qual-
ity SERVQUAL has been commonly used to compare customers' expectations
before a service encounter and their perceptions of the actual service delivered.
The SERVQUAL instrument is the predominant method used to measure con-
sumers’ perceptions of service quality. It was created and developed in the mid
eighties of the twentieth century by Parasuraman, Berry and Zeithaml.
SERVQUAL originally concentrated on 10 aspects of service quality: reliability,
responsiveness, competence, access, courtesy, communication, credibility, secu-
rity, understanding the customer and tangibles. By the early nineties the authors
had simplified the model to the useful acronym RATER coming from first letters
of words:
• reliability - ability to perform the promised service dependably and ac-
curately,
• assurance - (including competence, courtesy, credibility and security).
knowledge and courtesy of employees and their ability to inspire trust
and confidence,
• tangibles - physical facilities, equipment and appearance of personnel,
• empathy - (including access, communication, understanding the cus-
tomer). caring and individualized attention that the firm provides to its
customers,
• responsiveness - willingness to help customers and provide prompt ser-
vice.
37 37
In the service quality concept there are seven major gaps that can be inves-
tigated:
Gap 1 - Customers’ expectations versus management perceptions, which is
a result of inadequate marketing research orientation, inadequate upward commu-
nication and too many layers of management. A key way to narrow this gap is
survey research.
Gap 2 - management perceptions versus service specifications, which re-
sults from insufficient commitment to service quality, a perception of unfeasibil-
ity, inadequate standardisation and an lack of clear setting of goals. Managers
need to make sure the organization is defining the level of service they believe is
necessary.
Gap 3 - service specifications versus service delivery as a result of role
ambiguity and conflict, poor employee-job fit and poor technology-job fit, inap-
propriate supervisory control systems, lack of perceived control and lack of
teamwork.
Gap 4 - service delivery versus external communication that results from
inadequate horizontal communications and propensity to over-promise. Managers
need to audit the customer experience that their organization currently delivers in
order to make sure it is in accordance with the specifications. Too often, organiza-
tions exaggerate the process of marketing communications, promising clients too
much compared to what they actually can offer.
Gap 5 - discrepancy between customer expectations and their perceptions
of the service delivered. This comes from the influences exerted from the cus-
tomer side and the gaps on the part of the service provider. In this case, customer
expectations are influenced by the extent of personal needs, recommendations and
own experiences from the past. Customers' expectations have been shaped by
word of mouth, their personal needs and their own past experiences. Surveys after
delivering the customer experience are important for an organization to measure
customer perceptions of service.
Gap 6 - divergence between customer expectations and employees’ per-
ceptions, which results from the differences in the understanding of customer ex-
pectations by front-line service providers.
Gap 7 - divergence between employee’s perceptions and management per-
ceptions. This appears as a result of the differences in the understanding of cus-
tomer expectations between managers and service providers.
The model of gaps identifies seven key divergencies relating to managerial
perceptions of service quality, and tasks associated with service delivery to cus-
tomers. Six gaps (Gap 1, Gap 2, Gap 3, Gap 4, Gap 6 and Gap 7) are identified as
functions of the way in which service is delivered. Gap 5 pertains to the customer
38
and as such is considered to be the true measure of service quality. The Gap on
which the SERVQUAL methodology has influence is Gap 5.
SERVQUAL has its critics and is considered overly complex, subjective
and statistically unreliable. The simplified RATER model however is a simple and
useful model for qualitatively exploring and assessing customers' service experi-
ences and has been used widely by service delivery organizations. It is an efficient
model in helping an organization to shape up the efforts in order to cover the gap
between perceived and expected service.
The SERVQUAL measuring tool remains the most complete attempt to
conceptualize and measure service quality. The main benefit to the SERVQUAL
measuring tool is the ability of researchers to examine different service industries
such as education, banking, healthcare, financial services, etc.
In the SERVQUAL instrument, twenty two statements are used to measure
the performance across five RATER dimensions, using a seven point Likert scale
which measures both customer expectations and perceptions. It is important to
note that without adequate information on both the quality of services expected
and perceptions of services received then feedback from customer surveys can be
highly misleading from both a policy and an operational perspective.
The research on measuring service quality has focused primarily on how
to meet or even exceed the external customer’s expectations, and has viewed ser-
vice quality as a measure of how the delivered service level matches consumer’s
expectations. These perspectives can also be applied to the employees of the or-
ganization and in this case, other important gaps could identified and closed in the
service quality gaps model.
The concept of measuring the difference between expectations and percep-
tions in the form of the SERVQUAL gap score proved to be very useful for as-
sessing levels of service quality. With slight modifications, the SERVQUAL
method can be adapted and used in any type of service organisations. Obtained
information on service quality gaps can help responsible people in diagnosis of
areas where performance improvement can be targeted in a best way. The largest
negative gaps, combined with assessment of where expectations are highest, en-
ables prioritisation of performance improvement and leads to establishment of
several steps in the process of improvement.
A particular advantage of SERVQUAL is that it tested an instrument that
can be used for comparative purposes fairly. SERVQUAL, however, the benefits
of being statistically important tool as a result of extensive field testing and
refinement. As an instrument for general and widely used SERVQUAL can also
be used for repeated regularly and used for comparative benchmarking. To
appreciate more fully the benefits of using SERVQUAL, surveys should be
39 39
conducted regularly to enable periodic comparisons to determine how to improve
services affected perceptions and expectations of the service at the time, and to
determine the effectiveness of the development of services and initiatives
improvement in the targeted dimensions.
All service organizations are faced with the responsibility for its actions to
clients and society as a whole. Therefore, their actions should be, especially in
cases such as security, health care, special care. They should have in particular to
improve access to its services, ensuring efficient and effective manner within the
limited material and financial resources.
It is worth noticing that the measurement systems themselves are often in-
appropriate, because the system designers do not know enough about what factors
and elements should be measured. Some specialist claim that measuring customer
perception of service may raise expectations and performed too often can actually
lead to a loss of motivation of customers to respond properly. The basic aim and
objective of the study is to determine the satisfaction level of the gaps in their
elimination. Therefore, for obvious reasons, it is pointless to conduct research for
organizations that do not see the need and do not show the will to implement ap-
propriate changes representing the conclusion of the tests.
4. RESULTS OF RESEARCH
The research method used in the study was the SERVQUAL question-
naire. In this case was used the variant called Servperf. It consists in the omission
of phase of measurement of expectations and focus on making the measurement
of quality perceived by the customer. The research tool used for the purpose of
this study is a questionnaire for measuring the quality of educational services pro-
vided by universities and consists of two main parts. The first is an evaluation of
the quality of educational services provided by the university. In the second re-
spondent determines the level of significance of individual components of the
service.
A survey was conducted in May 2011, the group consisted of 272 students
from four universities in Rzeszow:
• Rzeszow University of Technology (RUT) - 69 students,
• University of Rzeszow (URZ) - 69 students,
• University of Information Technology and Management (UITM) - 68
students.
• School of Law and Public Administration (SLPA) - 66 students.
These are the four largest universities in the south-eastern Poland, educat-
ing thousands of students from numerous departments.
40
The questionnaire assessing the quality of educational services was based
on the methods highlighted by the developers of SERVQUAL twenty-two state-
ments describing the performance of universities. In the study a seven-point Likert
scale was used, where the numerical values from 1 to 7 are assigned to answer,
where individual points are assigned with meanings:
1 - strongly disagree,
2 - I do not agree,
3 - is unlikely to agree,
4 - hard to say,
5 - tend to agree,
6 - I agree,
7 - strongly agree.
In the first part of study participants determined the degree of significance
of individual components of an educational service, which are:
• technical equipment and material conditions of studies,
• university's ability to meet the needs of students
• qualifications and skills of staff (academic and administrative)
• building by staff of the university atmosphere of cooperation and mu-
tual trust
• education quality and prestige of the university
The relative importance of various elements was determined by the alloca-
tion of 100 points between the identified dimensions of quality of service. Then
the score was divided by 100 to give the weight of the element. All weights sum
up to 1. This step is verification of the level of significance of the individual com-
ponents determining the perceived quality of service. Knowing the importance
level is used to determine the weights of the elements that will be used to thus put
a definite acquired in later stages of the results.
According to results presented in table 2, it is noticable that for students
of Rzeszow University of Technology, the most important factors are: technical
equipment and material conditions of studies and education quality and prestige of
the university. Both were assessed at 0,231. The least important factor was the
building by staff of the university atmosphere of mutual trust and cooperation.
The students of University of Rzeszow, the greatest importance attributed to the
factors 3 and 4 (both assesed at 0,239). The least important to them was factor 2
(0,167). In the case of respondents studying at the University of Information
Technology and Management, the least important element was a factor 4 (0,159).
The most important were elements: 1 (0,235) and 3 (0,231). Students of the last of
the surveyed schools - School of Law and Public Administration, as the least im-
41 41
portant element considered factor 4, giving it a weight of just 0,123. The most
important for them was a prime factor, gaining weight 0,275.
Table 2. The importance of individual components of an educational service.

Nr Factor RUT URZ UITM SLPA
Technical equipment and material conditions
1 0,231 0,176 0,235 0,275
of studies
University's ability to meet the needs of stu-
2 0,192 0,167 0,173 0,162
dents
Qualifications and skills of staff (academic
3 0,183 0,239 0,231 0,241
and administrative)
Building by staff of the University atmos-
4 0,163 0,179 0,159 0,123
phere of cooperation and mutual trust
Education quality and prestige of the Univer-
5 0,231 0,239 0,202 0,199
sity
Source: results of own research.
The results indicate a divergence of expectations of students studying at

various universities. That is probably some level of awareness of the capabilities
of the institution when it comes to meet specific needs. This may result from one
side of the experience already acquired. On the other hand, may indicate a flow of
information from the existing college graduates surveyed.
The next step in the study was to collect the results of assigning points (1-
7), each describing the findings of educational services provided by the surveyed
institutions. Table 3 shows the mean scores assigned to the universities, the stu-
dents of each university.
The study shows that the best features of University of Technology are:
academic qualifications and knowledge of staff to answer questions of students
staff (5,67), modern equipment (5,65), respect for the implementation of study
plans and curricula (5,63). The lowest rated was the organization of activities on
time convenient for all students assessed at 3,87.
42
Table 3. Average rating of statements by students from four universities Rzeszow.
UIT
No Statement RUT URZ SLPA
M
1 The School has modern equipment 5,65 5,78 6,1 6,07
School facilities are visually appealing and comfortable (the
2 building and surroundings) 5,1 4,88 5,4 6,57
The university has the infrastructure (parking, computers, meeting
3 rooms), corresponding to the number of students 4,77 4,82 5,4 5,4
Materials related to the services of the University (leaflets, support
4 materials, web pages) are attractive and legible 5,12 5,26 5,7 5,47
When the School promises to do something within a certain time,
5 it does it 4,43 4,42 4,57 4,12
When you have a problem, the staff of the University are sincerely
6 interested in the solution 4,37 4,68 4,53 3,5
The school takes care of the interests of the students (social
7 assistance, dormitories, scholarships) 4,64 4,93 4,73 5,43
The University respects the implementation of study plans and
8 curricula 5,63 5,5 5,5 5,23
9 Courses at the university are carefully prepared 4,9 4,43 5,27 4,97
University staff have academic qualifications and knowledge to
10 answer questions students 5,67 5,43 5,53 5,9
University staff have academic qualifications and knowledge to
11 answer questions students 5,23 4,9 5,07 4,7
School staff is always willing to help students outside the
12 classroom 4,24 4,66 4,53 3,97
Staff outside the University presents the results of their research
13 (publishing scripts, books, articles) 5,23 5,03 5,27 5,5
14 University staff have appropriate communication skills 5,07 4,93 5,53 5,53
Students of the University shall be promptly informed of
15 important events for them 5,1 4,85 5,47 5,22
Employers have confidence in the quality of education at the
16 University 4,28 4,92 4,67 5,2
17 University staff apply appropriate teaching methods 4,87 4,67 5,33 5,03
18 The services provided by subcontractors are of good quality 4,82 4,73 5,4 6,1
19 The school organizes activities on time convenient for all students 3,87 4,5 5,03 4,67
The composition of academic staff has a positive effect on the
20 reputation of the University 4,83 4,9 5,1 5,9
University's reputation has a positive effect on the choice of its
21 graduates by employers 4,36 4,69 4,47 5,13
University's reputation has a positive effect on her choice for
22 students 4,64 4,67 4,73 5,22
Total 106,82 107,58 113,33 114,83
Far the highest rated feature in the University of Rzeszow was possession
of modern equipment (5,65), the lowest score is assigned reliability, because the
43 43
statement "When the School promises to do something within a certain time, it
does it" gained 4,42. Almost the same amount of points (4,43) was given to state-
ment "Courses at the university are carefully prepared".
In University of Information Technology and Management the highest
score (6,10) was given to the modernity of equipment (as in case of URZ). Stu-
dents are not very satisfied with university's reputation and its effect on the choice
of its graduates by employers. The score was 4,47.
Students from the School of Law and Public Administration are the most
satisfied with visual appealing of school's buildings and surroundings. While the
lowest average scores assigned to sincere interest of staff in solution of students'
problems (only 3,5).
Summarizing achieved results, the best average score - 114,83 - was ob-
tained by School of Law and Public Administration. Second in this ranking was
University of Inromation Technology and Management with total score of 113,33.
Third was University of Rzeszow collecting 107,58 points. On the last place was
Rzeszow University of Technology with 106,82 points.
The next step in the study was to determine the differences between the
perceptions of the quality of educational services, and the ideal situation in which
the university receives maximum note of 7 points. For this purpose, the mean
scores obtained for each of the analyzed statements was subtracted maximum
value equal to seven. The resulting difference is a measure of derogation of
service from an ideal situation.
As a result of the sum of the results and dividing them by the number of
questions in a group of statements obtained for each group by the average
deviation from the ideal situation. This makes it possible to notice the areas that
the greatest differ from the optimal situation.
Then by dividing the sum of the differences of all five groups received a
total measure of SQ without taking into account the weights of the groups of
agents assigned to the participants.
44
Table 4. Gaps in the level of educational services.
Dimen- Average Average Average Average
Nr of
sion of statement RUT measure URZ measure UITM measure SLPA measure
service of SQ of SQ of SQ of SQ
1 -1,22 -1,22 -0,9 -0,93

2 -2,12 -2,12 -1,6 -0,43
I 3 -2,18 -2,18 -1,6 -1,6
4 -1,74 -1,74 -1,3 -1,53
18 -2,58 -1,97 -2,27 -1,91 -1,6 -1,40 -0,9 -1,08
5 -2,32 -2,58 -2,43 -2,88
7 -2,07 -2,07 -2,27 -1,57
II 8 -1,5 -1,5 -1,5 -1,77
15 -2,57 -2,15 -1,53 -1,78
19 -1,57 -2,01 -2,5 -2,16 -1,97 -1,94 -2,33 -2,07
9 -2,1 -2,57 -1,73 -2,03
10 -2,34 -1,57 -1,47 -1,1
III 13 -1,97 -1,97 -1,73 -1,5
14 -2,07 -2,07 -1,47 -1,47
17 -2,15 -2,13 -2,33 -2,10 -1,67 -1,61 -1,97 -1,61
6 -2,08 -2,32 -2,47 -3,5
IV 11 -2,33 -2,1 -1,93 -2,3
12 -2,27 -2,23 -2,34 -2,25 -2,47 -2,29 -3,03 -2,94
16 -2,5 -2,08 -2,33 -1,8
V 20 -2,17 -2,1 -1,9 -1,1
21 -2,64 -2,31 2,53 -1,87
22 -2,36 -2,31 -2,33 -2,21 2,27 -2,26 -1,78 -1,64
Unweighted average
SERVQUAL measure -2,13 -2,13 -1,9 -1,87
According to presented data, the highest average gap in the level of ser-
vices provided by the Rzeszow University of Technology (-2,31) occurs in the V
group - "Education quality and prestige of the University". The smallest differ-
ence (-1.97) was noted with regard to the first group of factors associated with
Technical equipment and material conditions of studies. Where the system is also
concerned the smallest difference in Group I, amounting to -1.91. The greatest
disparity (-2.25) was observed in group IV - Building by staff of the University
atmosphere of mutual trust and Cooperation. As for the University of Information
Technology and Management, the smallest difference was noted in Section I. It
amounted to only 1.4. Similarly, as in the case URZ most remains to be done in
45 45
the fourth group of factors. The difference with the ideal situation was -2.29. The
last of the surveyed institutions (SLPA), the situation is best when it comes to
Technical equipment and material conditions of studies. -1.08 Results achieved
here, and he is the best among all of the units. Interestingly, in the fourth group of
factors, the result is the worst of all surveyed universities and the difference
amounted to -2.94 points.
The method of calculating the weighted average measure takes into con-
sideration the relative importance of specific dimensions of educational service
quality. The steps to achieve the weighted result of SQ are as follows:
1) for all respondents the average SQ score was calculated for each of the
five dimensions,
2) SQ score multiplied each dimension, the average weight assigned to
that dimension,
3) SQ scores were weighted in all dimensions, obtained the total weighted
score SQ, summed over all the results and divided by the number of
questionnaires, thus obtained the overall weighted result.
Table 5. The weighted and unweighted average measure of SQ.

Dimensions of quality of educational services RUT URZ UITM SLPA
Technical equipment and material conditions of stud-
-0,46 -0,34 -0,33 -0,30
ies
University's ability to meet the needs of students -0,39 -0,36 -0,34 -0,34
Qualifications and skills of staff (academic and ad-
-0,39 -0,50 -0,37 -0,39
ministrative)
Building by staff of the University atmosphere of
-0,36 -0,40 -0,36 -0,36
cooperation and mutual trust
Education quality and prestige of the University -0,53 -0,53 -0,46 -0,33
Overall weighted Servqual measure -2,13 -2,13 -1,86 -1,71
Overall unweighted Servqual measure -2,13 -2,13 -1,9 -1,87
Source: own research.
As shows the data presented in Table 5, the best result (smallest difference
between the perception of services, and an ideal situation), unweighted (-1.87) and
46
weighted (-1.71) was obtained in the case of School of Law and Public Admini-
stration. Next in order was the University of Information Technology and Man-
agement obtain weighted score of -1.90, and -1.87 after taking into account
weights. For other universities, we have seen a very interesting situation. Both the
Rzeszow University of Technology, as well as the University of Rzeszow ob-
tained identical results unweighted and weighted. In both cases, the difference
from the ideal situation was -2.13. This indicates a very even level of educational
services provided by these units.
CONCLUSIONS
In the paper were reviewed the educational service quality issues and the
model of gaps. There was also studied SERVQUAL method as an useful approach
for evaluating the difference between customers' expectations and perception of
quality of delivered services. The SERVQUAL instrument is extensively used to
assess external service quality, the instrument can also be modified to assess the
quality of the internal service provided by departments and faculties within a uni-
versity. The results of the current study illustrate that organizations can assess five
dimensions of service quality to ascertain the level of services provided, and to
determine which dimensions need special attention and some intervention. Know-
ing the service quality dimensions, universities can judge how well they per-
formed on each dimension and their representatives could identify the areas of
weaknesses in order to make improvements.
In conclusion, knowing how students perceive the service quality and be-
ing able to measure service quality, universities can benefit both quantitative and
qualitative ways. The measurement of service quality can provide specific data
that can be used in quality management. Assessing service quality and better un-
derstanding how various dimensions affect overall service quality would enable
organizations to efficiently design the service delivery process. By identifying
strengths and weaknesses pertaining to the dimensions of service quality organiza-
tions can better allocate resources to provide better service and ultimately better
service to external customers.
Generally speaking, the study of service quality is both important and
challenging. Future efforts should continue to advance the understanding of the
concept and the means to measure and improve service quality.
REFERENCES
[1] Becket N., Brookes M., Quality Management Practice in Higher Education - What Quality
47 47
Are We Actually Enhancing? Journal of HLS&T Education, 2009.
[2] Cheverton P., Kluczowe umiejętności marketingowe: strategie, techniki i narzędzia sukcesu
rynkowego, Helion, Gliwice 2006.
[3] Dobrzański L. A., Roszak M. T., Quality Managent in University Education, Journal of
Achievements in Materials and Manufacturing Engineering, 2007, vol. 24, issue 2.
[4] Hill N., Alexander J., Pomiar satysfakcji i lojalności klientów, Oficyna Wydawnicza, War-
szawa 2003.
[5] Kotler P., Marketing od A do Z, PWE, Warszawa 2004.
[6] Mazur K., Marketing usług edukacyjnych, WAPS, Warszawa 2001.
[7] Nieżurawski L., Pawłowska B., Witkowska J., Satysfakcja klienta: strategia, pomiar, za-
rządzanie: koncepcja wewnętrznego urynkowienia współczesnej organizacji, Wydawnictwo
Naukowe Uniwersytetu Mikołaja Kopernika, Toruń 2010.
[8] Pomykalski A., Zarządzanie i planowanie marketingowe, PWN, Warszawa 2005.
[9] Rocki M., Jakość kształcenia ekonomicznego, PTE, Warszawa 2009.
[10] Sagan M., Standaryzacja instrumentów marketingu-mix, Difin, Warszawa 2010.
[11] Stalewski T., Jakość kształcenia na kierunku zarządzanie i marketing, Difin 2005.
[12] Styś A., Marketing usług, PWE, Warszawa 2003.
48
Martin Mizla
The University of Economics in Bratislava, Slovakia
SELECTED IMPACTS OF QUALITY COSTS

DURING THE ECONOMIC CRISIS
Keywords: crisis, costs, quality, EBIT
ABSTRACT
Crisis of economy makes very strong pressure to managers for cost cutting. The paper shows that
approach related to direct costs and overheads is short-term only. The effort with long-term results
must be focused on fixed and variable costs. They show relation to results of production effort in
time of economical volatility as well as direct impact to EBIT.
INTRODUCTION
Quality is one of the main factors which influence the customer in select-
ing products and creating his/her loyalty. Enterprise, that wants to make business
for a long time, ensures high quality of its products and constantly improves, or at
least maintains, its positive reputation. Quality would be a guarantee of prosperity
of a business by its external (i) increase in sales volume (ii) and partly in revenue
and by its internal orientation towards (iii) production capacity optimization, (iv)
employment security for its staff and (v) reduction of sensitivity level to negative
changes.
Necessities of competitiveness make organizations to focus internally on
developing its human resources and structures. Usually grouping of employees
into teams is used there. Success of teams depends on its direct business, but es-
pecially on improving the processes by (i) supporting the organization as a whole
and (ii) by the attitude of employees to their processes and organization. The basic
criterion is the attitude of employees to meet their personal needs (and targets).
One of the basic needs of employees (which is manifested by a formal loyalty and
is the engine of self-identification) can be seen in the above-mentioned job secu-
rity (Fig. 1).
results of
improvement
effort for percepcion of

realization R employees
association of
employees
job stability
Fig.Cycle of continuous improvement by staff

Source: own processing
1. THE ECONOMIC CRISIS
The economic crisis, like all crises, leads to unexpected instability or risk
of achievement of the basic economic goals of individuals, groups, and entire
communities. In doing so, there is also a threat to the persistence of adopted core
values as well as reduction of possibilities of finding appropriate solutions limited
by lack of disposable time.
Appropriateness of hazard solutions depends on how deep the crisis has
affected the entire economy and in which point the economic cycle is. In the eco-
nomic sphere, we can say that the crisis occurs mainly to the negative changes on
the demand side, to primary and secondary solvency and liquidity, to reduction of
the usage of existing capacity, to the growth of unemployment and to increased
inflation. Decline in overall consumption (demand) leads to financial problems on
the revenue side of the firm. Negative impact of these changes is the firm's sensi-
tivity to fluctuations in the economy. Under the sensitivity to fluctuations in the
economy should be understood changes in aggregate demand that cause changes
in sales. The answer is usually no attempt to establish a balance of pressure to
reduce costs with a consequent increase in productivity. Methods and approach to
reduce costs have a direct or indirect short-term or long-term impact on the qual-
ity of outputs produced, firm’s reputation, the consumption of products of the firm
(Fig. 2), and in the possibility of retaining, or ideally even increase, its market
share.
50
status of
economy
quality of consumption
outputs
financial
productivity problems
cost cutting
Fig. Cycle of impacts of economic crisis

2. QUALITY MANAGEMENT AND ECONOMIC CRISIS RELATIONS
Economic crisis puts pressure on shifts in the understanding and manage-

ment of quality. For example, taleof the ongoing economic crisis has shown that
there are a surprisingly vulnerable those businesses which to formally declare not
only the quality but they deal with quality fairly and in long term. Companies with
ownership of quality management systems according to ISO 9001 certificates also
suffer by fluctuations in the economy and in some cases even stronger than com-
panies without certificates. This phenomenon can be called the paradox of im-
provement (or improvement paradox).
Crisis can be seen as an acute effect of a number of possible long-term
causes. Its primary cause is a passive approach to the management of small devia-
tions from normality. Management at the acute onset of a crisis is oriented to im-
mediate corrective action with a fast response time. Management in time of acute
problems tends to act quickly, which wants to show its initiative and make you
feel that the situation keeps well in hands. Quick responses to acute long-term
problems masks the symptoms and real causes are not removed. So, there is con-
stant self-degradation of the firm in progress. As the results, the corrective actions
taken are appropriate in the short run, but in the long run it causes decline of effi-
ciency and deepening in the problem.
51 51
problem B fix
symptoms
unintended
consequences
Fig. 3 "Fixes That Fail" archetype

Source: adapted from Senge, P.M., The Fifth Discipline: The art and practice of the learning or-
ganization. Doubleday, New York 1990.
3. ADDRESSING THE DIRECT IMPACT OF THE CRISIS BY

MONITORING COSTS
Onset of the crisis always activates the managements of firms to action. In

doing so, in fact top management has very few resources for immediate response
in the hands. Briefly we can say that senior management can partly influence with
an organizational structure and costs, including labour. It is natural area definition
of possible immediate action in case of urgency. The area of organizational
change is often associated with a reduction in the number of working days a week,
firing and saving of labour costs. Another area of costs savings, for example is
inventory reduction.
During the crisis, there is a significant reduction in incomes of the firm.
Maintaining liquidity and continued satisfaction of the owners by dividends in
such cases can only be reached by reducing the direct and overhead costs, which
leads to an increase in net income. This leads to the meticulous organization man-
agements focus on initiatives aimed at reducing costs. To the fore then come su-
perficial characteristics such as stoppage or reduction of errors. In order to reduce
costs there is also an alteration of raw materials for the production for less expen-
sive but also for less appropriate. Increase or at least stabilisation of the income
level is often covered with supply of goods with lower quality.
The starting point is the dissatisfaction of managers with economic out-
comes and with results of improvement. Attention of managers is then focused to
52
review the appropriateness of the methodology used for quality assurance.
Amended methodology with emphasis on reducing costs replaces the old method-
ology and usually brings some positive short term results, but on the side of em-
ployees leads to loss of their job security (Fig. 4).
Change of the orientation to reduce direct costs and overheads then leads
to a change in corporate culture and employee attitudes. The result of the changed
approach is then reduction of effectiveness of efforts to carry out the new meth-
odology and, consequently, increased psychological pressure of managers to em-
ployees resulting in dissatisfied employees. Improvement activity in this case
takes the management also with centralization of power.
method B
methodology
suitability
preassure of
method A managers
R
realization
effectiveness
results of
improvement
effort for percepcion of

realization R employees
association of
employees
job stability
Fig. 4 Cycles of cost-orientation

Management of direct and overhead costs during the crisis is important,

but in the long term quality does not give the opportunity to show how a change in
the amount of sales influences the amount of operating profit (EBIT); respec-
tively, how it affects the sensitivity of organization to economy. Variation in sales
53 53
up or down can be caused for example by decline in aggregate demand, by loos-
ing customers or by increase of sales by improving firm offers thanks to a higher
quality. The question is whether businesses those invest in higher levels of quality
while maintaining the same amount of total costs are more sensitive to fluctua-
tions in the economy or exhibit greater stability in spite of those changes. An im-
portant assumption is that changes in the economy affects all competitors equally,
which means that, for example, decrease / increase in sales is proportional for all
competitors.
The sensitivity to fluctuations in the economy - the changes in business
operating profit (EBIT) thanks to the overall cost structure - describes the effect of
operating leverage (DOL)1. This relationship is expressed by formula (1). At the
same time, the DOL gives information about the value of operational risk that is
associated with the level of fixed costs.
DOL = (% ∆EBIT) / (% ∆S) (1)
DOL – degree of operating leverage

% ∆EBIT – the percentage change in operating profit (earnings before in-
terest and taxes)
% ∆S - the percentage change in net sales
Quality costs are due to poor quality of existing non-quality or trying to

maintain the quality and efforts to prevent poor quality. Looking at the frequency
of the process it can be concluded that the absolute number of internal and exter-
nal errors in their specific probability depends on the amount of production. These
costs can include the variable cost of quality.
It should also be noted that the firm does not know when and in what
quantities of products there is a rework needed. This is reason why the company
must incur costs to ensure constant quality (e.g. the need for measurements and
their calibration). Various training courses and different associated costs are re-
lated to it. These types of costs can be classified as fixed costs which exist inde-
pendently on the amount of production. Among the fixed costs we can also count
the costs with jumping increase thanks to the initial investment in quality.
Based on these dependencies, we can say that quality costs are divided into
fixed and variable costs. The basis for classifying the quality costs into fixed and
variable costs is their dependence on the volume of products sold. When com-
1
[1] Dębski, W., Teoretyczne i praktyczne aspekty zarządzania finansami przedsiębiorstwa. PWN,
Warszawa, 2005, s. 158-159.
54
pared with most commonly used quality costs model P-A-F, costs of failures (F)
are variable costs, and majority of prevention costs (P) as well as appraisal costs
(A) are fixed costs. By calculating the DOL, the company can analyze the impact
of changes in the cost structure of quality to the level of operating profit now and
make same estimations for future.
Appropriate quality costs management leads to a decrease in the cost of
failures (F) and to an increase in the cost of prevention (growth of fixed costs and
decrease of variable costs). Efforts to increase the production volume results in
increasing the degree of production automation and consequently to an increase in
fixed costs and declining variable costs. In this sense it should be noted that the
steady rise in fixed costs as a result of quality improvement in case of the decline
leads to increases of business risk.
CONCLUSIONS
Firms with higher level of fixed capital response to external factors more
extremely than firms with higher level of variable capital. Automation of produc-
tion directly influences the overall increase in the share of fixed capital in the
firm. By calculating and monitoring the DOL, the firm can analyze the impact of
changes in cost structure to the level of operating profit. The firm management
should seek ways not only how to improve business processes in order to reduce
both external and internal fails, but also in prevention losses and appraisal losses
as a generator of fixed costs. This is the way how to reduce business risk and how
to reduce firm’s sensitivity to fluctuations in the economy.
REFERENCES
[1] Dębski, W., Teoretyczne i praktyczne aspekty zarządzania finansami przedsiębiorstwa. PWN,
Warszawa, 2005, s. 158-159.
[2] Duignan, P., Using Outcomes Theory to Solve Important Conceptual And Practical Problems
in Evaluation, Monitoring and Performance Management Systems. In: American Evaluation
Association Conference 2009, Orlando, 2009.
[3] Dooley, K. - Johnson, T. – Bush, D., TQM, Chaos, and Complexity, Human Systems Man-
agement, Vol. 14, No. 4, 1995, s. 1-16.
[4] Georgios, G. - Enklawa, T. - Washitani, K., Hidden quality costs and the distinction between
quality costs and quality loss. Total Quality Management & Business Excellence. Volume 12,
Issue 2, March 2001, s. 179 – 190.
[5] Kano, N., The Role of TQM in Economic Crisis – Category A Strategy vs. Category J
Strategy. In: ANQ Congress, Tokyo, 2009.
[6] Senge, P.M., The Fifth Discipline: The art and practice of the learning organization. Double-
day, New York, 1990.
55 55
Tomasz Nitkiewicz
Cracow University of Economics, Poland
THE DETERMINANTS OF ENVIRONMENTAL

MANAGEMENT SYSTEM IMPLEMENTATION
IN POLISH COMPANIES
Key words: environmental management systems, determinants and effects of
EMS implementation, reasons for non-implementing EMS
ABSTRACT
The objective of the paper is the evaluation of motives and effects of environmental management
systems implementation in Polish companies as well as analysis of obstacle preventing them from
implementing these systems. Reaching the objective of the paper is based on analysis of the results
of two surveys made in 2011 on company representatives. First of the surveys was the quantitative
research and was commissioned by PARP on the population of 1000 small and medium enter-
prises. Second survey, of qualitative character, was made by Department of Product Technology
and Ecology, Faculty of Commodity Science CUE on the population of 61 companies. In the paper
the comparative analysis of the results of surveys is made in the scope of motives, effects and
barriers of environmental management systems implementation. In the summary of the paper some
key similarities and differences between the results of the two surveys are interpreted as well as
some important phenomena.
INTRODUCTION
The recent history concerning management oriented research is quite rich

in sustainability related issues, such as: corporate social responsibility, environ-
mental management systems or eco-efficiency. The reasons for that research ori-
entation are connected to the redefinition of socio-economic policy and the role of
companies in its implementation.
Environmental management system (EMS) is one of the tool of reorienting
company management to this new policy paradigm. Still it is non-obligatory in-
strument and could be freely used by the companies depending of their market
situation, relationship with stakeholder groups, economic condition or organiza-
tional culture. The paper tries to investigate the issue of environmental manage-
ment system implementation exploring its motives, achieved results and on the
other hand obstacles restraining companies from its implementation1.
1
Adamczyk J., T. Nitkiewicz, Programowanie zrównoważonego rozwoju przedsiębiorstw, PWE, Warszawa
2007.
The inspiration for this investigation was provided by two research pro-
jects that have been realized last year in Poland and that are resulting in key data
on EMS implementation issue. Author uses the results of surveys that have been
realized within two projects in order to shed some light on motives, effects or ob-
stacles related to EMS implementation in Polish companies.
The text is structured in 5 chapters including the description of environ-
mental managements systems and its use in business sector, presentation of scope
and range of interpreted research, presentation of the results of two surveys and
comparative analysis of the two surveys. The final part of the paper is dedicated to
the interpretation of its analytical part and presentation of the conclusions.
1. ENVIRONMENTAL MANAGEMENT SYSTEMS AND ITS USE IN

BUSINESS SECTOR
Environmental management systems are commonly recognized as tools to

transfer the concept of sustainable development to the process of management of
business entities. The issue of transferring sustainability principles to companies
starts with evolving them into concepts and ideas how to approach them from
business perspective. The concepts are quite diversified and include such claims
life-cycle thinking, industrial ecology, eco-efficiency, cleaner production rules or
dematerialization. The logic of constructing environmental tools for sustainability
implementation is presented on Fig. 1.
57 57
Fig. 1. The logic of constructing environmental tools
for sustainability implementation
Source: based on Nitkiewicz T., The Tools of Implementing Sustainability in Business Sector, [in:]
The Role of Business in Achieving Sustainability; Part 1: Instruments and Strategies, V. Modrák,
T. Nitkiewicz (eds.), published by T.U.Košice, F. of Manuf. Technologies, Prešov 2010, p. 19.
58
These concepts need really rich toolbox in order to be successfully imple-
mented. Possibilities here are divided into three groups: (1) public management
tools, (2) analytical tools and (3) process tools. All the environmental tools, espe-
cially analytical ones, are based on certain assumptions and models that describe
the relationship between the industrial activities and environmental impacts.
Technical models are still being developed in order to project the actual impacts
of human civilization on environment. Additionally, there is a vast group of sup-
plementary tools, that are referring to different aspects of sustainability but could
strongly contribute to its environmental aspects2.
Process tools are internally or externally operated tools that aim at improv-
ing environmental aspects of company’s activities that could be used occasionally
or in a systemic manner. There are some complex managerial instruments like
environmental management systems or specific purposes oriented instruments like
eco-labels.
The practice of last few decades shows that in European Union only two
types of environmental management systems are recognized and being imple-
mented: ISO 14001 system and Environmental Management and Audit Scheme
(EMAS).
The ISO 14001 system is an international standard laying down require-
ments concerning the environmental management system. It is designed to enable
an organisation to formulate both its policy and objectives taking into considera-
tion legal requirements and information concerning significant impact on the envi-
ronment3. EMAS is a legal regulation, which provides for the rules of implemen-
tation of the environmental management system along with strictly defined re-
quirements for testing and minimising pollution4. The ISO 14001 and EMAS sys-
tem share certain features, it is also worth stressing that holding the ISO 14001
certificate ensures partial meeting of the EMAS requirements5.
The diversification of the two systems is not the area of interest in this pa-
per and both systems are treated as a company engagement to better manage their
2
Nitkiewicz T., The Tools of Implementing Sustainability in Business Sector, [in:] The Role of
Business in Achieving Sustainability; Part 1: Instruments and Strategies, V. Modrák, T. Nit-
kiewicz (eds.), published by T.U.Košice, F. of Manuf. Technologies, Prešov 2010, p. 19.
3
PN-EN ISO 14001:2005 - System zarządzania środowiskowego, 2005.
4
Pochyluk R., M. Macniak, J. Szymański, M. Behnke, H. Moora, A.-R. Bachmann, Wspólnotowy
System Ekozarządzania i Audytu (EMAS): Poradnik dla organizacji, Konsorcjum Royal Hasko-
ning Rotterdam, SEI Tallinn, LEMTECH Konsulting sp. z o.o. Kraków, Kraków 2005.
5
Wojnarowska M., M. Sołtysik, The Concept of Enterprise Operations Programming in the Con-
ditions of Sustainable Development, [in:] The Role of Business in Achieving Sustainability; Part 1:
Instruments and Strategies, V. Modrák, T. Nitkiewicz (eds.), published by T.U. Košice, F. of
Manuf. Technologies, Prešov 2010, p. 63.
59 59
environmental issues. Acronym EMS, used later in the text, refers to any one of
them and does not distinguish them at any rate. If some specific features of these
two systems are brought out it is specifically indicated in the text.
Treating EMS as a tool for sustainable development implementation leads
to assumption that its implementation relates also to some non-environmental
benefits. Of course, environmental issues are the key area of EMS influence but
directly and indirectly the effects of its implementation may spread over the eco-
nomic and social aspects of company functioning. The expected effects of EMS
implementation are presented in Table 1.
Table 1. Expected effects of EMS implementation

Areas of benefits Benefits for enterprise
efficient waste management
economic knowledge of the needs of business partners and customers
improved competitive position
improved environmental protection level
environmental
minimised breakdown risk
reduced pollution emission
improved company image
improved internal communication
social growing social awareness on the state of environment
provision of information on the functioning of an environmental man-
agement system in an enterprise
Source: based on Kuciński K. (ed.), Strategie przedsiębiorstw wobec wymogów zrównoważonego
rozwoju, Oficyna Wydawnicza, Warszawa 2009.
As show in the table 1 obvious environmental connotation of EMS does

not need to limit its effect in other areas of company functioning. The buildup of
EMS on more universal management systems platform (e.g. using ISO 9001 stan-
dard to develop ISO 14001) results in transferring some of its benefits together
with EMS implementation. Moreover, the common platform for different man-
agement systems favors the implementation of integrated management systems
that cover vast spectrum of company functions and parameters such as quality,
environmental issues, safety and security measures or social accountability.
2. SCOPE AND RANGE OF RESEARCH
Research results presented below are based on two surveys that were made
in 2011. First one of them was made by Polish Agency for Enterprise Develop-
60
ment (its organizational acronym in Polish language is PARP) within the frame-
work of their project on “Sustainable Production Design” and is referred as PARP
survey later in the text. Second survey was made by Department of Product Tech-
nology and Ecology (its organizational acronym is DPTE) on Cracow University
of Economics within the framework of their research project on “Ecology oriented
actions within product policy of companies” and is referred as DPTE survey later
in the text.
The respondents of PARP survey were representatives of small and medium com-
panies recruited on the base of their knowledge on the following issues:
- strategies and investment plans of a company,
- impacts on natural environment resulting from company functioning,
- implemented sustainable production design (in a case that any such solu-
tion was implemented.
The survey was made of the random profiled sample of 1000 companies classified
as small and medium enterprises. According to the methodological expertise, self-
employment based companies (with 1 employee) were excluded from the sample.
Tab. 1 presents the structure of the sample with regard to the size of enterprises
included in the survey.
Table 2. Sample structure of PARP survey concerning size of companies

Number of enterprises in the
Size of enterprise Number of employees
sample
Micro from 2 to 9 500
Small from 10 to 25 350
Medium from 25 to 249 150
Total 1000
Source: based on Anuszewska I., K. Podlejska, A. Jackiewicz, M. Filipek, Zrównoważona
produkcja w działalności przedsiębiorstw: Raport z badania, PARP, Warszawa, 2011.
Each one of size categories included companies from different branches

and localizations in order to reflect actual structure of companies in Poland. The
survey was made in winter/spring season 2011 by face-to-face individual inter-
views. The scope of the research was very vast and included also investigating
some issues related to environmental management systems.
The survey made within DPTE project was rather small scale and included
61 companies located in małopolskie and śląskie voivodships mostly (central
southern part of Poland). The sample was profiled and limited to production com-
panies. No limitations were made concerning the size of a company. The respon-
61 61
dents of DTPE survey were representatives of companies with knowledge on pro-
duction, sales and environmental issues. Tab. 2 presents the structure of the sam-
ple with regard to the size of companies included in the survey.
Table 3. Sample structure of DPTE survey concerning size of companies

Number of enterprises in the
Size of enterprise Number of employees
sample
Micro from 1 to 9 8
Small from 10 to 25 12
Medium from 25 to 249 20
Large 250 and more 21
Total 61
Source: own research within DTPE project (not published yet)
The survey was made in December 2011 by computer-assisted web inter-

view (CAWI). The scope of the research reflected the topic of the DPTE project
and included also issues related to environmental management systems and their
use in companies.
It is important to mention some key differences between the 2 surveys.
First of all, PARP survey was made on SME sample only, while within DPTE
survey large companies were represented by more than 30% of a sample. Sec-
ondly, PARP survey was profiled, in a sector and localization manner, in a way to
depicture the structure of SME sector in Poland. DPTE survey was profiled but
only in a way to include production companies. Finally, PARP survey was typical
big scale quantitative research matching the representativeness criteria while
DPTE survey was rather type of qualitative research.
Both of the surveys included very differentiated questions and the issue of
environmental management systems was only one of many issues investigated.
Nevertheless, the approach to EMS issue was rather similar in both of the surveys
and included such elements as: implemented management systems, reasoning and
motivation behind their implementation, obstacles and barriers within implemen-
tation process and objectives of implementation and their realization.
DPTE survey went deeper into details concerning EMS related issues and investi-
gated also plans concerning their implementation in the future, the reasons of fail-
ing to reach EMS implementation objectives and the structure of objectives.
In order to avoid confusion due to use of results of two surveys their presentation
is made in separate chapters and the discussion of the results and their comparison
follows in the next chapter.
62
3. PRESENTATION OF PARP SURVEY RESULTS RELATED TO EMS
Fig. 2 presents the motives of implementing EMS in companies with re-

gard to the importance assigned to them. The survey proposed 9 motives and re-
spondents ranked their importance from not important to very important ones. Fig.
2 presents only answers of companies that ranked motives as very important and
important.
It is evident that the most important motives to implement EMS are of
economic nature. Almost 70% of companies that had implemented EMS made it
to reduce their material and energy costs. Second group of motives relates EMS
implementation to possible market effects such as improving competitiveness
(almost 56% of respondents), adjustment of company operating to consumers
needs (52,5%) and improving company image (almost 50,5%). Ranked as fourth
important motive is care for natural environment (almost 51%). Implementation
of EMS is not regarded as a way to improve innovation capacity of a company
(only almost 31% of respondents), and it is not also regarded as a way to reduce
environmental payments and fees that company bears (only 31,3%).
Fig. 2. Motives of EMS implementation according to PARP research project

[N=71; share of companies responding that given motive is very
important or important]
63 63
The companies that had implemented EMS indicated benefits and gains
resulting from it. Fig. 3 presents the share of companies responding that given
benefit is important or very important. The two benetits are the most common
ones: increase of income and improving the profitability (over 90% of companies)
and improvement of market position (87%). It seems that EMS implementation
brings some important economic and market effects to the company. Surprisingly,
the third spot in ranking of most important benefits is taken by the increase of
company innovation capacity (over 69%). According to the motives investigated
in the same survey this type of benefit was rather of minor character in
undertaking EMS implementation. Just next to building up innovation capacity
establishing and tightening of cooperation with other enterprises is indicated as
important benefit from EMS implemenation (near to 87%). On the other side,
EMS implementation does not seem to influence company image too much or
increase ecological conciousness of company employees or even to decrease the
environmental impacts posed by company (12%-13,5% of companies indicates
them as important benefits from EMS implementation).
Two previously presented questions from PARP survey investigated the
motives and benefits of those companies that implemented EMS. Fig. 5 presents
the reasons of non-implementing any EMS with high or very high importance
prescribbed to them. The most important reason seems to be no real need to
change the current functioning of a company (over 79% of companies). It is worth
to remind that these opinions are collected from employees that have general idea
on strategic and environmental issues in the companies, and their assessment
reflects the actual practice in their functioning. The next two responses refer to
financial and economic barriers or rather percieved lack of potential benefits (over
61%) and public incentives (57,6%). The rest of the reasons seem to be of rather
minor importance and reach barely above 50% share in total number of responses.
64
Fig. 3. Benefits of EMS implementation according to PARP research project
[N=71; share of companies responding that given benefit is very
PARP survey investigated also the financing sources for EMS implementation,
support from other organizations for EMS implementation process and perception
on differences between two systems: ISO 14001 and EMAS. The most commonly
used financing source for EMS implementation is company own money (in 75,4%
of companies that implemented EMS), bank credit (69,6%) and resources of
European Union dedicated to improving management and environmental issues
within Polish companies functioning.
65 65
Fig. 4. Reasons of non-implementing EMS according to PARP research project
[N=932; share of companies responding that given reason is very
Only small number of companies received some support from public insti-
tutions, research and development units or non-governmental organization while
taking their efforts to implement EMS. The perception of ISO 14001 and EMAS
differences does not significantly relates to the objectives of the paper and this
issue is not brought here.
4. PRESENTATION OF DPTE SURVEY RESULTS RELATED TO EMS
Fig. 5 presents the reasons of non-implementing any EMS. In DPTE

survey no weithing system was used for this question and companies has indicated
only the reasons that stays behind their decisions of non-implementing EMS. The
most often used justification of non-implementing EMS system is no awarness of
such a need. Again the positions and qualifications of respondents suggests that
this the point of view of a company and its strategy concerning the issue of EMS
implementation. All the other reasons of non-implementing EMS are far less
common and one of them did not find any support at all (uncertainity of the
66
effects of EMS implementation). It is noticable that high costs are not considered
as important or common reason for non-implementing EMS.
Fig. 5. Reasons of non-implementing EMS according to DPTE research project

[N=27; share of responding companies]
Source: own research based on DPTE research project
On Fig. 6 the objectives of EMS implementation are presented. Again no

weighting system was used in that questions and companies have indicated only
the assumed objectives of EMS implementation. The most common objective is to
improve the image of a company (almost 92% of companies indicated that
objective). The second ranked objective is to decrease the enironmental costs
(62,5%). The third ranked objective is to improve the relationship with
institutional environment of the company. It seems that public relation related
issues and needs (company image and relationship with institutional environment)
are the most important reasons of EMS implementation here. All the other
objectives are not considered that often to lie behind EMS implementation.
Fig. 7 presents the actual effects of EMS implementation. Again no
weighting system was used in that questions and companies have indicated only
the effects they relate to EMS implementation. The whole ranking reflects the
ranking in previous question on EMS implementation motives. The most common
effect is the improvement of company image (41,7% of companies indicated that
effect), the second is the decrease of environmental costs (37,5%) and third most
common effect is the improvement of relationship with institutional environment
of a company (29,2%). Besides the fact that the certain effects are not so common
as assumed objectives the sequence of them is the same.
67 67
Fig. 6. Objectives of EMS implementation according to DPTE research project
As previously presented data proves the objectives of EMS

implementation are not always reached the following questions investigate the
reasons of these failures. Fig. 8 presents this issue with the share of companies
indicating certain reasons. the population of companies that answers this question
recriuts from those that did not manage to fully achieve EMS implementation
objectives. The most common reason of failure in achieving EMS implementation
objective is lack of sufficient financial resources (almost 54% of responding
companies).
Fig. 7. Effects of EMS implementation according to DPTE research project

68
All the other reasons are not so common and probably had some minor
significance in the EMS implementation process.
Fig. 8. Reasons of failure in achieving EMS implementation objectives according

to DPTE research project [N=13; share of responding companies]
The last question related to EMS implementation in DPTE survey was on its ef-
fects on better identification of environmental issues within company itself and its
surroundings. Almost every company implementing EMS has noticed such an
effect on better perception of environmental internal issues and more than a half
of them has noticed effect in form of better perception of environmental external
issues.
5. COMPARATIVE ANALYSIS OF PARP AND DPTE SURVEY RESULTS
There are three major topics that could be used to structure the compara-
tive analysis of the two surveys. These three topics are: company motives to en-
gage in EMS implementation, actual effects of its implementation and reasons for
non-implementing any EMS. The following part of the chapter explores each
topic in a comparative analysis and discusses the differences between the results
of two surveys.
The most common motive to implement EMS according to PARP survey
is to reduce material and energy costs in a company with a share of companies
perceiving it as important or very important at 69,2%. In fact the share of compa-
nies supporting that motive is not very different and amounts to 62,5% in DPTE
survey. The DPTE survey this motive is only second ranked and its share is far
behind the leading motive, which is to improve company image and reaches share
69 69
of 91,7% of population of companies. The same motive is ranked fifth in PARP
survey with share of 50,4%.
There could be different explanations of that difference but one of them
could be quite easily brought down with concrete data. In DPTE survey results the
share of large companies in those that implemented EMS systems is quite exces-
sive (62,5%) and all of them responded that to improve company image is one of
key objectives of EMS implementation. In PARP survey no large companies were
interviewed and excluding them from DPTE survey population would probably
decrease the importance of company image as EMS implementation determinants.
The reason that lies behind large companies interest in improving their im-
age relates to their bigger impact of consumers and other stakeholders (just as an
effect of its operating scale), better developed organizational structures, higher
environmental pressures from its surroundings and incorporation of environmental
issues in their functioning. Since the pressures are beard and environmental issues
are dealt with large companies use EMS implementation to get some extra effects
like improving their image not especially counting on cost reduction or improving
their competitiveness.
Another important difference occurs when the relationship with institu-
tional surroundings is concerned. In DPTE survey these motive is ranked as third
and its share amounts to 58,3%. In PARP survey such a motive was not included
but instead other quite relevant motive was present: to increase chances of getting
subsidies from public funds. The relationship between the two motives is straight
forward and has causal character in a way that improving relationship with institu-
tional surroundings should lead to increasing chances of getting some support
from public funds. The motive of increasing chances for getting subsidies from
public funds has 46,5% share in those of important and very important signifi-
cance for companies. This almost 12 points difference might have some justifica-
tion in size of the companies and shows process orientation of large ones (to reach
objective they need to build up the conditions supporting it) and effect orientation
of smaller ones (focusing on the final effect will eclipse the way to reach it).
Analyzing the effects of EMS implementation it is important to mention
that PARP survey was much more diversified in this matter and included 15 pos-
sible responses while in DPTE survey only 8 were included. Despite of this scale
differences there are some interesting pairs of effects that need to be compared.
Again, first of them is the effect of EMS implementation on company im-
age. In DPTE study it is the most common effect for 41,7% of respondents while
in PARP survey it is one of the least popular ones with share of 12,5%. The justi-
fication for it is the same as in the case of motives and relates to the excessive
share of large companies in those that implemented EMS in DPTE survey. But it
70
could also underline the different aspect of SME sector functioning. Company
image seems not to occupy mind of SME managers. Perhaps, care for image is
present there but it is not integrated in its character but exists in number of lesser
cares such as attractive price, decent quality, reliability or accessibility.
Some other pairs of effects could be placed on two opposite poles in each
survey. For example establishment and tightening of cooperation with other com-
panies has 68,6% share in PARP survey responses while similar effect, namely
establishment of new business contacts has only 8,3% share in DPTE survey. En-
vironmental cost decrease is second ranked effect in DPTE survey with its 37,5%
share while in PARP project it is ranked as 8th most important effect with 29,3%
share.
There are some similarities as well, like in the case of acquiring new cus-
tomers that gets 25,5% share in PARP survey results and 20,8% in DPTE survey.
It is also the case when the effect of improvement of efficiency is concerned. The
key factor responsible for that confusion with the identification and assessment of
EMS implementation effects might be related to omitting some categories in
DPTE survey and focusing the responses of companies on most universal ones
such as improving company image. The improvement could be related to market
effects, changes in the process of products and services it offers or its organiza-
tional structure and therefore should be treated as a platform for aggregating some
more specific effects that were not involved in questionnaire.
Some interesting remarks could be made on the basis of motives/effects ra-
tio while EMS implementation is concerned. Fig. 9 and Fig. 10 present the share
of motives and effects in companies surveyed in PARP and DPTE projects respec-
tively.
As shown on Fig. 9 there is no common trend for motives/effects ratio in
PARP project. Most of the motives have the bigger share in responding compa-
nies than its corresponding effects. It is the case for financial support from public
funds, company image improvement, meeting the needs of customers, environ-
mental impact decrease and costs decrease. Motives generally outreaches effects
in these cases and the ratio illustrates the rate of unfulfilled expectations of com-
panies implementing EMS.
71 71
Fig. 9. Motives/objectives ratio according to PARP research project [N=71; share
of companies responding that given benefit is very important or important]
In some cases, like reduction of environmental payments and fees beard by

companies or more rational management of material resources, the motives/effects
ratio is almost equal to 1. These cases are quite specific issues that are placed in
the very centre core of EMS concept.
Finally, there are two cases, when effects significantly exceed motives. It
is the case for the increase of company innovation capacity and market position
improvement. It seems that the first issue relates to the one of key EMS feature,
namely continuous improvement, that is not well perceived by parties not in-
volved in its implementation. The explanation of the second issue is more compli-
cated and potentially might include the suggestion that the consciousness of envi-
ronmental issues in business sectors is much stronger than it seems.
As shown on Fig. 10 there is the common trend for all the motives/effects
ratio in DPTE survey results. Generally, the motives appear twice more often than
effects. There are some small deviation from this rule but it never comes to the
situation, observed in PARP survey results, that effects equal motives or even
exceed them.
72
Fig. 10. Motives/objectives ratio according to DPTE research project
It is hard to identify one reason for such a difference between ef-

fects/motives ratio in PARP and DPTE surveys. Some trails might lead to the dif-
ferent population of two surveys but in fact, only when EMS implementing com-
panies are concerned, this difference in not that significant (71 companies in
PARP survey and 24 in DPTE survey). Also the inclusion of large companies in
DPTE survey does not explain the issue clearly enough. Moreover, the difference
could be also much more significant if all the effects included in PARP survey
would be grouped in a way to fit fully in the set of included effects. In the case of
DPTE survey the motives and effects are the same. Possible explanation could be
found if the positions of the survey responding representatives in their companies
could be cross-referenced to this ratio, but it is not possible due to lack of such
data from PARP project.
The reasons for not implementing EMS seem to be the most consistent is-
sue within the two surveys. The most important factor restraining companies from
implementing EMS is their conviction that there is no such need and environ-
mental issues in company functioning are taken care of appropriately. This reason
73 73
has the biggest share in PARP survey (79,1%) as well as in DPTE survey
(70,4%). DPTE survey results could be used to shed some light of this issue. Al-
most all of the companies, except one, that stated that there is no need of changing
environmental issues have never experienced any benefits from its environment
oriented activities. It seems that environmental issues have rather cost requiring
connotation and making this cost even higher through EMS implementation and
maintenance is not desirable at all. Even if the practice of EMS implementation in
companies could prove to some extent that the cost increase is not necessary the
case it is not convincing enough.
One obvious difference between the surveys is the share of high costs of
EMS implementation in the set of reasons of non-implementing them. In DPTE
survey the share of cost is 18,5% only while in PARP survey it is 49,6%. Addi-
tionally, PARP survey includes some more economic oriented reasons for non-
implementing EMS such as lack of financial benefits from it (57,6%) or lack of
economic incentives offered by public institutions (57,6%). Economic issues
stand strong among the others when the results of PARP survey are concerned and
are ranked as 2nd, 3rd and 5th most important reasons for non-implementing EMS.
Again explanation could involve the share of large companies in DPTE
survey and their less cost-benefit oriented approach to EMS implementation. On
the other side, more than a half of SMEs investigated in PARP survey admitted
that they have no knowledge on EMS functioning and therefore could not be re-
quired to assess what they do not know.
Besides DPTE survey investigates the importance of legal requirements in
non-implementing EMS while PARP survey omits this issue. Lack of legal re-
quirements for EMS implementation is second ranked barrier in DPTE survey and
reflects rather small self- or market driven motivation to do it.
Complicity of EMS implementation process is one of the issue surveyed in
both cases but in a different ways. DPTE survey includes such a direct response
with 14,8% share while in PARP project it is divided into several responses such
as: lack of substantial public support (52,1%), lack of knowledge on EMS func-
tioning (50,5%), lack of potential partners interested in EMS implementation and
supporting the process (44,1%) and lack of qualified personnel (44%).
CONCLUSIONS
The analysis of the results of surveys concerning the ESM implementation

issues leads to the following conclusions:
74
- the dominating motive for EMS implementation for SMEs is to gain some
direct benefits, preferably of financial character, while big companies tend
to focus on improving its image,
- the expectations of companies on EMS implementation are concerning
also the improvement of relationship with its institutional surroundings
and to gain some profits from this improvement,
- in general, the motives of EMS implementation and expectations of com-
panies are confirmed in the structure of implementation effects with some
noticeable decrease of its rate,
- most SMEs are experiencing income increase and market position im-
provement effect with EMS implementation while for large companies it
results first of all in improvement of their image,
- some common effects of EMS implementation for every type of compa-
nies are: acquiring new customers, improving efficiency or decreasing
costs,
- the major factor preventing companies from implementing an EMS is their
consciousness that there is no such need and that their activity is organized
well enough at least when environmental issues are concerned,
- another group of factors restraining companies from EMS implementation
refers to economic issues and includes such factors as high costs of EMS
implementation and unsure benefits resulting from it.
Some important differences in PARP and DPTE surveys are indicated es-
pecially of approaches to EMS implementation from the perspective of large
companies and SME. In the case of large companies the EMS implementation
plays important role in building their image while for SME it is sophisticated way
to get some costs reductions and efficiency gains.
ACKNOWLEDGEMENTS
The paper is based on partial results of the project no. N N115 436540 ti-
tled “Ecology oriented actions within product policy of companies” that is fi-
nanced from National Science Centre resources.
REFERENCES
[1] Adamczyk J., T. Nitkiewicz, Programowanie zrównoważonego rozwoju przedsiębiorstw,

PWE, Warszawa 2007.
[2] Anuszewska I., K. Podlejska, A. Jackiewicz, M. Filipek, Zrównoważona produkcja w dzia-
łalności przedsiębiorstw: Raport z badania, PARP, Warszawa, 2011.
75 75
[3] Kuciński K. (ed.), Strategie przedsiębiorstw wobec wymogów zrównoważonego rozwoju,
Oficyna Wydawnicza, Warszawa 2009.
[4] Nitkiewicz T., The Tools of Implementing Sustainability in Business Sector, [in:] The Role of
Business in Achieving Sustainability; Part 1: Instruments and Strategies, V. Modrák, T. Nit-
kiewicz (eds.), published by T.U.Košice, F. of Manuf. Technologies, Prešov 2010.
[5] PN-EN ISO 14001:2005 - System zarządzania środowiskowego, 2005.
[6] Pochyluk R., M. Macniak, J. Szymański, M. Behnke, H. Moora, A.-R. Bachmann, Wspólno-
towy System Ekozarządzania i Audytu (EMAS): Poradnik dla organizacji, Konsorcjum Royal
Haskoning Rotterdam, SEI Tallinn, LEMTECH Konsulting sp. z o.o., Kraków 2005.
[7] Wojnarowska M., M. Sołtysik, The Concept of Enterprise Operations Programming in the
Conditions of Sustainable Development, [in:] The Role of Business in Achieving Sustainabil-
ity; Part 1: Instruments and Strategies, V. Modrák, T. Nitkiewicz (eds.), published by T.U.
Košice, F. of Manuf. Technologies, Prešov 2010.
76
Paweł Nowicki
Tadeusz Sikora
Cracow University of Economics, Poland
HACCP SYSTEM DOCUMENTAION

PROCESS ACCORDING TO THE OPINION
OF THE EMPLYEES OF BISTRO BARS
Key words: HACCP, documentaion, food market, catering services, employees

opinion
ABSTRACT
With the growing importance of food safety, there can be noticed an increasing interest of
food safety management in food production, trade and services companies1,2,3.
For several years, in Poland, there has been noticed a growing trend for eating outside the home.
Currently, consumers have a catering service not only to meet their basic nutritional needs, but
offered services include a wider scope, as well as a growing group of customers. A good example
are petrol stations, where there are bistro bars situated4. Catering companies, including bistros at
petrol stations, in order to succeed in the market, in the company's strategy must take into account
customer requirements and needs as well as implement a quality assurance system. Proper quality
is a guarantee of regular customers and the ability to grow and profit5, 6, 7, 8.
The aim of this article is to present the opinion of bistro bars employees on the requirement of
HACCP system documentation process.
1
Kijowski, J., Sikora, T. (red.): Zarządzanie jakością i bezpieczeństwem żywności. Integracja i
informatyzacja systemów. WNT, Warszawa 2003.
2
Kołożyn-Krajewska D., Sikora T.: HACCP. Zarządzanie bezpieczeństwem żywności, Teoria i
praktyka Wyd. C.H. Beck, Warszawa 2010.
3
Luning P.A., Marcelis W.J., Jongen W.M.F.: Zarządzanie jakością żywności. Ujęcie technolo-
giczno-menedżerskie. WNT, Warszawa 2005.
4
Czarniecka-Skubina E.: Jakość usługi gastronomicznej w aspekcie żywieniowym, technologicz-
nym i higienicznym. Żywność. Nauka. Technologia. Jakość, 2006, 1(46) Supl., 24-34.
5
Nieżurawska M.: Jakość żywności a preferencje konsumentów. Przemysł Spożywczy, 2001, 55,
12, 32-33.
6
Nowicki P., Sikora T., HACCP system functioning evaluation model based on bistro bars in
Poland (w) Safety in Food Production Chain pod red. G Krasnowska, A.M. Salejda, Wydawnic-
two Uniwersytetu Przyrodniczego we Wrocławiu, 2011, s. 69-80.
7
Nowicki P.: Poziom zapewnienia jakości świadczonych usług przez sieć barów bistro w opinii
klientów, Żywność. Nauka. Technologia. Jakość, 2/2009,s. 154-166.
8
Kafel P., Kluczowe czynniki TQM wpływające na wyniki finansowe przedsiębiorstw branży spo-
żywczej, Zeszyty Naukowe Uniwersytetu Ekonomicznego w Krakowie, nr 815 , Kraków 2010
1. RESEARCH MATERIAL
The study was conducted in 2008 in nine provinces, using the survey
method with a questionnaire developed for this testing. The selection of regions
was not random but there had been selected all provinces in which there were lo-
cated the most of the stations of selected company. In other provinces the number
of stations was very small, so that is why they had not been tested. The study cov-
ered bistros of selected network of petrol stations in the number of 210 stations.
The study subjects were employees of petrol stations.
There was implemented and maintained HACCP system in the tested bistro
bars of the selected fuel company. The menu included: sandwiches, hot dogs, cas-
seroles, and drinks such as coffee and tea. In addition to offering products there
were also offered as ready-made supplied products and only served to the custom-
ers (cakes, tortillas, sandwiches).
Bistros' employees of fuel stations network were surveyed with an anony-
mous questionnaire designed to determine their level of knowledge, safety aware-
ness and hygiene of food processing and serving. Respondents were selected ran-
domly from among those who currently were working in bistros. The total number
of respondents was 280 people and it obtained a representative sample of the
whole population. The correct completed questionnaires replied only 269 respon-
dents. The study was conducted at the stations during the two consecutive months
in order to ensure homogeneity of the respondents, due to the level of knowledge
of employees and organizational standards in the bistros. The questionnaire sur-
vey intended for employees included 22 closed questions and one open-ended
question, which allowed to obtain a precise answers. In addition, respondents an-
swered questions categorized due to socio-economic characteristics.
The results obtained in the study were analyzed statistically using multiple
methods of analysis of variables, both qualitative and quantitative, including de-
scriptive statistics, statistical inference, and multivariate analysis methods9.
THE RESULTS
The characteristics of the social structure of the respondents are presented

in Table. 1. Among 269 employees who have properly filled out the survey, the
biggest group were women (78%). Taking under consideration the educational
level of respondents, the biggest group were people with high school education
9
Kot S. M., Jakubowski J., Sokołowski A., Statystyka, Diffin, 2007.
78
(46%). In terms of age of the largest group of bistros' employees were people be-
low the age of 35 (74% in total).
Analyzing the work experience, it was found that the vast majority of peo-
ple has been working in bistros over 6 years, which may indicate that workers
with such experience will have extensive knowledge in the health and safety of
food production.
Table 1. Social structure of the respondents

Gender Percentage [%]
Woman 78
Man 22
Age: Percentage %
below 25 24
26 - 35 years old 50
36 - 45 years old 19
46 - 55 years old 7
above 55 years old 0
Education: Percentage [%]

primary 2
vocational 6
high school 46
high-bachelor 21
high-master 25
Years of work in the bistro: Percentage [%]

below 1 4
1-3 23
3-6 25
above 6 48
Employees of the bistros of selected gas stations were tested in 9 regions of

Poland. Quantitative distribution of surveyed workers in the various provinces are
presented on Figure 1. Employees have the largest representation in Slaskie re-
gion, because in this province there is situated a biggest number of fuel stations of
the selected company. It is connected with the Katowice conurbation and a very
high concentration of population in this area. In other provinces the number of
surveyed respondents was lower, due to smaller number of petrol stations there.
79 79
Fig. 1. The number of surveyed employees i selected regions.
As for the location of the particular stations of the test group regarding the
size of the city (Fig. 2), the vast majority (52%) was located in cities with more
than 100 thousand residents. A large percentage of stations was also located in
cities from 10 to 100 thousand residents.
Fig. 2. Location of stations.

80
One group of questions that were posed to employees, were questions about the
formal operation of the HACCP system and enterprise policy. In the first, em-
ployees were asked if in the HACCP system filling out forms confirming the ef-
forts and keeping them for a specified period of time is mandatory. Nearly 98% of
employees responded properly, which is not particularly surprising in the com-
pany, where is very important to keep records (Fig. 3).
Fig. 3. The employees opinion in the importance of fulfilling and keeping re-
cords confirming HACCP system functioning.
It is also notoicable that, however there was only 2% of wrong answers, all
of them were selected by women. The rate of correct responses provides a good
preparation of employees, and a high awareness of the creation of records and
technical functioning of the system.
Employees were also asked about purpose of development and keeping a
documentation of the HACCP system, containing four variants of answers.
Among them they had to indicate in their opinion all correct options and that is
why answers do not sum up to 269 (Fig. 4). The correct responses were variants
"a" and "b", and of such a combination correctly replied to this question 61% of
the surveyed employees. Taking into account the multiplicity of answers to some
variants, the vast majority of workers indicated at least one correct answer.
81 81
Fig. 4. The employees opinion on the purpose of development and keeping a
HACCP documentation in the enterprise.
Answer "a" have indicated 216 employees, of which 164 in combination

with a second right answer "b". It follows that employees in general, properly un-
derstand the purpose of development and compiling documentation of the
HACCP system, but there are also noticeable voices expressing a negative opinion
on the subject. Probably the people who marked answer "c" and "d" expressed its
disapproval of the operation of the HACCP system in the enterprise.
Analyzing the distribution of answers to a question concerning the purpose
of developing and keeping record versus education of employees in accordance
with the expectations it can be observed, that among people with primary and vo-
cational education, responses more often appeared as incorrect (Fig. 5). In the
other groups there can be observed an inverse proportion, which may lead to the
conclusion that having a higher education level the employee can correctly iden-
tify the objective of the development and compiling documentation of HACCP
system. This suggests a higher level of knowledge of these workers.
82
80
70
60
50
Number of people
40
30
20
10
0
primary high school master primary high school master
vocational bachelor vocational bachelor
Correct answer Incorrect answer

Education
Fig. 5. The employees opinion on the purpose of developing and keeping record
versus education.
In turn, based on the distribution of answers to the question concerning the
purpose of developing and keeping records relative to work experience of em-
ployees (Figure 6), it can be observed that only in the case of employees working
more than 6 years in business, the ratio of correct to incorrect responses is shaped
in 2:1 proportion. Similar proportions are observed in the group of workers with
the shortest experience, but the size of this group of workers is very small, so the
sample is not representative. In the other groups the distribution of responses is
shaped by about 50% of correct and incorrect responses. This finding could sug-
gest that workers with the longest work experience understand the idea of docu-
menting and maintaining a functioning HACCP system in the best way. The veri-
fication independence test of the chi-square was found, that there were statistically
significant differences in frequency responses due to the work experience of em-
ployees.
83 83
While the distribution of responses relative to location of the station indicates that
the greatest differences in the numbers of correct to incorrect responses can be
observed in the case of stations located in cities from 10 to 100 thousand popula-
tion (Fig. 7).
90
80
70
60
50
40
Number of people
30
20
10
0
from 1 and 3 years
from 3 and 6 years
from 1 and 3 years
from 3 and 6 years

below 1 year
below 1 year
over 6 years
over 6 years
Years of work
versus years of work in the bistro.
In 68% of locations, employees working at stations in cities from 10 to 100

thousand inhabitants correctly answered this question, which is essential informa-
tion that employees in this group learned the principle of documenting and main-
taining the HACCP system. In the case of cities with over 100 thousand popula-
tion the difference was no longer so clear and it was 54% to 46% of the correct
and incorrect responses.
84
80
70
60
50
40
30
Number of people
20
10
0
over 100000
over 100000
below 10000
below 10000
from 10000 to 100000
from 10000 to 100000

village/close to main road/airport
village/close to main road/airport

Location of the station (size of the city - based on the number of inhabitants in the cities)
versus location of the station/bistro.
The verification test of the independence of the chi-square was found that
there were statistically significant differences in frequency of responses due to the
location of the station. By analyzing the distribution of numbers of correct and
incorrect responses for development and purpose of record keeping relative to
region (Fig. 8), it can be observed that the highest percentage of correct answers
was in Dolnośląskie (76%). On the other hand in the regions of Wielkopolska,
Mazowieckie, Śląskie and Kujawsko-Pomorskie the correct response rate varied
from 63 to 68%. The least employees that understand the idea of documenting and
maintain the functioning of the HACCP system are in the Warmińsko-Mazurskie,
where, as the only one of surveyed regions, the proportions were reversed from
the others, where the majority of incorrect responses occurred (67%). In the other
provinces the majority were correct answers, ranged from 55 to 58% of correct
answers.
85 85
40
35
30
Number of observations
25
20
15
10
zachodniopomorskie
małopolskie
dolnośląskie
łódzkie
warmińskomazurskie
kujawskopomorskie
wielkopolskie
mazowieckie
śląskie
Region of Poland
Fig. 8. The graph interaction of numbers of correct and incorrect responses on

purpose of development and compiling documentation relative to the region of
Poland
In the last question, bistro employees were asked about their opinion on the
policy actions of the company and its high level of care for the health safety of
produced food (Fig. 9). Surveyed employees had a choice of 5 options for answers
that they had sort out by allocating ranks, where 1 rating determines the least im-
pact, and evaluation of 5 the greatest impact. ich may be effectively used to pur-
sue its objectives.
Analysis of employees' opinion showed that the efficiency in conducting its
policy, the company achieves by applying the principles of the HACCP system
and inspections and audits at stations. In the group of 2 to 3 evaluations, employ-
ees most often indicated staff training, compliance with procedures and instruc-
tions and frequent cleaning of the bistro. A surprising result is the presence of
biggest number of indications in the group of responses, which have the least im-
86
pact on the effectiveness of the company's policy for variant "e" - inspections and
audits at stations, very often this action was shown to be very effective.
Fig. 9. The employees opinion on the policy actions of the company in the range
of the food safety.
Taking into account the overall distribution of responses, it can be seen

that the opinions of employees for the actions used to implement the policy of the
company are distributed relatively evenly, which may indicate that there is no
only one tool with wh
87 87
CONCLUSIONS
1. The employees in general correctly understand the purpose of developing and

keeping the records of the HACCP system documentation, but there are also
noticeable signals expressing a negative opinion on this subject.
2. Higher education can correctly identify the objective of the development and
compiling documentation of HACCP system, and suggests a higher level of
knowledge of these employees.
3. The employees with the longest years of working in the company, in a best
way understand the idea of documenting and maintaining the HACCP system.
4. The work experience of the employee significantly affect the perception of the
idea of documenting and maintaining a functioning HACCP system.
5. The location of gas station with the bistro bar significantly impact on em-
ployee perceptions of the idea of documenting and maintaining a functioning
HACCP system.
6. According to employees effectiveness in conducting its policy, the company
achieved through the application of the HACCP system principles and the
checks and audits of bistro bars located at the gas stations.
The research presented in this paper was founded from the Ministry of Science and Higher Educa-
tion grants no: N N112 054034 in the year 2008-2010.
REFERENCES
[1] Czarniecka-Skubina E.: Jakość usługi gastronomicznej w aspekcie żywieniowym, technolo-

gicznym i higienicznym. Żywność. Nauka. Technologia. Jakość, 2006, 1(46) Supl., 24-34.
[2] Kafel P., Kluczowe czynniki TQM wpływające na wyniki finansowe przedsiębiorstw branży
spożywczej, Zeszyty Naukowe Uniwersytetu Ekonomicznego w Krakowie, nr 815 , Kraków
2010
[3] Kijowski J., Sikora T. (red.): Zarządzanie jakością i bezpieczeństwem żywności. Integracja i
informatyzacja systemów. WNT, Warszawa 2003.
[4] Kołożyn-Krajewska D., Sikora T.: HACCP. Zarządzanie bezpieczeństwem żywności, Teoria i
praktyka, Wyd. C.H. Beck, Warszawa 2010.
[5] Kot S. M., Jakubowski J., Sokołowski A., Statystyka, Diffin, 2007.
[6] Luning P.A., Marcelis W.J., Jongen W.M.F.: Zarządzanie jakością żywności. Ujęcie technolo-
giczno-menedżerskie. WNT, Warszawa 2005.
[7] Nieżurawska M.: Jakość żywności a preferencje konsumentów. Przemysł Spożywczy, 2001,
55, 12, 32-33.
[8] Nowicki P., Sikora T., HACCP system functioning evaluation model based on bistro bars in
Poland (w) Safety in Food Production Chain pod red. G Krasnowska, A.M. Salejda, Wydaw-
nictwo Uniwersytetu Przyrodniczego we Wrocławiu, 2011, s. 69-80.
88
[9] Nowicki P.: Poziom zapewnienia jakości świadczonych usług przez sieć barów bistro w opinii
klientów, Żywność. Nauka. Technologia. Jakość, 2/2009,s. 154-166.
[10] Rozporządzenie (WE) nr 178/2002 Parlamentu Europejskiego i Rady z dnia 28 stycznia
2002 r. ustanawiające ogólne zasady i wymagania prawa żywnościowego, powołujące Euro-
pejski Urząd ds. Bezpieczeństwa Żywności oraz ustanawiające procedury w zakresie bezpie-
czeństwa żywności.
[11] Rozporządzenie (WE) nr 852/2004 Parlamentu Europejskiego i Rady z dnia 29 kwietnia
2004 r. w sprawie higieny środków spożywczych.
89 89
Rodica Pamfilie
Elena Roxana Stan
The Bucharest Academy of Economic, Romania
MANAGING QUALITY COSTS –A MUST FOR

GROWING ORGANIZATIONAL PERFORMANCE
(A CASE STUDY ON ROMANIAN BUSINESS
HOTELS)
Key words: quality costs, management performance, competitiveness
ABSTRACT
Today, organizations establish as primary objectives their survival on the market, maintaining
solvency, and obtaining short and long term profitability when under the impact of globalization
and increasing competition. Consequently, organizations need to approach quality in terms of their
respective costs, being aware of their competitive attitude on the market.
Quality costs allow performance evaluation by drawing a parallel between products and services,
on one side and, respectively, between its departments, too. Learning about the activities generat-
ing quality costs and their involved estimation, permit ranging the identified main problems ac-
cording to their importance.
The present paper aims to highlight the importance given by the managers of the 4-star hotels on
Bucharest business market considering the above presented aspects and based on our research
work aiming to highlight their real values of quality costs and benefits revealed by their knowl-
edge.
INTRODUCTION
Hospitality industry is the service sector considered the most important of

the global economy, currently with the fastest growing. Hospitality industry is a
profitable industry that depends especially on free time and disposable income.
In the literature, opinions regarding the scope of the hospitality industry
are divided. The most limited view includes, in the hospitality industry, lodging
and food service1. Other specialists include, besides the two categories mentioned,
1
Dopson R. L., Hayes K. D., Managerial Accounting for the Hospitality Industry, John Wiley &
Sons Inc., New Jersey, 2009, pag. 5 – „it can include a variety of managers in related fields”
Medlik S., Dictionary of travel, tourism and hospitality, Third edition, Butterworth Heinemann,
Oxford, 2003, pag. 86 – „imprecise term, most commonly used as a synonym for hotel and cater-
ing industry/services”
the leisure services2. Broader approaches of hospitality industry include also other
activities, namely transport, health and education3. Companies providing those
services are companies that focus on involvement in relationships they have with
customers, whose primary concern is the welfare and satisfaction of guests.
Internationally, in recent decades, there have been many changes. Global
market and competition increasingly fierce led organizations to realize that their
survival on the market depends on the high quality products and services that they
produce or sell.
The meaning of quality continues to evolve as the quality profession grows
and matures. Neither consultants nor business professionals agree on a universal
definition.4 Being considered a strategic element of the overall management of an
enterprise, quality is the main factor regulating the market through client. Having
in mind that the customer chooses from the market products and services which
best meet his needs and expectations, companies are starting to focus on achieving
quality programs. Quality programs require integration and correction of all proc-
esses related to quality during the creative of value process for customers.
Organizations from hospitality industry must always set as main objective
high quality of services, because customer satisfaction is the key to success for
any organization. In the hospitality services, unlike other categories of service, the
consumer active participation in service consumption differs depending on the
nature and content of the tourism types.
Dr. Gennady Voronin and Mr. Yury Samoylov mention, in the paper Qual-
ity – Vital and Moral category!5, the main issues that presents quality as a profit-
able thing, namely reduce work without added value; saves time; ensures human
safety, health and their environment; and guarantee the future for the next genera-
tion of our civilization.
In the literature, is stated that improving quality of products and services
of an organization has positive effects on increasing profit margins and on market
position of the organization. The main objectives of an organization are surviving
2
Hayes K. D., Ninemeier D. J., Human Resources Management in the Hospitality Industry, John
Wiley & Sons Inc., New Jersey, 2009, pag. 5
Kandampully J., Mok C., Sparks B., Service Quality Management in Hospitality, Tourism, and
Leisure, The Haworth Hospitality Press, New York, 2001, pag. 4
3
Tesone D., Principles of management for the hospitality industry, Butterworth-Heinemann, 2010,
Oxford, pag. 5
DeFranco L. A., Noriega B. M. P., Cost Control in the Hospitality Industry, Prentice Hall, New
Jersey, 1999, pag. 6
4
Evans R. J., Lindsay M. W., Managing for quality and performance excellence, 8th edition,
South-Western Cengage Learning Inc., Ohio, 2008, pp. 14-15.
5
The paper was presented in 54th EOQ Congress, Izmir, 2010, available on www.eoq.org
91 91
on the market, maintaining solvency and obtaining short-term profitability. Addi-
tionally, there is added obtain long-term profitability.
Quality influences the economic activity of firms in two main ways: on
costs, on sales revenue. They are very different concepts, although interacting in
some aspects. There are methods to assess the effect of quality on costs, which
involves assessing the various categories of costs to achieve quality and categories
of costs paid for poor quality.6 The main problem of quality management is the
identification of an optimal relation between quality and costs.
First used in Western Europe in the early 60, the cost of quality term origi-
nates in the costs study conducted by Fiegenbaum 7. Quality costs are the costs
involved in achieving and maintaining desired quality by following the criteria
required under current legislation and regulatory standards; and also costs in-
curred in creating products or providing services inadequate in terms of quality.
1. QUALITY COSTS IMPACT ON PERFORMANCE OF HOSPITALITY

INDUSTRY ORGANIZATIONS
All the competitors have access to the same techniques, technologies,

skills. The real differentiating factor is to create an organization that is able to set
out winning objectives and meet them (obviously through an intelligent use of all
existing technologies).8 Identifying quality costs influence on financial results of
an organization is relatively difficult; this is due to the difficulty of quantifying
certain categories of quality costs.
Quality costing system has the potential to become an excellent tool in the
overall management of a business. It can provide an indication of the health of
management performance in many areas of the organization. Measurements of
quality related costs also reveal shortcomings in cost allocation, standards, proce-
dures and practices which may remain undetected by the more commonly used
production / operation and labour based analysis.9 Measuring cost of quality sup-
port internal quality audits. This is the basis to identify defects/nonconformities
and frequency of occurrence, activities performed to prevent recurrence of de-
6
Juran M. J., Planificarea calității, Editura Teora, București, 2000, pp. 116-117
7
Feigenbaum Vallin Armand is American, born in 1922. Businessman and quality control expert,
Feigenbaum invented the concept Total Quality Control (later known as Total Quality Manage-
ment), and introduced the Quality Costs concept.
8
Conti T., Systems thinking in quality Management, The TQM Journal, Vol. 22 No. 4, 2010, Eme-
rald Group Publishing Limited, 1754-2731, pag. 354
9
Chopra A., Garg D., Behavior patterns of quality cost categories, The TQM Journal, Vol. 23, No.
5, 2011, Emerald Group Publishing Limited, 1754-2731, pag. 512
92
fects/nonconformities, determining monthly and annual cost of de-
fects/nonconformities. Knowing these issues, staff can focus on keeping control of
the main causes of identified problems.
If one department within the organisation can produce an improvement in
costs, timeliness or quality, then this can have a significant effect on the strategic
direction of the organisation.10Managers of many companies do not know or are
not very interested in knowing the exact values of quality costs. They lose sight of
the benefits that brings the knowledge of those costs, respectively the trend ana-
lyzes and forecast of these costs by category, budgeting, setting out key areas for
improvement and facilitating making decisions about cost categories that must be
reduced or eliminated. Lack of quality costs implies the impossibility of establish-
ing losses involved by non-quality products and services. Those are considered an
indicator of the efforts made to maintain and improve quality of provided products
and services.
Care is needed in the way budget and performance information is pre-
sented, because this is likely to influence its reception. A way of setting out the
information, based on its segregation into those items which the operating man-
ager can and cannot control, will help in the appropriate and efficient analysis of
various aspects of the organisation’s performance.11
Measuring quality costs focuses attention on main area of their reduction,
allows performance measurement and creates an internal knowledge base for
products, services, processes and departments.12 Short-term (usually a bad com-
mercial circumstances) many organizations reduce costs of quality assurance by
reducing evaluation of prevention costs, because they are very easy to control and
(mostly) are directly reflected in classic accounts.13
Ramdeen, Santos and Chatfield, in the article Measuring the cost of quality
in a hotel restaurant operation, mention the main categories of strategic benefits
derived from measuring and maintaining quality cost using the model of three
categories of costs (PAF), namely benefits resulting from prevention activities
that aimed identifying potential problems before they occur; benefits from evalua-
tion activities to ensure that quality products and services meet specific standards,
10
Walker D., Improvement in Costs, Timelines or Quality Within One Department Can Affect The
Strategic Direction of an Organisation, International Journal of Applied Strategic Management,
Volume 1, Issue 2, ISSN 1742-8204, available on www.managementjournals.com
11
Harvey M., Three-Way Path to Fair Analysis of Performance, International Journal of Applied
Finance For Non-Financial Managers, Volume 1, Issue 3, ISSN: 1742-528X, available on
www.managementjournals.com
12
Spatariu E. C., Analiza costurilor calității, Tribuna Economică, V. 16, Nr. 15, 2005, pag. 53
13
Parker W. G., op. cit., pag. 49
93 93
that will satisfy customer requirements; and benefits resulting from the identifica-
tion of service gaps that will allow overall assessment of quality products and ser-
vices. If known elasticity of demand for a product or service, between improving
quality and sales value can be established a connection. Quality improvement
programme and quality costs reduction opportunities can help making provisions
through guarantees, penalties, remedy noncompliance, carrying the debts arising
from customer refusal to pay.
Making this category of provisions it must take into account the probabil-
ity of risk factors. They are different from the costs included in costs of quality
assurance category, being considered factors that influence the price. The value of
provisions can be reduced if decreases the probability of some external noncom-
pliance costs appearance, which increases customer confidence in the organiza-
tion's ability to provide quality services.
The projects selected for improvement should link to the broader business
goals. The business goals might be lower costs, improved profitability or in-
creased market share. The external failures that have the biggest impact on the
business goals should be selected for improvement. Problem solving activities
must be completed to determine the root causes of the failure.14 It requires select-
ing and applying a solution. When data is collected it must be established their
source, to verify the veracity of information.
Depending on organization size, the range of activities, quality manage-
ment system and how costs are controlled, are established sources of information
about quality assurance costs. In practice it is considered that can be used as
sources of information all records of a company, actively involving managers and
staff implicated in the activity. An important role has the persons in charge of fi-
nancial reporting.
Various user groups apply a series of accounting ratios to interpret and ap-
praise financial performance and such comparisons may include:15
The current year’s results with previous year, to establish whether performance
is more favourable or adverse than before.
The current year’s results with those of comparable companies in the same line
of business, to establish whether the company is performing better or worse
than its competitors.
Current performance against a standard or benchmark of performance.
14
Beecroft D. G., Cost of Quality, Quality Planning and The Bottom Line, G. Dennis Beecroft
Inc., Ancaster, Canada, 2000
15
Dunn E. P., Financial Performance Indicators, International Journal of Applied Finance For
Non-Financial Managers, Volume 1, Issue 1, ISSN 1742-528X
94
Comparisons of one segment or division of a business with others to establish
which parts of the business are achieving their objectives.
In hospitality industry, from data sources used to identify quality costs we
find: program and audit reports, forms for specifying certain categories of expen-
diture, budget reports by department, supply agreements, records of training pro-
grams, customer complaints.
It is very important in establishing the quality cost reduction program, not
to delay its implementation because of accessibility of data sources. An essential
role it has knowledge that may exist, for certain categories of costs, partial data or
no data. In some cases it is accepted a data accuracy of ± 25%.
Of course, fixing the problem next week or next release, or letting cus-
tomer support deal with it does not get rid of the failure cost; it only defers it until
later. The company ends up paying the cost one way or the other.16 It is considered
that increasing the period between the finding of the defect and the removal; de-
termine the increases of additional costs of the organization.
In hospitality industry organizations, the existence of deficiencies that may
occur when a service is provided is considered to be because by the fact that they
have not gone through the previous evaluation stages. No they could not, if we
consider that, essentially, the services are immaterial and intangible.
G.W. Parker presents, in his book Quality Costs, the effect of reducing
quality assurance costs. Called leverage of quality or quality lever on performance
of an organization, with a proportion is equivalent to increasing turnover, and is
determined by the relation:
C. A.C.
E pc = 1 + R ⋅
Pr
Where: Epc – Leverage of quality
R – Proportion of costs of quality assurance reduction
C.A.C. – Cost of quality assurance
Pr – Profit
This concept does not involve quantitative improvement of efficiency, but
has an illustrative role. The main disadvantage of this comes from practice, be-
cause the total quality assurance costs are not known exactly, their percentage
reduction being hypothetical.
If we analyze the effectiveness of investments, in terms of allocating hu-
man and financial resources, the attention should be focused more on prevention
activities, than on assessment activities. This approach is because prevention ac-
tivities involve reducing defects, while assessment activities discover defects, not
16
ASK Process Inc., 2003, disponibil pe www.askprocess.com/resources/articles
95 95
reduce them. Addressing primarily the prevention costs can reduce total quality
costs and change the structure of quality assurance costs.
2. POSSIBILITIES FOR IMPROVING THE ECONOMIC FACTOR OF

AN ORGANIZATION IN TERMS OF QUALITY COSTS
Companies can lose money because they fail to use significant opportuni-
ties to improve their costs of quality. Most cost accounting data are not revealed
to the public and are rarely exchanged among businesses, and there is no known
study testing the effect of organization size, i.e., small and medium sized enter-
prises (SME) and large organizations, on quality costs.17 Profitability together
with productivity are key business objectives and management activities focus on
these factors accordingly. There is hardly a business management decision that
does not influence productivity and its development.18
To identify opportunities for improving the economic factor of an organi-
zation in terms of quality costs should be considered economic and financial as-
pects of the organization. Managers need to realize and to consider conduct an
effective activity.
Organisations wishing to provide to customer services at competitive
prices, should consider the quality of services they provide and the economic use-
fulness of the service. Figure 1 shows the nonlinear relationship that exists be-
tween the level of service quality and the price that customers are willing to pay.
In terms of company competitiveness, respectively of the quality costs share of
the amount of income, 0.4 (40% of price unit) is the critical level. For an organi-
zation to be profitable in a given period of time, total quality costs related to the
number of clients must be less than 0.4 x Pu.
17
Kendirli S., Tuna M., In the context of total quality management, quality costs and effects on
financial decisions: a research in Çorum’s enterprises, International Journal of Entrepreneurship,
Volume 13, 2009, pag. 104
18
Nebl T., Schroeder A. K., Understanding the interdependencies of quality problems and
productivity, The TQM Journal, Vol. 23, No. 5, 2011, Emerald Group Publishing Limited, 1754-
2731, pag. 481
96
Price/unit
(Pu)
Pu
Pu, current
0,4 x Pu
TQC, critical Optimization trend of total quality

related costs/unit (TQCu) for a
TQC, current given level of quality (Qcurrent)
Minimum level Qcurrent 100% Quality con-

of conformity formity
Figure 1 Company`s profitability from the perspective of quality-related costs

Source: Brad S., A General Approach of Quality Cost Management Suitable for Effective Imple-
mentation in Software Systems, Informatica Economică, vol. 14, no. 4/2010, pag. 101
Although some quality improvements may increase revenues and decrease

costs simultaneously, efforts to improve customer-perceived quality usually in-
crease profits through revenue expansion, and efforts to improve the efficiency of
internal processes tend to increase profits through cost reduction.19 The economic
factor, if we speak about for-profit organizations, is determined by the ratio of
profit value and cost value. Improving the economic factor involves a structured
approach who will take into account on the one hand increase earnings and reduce
costs on the other.
19
Rust T. R., Moorman C., Dickson R. P., Getting return on quality: revenue expansion, cost
reduction, or both?, Journal of Marketing, Vol. 66, No. 4, Oct. 2002, pp. 7-8
97 97
Table 1 Improvement of gain/cost report
Increasing gain/cost report
Increase earnings Cost reduction
Improvement of market- Reducing compli- Reducing non-
Launching new prod- ing for existing prod- ance costs compliance costs
ucts/services ucts/services
Improve prod- Winning new custom- Reengineering Reduce wastage
uct/service ers processes and repair
Development of Keeping existing Improve Reduce Waste
unique prod- customers process capa- Time reduction
uct/service Multiply sales markets bilities Reduce pollu-
Reduce time to Exploitation of reputa- Improving tion and acci-
launch tion competences dents, etc.
Encourage innova- Better use of re-
tion sources, etc.
Increased price etc.
Source: adapted from Froman B., Manualul calității – Instrument strategic al abordării calității,
Editura Tehnică, București, 1998, pag. 136 (ISO/CD 10014)
In specialized sources, is mentioned that quality assurance costs are close

to gross profit related to turnover values, in some cases being even twice as large.
Therefore results the benefits of implementing a quality assurance cost reduction
program, reflected by increasing profits.
Establishing a relationship between cost categories published in the ana-
lyzes of quality and results of a company, as well as determining the indicators of
performance report to quality requires in terms of an organization considerable
financial and organizational efforts.
3. THE IMPORTANCE GIVEN BY MANAGERS OF 5 AND 4-STAR

HOTEL IN BUCHAREST TO KNOWLEDGE ACCURATE
VALUES OF QUALITY COSTS AND ITS BENEFITS
To identify the importance given by managers of hospitality industry or-

ganizations to quality and cost of quality, we conducted a survey among 4 and 5
star hotels in Bucharest. The survey was conducted among these categories of
classification, based on the idea that the potential of an organization to meet mar-
ket quality requirements and benchmarks is the financial, technical, and organiza-
tional and personnel resources available.
Considering the questions to be answered when assessing a representative
sample for this research has established that the most appropriate is the sampling
rate. Knowing that, on the Bucharest market, on 01/06/2011, operating 48 hotels
98
of 5 and 4 star (http://www.turism.gov.ro/turism/unitati-clasificate), the number of
units of observation was of 32 hotels (2 hotels of 5-star and 30 hotels of 4 star).
To obtain necessary information was used direct quantitative research,
which aimed to record the responses to questions from a questionnaire. Questions
in the questionnaire is mainly addressing to managers of the units among the re-
search is conducted. The survey was conducted from April to July 2011.
Recognising that accounting systems do not allow highlighting the quality
costs, the undertaken research aimed to identify whether among analyzed hotels
exist an own system for highlighting, correction, collation and synthesis of each
type of quality cost. These question responses were 100% negative. This situation
is because between managers and specialists on quality problems there are com-
munication barriers. Therefore, managers do not understand very well the conse-
quences of identifying and evaluating the quality costs on economic and financial
results of companies.
For answers to the question regarding the interest in the existence of a sys-
tem for highlighting quality costs specific to the hospitality industry, was estab-
lished that, from 32 respondents, only 9 said that they are interested in such a sys-
tem, in while 15 consider that is not necessary to place a special emphasis on
separate highlight of quality costs. 8 respondents reasons that they would be inter-
ested in a such a system which highlights the quality costs specific to hospitality
industry, but in his election they would consider the implications, generated costs,
and the person making this system.
Regarding to the quality costs share of total turnover, on the responses ob-
tained from managers of hotel units among which was the research conducted, we
could conclude that quality assurance costs to approximately 37.5% of the units is
less than 10% of turnover. While for 62.5% of units the quality costs are between
10% - 25% of turnover.
In terms of quality cost structure, the share of quality cost categories var-
ies as follows: prevention costs between 5% - 50%, evaluation costs between 5% -
40%, internal nonconformities costs between 10% - 60% and external noncon-
formities costs between 10% - 40%. In the literature, the average total cost of
quality assurance for products is: prevention 2% - 10%, evaluation 15% - 34%,
internal nonconformities cost 21% - 49%, external nonconformities costs 20 -
48%. Responses were given by managers and reflect the fact that they are not
aware of the quality cost categories that are actually found in hotel units.
Given the importance of the human resources, material and the way
complaints are solved, was set the costs share of these categories. As a result
of responses centralization were obtained the following average weights for
the quality cost categories: quality costs with material 43.59%, quality costs
99 99
with human resources 29.06%, costs of poor quality generated by resolving
complaints 15.63% and other quality-related costs 11.72%.
CONCLUSIONS
Many economists/managers of an organization neglects to consider a very

important issue for the efficiency of their activity, namely the realization that, at
an equal price, customers prefer the organization that provide better quality ser-
vices and in case of organizations providing equal in terms of quality, customers
will choose organizations with lower prices.
This means concentrating their resources on key issues of the organization,
to know and solve them quickly. Representing a potential source to maximize the
organizations profit, quality costs can be used as a tool for optimization of proc-
esses and activities relevant to quality.
However after the conducted research we established that managers of
5 and 4-star hotel in Bucharest does not realize the importance and advantage
of highlighting, correction, collation and synthesis of each type of quality cost.
Quality costs are not perceived as an important tool for valuing quality and
are not used as tools to optimize activities relevant to quality. Which implies that,
as previously mentioned, in these hotels there are communication barriers be-
tween Persons responsible with quality, Accounting and Managers.
REFERENCES
[1] ASK Process Inc., 2003, available on www.askprocess.com/resources/articles (20/12/2011)

[2] Beecroft D. G., Cost of Quality, Quality Planning and The Bottom Line, G. Dennis Beecroft
Inc., Ancaster, Canada, 2000
[3] Brad S., A General Approach of Quality Cost Management Suitable for Effective Implemen-
tation in Software Systems, Informatica Economică, vol. 14, no. 4/2010
[4] Chopra A., Garg D., Behavior patterns of quality cost categories, The TQM Journal, Vol. 23,
No. 5, Emerald Group Publishing Limited, 1754-2731, 2011
[5] Conti T., Systems thinking in quality Management, The TQM Journal, Vol. 22 No. 4, Emer-
ald Group Publishing Limited, 2010
[6] DeFranco L. A., Noriega B. M. P., Cost Control in the Hospitality Industry, Prentice Hall,
New Jersey, 1999
[7] Dopson R. L., Hayes K. D., Managerial Accounting for the Hospitality Industry, John Wiley
& Sons Inc., New Jersey, 2009
[8] Dunn E. P., Financial Performance Indicators, International Journal of Applied Finance For
Non-Financial Managers, Volume 1, Issue 1, ISSN 1742-528X
[9] Evans R. J., Lindsay M. W., Managing for quality and performance excellence, 8th edition,
South-Western Cengage Learning Inc., Ohio, 2008
100
[10] Froman B., Manualul calității – Instrument strategic al abordării calității, Editura Tehnică,
București, 1998
[11] Harvey M., Three-Way Path to Fair Analysis of Performance, International Journal of Ap-
plied Finance For Non-Financial Managers, Volume 1, Issue 3, ISSN: 1742-528X, available
on www.managementjournals.com (12/12/2011)
[12] Hayes K. D., Ninemeier D. J., Human Resources Management in the Hospitality Industry,
John Wiley & Sons Inc., New Jersey, 2009
[13] Juran M. J., Planificarea calității, Editura Teora, București, 2000
[14] Kandampully J., Mok C., Sparks B., Service Quality Management in Hospitality, Tourism,
and Leisure, The Haworth Hospitality Press, New York, 2001
[15] Kendirli S., Tuna M., In the context of total quality management, quality costs and effects on
financial decisions: a research in Çorum’s enterprises, International Journal of Entrepre-
neurship, Volume 13, 2009
[16] Medlik S., Dictionary of travel, tourism and hospitality, Third edition, Butterworth Heine-
mann, Oxford, 2003
[17] Nebl T., Schroeder A. K., Understanding the interdependencies of quality problems and
productivity, The TQM Journal, Vol. 23, No. 5, 2011, Emerald Group Publishing Limited,
1754-2731
[18] Parker W. G., Costurile calității, Editura Codecs, București, 1998
[19] Rust T. R., Moorman C., Dickson R. P., Getting return on quality: revenue expansion, cost
reduction, or both?, Journal of Marketing, Vol. 66, No. 4, 2002
[20] Spatariu E. C., Analiza costurilor calității, Tribuna Economică, V. 16, Nr. 15, 2005
[21] Tesone D., Principles of management for the hospitality industry, Butterworth-Heinemann,
Oxford, 2010
[22] Voronin G., Samoylov Y., Quality – Vital and Moral category!, 54th EOQ Congress, Izmir,
2010, available on www.eoq.org (20/12/2011)
[23] Walker D., Improvement in Costs, Timelines or Quality Within One Department Can Affect
The Strategic Direction of an Organisation, International Journal of Applied Strategic Man-
agement, Volume 1, Issue 2, ISSN 1742-8204, available on www.managementjournals.com
(12/12/2011)
101 101
Jan Rewilak1
Tomasz Tokaj2
1
Cracow University of Technology, Poland
2
PPUH Malbox ZPChr, Poland
RISKS OF MAKING NON-OPTIMAL DECISIONS

RELATED TO QUALITY IMPROVEMENT BASED
ON PARETO ANALYSIS
Key words: Pareto-Lorenz Analysis, Pareto Chart, quality improvement, 20/80
rule, quality tools
ABSTRACT
Pareto Analysis is one of the basic quality tools, commonly used in selection of activities improv-
ing quality of products or/and processes. Dominant strategy of manufacturing companies which
use Pareto method is only evaluation of occurrence frequency of problems. The paper analyzes
potential risk of decision making process based only on this single criterion. Furthermore, the
article presents possible applications of others than frequency analysis criterions to Pareto Analy-
sis in order to reduce risk of wrong decisions. Practical restrictions resulting from realities of pro-
duction companies are also addressed.
1.BASIC QUALITY TOOLS
During its activity, each production company, despite using numerous se-
curity system (preventive actions), encounters quality problems. The change-
ability of processes is a result of many different factors. As one of Murphy’s laws
says: “Anything that can go wrong will go wrong”. This saying, describing in a
pessimistic way the effect of human activity, can be applied to many aspects of
the surrounding reality. It has also been popularized in industry, among services
responsible for quality, where it describes directly the consequences of the inap-
propriately secured (preventively) production process. Another Murphy’s law
warns: “Left to themselves, things tend to go from bad to worse.” That means that
the lack of commitment into corrective actions will cause an accumulation of the
problems, resulting in turn in growing losses coming from the production of faulty
products, which will have to be repaired or destroyed, or the yet higher costs of
the client’s complaint will have to be covered. The common sense hidden in Mur-
phy’s laws points clearly to the need for undertaking constant actions meant to
remove the causes of the potential and ensuing problems.
The obligation of a constant training is included in the guidelines of the
quality norms ISO 90011 as well as in its specification ISO/TS 169492 being its
enlargement for the automotive industry. The training consisting on gradual im-
provement of the processes and products may be treated as a systematic problem
solving. A problem does not, however, have to bring negative associations. There
may be a problem of inconsistency (divergence between what is required and
what has been achieved) or a problem of an identified opportunity to increase the
efficiency or effectiveness of a process (in this case the problem is brought by a
positive thinking about the future). In order to efficiently solve a problem, knowl-
edge about the process or the object to which the problem refers, the range of ap-
propriate tools, methods and skills about their proper use are necessary3. Tradi-
tional management quality tools include:
-the check sheet – meant for gathering data and ordering information about a spe-
cific product or process;
-the histogram – allowing a graphical representation of the frequency of occur-
rence of the value of the random variable within a specified range and the char-
acter of this changeability;
-the control card – allowing a statistical supervision and control of the process, a
current evaluation of its stability and a periodical evaluation of ability;
-the Ishikawa diagram – allowing the analysis of the factors having an impact on
the effect of the process or of the causes of the inconsistency;
-the scatter diagram – giving a graphical representation of the relationship be-
tween two variables (e.g. related to the problem and to the factor having a pos-
sible impact on it);
-flow chart – allowing to represent the sequence and relationships between the
actions realized in the processes;
and the tool being the topic of the present article:
-the Pareto diagram – which allows to identify the factors having a key impact on
the analysed problem, described (measured) by a specific quantity.
1
PN-EN ISO 9001:2009 Systemy Zarządzania Jakością – Wymagania. Polski Komitet Normaliza-
cyjny. Warszawa 2009
2
Systemy Zarządzania Jakością - Szczegółowe wymagania w zakresie stosowania ISO 9001:2008
w produkcji seryjnej oraz produkcji części zamiennych w przemyśle motoryzacyjnym. Specyfika-
cja techniczna ISO/TS 16949: 2009
3
Hamrol A.: Zarządzanie jakością z przykładami. Wydanie drugie zmienione. Wydawnictwo
Naukowe PWN, Warszawa, 2007, s.121
103 103
2.PARETO-LORENZ ANALYSIS
The Pareto-Lorenz analysis is a tool used to identify factors having the

biggest impact on chosen quantities which describe either the process or the char-
acteristics of the product.
The essence of the method is based on the work of the Italian economist
Vilfred Pareto who was examining the wealth of the 19th century Italian society.
He noticed that 20% of the families in Italy possess as much as 80% of the wealth
of this country. By finding also such an uneven distribution in other situations,
Pareto has formulated a rule known at present as the 20/80 rule. It says that the
occurrence of the majority of the events can be observed in a small fragment of
possible circumstances4. The universal rule created by Pareto says therefore that
80% of all events come from 20% of causes. M.O.Lorenz, similarly, picturing the
unevenness of the wealth distribution, represented this phenomenon on a chart by
using , unlike Pareto, the curve of the cumulated values of the examined data. The
Lorenz’s rule says that in a heterogeneous community 20% of its elements repre-
sent 80% of the cumulated values of the feature, for which the community is be-
ing analysed (serves as a choice criterion)5. The result was the dispute about the
method authorship. The representation of the Pareto diagram and the Lorenz curve
on one chart has ended the argument. The Pareto presentation showing the share
of specific groups and the Lorenz presentation showing the cumulated values of
the groups make the Pareto-Lorenz diagram.
The proceedings to follow while creating the Pareto-Lorenz diagram can
be schematically presented on the following scheme:
The 20/80 rule says that there is a basic inequality between causes and ef-
fects, expenditures and results, effort and benefit. Causes, expenditures or efforts
can be divided into two groups:
-the majority which has lesser impact,
-the small minority which has a great, dominant impact.
4
Łańcucki J., Kowalska D., Łuczak J.: Zarządzanie jakością w przedsiębiorstwie. Wydania pierw-
sze. Wydawnictwo OPO. Bydgoszcz 1995, s.162
5
Szczepańska K.: Koszty jakości dla inżynierów. Wydanie pierwsze. Wydawnictwo Placet. War-
szawa 2009, s.314
104
Scheme1. Sequence of actions in preparing Pareto-Lorenzo analysis
Source: own study
Usually, effects, results and benefits come from a small fraction of causes,
expenditures or efforts leading to their achievement. The relationship between
causes, expenditures or efforts on the one hand and effects, results or benefits on
the other is therefore generally unstable6.
A classical example of “qualitative” use of the Pareto-Lorenz analysis in
industry is gathering data about the number of occurrences of the specific events,
defaults or other factors having an impact on the quality of the processes and
products in order to being able to making decisions about corrective actions.
The example below shows the possibility of using the Pareto-Lorenz dia-
gram for the analysis of the defaults appearing during the production process. The
collected data show the direction the management of the company should take in
their action on the first place.
A company producing metallic elements using the cold working technique
(in the automotive industry) produces oil pans. In the production process within 1
6
Koch R.: Zasada 20/80. Lepsze efekty mniejszym nakładem sił i środków. Wydawnictwo Me-
dium. Łódź 2003, s.37
105 105
month there were 130 incompatible oil pans out of 10.000. In the faulty pans, 16
types of defaults were stated – table 1.
Table 1 The frequency of defects occurrence in the oil pans
Source: own study
These data are presented in a Pareto Lorenzo diagram.
Figure 1 Pareto-Lorenzo diagram for oil pans defects according to their frequency
Source: own study
The following conclusions can be drawn from the Pareto-Lorenz diagram:

-80% of defective oil pans are caused by three defects, ie A-scratches, B-lack of
marking, C-dents;
106
-assuming that it would be possible to eliminate these three defects (theoretical
assumption), the impairment of the production would be at 20% of the current
state, so from the sum of the total 130 gaps it would remain only 26 deficiencies
to eliminate;
-Therefore, it is appropriate to focus corrective action on deficiencies identified in
order to dramatically reduce the impairment of the production;
-scratches have the largest share of the total defects.
The elimination of this defect would reduce the deficiency of around 30%.
3. QUALITY TOOLS VS. QUALITY MANAGEMENT PRINCIPLES
According to the latest update to ISO 9004:20097, a lasting success of the or-
ganization is possible under the condition of implementing eight quality manage-
ment principles. This set of these rules has its roots in quality guidelines devel-
oped by Deming and points to the following principles:
- customer orientation;
- leadership;
- involvement of people;
- a process approach;
- system approach to management;
- continuous improvement;
- making decisions based on facts;
- mutual beneficial relationships with suppliers.
The seventh of these rules provides that in decision making, one has to
rely on data and information based on facts. Management requires continuous
decision-making. It is important that these decisions were taken based on the cur-
rent state of affairs, therefore systematic collection of information is necessary. In
the quality management data acquisition means the gathering of quality records,
often aided by quality tools. Besides the traditional quality tools (listed in the first
chapter of this article) there is a group called new quality tools. These include: the
affinity diagram, interrelationship digraph, tree diagram, prioritization grid, matrix
diagram, process decision program chart, activity network diagram.
The seventh principle of quality management urges therefore to observe,
measure, control, record, or to gather facts and analyze them before deciding on
improvement activities, also in terms of choice of non-compliance or defects,
7
PN-EN ISO 9004:2009 Zarządzanie mające na celu osiągnięcie trwałego sukcesu organizacji -
Podejście przez zarządzanie jakością
107 107
whose reduction (or even elimination) is taken into consideration in the first place.
This can lead to:
- a long time taken for making decisions, and thus to potentially long period
of time during which there will be defective products before effective cor-
rective action are taken;
- incurring significant costs of the data (facts)acquisition required for the
decision;
- mental elimination of preventive approach, which promotes the superiority
of prevention over correction.
Preventive measures are often taken in the absence of "hard data" and thus the
facts, which are expected in the seventh principle of quality management and cor-
rective action are be designed based on the identified problems (facts).
Because the fact is interpreted as an event that took their place in history, preven-
tion, on the other hand, requires a reach of thought into the future (eg in the form
of risk analysis). For this reason, you can bet the idea that the principle of "mak-
ing decisions based on facts," undermines the preventive approach to improve-
ment. Unless the interpretation of this rule will expand its field of application to:
- observation and analysis of historical facts (for similar processes, projects
and products) in order to predict the potential weaknesses in the new
(similar) process, design and product in order to decide on the need for ap-
propriate preventive security, or
- observation of the facts resulting from the research (simulation, prototype,
pre-production) of new products and processes before starting the produc-
tion.
Industrial practice shows that the seventh principle of quality management
is not, in general, interpreted in the above (expanded) way.
4. HOW ARE DECISIONS MADE ON IMPROVEMENT ACTIONS?
A typical decision-making process on improvement in manufacturing

companies can be illustrated by the diagram below.
Practice shows, however, that the use of this methodology to identify the
causes, to which corrective action should be addressed is often unrealistic because
the acquisition of information about the facts being the causes of detected defects
is very costly and time consuming. Data on defects, which are acquired by manu-
facturing organizations generally relate only to the number of defective units of a
particular product or the number of different types of defects.
108
Scheme 2 The typical step by step decision making process in productions com-
panies
Source: own study
These data are then referenced to the production volume to calculate the
deficiency indices. Contrary, therefore, to the principle of "making decisions
based on facts" it is generally not practiced in the production companies to acquire
the "facts" or information about the causes of defects in order to develop on their
basis the Pareto-Lorenz analysis of the reasons, to predict the reasons for the
elimination (reducing the likelihood of occurrence)in accordance with the princi-
ple of 20/80. How then decisions are made regarding the elimination of the
causes? Identification and selection of the causes is often a debate in the team
exchanging the opinions and experiences, often unsupported by "hard data" but by
intuition, sometimes backed up by a brainstorm or using Ishikawa diagram (which
does not choose the causes to eliminate, but points to and determines the cause
and effect relationships between them).
It is a standard that manufacturing companies apply simple rates of pro-
duction quality like DPMO (Defects Per Million Opportunities), PPM (Parts per
Million), FTY (First Time Yield) or defectiveness (%). These indicators have de-
fined goals for the specified time. Those responsible for these objectives to be
achieved most effectively, naturally choose to eliminate the most common de-
fects, represented on the Pareto-Lorenz chart by the first posts, according to their
knowledge of the facts. It is easy to show that it is not necessarily the optimal
109 109
strategy for improving the quality of the company, despite the fact that decisions
are taken based on facts.
5. PARETO-LORENZ ANALYSIS TO OTHER CRITERIA?
Standing on the ground of the seventh principle of quality management,

the question arises: what other criterion should be used for the Pareto-Lorenz
analysis, so that the decisions taken about the improvement were closer to the
optimum?
In the Pareto-Lorenz analysis the data can be used containing the costs of
actions affecting the implementation of certain projects8. Let us add, therefore, a
further criterion to the analysis: internal costs (consequences) of defects.
Table 2 Internal unit cost of defects of oil pans
Source: own study
These costs consist on inter alia: costs of scrapping defective products

(commonly: irreparable lacks), costs of repair of products that have removable
defects (colloquially: repairable defects), costs of additional inspections and test-
ing, costs of the defective product reclassification, analysis costs, costs of changes
8
Miller P.: Systemowe zarządzanie jakością. Koncepcja systemu, ocena systemu, wspomaganie
decyzji. Wydanie pierwsze. Wydawnictwo Difin. Warszawa 2011, s.414
110
and approvement of deviations from the specifications, the cost of downtime,
overtime, etc. Using the still above-mentioned example of oil pans, the internal
unit costs (consequences) of defects were calculated - Table 2, estimating and
summing these component costs for each defect separately.
Estimated costs are shown on the Pareto Lorenz chart - Figure 2.
Figure 2 Pareto-Lorenzo diagram of internal unit cost of defects occuring in oil

pans
Source: own study
By analyzing the obtained Pareto-Lorenz chart for the criterion of internal

unit cost of defects, we can make the following observations:
- 80% of defects are generated by four faults, identified by codes H, I, P, F,
that is: cracks, constrictions, leakage, wrong position of barrier after spot
welding;
- by eliminating the four defects from the sum of all unit costs of 964 PLN a
reduction in unit costs about 770 PLN would be reached;
- the drawback generating the biggest internal cost unit are cracks making
the cost of 250 PLN or 25.9% of all defects;
Comparing the data from the two previous studies, ie taking into account the fre-
quency and internal cost of defects it can be stated that they give different indica-
tions in terms of priorities for implementation of corrective action.
Using the data from both studies, you can make another Pareto-Lorenz chart
which is the product of the frequency of defects and its internal unit cost. This
way we obtain the Pareto-Lorenz analysis of the aggregated internal costs of de-
fects - Table 3, Figure 3.
111 111
Table 3 Aggregate internal cost of defects of oil pans
Source: own study
Figure 3 Pareto-Lorenzo diagram of aggregate internal cost of defects occuring in

oil pans
Source: own study
This analysis, compared to two already done Pareto-Lorenz analyses, sug-

gests again other priorities for corrective action. Using the criterion of aggregated
internal costs of defects it can be observed that:
- 82% of the aggregated internal costs are caused by seven of the 16 defects,
described by codes: F, D, H, I, A, P, B, namely: wrong position of barrier
112
after spot welding, improperly welded drain plug, cracks, constriction,
scratches, leakage, lack of marking.
- Total cost of internal defects is 2084 PLN, by eliminating the identified
seven flaws, the defects cost will be lowered by about 1710 PLN;
The costs of internal inconsistencies are, of course, only one part of the
losses that may result from the formation of the defect. These are the only costs
that accumulate in the plant manufacturer. Significantly higher costs arise if the
defective product reaches the customer. Then outside the already incurred costs of
internal inconsistencies additional costs are generated namely external costs of
non-compliance. These include costs of: complaints, sorting and possible repair
service, returns including transport costs, contractual penalties, potential costs of
the client’s detention process, service, warranty returns, claims for damages, loss
of reputation with customers, loss of profits. These costs, however, are very diffi-
cult to estimate, which means that in industry they are generally not counted. It
demands the development of an adequate computational model for the company,
highly skilled professionals, and collecting and analyzing large amounts of addi-
tional data, and so they are labor intensive. For the analysed example of the oil
pans production an estimate was carried out about the unit cost of external non-
compliance - the results are shown in Table 4 and the Pareto-Lorenz diagram -
Figure 4 summarizes the data for such an analysis.
Table 4 External unit cost of defects of oil pans
Source: own study
113 113
Figure 4 Pareto-Lorenzo diagram of external unit cost of defects occuring in oil
pans
Source: own study
Pareto-Lorenzo analysis conducted for the unit cost of external defects

suggests the following conclusions:
-81.58% of total unit costs are made by three drawbacks, ie: P-leakage, I-
constriction and F-wrong position of barrier after spot welding;
-their elimination will reduce the total unit cost of PLN 56 384 external value of
about 46 000 PLN.
Table 5 Total external cost of defects in oil pans
Source: own study
114
Similarly to the internal costs, this time you can also calculate the total
cost of the external defects of non-compliance during the relevant period. Table 5
presents the results from which the Pareto-Lorenz analysis was developed - Figure
5.
Figure 5 Pareto-Lorenzo diagram of total external cost of defects occuring

in oil pans
Source: own study
The Pareto-Lorenz analysis based on the criterion of the total external cost of de-
fects indicates the following conclusions:
-82.76% of the total external costs of oil pans defects are caused by 3 defects such
as D- improperly welded drain plug, F-wrong position of barrier after spot weld-
ing, P-leakage;
-elimination of defects D, F, P will lower overall cost of defects, ie about 116 004
PLN of 96 000 PLN;
6. PARETO-LORENZ ANALYSIS FOR THE CAUSES OF DEFECTS
The Pareto-Lorenz analysis for defects is only a preliminary step for ac-
tions leading to the elimination or reduction of problems. The introduction of ef-
fective corrective action, however, requires identifying the causes of problems
(defects). It is clear that if the cause is not identified and removed completely or
partially (actions meant to remove the causes), and only the incompatibility is
removed (actions meant to remove the results), the problem appears again. In or-
der to seek the causes selected to eliminate the defects, a number of tools can be
used. The following tools are used commonly: brainstorming, cause and effect
115 115
Ishikawa diagram, planning of the experiment (DOE - Design of Experiments)
and the 5Why principle. The identified causes will have to be subject to further
analysis (quantitative), as it will be necessary to select among them those reasons
to which the first corrective action should be addressed. What criteria should be
followed when determining the order of elimination of the causes? The most
common criterion is the frequency (probability) of occurrence of the cause. The
Pareto analysis should therefore be carried out in terms of frequency of the causes
of the defect. Data on the causes of defects in industrial reality are usually not
systematically collected, they are often fragmentary and scattered, mostly in the
records relating to activities post-complaint, and mostly they are missing alto-
gether. It seems that the reasons for this are as follows:
- Inability to identify the causes,
- Lack of defined responsibilities for identifying and collecting data on the causes,
- Insufficient human resources (engineers in the departments of quality and pro-
duction),
- Lack of awareness of the benefits of having data on the causes and results of
their analysis;
- High cost of obtaining data on the causes of defects in the production because of
the number of necessary observations and measurements (especially in manufac-
turing processes for complex products with a potentially large number of types of
defects), measurements allowing to record the reasons would require monitoring
of a large number of factors - the parameters of the process, tools and the proper-
ties of input materials and components, or even staff behaviour - all of the people
who may affect the quality of the product (eg operators, setters, maintenance per-
sonnel, logistics, etc.);
- The need to having knowledge about the correlation between the above men-
tioned parameters and the characteristics of the product (the failure of which is a
defect of the product) and the need to periodically update this knowledge,
- High cost of updating data on the reasons for the amendment of the processes
(technology, tools, parameters, methods, personnel, suppliers), including the im-
plementation of corrective action changing the probability of occurrence of certain
causes.
It follows that a doubt can again be expressed on the validity of using the
seventh principle of quality management in the global (ie, in the context of the
entire production process) planning of the optimal corrective action based on ob-
servation of the causes of defects. It seems that decisions about corrective actions
for the continuous improvement of processes and products based on the facts is
particularly difficult and costly on the level of the causes of defects. Industrial
practice confirms this conclusion. In general, in fact, the frequency of causes is
116
determined approximately, like: common, rare, very rare or almost impossible.
The application in this case the Pareto-Lorenz analysis (the so-called second row -
for causes) seems pointless and unrealistic. On the other hand, it confirms the ac-
curacy of the FMEA method, which in relation to the production process
(PFMEA) allows for such an analysis and description of the frequency of the
causes of defects by means of the conventional rate of frequent cause of defect
(Occurrence) evaluated at a scale of 1-10. It is worth mentioning that the Pareto-
Lorenz analyzes for causes by the above mentioned rate (Occurrence) is one of the
forms form of reporting the results of the process risk analysis performed with the
PFMEA method.
CONCLUSIONS
The Pareto-Lorenz analysis is primarily a diagnostic tool that allows or-

ganizations to determine the most important problems9. The analysis may be
multi-leveled and may relate to various aspects of the emerging problems. As was
indicated in the example of oil pans above, the analysis may relate to the fre-
quency of defects, can be directed to the internal unit costs, aggregate internal
costs or unit and aggregate costs of external inconsistency. The Pareto-Lorenz
analysis can also be performed to determine the ranking of causes of defects, it is
rare, however, for many reasons described above. As has been shown, in practice
almost exclusively the Pareto analysis of frequency defects is applied.
With consideration of the application of the Pareto-Lorenz analysis for
planning continuous improvement processes the following conclusions can be
drawn:
- the seventh principle of quality management should be interpreted flexibly
and not to the letter. Improvement decisions based solely on the facts
("hard data") represented by the Pareto-Lorenz analysis can lead to differ-
ent decisions depending on the data, that is on the costs and the possibility
of their acquisition, and not on the profitability of the planned activities,
the enterprise interest. The recommendation to base the decisions on the
data can also be read as an incentive to improve quality through corrective
rather than preventive action, which rarely can be supported by the facts,
but rather based on the estimation, anticipation, extrapolation or subjective
assessment;
9
Miller P.: Systemowe zarządzanie jakością. Koncepcja systemu, ocena systemu, wspomaganie
decyzji. Wydanie pierwsze. Wydawnictwo Difin. Warszawa 2011, s.422
117 117
- the Pareto-Lorenz analysis as a qualitative tool can be used to support de-
cision-making processes to improve on the condition of consciousness of
the importance of decisions depending on the type of data held and ana-
lyzed;
- Those responsible for quality improvement should be aware that the per-
formance of Pareto-Lorenz analysis, and then the application of the ap-
proved quality tool, does not guarantee to take informed decisions. The
example showed that the Pareto-Lorenz analysis of defects generated in
the production of oil pans, using different criteria, does not show un-
equivocally defects, for which improvement action should be taken in the
first place. Each of the criteria provided different priorities when it comes
to the order of elimination of defects;
- belief in the veracity of the Pareto principle, against the failure of several
studies(on costs) presented, leads to the assumption that the analysis per-
formed did not cover all defects or all costs, which further reduces confi-
dence to the decisions made on the basis of the performed Pareto-Lorenz
analysis showing "facts ";
- Commonly dominant in manufacturing companies the strategy to eliminate
the most common defects, often presented in Pareto-Lorenz graphs, (with
the objectives defined in terms of defects, DPMO, etc.) generates deci-
sions on improvement activities far from optimal due to ignoring the fi-
nancial criteria;
- Improving the quality by using the Pareto-Lorenz analysis according to
financial criteria requires the development of company strategy viable to
be carried out, giving a clear indication of the priorities of the elimination
of defects with an accuracy of their causes.
The examples of the attempts to account for the financial criterion in planning
quality improvement presented above show the dependence of decisions on the
type of available data, whose gain is associated with different cost and reliability,
the assessment of which is beyond the scope of this article, and certainly should
be an important criterion for making decisions on the improvement quality. Un-
fortunately, the Pareto-Lorenz analysis does not conventionally take into account
the reliability (uncertainty) of the analyzed data. It seems worth pondering the
possibility of rough assessment of the reliability (uncertainty and resolution) of
the data provided by the Pareto-Lorenz analysis through the degree of compliance
to the 20/80 rule.
118
REFERENCES
[1] Hamrol A.: Zarządzanie jakością z przykładami. Wydanie drugie zmienione. Wydawnictwo
Naukowe PWN, Warszawa, 2007.
[2] Koch R.: Zasada 20/80. Lepsze efekty mniejszym nakładem sił i środków. Wydawnictwo
Medium. Łódź 2003
[3] Łańcucki J., Kowalska D., Łuczak J.: Zarządzanie jakością w przedsiębiorstwie. Wydania
pierwsze. Wydawnictwo OPO. Bydgoszcz 1995
[4] Miller P.: Systemowe zarządzanie jakością. Koncepcja systemu, ocena systemu, wspomaga-
nie decyzji. Wydanie pierwsze. Wydawnictwo Difin. Warszawa 2011
[5] Szczepańska K.: Koszty jakości dla inżynierów. Wydanie pierwsze. Wydawnictwo Placet.
Warszawa 2009
[6] PN-EN ISO 9001:2009 Systemy Zarządzania Jakością – Wymagania.
[7] PN-EN ISO 9004:2009 Zarządzanie mające na celu osiągnięcie trwałego sukcesu organi-
zacji - Podejście przez zarządzanie jakością.
[8] Systemy Zarządzania Jakością - Szczegółowe wymagania w zakresie stosowania ISO
9001:2008 w produkcji seryjnej oraz produkcji części zamiennych w przemyśle motoryza-
cyjnym. Specyfikacja techniczna ISO/TS 16949: 2009
119 119
Beata Starzyńska
Poznan University od Technology, Poland
THE SELECTION OF QUALITY TOOLS FOR

IMPROVING MANUFACTURING PROCESSES IN
PRODUCTION COMPANIES
Key words: quality management, quality tools, process improvement, DSS
ABSTRACT
All the employees responsible for, and engaged in all processes must be equipped with proper
tools allowing them for quick easy but also efficient undertaking of improvement activities in all
areas of creating value for a client. To solve the problem effectively one needs knowledge about
the process (or the product) which the problem concerns, resource of appropriate tools and proce-
dure methods and the ability of their proper use. Such an approach enables efficient management
and use of possessed information (both quantitative and qualitative), and also ‘generating’ new
knowledge in the area of manufacturing process improvement. The recognition of this possibility
has become a prerequisite for the development of the methodology, and – based on the developed
methodology – the system of selection and application of the quality management tools for the
improvement of manufacturing processes, which at the same time ensures the full use of the em-
ployees’ knowledge.
INTRODUCTION
Modern companies have found themselves in a situation where the ability

of dynamic adaptation to changing market conditions is a key factor to competi-
tive advantage. That means that all the employees responsible for, and engaged in
all processes must be equipped with proper tools allowing them for quick easy but
also efficient undertaking of improvement activities in all areas of creating value
for a client. In production companies the core processes include manufacturing
processes together with supporting processes (transport, storage) and service
processes (control and measurements). The Process Improvement is implemented
in the form of two strategies: firstly, extensive activities requiring high expendi-
ture on radical step change of the qualitative process capacities (new technologies,
machine park modernization, etc.) – (breakthrough projects); secondly – intensive
activities involving effective use of already existing material and information re-
sources used in these processes (small-step ongoing improvement activities).
While the first approach allows for radical increase of quality capacity of the
process, the second approach allows for gradual improvement of actual qualitative
capacity of the process and ‘coming closer’ to the potential qualitative capacity.
Improvement involving gradual enhancement of the processes and prod-
ucts arising from their implementation may be regarded as problem solving,
which may not always be associated negatively. In such approach the aim of the
improvement provides a guideline to actions which can be entered in the frame-
work of a large number of available methodologies, models and problem-solving
cycles (Table 1). The problem can, in fact, be found in the discrepancies between
what is required and what is gained in the production processes (disadvantage),
and seeking possibilities to increase efficiency or effectiveness of the process (‘a
case’ of positive thinking).
Table 1. Improvement and/or problem-solving methodologies (own data)

(Brassard 1994) (Hamrol 1998) (Tague 2005) (Van Loon 2006)
Select and de- Problem identifica- Identify charter Set goals
scribe opportunity tion and make initial -clearly defined goals
(P) plans (D) -fuzzy goals
Describe current Collection and pre- Identify customers Thinking
process (P) liminary data analy- and requirements -reflective (review)
sis (D) -decision (actions)
-creative (innovation, ideas)
-strategic (setting directions)
-lateral (opportunities)
-critical (problem solving)
-judgmental (quality appraisal)
-holistic (total)
-systems (relationships)
Describe root Theories and hy- Assess current Act
causes (P) potheses formula- state (D) (M) -prioritize actions
tion -proactive/consensus actions (in
team)
-reactive/coordination actions
-action tracking
Develop solutions Adoption of work- Define preferred Review

or change (P) ing hypothesis state, gaps be- -compare goals to actions out-
tween current and comes
preferred state, -find mistakes
and improvement -learn about improvement op-
opportunities (A) portunities
121 121
Implement solu- Consideration of Identify barriers Supply Improvements
tion or change (D) alternative solutions and root causes -describe improvement
(A) -categorize improvement
-select improvements
-convert improvement opportu-
nity to a goal
Review evaluation Design of the solu- Develop im-
results (C) tion provement solu-
tions and plans (I)
Reflect and act on Analysis of the Implement plans
learning (A) solution weak points (I)
Implementation of Monitor results;
the solution recycle if neces-
sary (I)
System monitoring Standardize (C)
after implementation
Conclude project,
identify lessons
learned, and rec-
ognize accom-
plishment (C)
To solve the problem effectively one needs knowledge about the process
(or the product) which the problem concerns, resource of appropriate tools and
procedure methods and the ability of their proper use.
In a modern-managed and knowledge-based enterprise all accessible data
and information should be used, which, when processed into information, create a
source of formalized explicit and so called tacit knowledge possessed by employ-
ees who are directly and indirectly involved in the implementation of manufactur-
ing processes. Such a solution increases the effectiveness of decisions made in the
area of gradual improvement of business activity (the area of improvement in the
current work is determined by basic processes of machine parts manufacturing,
together with supporting processes (transport, storage, maintenance and repair of
the machines), and service processes (quality control, administration, at al.) To
make the knowledge of the manufacturing processes sufficient for their gradual
improvement, two conditions need to be met: the notion that variability is an inte-
gral component of each process, and that every basic component of the process
(e.g. in form of a technological operation) is a source of information – and – treat-
ing the employee (operator) as an equivalent source of information about the
processes (experience, qualifications, creativity, ‘reactivity’ to problems, inde-
pendent decision-making, etc.).
122
Featured, mutually complementary data and information sources may be
effectively converted into generally available knowledge with the use of numer-
ous but rarely fully used tools for quality management. Such an approach enables
efficient management and use of possessed information (both quantitative and
qualitative), and also ‘generating’ new knowledge in the area of manufacturing
process improvement. The recognition of this possibility has become a prerequi-
site for the development of the methodology, and – based on the developed meth-
odology – the system of selection and application of the quality management tools
for the improvement of manufacturing processes, which at the same time ensures
the full use of the employees’ knowledge.
The basis for developing the methodology was the identification and gen-
eralization of relations between broadly defined quality management instrumenta-
tion and effectiveness and efficiency of the activities in the area of manufacturing
process improvement in production companies. The new aspect of organizing and
creating rules of selection of tools for management in the area of methodology –
in relation to previous studies – was to see the potential of employees, as the rich-
est source of knowledge concerning production processes – thus, perceiving the
quality management tools as instruments for developing and creating knowledge
about production processes with an active participation of the employees.
1. IMPROVING THE QUALITY OF MANUFACTURING PROCESSES

BASED ON KNOWLEDGE
Finding parallels between the concept of quality management and the

newly emerging areas in business allows for having a new perspective on the role
and place of quality tools in managing a business. An example of such a connec-
tion is linking quality management with knowledge management. Quality man-
agement, in its most developed form, emphasizes a balanced use of all company’s
resources – including the incorporeal ones, known as knowledge. In turn, one of
the directions of quality management development is to elaborate methods and
techniques to allow its effective use in an enterprise. In this way, both these lines
complement each other, becoming a feature of the knowledge-based businesses.
Perceiving knowledge as one of the most important sources of competitive
advantage concerns not only service companies (e.g. consulting), in which the
intellectual capital of employees is an essential resource converted into their
products, such as expertise, projects and software. Knowledge is also an important
resource for enterprises, in which manufacturing processes prevail. It is treated as
another resource that allows to combine limited physical resources: labour, capi-
tal, raw materials – into a combination of greater value for the customer. The con-
dition for the effective use of knowledge is the realization of the fact that it is a
123 123
specific intangible factor and its resources are not diminished as a result of being
used, on the contrary - acquiring, using, disseminating knowledge results in en-
riching it. These processes may be implemented in a company only with the par-
ticipation of employees because knowledge is a potential strongly related to man.
The concept of knowledge can be defined as the capacity of the employee
or a team to use the material resources and information in a variable environment.
It is a term relevant to the activities of both service and manufacturing companies.
However, manufacturing companies, in addition to standard procedures, require
specific solutions where they apply specific knowledge - technical knowledge. Its
characteristic features are (Fischer, Stokic 2002):
- concentration of knowledge around specific products, processes, tech-
nology,
- clear transition and comprehension of the knowledge concerning prod-
ucts and processes,
- assigning employees double roles: users and sources for knowledge
management system,
- diversity of tacit knowledge sources (which is manifested in the skills
of employees): from production workers and engineers to specialists in
specific areas and managers,
- enrichment of introduced products, structures, rules with a description
of proceedings in the form of documentation, procedures and instruc-
tions,
- understanding the course of processes - combining the circulation of
material and human resources in a company with a parallel flow of in-
formation.
The basis for creating and enriching knowledge are data and information. In the
production company data consist of raw numbers and facts which describe events
or phenomena, such as the amount of input material for shaping machinery, re-
sults of measurements, number of deficiencies, machine’s production year. To
make the data useful for the company, they need to be processed into information,
i.e. arranged, interpreted, ordered, assigned to specific phenomena. The informa-
tion resulting from above mentioned data include: material supply specification,
information about deregulation of processes, a list of inconsistent products, ma-
chine condition report, respectively. Transforming information into knowledge,
however consists in associating it within a specific context and the association is
made by men. The context in a production company is the process of production,
and thus the knowledge is concentrated around products and processes.
The above mentioned definition of knowledge concerns only its explicit
part, expressed in formal language, which is relatively easy to manage and use in
124
a company. This type of knowledge is, in fact, fairly easy to locate, acquire, de-
velop, disseminate and preserve (Probst, Raub & Romhardt, 2002). All employees
also posses tacit knowledge. This is a personal, individual knowledge consisting
of personal beliefs, system of values, intuition, feelings and attitude, which often
have roots in practical actions. The knowledge of an individual employee is a ba-
sic element of the source of knowledge in the company. Once this type of knowl-
edge has been used – through using quality management instrumentation – the
company gains a new kind of competence. This includes, in particular, the quality
management tools, which can be described as innovative, focused on generating
and managing ideas, concepts or information, which in effect make it easy to cre-
ate and develop the knowledge needed to take effective action to improve manu-
facturing processes. In this case, the ‘quantitative’ tools are less useful since they
are aimed at collecting and processing data related to various aspects of quality
and are used in individual work.
The possibility of using the instruments of quality in completing frequently
occurring "knowledge gaps" and in creating new knowledge is justified, in par-
ticular through collective quality problem-solving (e.g. generating ideas, organiz-
ing ideas, identifying relations, settling choices, working out the solution details,
etc.). Such a working system guarantees dissemination of employees’ tacit knowl-
edge, collective creation of solution patterns, sharing experiences, and ultimately
– making the "new" knowledge accessible to everyone - in particular for the pur-
pose of increasing quality capacity in manufacturing processes. Reaching for the
quality management tools at the same time facilitates the "transition" between the
tacit and explicit character of knowledge, which is defined in literature as proc-
esses of knowledge conversion (Nonaka, Takeuchi, 1995). Depending on the di-
rection of transformation of tacit knowledge into explicit one, there are four ways
of knowledge conversion:
- socialization – conversion of tacit knowledge into tacit one, e.g. through
observation, imitation, practice;
- externalization – conversion of tacit knowledge into explicit one through
dialogues, using metaphors or analogies;
- combination – conversion of explicit knowledge into explicit one through
various methods of converting information;
- internalization – converting explicit knowledge into tacit one as a result of
learning through acting.
The concept of knowledge-based improvement has been present in numerous pub-
lications, e.g. (Deslandres 1997), (Mukherjee 2000), (Linderman 2004). The basis
for creation of technological knowledge, understood as “understanding the effects
of the input variables [of a process] on the output” is a learning cycle. In the
process of knowledge creation, which enables improvement of process quality,
125 125
there are two linked learning processes: conceptual and operational learning. In
essence, conceptual learning is a continuous search for an answer to the question
of why a particular phenomenon occurs, and thus acquisition of know – why? type
of knowledge. Contrary to the above mentioned knowledge, operational knowl-
edge is about introducing changes into the process and observing the obtained
results. It is also acquiring skills of how to deal with undesirable phenomena,
what makes it know – how? type of knowledge (Mukherjee 2000).
Continuous gradual improvement of production process quality and activi-
ties connected with problem solving require constant complementing of knowl-
edge gaps within the area of so called quality control knowledge by employees
(managers and front-line employees). It is very important in this particular area of
business activity since that knowledge allows to identify discrepancies, prevent
deficiencies, increase quality capacity of the processes, etc. This also means that
all employees responsible for, or engaged in implementation of the processes
should be ‘equipped’ with appropriate methods and tools, which will allow them
for quick easy and efficient decision-making and action undertaking.
2. SYSTEM FOR SELECTION OF QUALITY TOOLS FOR BUSINESS

PROCESS IMPROVEMENT
2.1. GENESIS OF THE SYSTEM DEVELOPMENT
Within the framework of a project financed by the Ministry of Science and

Higher Education (N N503 263234) a new system has been developed. It is a de-
cision-supporting system for selecting and applying tools and methods of quality
management in the improvement of production processes. The abundance and
variety of quality management tools demonstrated in the course of literature re-
search (Grabowska & Starzyńska, 2010) (Starzyńska, Hamrol & Grabowska,
2010) on the one hand, and possibility of their broader use in practice (presented
in the project surveys) resulted in the development of the system. The system pro-
vides a user, who reaches for quality management tools and methods, with an easy
and quick access.
The application was designed to provide as much flexibility to the knowl-
edge stored in the database system, as possible, to enable continuous expansion of
the criteria for selection of tools - and ultimately – expanding the knowledge
stored in the system with methods / programs for improvement and / or solving
problems (see Table 1. ). The basis for the system software was a developed
method of criteria matrix (Starzyńska, Hamrol & Najlepszy, 2009).
Its implementation in the system has allowed to gain knowledge about the
tools (and methods), of quality management of a new structure (a description of
126
tools and methods through a set of attributes and their possible conditions). The
developed method required collecting domain knowledge concerning developed
and recommended tools and methods of quality management. In the language of
knowledge management it is codified knowledge, and thus explicit and available
to the interested (in literature), which in the developed system has been given a
new structure (characteristics of tools by a complete set of attributes and their
conditions). Theoretical knowledge constitutes the core of the knowledge stored in
the developed system and it is static knowledge. The functionality of the created
system allows for extension. Extending this knowledge is related to the possibility
of incorporating characteristics of other instruments to the system, e.g. acquired
from other areas of business improvement process (e.g. lean management, lean six
sigma, TPM).
The supplement of the knowledge stored in the system was the knowledge
acquired through the sample survey (conducted among manufacturing companies
of Wielkopolska), the purpose of which was to gain knowledge from experts,
which would then provide – having been placed in the database system – an op-
timized access to relevant tools and methods of quality management for system
users. The source of the knowledge was a conducted study concerning expertise,
utilization and evaluation of the suitability of the methods and tools in solving
problems during production processes and providing technical services. The user
can thus benefit from both theoretical and practical sources of knowledge. That
results in the system’s hints of what variants of using a particular tool/method
there are (e.g. application purpose, phase of the process), and also in tips concern-
ing certain limitations of their use in practice (e.g. type of needed data, team work
only, etc.).
Algorithms implemented in the application allow the user to perform a
double role, so often emphasized in the literature and concerning knowledge man-
agement in manufacturing companies. Each employee of a manufacturing com-
pany plays a double role: the user and the knowledge provider. Within the project
study, an employee using the application is a user of the gathered knowledge
(domain knowledge, concerning quality management tools and also the knowl-
edge obtained from surveys) and, at the same time, they are the source of knowl-
edge about choices and evaluation of already used tools. The resources of ‘static’
knowledge in the system complete the resources of dynamic knowledge, the
source of which is a learning mechanism (designed algorithm) whose task is to
constantly enrich the system knowledge resources through gathering information
about users’ choices (remembering activities and preferences of a user), and about
the evaluation of efficacy of used tools (statistics on tool selection and evalua-
tion).
127 127
Compared to previous studies, the proposed solution has two distinguish-
ing features: while the way of presenting tools and methods of quality manage-
ment in the extensive literature on the subject is directed to indicate the possibility
of their application and does not include restrictions on their use in practice – the
developed methodology fills this gap – it enables a choice of a useful instrument
while taking into account such restrictions as procedural, informational, organiza-
tional, personnel limitations, et al.; the methodology has been implemented in a
form of software application, supporting the selection of an instrument of quality
management taking into account multiple criteria of selection (decision support
system DSS). The main objective of the application is to help the inexperienced
user in selecting the right tool by responding to a series of questions, clarifying
the needs and expectations of the user.
2.2. SYSTEM FUNCTIONALITY
The developed system is characterized by solutions typical of systems

called DSS. The elements of the decision support systems make possible:
− continuous improvement of the program knowledge through collecting
information on choices made by a user and a system evaluating the
effectiveness of problem solving with the use of a particular tool,
− remembering user’s actions and preferences,
− keeping statistics on tool choice.
Moreover, the application ‘learns’ the user’s actions and stores tool selection paths
in order to lead the user to proper tools quicker in future. The building elements of
the system include:
− Knowledge base – a declarative form of knowledge written with the use of
special rules. Recording of tools and criteria describing them, recording of
methodology as decision trees. Data are stored in form of tables connected
to one another by relations.
− Acquired knowledge base – dynamic knowledge, recording of selected
tools, criteria and their evaluation. This knowledge is used to influence
results, so as to suggest the best choice to the user. Information about
selected criteria (or the path in decision tree), the order of the choices
made and evaluation of a chosen tool is stored in the database.
Additionally, the frequency of choice of a particular tool is also stored.
− Explaining mechanism – allows a user to obtain information on why the
system suggested a particular hint. Showing a user which criteria are met
by a chosen tool, or what was the path that ‘led’ him to such a result.
128
Opportunity of becoming acquainted with the description of a selected tool
and its features.
− Concluding mechanism – the main element of the system responsible for
reasoning. Use of method of criteria matrix algorithm to calculate a
ranking of tools corresponding to criteria chosen by a user.
− Knowledge base editor – allows to modify the knowledge stored in the
knowledge base. Enables extension of the knowledge with new tools,
criteria or methodologies. It also allows introduction of statistics.
− Decision supporting mechanism – a mechanism collecting information
about actions and choices made by a user, as well as a mechanism
moderating the results of the concluding mechanism in order to suggest an
optimum result. The algorithm suggests suitable tools according to
evaluations which were made earlier by a user, determines the optimal
order of specifying the criteria.
− User interface – visualization of the knowledge represented by the system
allows to introduce information about searched tools.
The application allows for, and supports:
− selection of an appropriate quality tool/method for improvement of quality
in an enterprise,
− introduction of new tools,
− defining new criteria of quality tool selection,
− defining rules of conflict between tool selection,
− introduction of new methodologies for the selection of tools,
− assistance for a user with becoming acquainted with new tools,
− interactive interface with hints,
− introduction of evaluation results of already used tools (used tools and
their evaluation),
− service by unqualified and qualified staff.
2.3. TECHNICAL REQUIREMENTS AND IMPLEMENTATION
The application is designed for Microsoft Windows, which is widely used in

companies. The used technology has been adjusted in such a way as to allow the
application operate with older versions of the systems. Application system re-
quirements are:
− Windows 98 or later
− .NET platform 2.0 or later
129 129
To implement the application (MDI-type) there have been used currently popular
technologies, providing a convenient and transparent working environment:
Integrated Development Environment (IDE)
− Visual Studio 2008 – Microsoft’s flagship tool for application
development
Language of programming
− C# – object-oriented programming language, a part of .NET platform
Database
− SQLite3 – free SQL database engine, does not require additional service
for database access
Properly designed and fully implemented database plays a key role in the applica-
tion:
− stores information about introduced tools of quality improvement,
− tools characterising criteria,
− rules of conflict between criteria,
− relations between tools (originally contained in specially prepared matrix,
− data on methodologies,
− statistics on tool selection,
− information about the user’s actions during tool selection,
− tool evaluation.
2.4. SOFTWARE INTERFACE
The operation of the system can be divided into two main parts: the so
called expert interface and user interface (Fig. 1). Such a solution is a conse-
quence of the assumptions about the flexibility of the system in the context of its
accumulated knowledge. A user, via the user interface, uses knowledge accumu-
lated in the system, and additionally, he is a source of knew knowledge (going
back to the selection session allows him to evaluate the usefulness of the chosen
tool in practice). On the other hand, the knowledge accumulated in the system at
the given moment can be continuously extended with further tools and methods –
the expert module is designed for introducing new knowledge. In addition to the
implementation of the method of criteria matrix, possibility to introduce (also via
the expert interface) methodologies of improvement/problem-solving has been
implemented. They have been implemented in the form of hierarchy trees. Going
through consecutive levels of a particular methodology or making a ‘leap’ from
one methodology to the other, a user can also receive a hint of which tool they
should use, without defining the selection criteria in the criteria matrix module.
130
Fig. 1. Example window (own data)
2.4.1 EXPERT INTERFACE
Database editor window (Fig. 2) allows to add, edit, and delete data from the da-
tabase. This part of the program is mainly designed for an expert to enter knowl-
edge about tools and their characteristics and to implement the methodology of
problem solving / improvement. Data are presented as a tree split into two sub-
trees: Tools and Methodologies. The editor window is divided into parts. The left
side of the window allows to navigate through the data stored in the database and
to edit the items. The right side shows additional information about the selected
item in the tree.
The tree structure of the instruments has a fixed structure, and each level
of the tree performs a different function. The first level contains the names of de-
fined tools, the second level contains the names of the criteria for describing the
tool. In the third and last level there are features of the tool.
The criteria and characteristics are global in nature - this means that by
adding a criterion for one tool, it is automatically added to the other tools. The
same rule applies to properties within a given criterion (Fig. 3). The criteria that
do not have any defined value of a feature are assigned a black icon to enable
convenient location of gaps in the knowledge about the tool. Defined features are
assigned a red or green icon, which describes the condition of a given feature (e.g.
true/false). In order to change the state of a feature for a given tool, one needs to
131 131
check or uncheck the box to the icon’s left. To add a new tool one needs to check
„Instrumenty” (“Tools”) and click „Dodaj” (“Add”) button located on the toolbar
above the tree. The same procedure applies to adding criteria or features, i.e. in
order to add a criterion one needs to check one of the tools and to add a feature
one needs to check an appropriate criterion.
Fig. 2. Database editor window (own data)
Fig. 3. Characteristics of quality tools in the form of a tree diagram (own data)
132
Clicking on a particular type of an element in the tree changes the outlook
of the right side of the window. Selecting a tool causes the appearance of the
following tabs: Description, Alternative names, Application, Procedure of use,
Examples, Links. The first five tabs, divided into separate categories, allow to
add a tool description. Editing can be performed in the text box (for example,
by pasting the text) or by importing a text file in "RTF" format. The tab enti-
tled „Powiązania" (“Links”) allows to define relations between tools for easier
location of similar tools or those linked by another relation (Starzyńska,
2010). The relations are unilateral, i.e. if the tool A is a predecessor for the
tool B, the inverse relation does not occur automatically, one must add it
manually for the tool B. The application does not have restrictions on the
number of types of relationships. New types of links can be defined by click-
ing „Edycja powiązań” ("Edit links") (Fig. 4).
Fig. 4. “Edit links” window (own data)
In order to clarify the character of the criteria for quality tools search there
are two tabs available in the system database in the ‘tree’ of the database editor:
„Opis” (“Description”) and „Rodzaj kryterium” (“Criterion type”). Functioning of
the „Opis” tab is exactly the same as in the case of editing tool property. The con-
tent of the „Opis” box is used in the method of criteria matrix to inform a user
about the meaning of a given criterion. In the „Rodzaj kryterium” tab one can de-
fine a character of a searched tool through checking an appropriate box on the
screen. Additionally, the criterion can be marked as critical, what causes special
treatment of such a criterion when calculating the tool ranking (Fig. 5.).
133 133
Fig. 5. Types of criteria window (own data)
Choosing a feature in the knowledge editor tree a user has 2 tabs available:
„Opis” (“Description”) and „Sprzeczności” (“Conflicts”). The „Opis” tab works in
exactly the same way as the ones mentioned before. The content of „Opis” tab is
presented to a user in the method of criteria matrix after checking a feature of the
tool which was inserted in the generated ranking list. In turn, in the „Sprzec-
zności” tab, a user of the system – expert can define which of the tool features are
mutually exclusive. Defining the conflict is a bilateral relation, i.e. if a feature A is
inconsistent with B, it will automatically reverse the relation. Defining the conflict
will - according to the present method - block possibility of checking two contra-
dictory features for the same tool (Fig. 6).
A part of the database editor, i.e. methodology edition, allows entering the
mentioned methodologies of conduct in the area of process improvement (e.g.
PDCA) or problem solving (e.g. DMAIC). The methodologies are stored in the
form of tree diagrams. At each level one can define „Opcje” (“Options”) which a
user can select by going to the next sub-stages of a methodology. In addition, each
option can have a defined question (or statement) explaining what needs to be
determined in a particular methodological step.
134
Every methodological path needs to ‘end’ with an assignment of an appro-
priate quality tool (expert role), tool or ‘leap’ to another methodology (e.g. stage
of a similar nature).
Fig. 6. Defining conflicts window (own data)
In order to add a new methodology step, one needs to select an element

which will undergo a process of decomposition into sub-stages. After clicking
„Dodaj” (“Add”) on the toolbar the user – expert will be presented with a window
where he can enter the name of a new element and select a type of the new ele-
ment. Possible options include: option – question, leap and tool. „Pytanie”
(“Question”) is about defining a new choice or step in a given methodology (Fig.
7). „Skok” (“Leap”) allows to refer to another methodology or direct a user to a
different place of a currently viewed methodology. „Narzędzie” (“Tool”) is about
defining the final selection which a user can make using a particular methodology
path, i.e. it consists in hooking up – from the system database – a tool which can
be used at this stage.
135 135
Fig. 7. Edition of the stages of improvement methodologies/problem
solving (own data)
2.4.2. USER INTERFACE
The method of criteria matrix allows to find directly an appropriate tool meeting
criteria chosen by a user. The user proceeds to the next search steps by clicking on
the appropriate tab or using navigation buttons located at the bottom of the screen.
At each step one checks features of interest in certain tool describing criteria. At
any time it is possible to go to „Podsumowanie” tab (“Summary”), where a cur-
rent ranking of the tools meeting chosen criteria is located (Fig. 8 and 9).
Fig. 8. “Summary” tab (own data)
136
On the right side there is a visualization of the matrix showing features of a
viewed tool and information on which of the features chosen by the user are met
and which are not. Pointing the cursor at particular matrix cells the user receives
information about the name of the feature assigned to a particular cell. At the bot-
tom of „Podsumowanie” tab there is a ‘help’ divided into 6 categories describing
a highlighted tool. The help allows to become familiar with characteristics of a
given tool and to expand the user’s knowledge on its use (Fig. 9).
Fig. 9. An example of a tool ranking (own data)
Fig. 10. Priority window (own data)
In order to determine the characteristics of a searched tool more accurately, the

user can assign significance to each criteria to stress which features are important.
137 137
In addition, the criteria may be identified as critical to force the compliance with
the characteristics by the searched tool (Fig. 10).
Critical criterion is a special function which ensures that all selected fea-
tures within the criterion are strictly met by the searched tool. The tools not meet-
ing the critical features are not taken into account when calculating the ranking.
This results in significant restriction of a group of searched tools (the tab with a
critical criterion is marked with a red circle on the icon - next to the name).
2.4.3 GENERATING TOOL RANKING AND STUDYING

THE APPLICATION
Indicating choice criteria and features of the searched quality tool by a system
user leads to generating a ranking list of tools in the system. The ranking can be
viewed at any time of choosing the tool features by going to „Podsumowanie”
tab. The list presents a ranking of the tools sorted by compatibility with the user-
selected features. The outlook of the matrix allows for visual analysis of which
features are met by the selected tool. Each tool is given a description allowing for
getting acquainted with its characteristics. If a tool is described by a given crite-
rion, and the value of the feature has not been entered into the system through the
knowledge editor, it is highlighted by colouring the feature of such a criterion
black ( see Fig. 9), and the compliance of the tool is calculated in a different way.
The application remembers the changes made by the user while selecting the fea-
tures (or rather their states) in particular criteria in the method of criteria matrix (a
module of the same name is located in the main window of the application). The
database stores the order of criteria and feature selection made by the user. The
user, having used the selected tool, can go back to a previously saved session and
determine if the selected tool fulfilled his expectations in practise. The evaluation
of sessions is very important for the program to be able to determine if a given
selection “path” is appropriate. Collecting information about sessions in the sys-
tems allows for an effective search of a tool through using prior experiences of
other system users.
CONCLUSIONS
The proposed method of criteria matrix is an element of a developed

methodology of selection and application of quality management tools for im-
proving quality of production processes in a manufacturing company, while pro-
viding a complete use of employees’ knowledge. The prerequisite for developing
the search algorithm is the abundance and variety of quality tools presented in the
available textbooks and manuals in such a form that does not allow for their quick
and precise selection, especially during production processes. The main goal of
138
developing the method was a transition from the characteristics of given tools in
form of their unstructured description (tool description) to defining them via a
complete set of features, which, as a consequence, allow do define multiple crite-
ria for their choice (tool selector) by a user. Such a solution was a result of con-
ducted analyses of the tools and quality management methods which are present
in the literature and used by companies. Those tools and methods are claimed to
be particularly useful in operating conditions. The consequence of such an as-
sumption was the designing a selection procedure for choosing an appropriate
(searched) tool as a process of multicriterion selection. The development of the
method was thus connected with appointing a complete set of features characteris-
ing the tools, and with recognising and determining their possible condition. Each
feature takes one or more values assigned to a given feature – e.g. input data type,
as a feature distinguishing a tool, can have one of possible values: numerical or
non-numerical. The method of criteria matrix has been implemented as an execu-
tive algorithm of the computer program which supports – in certain production
conditions – a selection of the most useful quality tool (Starzyńska & Hamrol,
2012). Making use of the algorithm allows for selecting an appropriate tool, i.e.
the one that, to the highest degree, meets the selection criteria introduced by a
user, out of all criteria included in the created database of the quality management
tool system.
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140
Miladin Stefanović
Slavko Arsovski
Zora Arsovski
University of Kragujevac, Serbia
THE KEY ISSUES IN QUALITY ASSURANCE OF

ENGINEERING EDUCATION AND PREPARATION
FOR INTERNATIONAL ACCREDITATION
Key words: quality, engineering education
ABSTRACT
Engineering education as well as quality of engineering education is very important issues. In this
paper the main issues in quality assurance and enhancement system for engineering education will
be covered. Finally the development of new flexible study program models in order to reach in-
terdisciplinary for new qualification frameworks will be presented.
INTRODUCTION
Planning the implementation of quality assurance is a complex process that

depends on many different internal and external factors. Planning the implementa-
tion is defined by the capabilities of management to visualize the educational po-
sition of the University and to evaluate University’s strengths, weaknesses, oppor-
tunities and threats. Serving to the educational purposes, planning the implemen-
tation of quality assurance must be integrated into the University’s strategic objec-
tives and then transferred to other parts of the organization. Planning the imple-
mentation, as a part of strategy formulation, should be reflected in 1) University’s
vision and mission development, 2) goals setting, 3) strategy development aimed
at achieving goals, 4) implementation and execution of the strategy, and 5) moni-
toring, evaluation, control and readjustment of the strategy. Finally, planning must
account for all possible implementation barriers. In order to achieve general goals
following steps should be taken:
1) Consideration of all relevant frameworks such as: European and national
qualifications frameworks in the partner countries, Dublin descriptors,
„European Accredited Engineer (EUR-ACE) criteria- and Criteria
ASIIN´s Requirements and Procedural Principles
2) Reviewing quality standards for learning, education and training: ISO /
IEC 19796-1, ISO 9241, TQM.
Quality is at the heart of Europe s vision to become worldwide reference
for education and training by 2020. Generally the issues of engineering education
is very important and was treated in number of papers1, 2 both in the world and n
fast developing countries3, 4. In order to join to this process Serbia needs quality
assurance and enhancement system for engineering education. They could be
many different approaches that could lead to that direction. In this paper the major
issues in quality assurance of engineering education5, 6. Quality Assurance of en-
gineering education through accreditation could be one approach7, 8. The complete
process could be divided in two different processes. The first one is development
of quality assurance and enhancement system for engineering education and de-
velopment of new flexible study program models in order to reach multidiscipli-
nary and new qualification framework. In this paper we will also present the set of
possible actions for both processes that could eventually lead to improvement of
engineering education.
1
Mathur R. M., Venter R. D., Quality Assurance of Engineering Education in Canada: its suitabil-
ity for graduates working in global markets, Vol. 16, Int. J. Engng Ed.,Canada, 2000.
2
Arsovski Z, Approach to Quality Assurance in Higher Education - International Journal for Qual-
ity Research, Vol. 1, Center of Quality, University of Montenegro, Montenegro, Center of Quality,
University of Kragujevac, Serbia, 2007.
3
Carnoy M., Dossani R., Tilak J., Understanding the Expansion and Quality of Engineering Edu-
cation in India , Stanford University, 2010.
4
Banerjee R., Muley V.P. , Engineering education in India, Published by Observer Research
Foundation Mumbai, India, 2007.
5,
Spasos S., Aleksandris A., Petropoulos G. and Vaxevanidis N.M., Implementation of efqm
model in a Greek engineering higher education institute: a framework and a case study - Interna-
tional Journal for Quality Research, Vol. 2, Center of Quality, University of Montenegro, Monte-
negro, Center of Quality, University of Kragujevac, Serbia, 2008.
6
Shekhar S. N. C., Rao K. N. and Subbaiah K.V., Enhancing the Quality of Engineering Educa-
tion Institutions (EEIs) Through GAP Analysis - International Journal for Quality Research, Vol.
4, Center of Quality, University of Montenegro, Montenegro, Center of Quality, University of
Kragujevac, Serbia, 2010.
7
Prados J. W., Peterson G. D., Lattuca L. R., Quality Assurance of Engineering Education through
Accreditation: The Impact of Engineering Criteria 2000 and Its Global Influence, Journal of Engi-
neering Education, Jan 2005.
8
Reyes N. R. , Candeas V., Cañadas F., Reche P. and Galán S. G., Accreditation and Quality As-
surance of Engineering Education Programs in the European Higher Education Area, New Chal-
lenges in Engineering Education and Research in the 21st Century, Budapest, 2008.
142
1. QUALITY ASSURANCE AND ENHANCEMENT SYSTEM FOR
ENGINEERING EDUCATION
This first process needs to establish infrastructure and framework

for ensuring the quality assurance in engineering education. This covers three
steps: (1) Establishment of Committee for quality of engineering education; (2)
Promotion of necessity of quality assurance and enhancement system based on the
best international practice and (3) Implementation of quality assurance and en-
hancement system at beneficiary faculties.
1.1 Establishment of Committee for quality of engineering education
Establishment of Committee assures that quality of engineering education

will be introduced, checked and the most important measured using the same cri-
teria. This Committee could support permanent bodies on Serbian Universities,
coordinate their activities, monitoring procedures of quality assurance for engi-
neering education, work on improvement of internal processes and quality man-
agement, keep public relations and work on specific projects such as international
offices establishment etc.
This Committee could be composed of experts in academia, scientific as-
sociations and industry and also include one student representative. They com-
prise the persons most knowledgeable about accreditation procedures, standards
and systems of higher education in general.
The most important issue is selection and training of persons that will con-
sist Committee for quality of engineering education.
1.2 Promotion of necessity of quality assurance and enhancement system

based on the best international practice
This action should promote necessity of QA system based on the best in-
ternational practice in order to promote vision of diverse system with shared goals
all over the Europe, in accomplice with mutual quality assurance principles. In
order to achieve this goal it is necessary to:
1) Establishment of a group of quality assurance promoters;
2) Promotion of necessity of QA on three tracks:
a) Importance for prospective students;
b) Placement of graduates on the labor market; and
c) Demands from the relevant professional field.
3) Promotion importance of QA because it is crucial to keep the outcome ori-
143 143
ented process balanced and provides mechanism for control of educational
process.
1.3 Implementation of quality assurance and enhancement system at benefi-

ciary faculties
A quality assurance system for educational activities is a prerequisite for

an accreditation.
Quality assurance should provide:
1) A quality assurance system shall sufficiently document quality assurance
work.
2) A quality assurance system shall uncover poor quality.
3) A quality assurance system shall include all processes of importance for
educational quality.
4) The institutions shall have routines enabling the continuous improvement
of the system.
According to reviewed material and the best European practice with full support
of for quality of engineering education, Serbian universities should take following
action s in order to implement developed QA system:
1) Development of self-assessment procedures for engineering education.
2) Training of people for self-assessment and writing of self-report.
3) Performance of self-assessment and identification of necessary measures
and actions.
4) Implementation of procedures for quality assurance at beneficiary facul-
ties.
2. DEVELOPMENT OF NEW FLEXIBLE STUDY PROGRAM MODELS

IN ORDER TO REACH INTERDISCIPLINARITY AND NEW
QUALIFICATIONS FRAMEWORKS
The second process represents actions in development of specific study

program models using developed infrastructure. This covers three steps: (1) Re-
view of current standards in engineering education and contemporary
qualifications frameworks; (2) Creation of new flexible study program models in
order to reach interdisciplinarity and new qualifications frameworks and (3) De-
veloping of partnership with enterprises through student practice organization.
144
2.1 Review of current standards in engineering education and contemporary
qualifications frameworks
New flexible study program models should be based upon following is-
sues, using best practice from Europe:
1) Identification of engineering education outcomes.
2) Development of set of requirements and procedural principles contain a
list of educational outcomes for engineers.
3) Separation of two fields: specialist competencies and social competencies.
4) Clear definition of the knowledge, skills, competencies (specialist and so-
cial) to be achieved in the engineering programs.
5) Definition of measures by which these competencies are to be achieved.
2.2 Creation of new flexible study program models in order to reach

interdisciplinarity and new qualifications frameworks
The study program has core importance for quality education. Creation of
new flexible study program models should be performed through folowing steps:
1) Definition of study programs oriented towards the targeted objectives and
qualification profiles.
2) Definition of formal outcome of an assessment and validation process
which is obtained by individual has achieved learning outcomes to given
standards (Figure 1).
3) Definition of competency profile that describe enables graduates to have
employment corresponding to their qualification.
4) Identification of demands from industry.
5) Definition of the structure of the programs (Table. 1 and Table. 2, accord-
ing to ASIIN recommendations9).
9
Shekhar S. N. C., Rao K. N. and Subbaiah K.V., Enhancing the Quality of Engineering Educa-
tion Institutions (EEIs) Through GAP Analysis - International Journal for Quality Research, Vol.
4, Center of Quality, University of Montenegro, Montenegro, Center of Quality, University of
Kragujevac, Serbia, 2010.
145 145
Table. 1. ASIIN - General Mechanical Engineering
Bachelor, mechanical engineering, more research-oriented (based on ECTS ECTS
the example of the 6th semester) % CP
Mathematic-scientific fundamentals
min. 18 min. 32
Mathematics, chemistry, physics, informatics
Engineering fundamentals
Technical mechanics/mechanical dynamics/theory of vibrations, fluid
mechanics, technical thermodynamics, electrical engineering and elec-
min. 28 min. 50
tronics, materials engineering, measurement engineering and control
engineering , fundamentals of the elective subject (techn. physics, techn.
informatics, etc.)
Engineering applications
min. 12 min. 22
Construction/product development/manufacture
Advanced subjects, focal subject
min. 6 min. 10
orientated on fundamentals according to choice
Cross-subject contents
Subjects in the fields of economics, non-technical electives, languages min. 10 min. 18
(as far as not taught in the afore-mentioned subjects)
Bachelor’s Thesis: 12
Practical training (technical laboratory) min. 6
Total CP 180
Table. 2. ASIIN - General Mechanical Engineering

Master, mechanical engineering, more research-oriented, ECTS ECTS
(on the example of the 4th semester) % CP
Advanced fundamentals in mathematics, natural sciences and engi-
neering
Mathematic methods, advanced mechanics or heat and matter trans- min. 19 min. 22
fer, technical informatics, elective subject (construction theory, techn.
physics, etc.)
Advanced engineering applications
Machine engineering, production technology, energy management, etc. min. 19 min. 22
(incl. laboratory, industrial placement)
Advanced subjects, focal subject
min. 22 min. 26
Orientated on fundamentals according to choice
Cross-subject contents
Subjects in the field of economics, non-technical electives, languages min. 10 min. 12
(as far as not taught in the afore-mentioned subjects)
Master’s Thesis min. 15
Practical engineering activity (technical laboratory, as far as not con-
min. 5
tained in previous studies)
Total CP 120
146
Figure 1. Focus on outcomes
2.3 Developing of partnership with enterprises through student practice or-

ganization
It is very important that engineering education ensure industry focus, re-

search focus, industrial placements and professional qualification conferred by the
degree. The competency profile for engineering education enables graduates to
take up employment corresponding to their qualification. In order to achieve these
goals it is important to develop partnership with enterprises to ensure:
1) That an adequate connection to professional practice has been integrated
into the programme (external placements, laboratories, projects, etc.).
2) Graduates are well prepared to work in existing or foreseeable professional
fields and to face challenges in their (specialist) field.
Besides it is important to have:
1) Data, statements and forecasts on demand from industry are available.
2) Existing labour market demand for graduates with the relevant qualifica-
tion profile.
All of this could be achieved by developing partnership with enterprises through:
students practice, students projects for industry, demands from industry for new
skills.
147 147
CONCLUSIONS
International accreditation could contribute to higher internationalization

of faculties and universities as well as faster integration in EU educational envi-
ronment.
Engineering education demands laboratories and organization of educa-
tional process in industrial environment as well as dynamic and flexible educa-
tional process and quality teachers.
In this paper we presented on of the possible approach in improving the
quality of engineering education through two steps: development of quality assur-
ance and enhancement system for engineering education; and development of new
flexible study program models in order to reach multidisciplinary and new quali-
fication framework. Considering that this profile of education is very important
for modern society and creation of new value the quality of engineering education
is important issue10.
REFERENCES
[1] Mathur R. M., Venter R. D., Quality Assurance of Engineering Education in Canada: its
suitability for graduates working in global markets, Vol. 16, Int. J. Engng Ed.,Canada,
2000.
[2] Arsovski Z, Approach to Quality Assurance in Higher Education - International Journal for
Quality Research, Vol. 1, Center of Quality, University of Montenegro, Montenegro, Cen-
ter of Quality, University of Kragujevac, Serbia, 2007.
[3] Carnoy M., Dossani R., Tilak J., Understanding the Expansion and Quality of Engineering
Education in India , Stanford University, 2010.
[4] Banerjee R., Muley V.P. , Engineering education in India, Published by Observer Research
Foundation Mumbai, India, 2007.
[5] Spasos S., Aleksandris A., Petropoulos G. and Vaxevanidis N.M., Implementation of efqm
model in a Greek engineering higher education institute: a framework and a case study - In-
ternational Journal for Quality Research, Vol. 2, Center of Quality, University of Montene-
gro, Montenegro, Center of Quality, University of Kragujevac, Serbia, 2008.
[6] Shekhar S. N. C., Rao K. N. and Subbaiah K.V., Enhancing the Quality of Engineering
Education Institutions (EEIs) Through GAP Analysis - International Journal for Quality
Research, Vol. 4, Center of Quality, University of Montenegro, Montenegro, Center of
Quality, University of Kragujevac, Serbia, 2010.
[7] Prados J. W., Peterson G. D., Lattuca L. R., Quality Assurance of Engineering Education
10
Arsovski S., Arsovski Z., Andre P. and Stefanović M., Relation Between Organizational – and
Information Resilience: Away for Improvement of System Capacity - International Journal for
Quality Research, Vol. 4, Center of Quality, University of Montenegro, Montenegro, Center of
Quality, University of Kragujevac, Serbia , 2010.
148
through Accreditation: The Impact of Engineering Criteria 2000 and Its Global Influence,
Journal of Engineering Education, Jan 2005.
[8] Reyes N. R. , Candeas V., Cañadas F., Reche P. and Galán S. G., Accreditation and Quality
Assurance of Engineering Education Programs in the European Higher Education Area,
New Challenges in Engineering Education and Research in the 21st Century, Budapest,
2008.
[9] Möhren J, (2010), The Accreditation Process and Criteria - International Accreditation of
Engineering Studies June 16, German University in Cairo (GUC), 2010.
[10] Arsovski S., Arsovski Z., Andre P. and Stefanović M., Relation Between Organizational –
and Information Resilience: Away for Improvement of System Capacity - International
Journal for Quality Research, Vol. 4, Center of Quality, University of Montenegro, Monte-
negro, Center of Quality, University of Kragujevac, Serbia , 2010.
Acknowledgment
Research presented in this paper was supported by Ministry of Science and Technological Devel-
opment of Republic of Serbia, Grant III-44010, Title: Intelligent Systems for Software Product
Development and Business Support based on Models.
149 149
Amalia Venera Todorut
“Constantin Brâncusi” University of Târgu-Jiu, Romania
THE IMPORTANCE OF ORGANIZATIONAL

CULTURE TOWARDS QUALITY IN THE SOCIETY
BASED ON KNOWLEDGE
Key words: culture, organization
ABSTRACT
To have a strong organizational culture, oriented toward quality, implies: entire staff awareness
regarding “quality”, continuous use of quality management principles en entire organization, re-
gardless of hierarchy, promotion of the values and behavioural rules strengthening “quality” and
idea that whatever organizational target is, it is fulfilled only through a constant pursuit on stake-
holder’s satisfaction.
I present the characteristics of the new organizational culture in society based on knowledge and
the efficiency of the organizational culture toward quality.
INTRODUCTION
Culture is considered to be the invisible “force” behind easily observable

and tangible things within an organization and it is also, the social energy that
causes people to act. We may compare the organizational culture of an organiza-
tion with an individual personality, which meets a number of visible and less visi-
ble issues, but provides vision, purpose, direction and energy for development.
Any organization can be seen as a social structure consisting of a group of
people who work together to achieve the organization’s goals. The success of an
organization is conditioned on whether the staff acted as one to achieve its goals.
A major factor influencing the unit of personnel action is the “organizational cul-
ture”.
Two of the most commonly encountered senses in the literature are pre-
sented1:
1) The organizational culture is the “personality of the organization”;
2) The organizational culture is a set of traditions, values, procedures, concepts
and attitudes that create the context of everything we do and think within the
organization.
1
Popa, I., Dobrin, I., Cultura organizațională orientată spre client, in revista „Calitate-acces la
succes”, anul 10, nr. 4, 2009, pp. 27
The author who had an overwhelming contribution in clarifying this con-
cept is Edgar Schein2, who defines the notion of culture as: “a pattern of basic
assumptions – invented, discovered or developed by a given group, as it learns to
cope with their problems of external adaptation and internal integration – that has
worked well enough to be considered valid and, therefore, to be assimilated by the
new members of the group as the correct way to perceive, think and feel about
these problems”.
Culture is presented more as a configuration with powerful procedural
elements than a structure in the classical sense of this concept. The essence of the
organizational culture is not what is visible on the surface, but what is shared by
the groups of people in the organization and how they understand and interpret the
culture.
Organizational culture is a combination of human elements, conscious and
unconscious, rational and irrational, group and individual, between which runs
complex and fluid inter-influences, with a major impact on the functionality and
the performances of the system.3
Organizational culture is the set of principles, values, attitudes, beliefs and
expectations shared by the environment of an organization, and the quality of cul-
ture means “all the knowledge gained or recognized of values referring to quality,
on which the organization develops its own capacity to survive in its external en-
vironment and administer their own affairs”.4
The new culture of quality should be directed to create new value added, in
all aspects, and the quality culture approach involves the internal and external
stakeholders’ engagement.
1. THE CULTURE OF QUALITY IN THE ORGANIZATION
The complexity of the concept of organizational culture is given by the in-

disputable connection between quality culture and performance. The establish-
ment of a theoretical framework of the organizational culture can be done by ex-
amining the relationships on two axes: internal-external and flexibility-control.5
The first reflects the organization’s orientation to internal dynamic or external
2
Schein, E., Organizational Culture and Leadership, Jossey-Bass, A Wiley Imprint, 4th edition,
San Francisco, 2010, pp. 32-36
3
Verboncu, I.,(coordonator), Strategie-cultură performanță, Editura Printech, București, 2008, pp.
84;
4
Stanciu, I., Managementul calității totale, Editura Cartea Universitară, București, 2003, pp. 56
5
Nguyen, N., Gestion de la qualite, Ed. Cheneliere Education, Montreal, 2006, pp. 84.
151 151
environment, while the second expresses a preference for control or flexibility in
the organizational structure.
Combining the two axes creates five forms of cultural orientation, includ-
ing in quality domain:
a) Hierarchical culture (stability and control by coordination, communication,
information);
b) Group culture (cohesion and ethics through training and development);
c) Rational culture (productivity and efficiency by planning, appropriate goals
and objectives);
d) Development culture (confidence, acquisitions of resources, external sup-
port through adaptive capacity);
e) Corporative culture;
Quality culture within the organization should be based on a long term vi-
sion and is characterized by confidence, creative thinking and investment in train-
ing.6 In addition, this culture should be based on the principles of total quality
management.
Confidence, as a feature of quality culture, may be the “reliable word or
promise made by one part to another”. 7 Confidence is the underlying assumption
that the parties meet their obligations. The multidimensional approach of mutual
confidence requires the following elements: good communication, a greater sensi-
tivity to differences and diversity within the organization or external environment
and the decentralization of the decision-making power and a greater autonomy of
the work teams.
Confidence brings an important contribution to the personal development
of the organization’s members, to their ability to cooperate, to establish a better
organizational climate, to the effectiveness of problem-solving processes and to
improve the overall performance. Confidence also allows the creation or strength-
ening of an organizational culture, oriented towards the continuous improvement
of quality and excellence.
Creative thinking has an important role, expressed through creativity,
which plays a decisive role in the renewal and improving of quality. The small
teams have a fundamental role and they allow the development of the creative
spirit, thus, helping to improve the working climate, the communication among
members, the greater openness and freedom to advance ideas. Creative thinking is
enhanced by an appropriate participatory management and staff’s ability.
6
Paraschivescu, A., O., Managementul excelenței, Editura tehnopress, Iași, 2009, pp. 73
7
Paraschivescu, A., O., Managementul excelenței, Editura tehnopress, Iași, 2009, pp. 73
152
To all these, the investment in training is added, which represents a sus-
ceptible element, which contributes to the formation and enrichment of the quality
culture. The training programs are open to all members of the organization. Total
quality strategy must be understood by all the employees to raise awareness, mo-
tivate them to do right from the first time and every time and to give the customer
the place it deserves. The organizations with a favourable climate for quality cul-
ture have some common characteristics that are based on stakeholders, innovation,
staff, new created value, on the development and promotion of quality culture, as
seen in Figure 1:
The knowledge and satisfaction of

the stakeholders’ requirements
Staff’s training
Quality and accountabil-
culture Characteristics ity
Continuous improvement through

innovation; new created value for the
customer
Fig.1 – The characteristics of the organization with a favourable

climate for the quality culture
Quality culture is therefore based on a value system that exists within an

organizational environment and which is oriented towards the maintenance and
continuous improvement of quality.
2. ORGANIZATIONAL CULTURE AND THE TOTAL QUALITY

MANAGEMENT
To be able to describe the existing correlations between the organizational

culture and TQM implementation, the idea of Edgar Schein8 has represented a
8
Schein, E., Organizational Culture and Leadership, Jossey-Bass, A Wiley Imprint, 4th edition,
San Francisco, 2010, pp. 77
153 153
starting point, which considers six component elements of the organizational cul-
ture:
a) Behaviour rules;
b) Norms in work teams;
c) The dominant values adopted;
d) The rules established for an efficient functioning of the company;
e) The philosophy that guides the organization politics towards customers and
its own employees;
f) The spirit and the climate within the company and the way in which the or-
ganization’s members interact with those outside it.
The culture of an organization is, therefore, an assembly of characteristics
which distinguish it from any other organization and represent its intangible pat-
rimony. In this context, the quality strategy is, deeply, influenced and conditioned
by the level and complexity of the organizational culture. The creation of a coher-
ent and successfully applicable strategy is possible only in the context of a com-
plete and correct adaptation to the existing organizational culture. On the contrary,
the strategy will be seen as a strange body and a strong phenomenon of rejection
will stop its implementation.
In its turn, the quality strategy is on short, medium and long term for the
organizational culture, as9:
a) On short term, by violent shocks, in case of a major disagreement between
the proposed strategy and the existing organizational culture;
b) On medium term, by the transformation and gradual adaptation of the or-
ganization culture to the needs of strategy functioning and its effectiveness;
c) On long term, by the prefiguration of a new set of values able to sustain and
develop the elaborated strategy.
Thus, it can be concluded that between the two entities, strategy of quality
and organizational culture, there is a bi-univocal correspondence.
The key to an effective implementation of TQM is TQM understanding
not as a management tool, but as a fundamental change in the management phi-
losophy. TQM can not be installed in an organization, it may be rooted in the or-
ganizational culture, both developed by the top management and maintained by
members of the organization.
The emphasis is on developing an organizational culture, which is com-
patible with TQM tools and techniques and it is important to realize that the in-
9
Popa, I., Dobrin, I., Cultura organizațională orientată spre client, in revista „Calitate-acces la
succes”, anul 10, nr. 4, 2009, pp. 29
154
stallation of these tools and techniques the organization in the organization is not
equivalent to implementing quality. TQM can not be confined only to this stage,
which is nothing but a necessary condition, but not sufficient for the existence of
total quality. TQM is a fundamental change in the management philosophy of the
organization10, the term “total” suggesting that the entire organization must be
involved.
It is obvious that TQM is more than management tools and techniques,
because it can not be installed as a software program. The effective implementa-
tion of TQM is dependent on a compatible organizational culture. In the literature
there are identified eight cultural elements that lead to the development of an ap-
propriate TQM environment11:
1) The information on quality should be used to improve, not to judge or con-
trol the organization’s staff. The role of information should be the one
which helps solve the problems arising in connection with customers’ satis-
faction. If employees feel that negative information will result in sanctions,
the management will not have access to this information;
2) An organizational culture oriented towards quality is a long process. The
set up of the quality management system determines major changes in the
general management of the organization. The entire management of the
organization is reshaped so that it can guide and control the organization
towards quality, in the direction of obtaining the maximum satisfaction for
all those who are interested in the organization’s results. Also, the cultural
values promoted with the implementation of quality management system
are a consequence of the changes emerged in the organizational culture.
For the change – as a sequence of organizational events – to be
successful, more steps are required, as shown in figure number 2:
Also, the success of the change process, as a psychological process, is
conditioned on how the change is perceived, both at individual and organizational
level. This change takes place on the following areas: cognitive, behavioural and
action12, as shown in figure number 3:
The success of setting up a quality management system, as a process of
changing the organizational culture, is closely related to how the organization
10
Murray, M., Total Quality Management (TQM), About.com Guide, New York, 2011, pp. 156
11
Sashikm, M., Kiser, J., K., Putting Total Quality Management to work; What TQM means, How
to Use it and How to Sustaint it over, Berett-Koehler Publisher, Dallas, 1993, pp. 79.
12
Popa, I., Dobrin,I., Cultura organizațională orientată spre client, in revista „Calitate-acces la
succes”, anul 10, nr. 4, 2009, pp. 30
155 155
staff responds to this process from a cultural aspect. To get a positive response it
is necessary for the organization staff:
The involvement of all employees in the changing process;
The planning of activities that will support the change;
Implementation of the planned elements;
The evaluation of the results obtained from change;
Institutionalization of change (maintaining the need of producing

changes to continuously improve quality)
Fig. 2 – The necessary steps in the process of change
a) To know what is the implementation of the quality management system at

individual and group level (the cognitive plan);
b) To have a positive attitude to changes that involve the configuration of the
quality management system (the action plan);
c) To develop a certain individual and group behaviour, which sustains the
implementation and maintenance of a performant quality management sys-
tem (the behavioural plan);
The implementation of TQM principles is possible only by creating a
strong culture, through the awareness of all staff, on what quality means in the
current context.
156
Behavioural Plan
Cognitive Plan Emotional tenden- Action Plan
Faiths, knowledge, cies as a response to Action (behavioural
values related to differ- different situations acts) done to assimi-
ent situations or events or events late the role
Fig.3 – The plans of change
Particularly significant in shaping and developing a culture that will

allow getting the total quality is the approach of a set of elements, which deter-
mine the full involvement of the staff. Therefore, we must take into account a
number of exogenous and endogenous variables in the holistic approach of staff
involvement.
Professional ethics
Subjective norms
Usefulness
perception
Intention of in-
Attitude towards volvement
involvement
Risk percep-
tion
Auto-efficiency
Employees’ involve-
ment
Fig.4 – The conceptual model of employees’ involvement
157 157
Exogenous variables refer to professional ethics, subjective norms, per-
ceived usefulness, and perceived risk.13 Attitude towards change and the intention
to involve are the intermediate endogenous variables and the effective involve-
ment is an endogenous variable. We propose a conceptual model concerning the
relationship between the employees’ involvement, attitude and intention in the
context of TQM, in figure number 4:
This model emphasizes the relationship between the TQM practices, in-
cluding leadership, culture, quality, staff involvement and quality performance.
CONCLUSIONS
To have a strong organizational culture, oriented towards quality, it is nec-

essary to reach the following issues: the awareness of all staff on the importance
of quality; consistent application of quality management principles throughout the
organization; the promotion within the organization of those values and behav-
ioural norms that support the idea of “quality”, of the idea that whatever is the
goal of the organization, this is achieved only by a constant preoccupation to sat-
isfy all those interested in the organization’s results.
Having an organizational culture oriented towards quality, implies the
existence within it of some values, perceptions and representations strongly
related to quality. Thus, “quality” becomes an important element of organizational
cohesion and, at the same time, one of the most important factors, which
determines the success of the organization.
REFERENCES
[1] Murray, M., Total Quality Management (TQM), About.com Guide, New York, 2011, pp. 156;
[2] Nguyen, N., Gestion de la qualite, Ed. Cheneliere Education, Montreal, 2006, pp.84, 507;
[3] Paraschivescu, A., O., Managementul excelenței, Editura tehnopress, Iași, 2009, pp. 73
[4] Popa, I., Dobrin,I., Cultura organizațională orientată spre client, in revista ”Calitate-acces la
succes”, anul 10, nr. 4, 2009, pp. 27-30;
[5] Sashikm, M., Kiser, J., K., Putting Total Quality Management to work; What TQM means,
How to Use it and How to Sustain it over, Berett-Koehler Publisher, Dallas, 1993, pp.79.
[6] Schein, E., Organizational Culture and Leadership, Jossey-Bass, A Wiley Imprint, 4th edition,
San Francisco, 2010, pp. 32-36, 77;
[7] Stanciu, I., Managementul calității totale, Editura Cartea Universitară, București, 2003, pp. 56
13
Tang, Z., Chen, X., Wu, Z., Using behavior theory to investigate individual level determinants
of employee involvement in TQM, in Total Quality Management, 2010,
http://www.tandfonline.com/loi/ctqm20, accesed March 12th, 2012
158
[8] Tang, Z., Chen, X., Wu, Z., Using behaviour theory to investigate individual level determi-
nants of employee involvement in TQM, in Total Quality Management, 2010,
http://www.tandfonline.com/loi/ctqm20, accesed March 12th, 2012
[9] Verboncu, I., (coordinator), Strategie-cultură performanță, Editura Printech, București, 2008,
pp. 84;
159 159
Ada Mirela Tomescu
University of Oradea, Romania
STUDY REGARDING THE CULTURE

OF QUALITY IN BIHOR COUNTY FIRMS
Key words: culture of quality, enterprise, Romania
ABSTRACT
The aim of this study is to create a better understanding of how one can make sense of the concept
of quality culture, and its intensity measured in Romanian enterprises located in Bihor County.
In this paper, we concentrate on the following objectives:
- to construct a tool and to develop its own methodology;
- to measure the intensity of the culture of quality in the organizations operating in bihor
county;
- to identify the differences, if any, between the culture of quality in the various firms.
- to emphasize relevant features referring to the culture of quality in bihor firms.
This study was conduct last year (2011) in 50 enterprises, located in a County form the North-
western part of Romania, which amounts for 3.2% of country’s territory of the country, hosting
approx. 549,752 inhabitants, making it 12th largest County in Romania in terms of population.
Bihor county's economy is characterized by continuous development. Compared to other counties
or its proximity to Hungary, it may be one of the counties privileged in terms of its economic level
of activity; in terms of contribution to the state budget, Bihor County is the 5th largest contributor
(after Bucharest and Constanta, Prahova, Bacau) and the 2nd largest in the North-West of the coun-
try, after Cluj.
In Bihor county firms there is a tireless preoccupation of the managers to develop a culture of
quality and to improve its capability to provide quality. Most of the managers belong to the last
typology of the three presented above.
The employees are to a great extent the supporters of continuous improvement of quality. It is
important that they capitalize the continuous improvement in the daily practice, the motivational
system in the firm being vital in this view.
Yet, insignificant, there is a difference between the firms with foreign controlling capital and the
firms with Romanian controlling capital.
INTRODUCTION
The purpose of our study is to measure the intensity of the culture of qual-
ity in the Romanian organization, for quality is strongly related to the organiza-
tional culture, therefore the purpose of the study carried out and its results are pre-
sented in this paper concentrate on the following objectives:
- To construct a tool and to develop its own methodology which we could
measure with the intensity of the culture of quality in an organization.
- To measure the intensity of the culture of quality in the organizations op-
erating in Bihor county. Taking into consideration the size of such a study and the
costs involved, we have been constrained to Bihor county, planning, in not such a
far future, to expand our study to the level of the entire Romanian market.
- To identify the differences, if any, between the culture of quality in the
firms with foreign controlling capital and those with Romanian controlling capi-
tal.
- To emphasize other relevant features referring to the culture of quality in
Bihor firms.
-
1. METHODOLOGY AND WORK HYPOTHESIS
The survey was drawn up taking into account the following dimensions
defining the culture of quality in a firm (TQM principles):
1) The Pro-quality Leadership. The first ten questions of the survey
target the pro-quality leadership exercised within an organization. Obviously, it is
determinative for the culture of quality within an organization. Its capability to
acquire quality, an aspect emphasized by the SR EN ISO 9001/2001 quality stan-
dard, by the TQM principles, and also by the majority of models of excellence
such as EFQM shows this connection.
2) Customer orientation. The set of questions from 11 to 17 are
meant to measure the orientation of the organization towards the customer. It will
never be possible to talk about a culture of quality when the orientation towards
the customer is absent.
3) The exploitation of the innovative potential of the employees. The
set of questions from 18 to 20 targets the analysis of the way in which the prem-
ises to exploit the innovative potential of the employees are created, especially
exhibited as suggestions for improvement.
4) Starting from the continuous improvement principle. If the em-
ployees are not receptive to change, they will not be the advocates of continuous
learning as a fundamental premise of progress, characteristic to any organization
learning and applying the continuous improvement, the organization will never
reach excellence. Excellence being the desideratum leading to acknowledgment
and success. Question 24 evaluates the extent to which the employees consider
themselves responsible for the quality of results obtained. To consider yourself
responsible for the quality of the results obtained represents the most appropriate
form of feedback for performance in work, being a premise meant to overcome
real/current limits, implicitly for the continual improvement of the process/system
in which the employee brings his contribution. To consider yourself not responsi-
161 161
ble for the quality of the results obtained makes you find other people to blame
and not solutions when there are certain problems/generating inaccuracies. It is
rather created a striving, non-cooperating atmosphere to the disadvantage of a
constructive, stimulating atmosphere, oriented towards solution identification.
5) Process orientation. The set of questions 25-26 were drawn up
starting from the process orientation as a fundamental principle of quality man-
agement. Question 25 measures the trans-departmental cooperation absolutely
necessary, considering the fact that quality is the result of a trans-departmental
process. The existence of a trans-departmental cooperation demonstrates the fact
that the employees, no matter the department they belong to, subscribe to a com-
mon purpose, to satisfy the customer to the highest level. Question 26 refers to the
communication quality in an organization. Communication is the basis of a trans-
departmental process in order to obtain quality results.
6) The involvement of the entire personnel represents one of the fun-
damental principles of total quality management (TMQ), and the empowerment of
the employees represents an advanced form of their involvement. Question 27
deals with the problem of empowerment, its importance to achieve quality being
related to efficiency and quality results.
Empowerment = alignment + authority+ capability + commitment1
The alignment implies the subordination of all the employees’ activities to

the superior purposes of the organization in order to achieve them.
A relevant example of authority given to employees is that of the Ritz-
Carlton hotel company, within which each employee is authorized to spend up to
2,000USD, outright, to solve a guest’s problem, so that the guest is satisfied2.
The employees’ capability refers to the fact that the employees must know
the actions they must engage in and how to react in order to achieve the objectives
set.
The commitment implies the employees taking responsibility to achieve
the success of the organization, doubled by concrete initiatives in this direction.
For an organization it is vital to get the employees’ commitment, continuously
demonstrating them that they are valuable members of the organization, being
1
Juran M. Joseph, Godfrey A. Blanton, Manualul calităţii Juran, Editat de SRAC, Bucureşti 2004,
pp. 15-20.
2
Bruhn Manfred, Orientarea spre client – temelia afacerii de succes, Editura Economică,
Bucureşti, 2001, pp. 275.
162
grateful and rewarding them appropriately. Some companies name these employ-
ees, suggestively, champions.
7) Teamwork. Question 28 targets the teamwork, so necessary to
solve some more and more complex problems the contemporary organization has
to face. Practice often confirms that the team is essential to efficiently achieve
success following the well-known paradigm that the whole is bigger than the sum
of its parts.
8) Preventive attitude – the target being “zero defects”. Question 29
was conceived starting from the defect prevention principle. We are aware of the
fact that it is much cheaper to prevent than to rectify. Considering the fact that the
customer’s degree of satisfaction will be determined by the performance of the
entire value-generating system, the organization will have to manage partnerships
with the other members of the chain (suppliers, distributors). Question 30 refers
exactly to this aspect.
9) Question 31 starts from the premise according to which human re-
source is the most important resource of an organization, its quality influencing
significantly the capability of the organization to provide quality. The investment
in the human resource will be determinant for the road towards excellence of the
organization.
The starting hypotheses of our study are the following:
- the organizations have or have not developed a great culture of quality;
- there is a difference between the culture of quality in the majority organi-
zations with foreign controlling capital and those with Romanian control-
ling capital, meaning that in the organizations with foreign controlling
capital the culture of quality is stronger than in the national organizations;
By the methodology we conceived, we allowed a score of maximum 100
points to each variable included in the applied questionnaire.
The scale applied to each question corresponds to the following score: to a
very great extent – 100 points; to a great extent – 75 points; to a small extent – 50
points; to a very small extent – 25 points; at all – 0 points. Thus, the maximum
score can be obtained by a firm by applying the survey and which reflects the in-
tensity of the culture of quality, is of 100 points.
We present further the results of the research carried out.
2. THE MEASUREMENT OF THE INTENSITY OF THE CULTURE OF

QUALITY IN BIHOR COUNTY FIRMS
For this research, we chose a sample of 50 enterprises activating in Bihor

county from the small and middle sized category. The small enterprises were not
163 163
included in the sample for some of the aspects targeted by the survey questions
are specific only to small and middle sized enterprises. For instance, it is rather
difficult to talk about an organization’s mission in the case of a firm with 5 em-
ployees, when a great deal of these firms have not declared their mission or do not
have a strategic overlook on their future.
The period of research is May-July 2012, and the sampling method is the
snowball method. The instrument used in this research is the survey. It has been
applied to middle managers in the firms, especially to the quality manager or the
person in charge with quality. We have made this decision for we considered that
a middle manager can be objective, equidistant regarding the evaluation of the
managerial team and of the employees at the operational level.
The first premise of this research refers to the fact that the organizations
functioning in Bihor county have not developed a strong culture of quality.
After quantifying the score obtained by all the 50 firms in the sample, the
following resulted:
- the minimum score obtained within the sample was of 45,94 points ;
- the maximum score obtained within the sample was of 89,86 points;
- average score is of 73,18 points.
These results, especially the average score of 73,18 points, invalidate to a
great extent the first hypothesis of the research according to which the organiza-
tions activating in Bihor county have not developed a strong culture of quality.
Yet, the following observations are required:
- The application of the survey to a member of the managerial team has
positively influenced, to a certain extent, the average score obtained.
- The intensity of the culture of quality at the managerial team level is, gen-
erally, higher than at operational levels. Therefore, the culture of quality
loses from its intensity in the transmission process from the leadership
level to the operational level. The phenomenon is identical to the transpor-
tation process of the thermal/heat agent from the supplier (The Electric
Power Company) to the beneficiary (the consumers of heat energy), one
being the temperature when supplying and another when receiving. In both
cases, the increase of the efficiency of the transmission system is followed,
the transport system respectively.
- The homogenization of the culture of quality in the entire organization can
be achieved only through an aggressive pro-quality leadership (in the good
sense of the word) through an innovative motivational system and through
an appropriate personnel recruitment policy.
164
3. THE MEASUREMENT OF THE DIFFERENCE BETWEEN THE
INTENSITY OF THE CULTURE OF QUALITY IN THE FIRMS WITH
FOREIGN CONTROLLING CAPITAL AND THOSE WITH ROMANIAN
CONTROLLING CAPITAL
The second premise of the research refers to the fact that there is a differ-
ence between the culture of quality in the firms with foreign controlling capital
and those with Romanian controlling capital, meaning that in the organizations
with foreign controlling capital the culture of quality is much stronger. After
quantifying the score obtained by all 50 firms in the sample, we had the following
results:
- the average score obtained by the companies with foreign controlling capital
was of 77,83 points.
- the average score obtained by the companies with romanian controlling capital
was of 72,02 points.
We notice the fact that the firms with foreign controlling capital have a
clearly superior score as compared to the firms with Romanian controlling capital.
Yet, the difference is not significant. One of the explanations would be that in the
firms with foreign controlling capital the majority of employees are also Roma-
nian. Yet, it is more difficult to export a certain organization culture than a tech-
nology.
An example in this view was the Nokia factory at Jucu. Out of the ap-
proximately 3,000 employees working in the factory located near Cluj, 200 were
involved in the recovery work of the faulty products. According to a source within
the firm, it is the highest percentage of employees involved in this kind of work of
all the Nokia factories worldwide. Apparently, the Nokia factory of Jucu was a
relocation of the Germany factory. In reality, the differences are significant from
several points of view, including the culture of quality.
4. RELEVANT ASPECTS OF THE CULTURE OF QUALITY IN

BIHOR COUNTY FIRMS
Other relevant aspects referring to the culture of quality in Bihor county

firms we had studied are the following:
1. Ways to capitalize the ideas regarding the employees’ improvement;
2. The extent to which the employees of the firms are the supporters of
continuous learning in order to improve their performance;
3. The extent to which the employees of firms are perceptive to change
165 165
4. The degree to which the employees of firms are the supporters of con-
tinuous adaptation.
One of the most important aspects for the development of the culture of
quality refers to the way in which the organization capitalizes the ideas regarding
the employees’ improvement. Question 19 of the survey targets exactly these as-
pects. According to the results obtained, we drew up the graph in Figure 1. Analy-
sing this graph, we notice that:
- The most used method to capitalize the ideas regarding the employees’ im-
provement are the meetings, 94,1% of firms using them for this purpose.
- The suggestion system is used by more than half of the firms surveyed, al-
though in certain firms it does not appear in an institutionalised form.
- Very few of the firms use the quality circles, only 11,1% of the surveyed
firms. Although it is a very efficient instrument, it has not been used yet on a
large scale in Bihor county firms.
- The percentage of the firms using improvement project teams is relatively
low. The two instruments, the quality circles and the improvement project
teams, are specific to the firms with a strong culture of quality. These instru-
ments do not only identify the improvement ideas, their successful implemen-
tation being a priority. The lack of the quality circles and of the improvement
project teams from the majority of firms demonstrates the firms’ inability to
capitalize, meaning to implement, the ideas regarding the employees’ im-
provement.
- Brainstorming, too, as an instrument for the generation and collection of the
improvement ideas is little used in the Bihor firms. In spite of the fact that
they have proved their efficiency, and we cannot talk about their character of
novelty, the brainstorming, the quality circles and the improvement project
teams are not the privilege of Bihor firms.
It can be noticed that 71,8% of the employees are to a very great extent
and to a great extent the supporters of continuous learning in order to improve
their performances, which represents a significant percentage. It is important that,
in reality, the employees, in order to operationalize this skill, consider this respon-
sibility as being their own and not only of the firm’s.
166
Fig. 1 – Ways to capitalize the ideas regarding the employees’ improvement
Table 1 – The extent to which the employees of firms are the supporters
of continuous learning
% Cumulative percentage
to a very great extent 10,6 10,6
to a great extent 61,2 71,8
to a small extent 23,5 95,3
to a very small extent 4,7 100,0
Total 100,0
Fig. 2 – The extent to which the employees of firms are the supporters of
continuous learning
167 167
It can be noticed that 65,9% of the employees are perceptive to change,
which represents a significant percentage. The dynamic character of quality re-
quires perceptiveness to continuous change. The improvement of quality requires
a continuous succession of changes.
Table 2 – The extent to which the employees of firms are perceptive to change
% Cumulative percentage
Total 100,0
The continuous improvement and re-engineering are not possible when re-
ceptiveness to change is missing. The firm’s adaptability to frequent changes oc-
curred in its external environment highly depends on the extent to which the em-
ployees are perceptive to change.
Fig. 3 – The extent to which the employees of a firm are receptive to change
An overwhelming percentage of 85,9% of the employees are to a very

great extent and to a great extent the supporters of the continuous improvement of
quality. It represents a good premise for the improvement of competitiveness of
firms in Bihor county.
168
Table 3 – The extent to which the employees of firms are the supporters of
continuous change/improvement
Cumulative percenta-
% ge
Total 100,0
Fig. 4 The extent to which the employees of firms are the supporters of
continuous change/ improvement
In this research, we have identified three managerial typologies regarding

the attitude towards the problem of quality:
- The managers who do not understand the strategic importance of quality,
for which they treat it superficially. The probability to develop a culture
of quality in the organizations run by them is almost zero.
- The managers who understand the strategic importance of quality, yet they
consider that they do not have the time and the resources necessary to de-
vote themselves to it. Perhaps it is required a major failure (the loss of a
very important bid/contract due to their organization’s incapacity to pro-
vide quality) for them to change their approach.
- The managers who understand the strategic importance of quality and de-
vote considerable time to this problem, including to the development of a
culture of quality in the firms they manage.
169 169
CONCLUSIONS
The conclusions of the research carried out are the following:

1) In Bihor county firms there is a tireless preoccupation of the managers to de-
velop a culture of quality and to improve its capability to provide quality.
Most of the managers belong to the last typology of the three presented above.
2) The employees are to a great extent the supporters of continuous improvement
of quality. It is important that they capitalize the continuous improvement in
the daily practice, the motivational system in the firm being vital in this view.
3) Yet, insignificant, there is a difference between the firms with foreign control-
ling capital and the firms with Romanian controlling capital.
4) Dependent on the procurement of the financing sources in the future we intend
to expand our research to the level of Romanian firms and to fathom our re-
search by measuring the correlation coefficient between the dynamic of the
firms’ turnover and the intensity of the their culture of quality.
REFERENCES
[1] Băcanu B., Management strategic în turism. Concepte și studii de caz, Editura Polirom, 2009;
[2]Bruhn M., Orientarea spre client – temelia afacerii de succes, Editura Economică, Bucureşti,
2001;
[3] Mintzberg, H. Managers not MBA`s, Meteor Press, București, 2006.
[4] Juran M. J., Blanton A. G. Manualul calităţii Juran, Editat de SRAC, Bucureşti 2004.
170
Grzegorz Wróbel
University of Information Technology and Management in Rzeszów, Poland
INTEGRATING OF SIMULATION MODELING

METHOD WITH THE CONCEPT OF LOW-COST
PROCESS IMPROVEMENT
Key words: simulation, model, process improvement, kaizen, optimization
ABSTRACT
Activity in the area of process improvement increases in the periods of recession. There are two
ways of process improvement. The first one is radical investment in technology and infrastructure.
The second one concerns the commonsense based on human efforts, with features of small im-
provements regularity. One of the main practical functions of simulation modeling is the optimiza-
tion of processes. Simulation modeling methodology can be integrated in the classic practical
PDCA improvement process, as an alternative tool for identification and elimination of
waste, analysis and implementation of optimization ideas. Simulation models also allow to deter-
mine the influence of changes proposed into the process flow. The attached example of the simu-
lation shows the ability to identify areas of improvement and actions suggested.
INTRODUCTION
Keeping a company competitive in dynamically changing market condi-

tions requires from contemporary managers not only specific competencies but
also flexibility in the choice of management concepts and methods and techniques
supporting them on operational level.
It is relatively easy to prove the thesis that in prosperous economy and
with relative ease in decision making, bearing comparatively lower risk, managers
try to intensify actions focused on aggressive, offensive strategies aiming at com-
pany’s development, expanding its market share or at least consolidating its com-
petitive condition. In the situation where it is impossible to improve market ab-
sorption, with the signs of a slump in economy leads—as business practices
shows—to intensification of controlling actions and looking for savings. In other
words, the tool to defend profits, often planned in development strategies or ex-
pected by strategic shareholders, is internal optimization, leading to increase of
company assets’ productivity. On operational level it boils down to increased at-
tention to process quality, elimination of waste on the specific stages of the value
stream chain and efficient product flow.
The focus of managerial decisions therefore decidedly moves to the inside
of an organization. What is the reason for that? In the outside environment there
are not many chances to prove one’s marketing or commercial effectiveness and,
what is more, the elements of this environment are not within direct managerial
control and are not the asset that can be managed and improved.
It certainly does not mean resignation from market monitoring especially
taking into account the need for analysis of risk occurring more often than in the
periods of prosperous economy. World class competitors (global corporations – in
a way setting trends in modern management) consequently realizing their long-
term strategies, not resigning, despite economic turbulences, from their market
expansion plans and quality policies on their internal processes.
Bering in mind the significance of process improvement, especially impor-
tant during slumps in economy, a problem arises related to the choice of methods
and tools which allow for identification, analysis and possible implementation of
potential savings and improvements.1 The essence of this problem is the evalua-
tion of possibilities of their implementation which depend on two factors:
− human, related to adaptation to change, understanding, acceptance and
implementation of new rules, work procedures, organizational culture;
− financial, related to investment in technologies, infrastructure and it
tools.
Success in the world economy is very often perceived in three main cate-
gories: competition, risk and innovation. What determines success is the speed of
taking accurate decisions and solid informational support of this process.
Let’s consider several examples of the influence of competition and risk
on customer-oriented enterprises. Production and distribution of goods and ser-
vices not directly connected with the information on demand is economically un-
profitable. The result of such approach are high stock levels, which, in turn,
minimize company’s profits. Electronic goods lying idly in warehouses depreciate
in view of technological and innovative changes systematically introduced in new
products. Food filling the shelves pass its use-by date and service providers and
service staff wait idly for customers making no profits.
1
I base the thesis about particular interest in process improvement concepts on conversations with
participants of congresses, conferences and training courses organized in the years 2008-2011, that
is the commencing period of world crisis. The number of participants and general demand for the
know how in the fields of kaizen, lean, process simulation increased significantly (Congress
Gemba Kaizen, Kaizen College). It might also be an effect of marketing activities and temporarily
increased interest of quality managers in these concepts. Nevertheless, without market demand this
kind of services and enterprises could not have taken place on such a scale.
172
From the perspective of company management practice one cannot afford
to keep unused assets (people, machines) on one hand, and, on the other, to lead to
insufficient supply and as a result to loose customers. Suppliers of various goods,
for instance retailers refuse to accept storage costs, which they would have to sell
in sales later.
In reply to the need to meet customers’ requirements quickly and accu-
rately the concept of pull production (pull system) has been developed. According
to its principles goods and products are only produced if a need for them appears.
In theory it sounds like a perfect solution. In practice though it is difficult to im-
plement.
Similar scenarios refer to other sectors. Banks want to optimize employ-
ment levels by opening the suitable amount of branches serving customers and
dealing with their financial needs. Grocery shops face a similar problem with bal-
ancing their cash desk personnel and employees who restock the shelves. Logis-
tics units in the army have to maintain a specific spare parts level for machines
and devices, and deliver them to the places, where they are needed at a time. Hos-
pitals have to know what the optimal amount of rooms, beds and equipment is
necessary to cure patients diverse in terms of illness types and their medical con-
dition, while trying to minimize operational costs and keep their activities profit-
able.
1. THE IMPORTANCE OF SIMULATION MODELING IN PROCESS

IMPROVEMENT
“People in organizations are learning concepts such as “Lean”, “Six

Sigma”, and “Continuous Improvement” to analyze and improve their operations
and the way they interact while doing business. Many of the concepts involve
people at all levels of an organization studying and improving their operations
using simple analytical tools. Unfortunately, a company or organization generates
more innovative ideas than it can handle. Priorities for funds have to be consid-
ered as well as the impact of the innovative concept. With highly interactive sys-
tems, a great idea for one area may actually harm another. For example, a lean
team on the production floor gave a recommendation for how they could increase
the capacity of their assembly line without the need for additional equipment or
personnel. They suggested that by making a minor change in the resource flow
path, they could share part of the path with a nearby line that had excess capacity.
There also were proposals from lean teams on another line claiming efficiency
improvement, including the line sharing part production. Someone has to decide if
173 173
the proposed efficiency gain would actually be achieved and be sustainable
through production forecasts for both lines.”2
Before defining the significance of computer simulation to process im-
provement and managerial decision support, let’s interpret the term simulation as
such. To simulate means to copy or imitate a real-life system with the help of ex-
periments carried out on the model representing (showing) this system.
Simulation is, however, not only imitation and experimentation. It encom-
passes such activities as defining, designing and model building, and, among oth-
ers: definition of experiments to be carried out, gathering and analyzing of data
needed to start the model, analysis and interpretation of results gathered from car-
ried out experiments. Therefore, to simulate is to participate in the process, which
includes all the above-mentioned activities.
In view of quite broad possibilities of decision support coming from the
use of computer simulation modeling processes, one may pose a question regard-
ing their role, use and integration with classic, common sense methods of process
improvement—kaizen and lean. Rational necessity of combining these two ap-
proaches and obtaining synergy in the form of higher and consistent quality stan-
dard has been indicated by the author of kaizen—Massaki Imai. This demand,
taken into account the support of both kaizen and computer process modeling has
been presented in drawing 1.
Figure 1. Kaizen integration with innovation and computer simulation modeling

support.
Source: Own study basing on Imai M., Kaizen. Klucz do konkurencyjnego sukcesu Japonii, Wy-
dawnictwo MT Biznes, Warszawa 2007, s. 56.
2
Beaverstock M., Greenwood A., Lavery E., Nordgren W., Applied Simulation. Modeling and
Analysis using Flexsim, Flexsim Software Products, Inc., Canyon Park Technology Center, Orem,
USA, 2011, s. 3
174
On account of the necessity of buying license for simulation software and
the cost of quality engineers’ training in the scope of object-oriented modeling,
the methods of computer simulation should be categorized as quality investments
rather than minor everyday kaizen improvements. On the other hand the speed of
carrying out multi-variant experiments, the overview of changes in quality indica-
tors at many process stages with no resources being excluded from current opera-
tions are the advantages of this solution. Taking into account the benefits related
to saving the time spent on the carried out analysis (PDCA improvement process),
computer simulation methods supplement detailed observations of specific work-
station areas and sections and redirect them to wider process perspective (mul-
tichannel processes, production line etc.)
In this way, single workstation improvements and spot-on waste elimina-
tion leads not only to higher quality standards reached in this area but its influence
on the whole process it affects is checked. It results in the possibility of multiply-
ing the specific kaizen actions as well as of checking them in terms of integration
in the process as a whole. It’s worth remembering that modification of a single
element of the value chain has its consequences in the product flow. It in turn in-
fluences the mode of operation and work organization in the preceding and fol-
lowing links: for instance a change in operation time or in setup of machine X
may result in development of bottle necks or changes in the whole production
cycle.
Summing up the support of process improvement by the methods of simu-
lation and experiment analysis may be realized on two planes:
1. Innovative, in which simulation concerns: complex projects, process models
with multiple elements and criteria, designing of organizational systems
from scratch (Greenfield investments), tool support for realized concept of
business process reengineering. Example: building of a football stadium,
simulation of people flow in the system of entrances and exits and the logis-
tics of their transport. Optimization criteria: safety standards (stadium leav-
ing time), public transport organization (the number of vehicles, communi-
cation routes, timetables), road capacity (the layout of infrastructure sur-
rounding the stadium).
2. Kaizen continuous improvement in which simulation supports and verifies
improvement ideas from the perspective of the entire process. These are
simple flow models concerning analyzed workstation. Example: Change in
machine and device setup in a workstation (layout). Change in machine
change-over time. Optimization criteria: balancing the entire production line
(one piece flow time), productivity (operator and the machine’s working
175 175
time, OEE), minimization of storage space (accumulation of a number of
flow elements in queues—storage places).
2. CLASSIC METHODS OF PROCESS IMPROVEMENT AND

OPTIMIZATION OF A VALUE CHAIN
Improvement of quality standards concerns the assets as such (human, IT,

fixed) but also value development processes where the assets are used. The level
of process quality depends on the effectiveness of utilization of assets in the sup-
ply chain and on employment of methods allowing for maximization of the value
added. Finally, the third if not the most important object of improvement is the
product itself (service), reflecting in its features the process value as well. Product
/ service marketing interpretation scheme and the scope and the influence of qual-
ity actions on its specific components has been shown in drawing 2. Higher qual-
ity of assets has an influence on the product core, the real and extended product.
Process quality exerts direct influence on such aspects as: project, price, customer
care, deliveries, service.
Figure 2. Product’s components and the division of improvement activities

Source: Own study
Generally, the concepts of process improvement and optimization of value

stream can be divided into two groups. The first includes the concepts which re-
quire serious capital investments, the other—low-cost concepts based on human
effort and common sense. BPR (Business Process Reengineering) would be in-
cluded in the first group, KMS (Kaizen Management System), TQM and TFM in
the second.
Leaving aside the issues of asset improvement and development of techni-
cal and functional standards of the product as such, I will concentrate on process
quality improvement methodology.
176
Process quality can be understood as:
- the level at which customer requirements are met through the use of a
specific method of product manufacturing, service provision (perspective
of external client defining the product and the way it is manufactured);
- work organization methods and effective use of available assets with the
goal of maximizing value added and eliminating waste, monitored by a
measurement system related to quality targets and taking into account ac-
cepted standards: trade, quality management systems, and safety and envi-
ronment protection systems (perspective of a company realizing a given
management concept)
Process quality improvement is realized with the utilization of a number of
methods and techniques. The most commonly used among them are the low-cost
quality management concepts—kaizen and lean—referred to in this paper as clas-
sic tools. A cohesive system of all process improvement systems has been pro-
posed by Masaaki Imai and is referred to as KMS (Kaizen Management System).
The system is presented in drawing 3.
Figure 3. Kaizen Management System

Source: http://fr.kaizen.com/nos-competences/consulting/le-kaizen-management-system.html
(27.03.2012)
The basis for the use of particular methods and tools in four main process
improvement concepts is the awareness and functioning of quality culture mani-
festing itself through the following activities, artifacts, rules and norms of behav-
ior (total change management):
177 177
1. The awareness of muda, that is perceiving work environment from the an-
gle of the objects and actions which add value for the client and the ones
which do not add value becoming different kind of waste (muda). This
awareness leads to identification and elimination of excessive production,
supplies, shortages, unnecessary movement, process errors, waiting and
transportation.
2. Standardization, consisting of identification and documentation of the best
way of performing particular work. The standard sets the process quality
level, which, in the early phase of implementation is unstable, becomes a
maintained standard in the course of gaining experience, undergoing train-
ing and with the support of lean.
3. 5S is a basic technique used to keep order with the goal of improvement of
process quality, work effectiveness and discipline. The techniques com-
prise of realization of five subsequent steps (actions): selection, systemat-
ics, cleaning, standardization and self-discipline. 3
4. Visual management. All activities, which through the system of labels,
symbols and other visual effects, aim at quick and understandable present-
ing of any information and gembutsu (process objects). Visualization
should assist in quick understanding of gemba, identification of flow in the
process and perceiving all its abnormalities.
Without introduction of the above actions and improvement techniques
there are no real chances of implementing any of kaizen systems as they formulate
fundamental attitude and style of work aimed at improvement. Their effective
introduction into a company’s practice allows for taking care of implementation
of four main pillars of KMS in organizational system.
1. Total Flow Management. Main goal—process improvement through
flow optimization. Management, which utilizes tools that streamline
flow and eliminate waste in production sections: VSM (value stream
mapping), SMED, kanban, line balancing and one piece flow, low-cost
automation, just in time, logistics organization close to mizusumashi
etc.
2. Total Productive Maintenance. Main goal—process improvement
through extensive machine park management. Management, which
utilizes the following tools: kobetsu kaizen board, machines utilization
effectiveness measurement (OEE), creation and visualization of ma-
chine park maintenance standards, autonomous maintenance—
3
Imai M., Gemba Kaizen. Zdroworozsądkowe, niskokosztowe podejście do zarządzania, Wydaw-
nictwo MT Biznes, Warszawa, 2006, s.25.
178
independent maintenance of workstation standards, monitoring of
MTTR, MTBF indicators, EEM Early Equipment Management.
3. Total Quality Management. Main goal—process improvement through
managing its quality standards, organization of a company’s quality ac-
tivities engaging all employees at every organizational level. Currently,
continuous improvement has been included in international norms of
ISO quality management systems. Management according to this con-
cept encompasses the use of the following tools: QFD, FMEA, SPC,
experiments design, block diagram, Ikishawa diagram, ABC method,
control charts, one point lessons, quality self-control matrix etc.
4. Total Service Management. Main goal—process improvement in ser-
vice units (administration departments). The concept is in fact inte-
grated with three previous ones, but taking account of the specificity of
service processes (supporting). Tools similar to the ones used in pro-
duction, aimed at helping in waste elimination, standardization, visu-
alization and flow optimization.
KMS model is supplemented by a diagram of conduct logic in every of the
abovementioned management concepts, despite their profile orientation to flow
(TFM), machines and devices (TPM), standards and people (TQM), and business
and administration (TSM). The logic is built on the general rule of perceiving all
actions from the perspective of process, supply chain, where the actions between
an individual supplier and consumer are verified in terms of three key criteria
(time, cost and quality).
KMS is than quite a consistent system. There is however one fundamental
question. Where in this system is the most appropriate place for simulation model-
ing? Without any doubt, process and its flow improvement as a general function
of simulation and dynamic analysis (process functioning in a given time space), is
close to the concept of TFM. The focus of this approach is in the first place on
tasks and goals related to: design and improvement of production lines, optimiza-
tion of their supply, synchronization of individual links (workstations) and level-
ing their work, planning in pull system and space utilization. Time, cost, quality
(standard), metric area (surface area), supply level, queues and bottle necks are
among the most common problem criteria for process analysts, kaizen-lean man-
agers, maintenance staff.
The tasks of process improvement are commonly ascribed to the structures
responsible for quality management. It is where simulation modeling competen-
cies should be located, integrated with kaizen-lean team competencies or extend-
ing this team by an engineer, modeler, IT specialist-designer supporting their
work from the technical perspective.
179 179
3. THE POINT OF APPLICATIONS OF SIMULATION MODELS IN
MANAGERS DECISION SUPPORT SYSTEMS
Managerial work creates the need to understand, analyze and optimally

manage a given area. Organizational system conveys to the decision-makers a
number of information on its operation, on the basis of which attempts are made
at choosing optimal solution with the estimated risk of making a mistake. As quite
often are these analyses complex and multi-criteria, managers help themselves
with various IT systems including simulation applications.
Process simulation modeling software should be treated as a mainly ana-
lytical tool, which helps engineers and managers in decision making in the scope
of process design and its operational exploitation.
The main idea of simulation applications’ use is then decision making
process support, for various managers with emphasis on quality managers, main-
tenance engineers and kaizen-lean managers. Simulation applications should be
integrated and constitute a fixed element of IT decision support system. The place
and role of simulation models within the organization matrix is presented in draw-
ing 4.
Figure 4. Model based decision support system

Źródło: Beaverstock M., Greenwood A., Lavery E., Nordgren W., Applied Simulation. Modeling
and Analysis using Flexsim, Flexsim Software Products, Inc., Canyon Park Technology Center,
Orem, USA, 2011, s. 6.
The main effect of process simulation use is:
180
− design and process modification costs savings,
− the possibility of multiple experimentation with changes and adaptations
with the goal of optimizing all process elements and
− shortening the time necessary to get the optimal solution, within given
boundary conditions: human resources, technology, know how, infrastruc-
ture.
The basic functionality of simulation software is the possibility of building
a real model of a system / process, for example production process (some applica-
tions allow for its development in 3D graphics), and then in specific—shorter than
real life—time frames allow for studying and analyzing its functioning (flows).
The cost of such simulation is much lower than carried out in real life with the
exclusion from current operation of the chosen spatial area (production hall or its
part) as well as all the assets engaged in the process or located in the excluded
space.
Fulfilling the role of an analytical tool with “what-if” functionality, com-
puter process simulation provides feedback related to many proposed solutions,
which may help narrow the scope of analytic engineer’s optimal search. With the
help of realistic graphic animations and extensive reports on, for instance effi-
ciency, downtime, change-over, queues, one piece flow etc., it is quite quickly
possible to identify process quality problems and evaluate their alternative solu-
tions.
Summing up, computer process simulation allows to avoid many design
errors before their costly implementation: process layout, additional investments
in infrastructure, devices, people, methodology of systemic operational work with
its procedures and policies. Improvements, which in the past took months or even
years of implemented experiments with simultaneous deprivation of assets for
current business operation, can be achieved within days or weeks with the use of
computer simulation.
It is obvious that not all actions and activities must be analyzed with the
use of computer simulation. The basic criterion for or against the use of computer
modeling is the level of problem complexity. The aim of every simulation is an
analysis of activities (process course) and obtaining as a result, the indicator val-
ues, the knowledge of which is necessary to estimate the effectiveness or problem
solution. If individual process activities occur sequentially and there are no stop-
pages, bottle necks or unexpected problems identified in this chain, all indicator
values can be calculated in a normal spreadsheet. 4
4
Beaverstock M., Applied Simulation, op.cit., s. 25
181 181
What kind of optimization problems can be tackled and at the same time
what effects can be achieved with the use of computer simulation model solu-
tions? The list below presents the most important and the most common tasks of
simulation optimization. Process simulation is used to:
− improve the utilization of owned equipment and machines,
− reduce waiting time and size of queues,
− allocate assets successfully,
− minimize negative effects of breakdowns,
− minimize negative effects of rejections and losses (waste),
− analyze alternative investment ideas,
− determine capacity times,
− analyze cost reduction plans,
− set optimal batch quantity and spares’ sequence,
− optimize priorities and logic of dispatch of goods and services,
− train operators in general system maintenance and work efficiency,
− demonstrate new design tools and possibilities,
− manage everyday operational decisions.
The use of software in creation of process simulation models, experiment-
ing and analysis of their optimization, is known in business practice but is not
common. To the greatest extent simulation methods and software offer is charac-
teristic of business activity in the United States. The key barriers preventing wider
use of these tools in our economy are:
− high purchase cost of commercial licenses;
− necessity to acquire knowledge of both object modeling and systemic
analysis (process);
− narrow scope of training services and technical support for modelers and
process analysts;
− relatively little utilization of simulation software in education of engineers,
IT specialists, logistic staff and economists.
Simulation modeling methodology against classic approach to process im-
provement.
Simulation modeling methodology basically consists of six stages. Their
number differs in various sources but they always covers a similar scope of activi-
ties. Their allocation to kaizen PDCA improvement cycle has been presented in
drawing 5.
182
Figure 5. PDCA cycle and assigned phases of simulation modeling
Source: Own study.
The following set of activities are characteristic of individual stages of

simulation modeling. In principle they correspond to PDCA technique (Plan-Do-
Check-Act) in the continuous improvement concept:
1. Problem definition and determination of simulation goal. It is the first
stage without which it is difficult to imagine any model. Every im-
provement and optimization is built on the ground of standardized
level of process quality or on the essence of the problem. Otherwise we
would be dealing with pure theorizing or “art for art’s sake”. Subse-
quent cycle of PDCA should not be started if the process being im-
proved is unstable. In order to improve anything, its initial state should
be known beforehand and controlled. At this stage, the data and infor-
mation is collected necessary for a detailed characterization of the
process being examined (system documentation, current measurement
in gemba kaizen). Activities of this stage include:
− description of initial state, problem characteristics,
− goal of model creation and experimentation,
− definition of key efficiency indicators,
− definition of main decision variables,
− definition of scope, assumptions and simulation conditions.
2. Model operational characteristics. At this stage the most important ac-
tivity is graphic presentation of the whole analyzed process. Analyst –
183 183
modeler, in communication with quality engineer, create object flow
diagram (OFD) on the basis of which, simulation model will be cre-
ated. OFD is supplemented with additional diagrams (for example
flowchart) and pictures from gemba kaizen.
3. Model construction. After collecting necessary information computer
simulation model is created. This activity can be carried out by a con-
structor or IT designer, leaving part of simulation analysis and experi-
ments to quality engineer. Object modeling competencies are neces-
sary to carry out this activity. At this stage the following actions are
taken: choice of simulation measurements, definition of properties, la-
bels and operations of flow elements, of fixed objects and actors (op-
erators), determination of objects’ logic and contents of global tables.
This stage can be considered equivalent to the stage of do in classic
cycle of PDCA improvement.
4. Experiments design. Preparation of even the most detailed simulation
model does not solve the essence of a problem and does not justify its
creation. Having a basic model of a chosen system at his disposal,
quality engineer makes a process flow diagnosis starting simulation. In
the simulation, quality engineer identifies places and objects, which do
not meet process standards or input improvements from workers sug-
gestion systems and analyzes their influence on indicator improve-
ments and the flow in the whole process. For this purpose he makes all
sorts of modifications in the model’s layout elements and their fea-
tures, creating individual model versions and carries out experimental
simulations for each of them.
5. Analysis of experiments’ results and choice of optimal solution. Indi-
vidual experiments variants and model variables manipulation should
lead to the choice of the right model i.e. the one that meets the assumed
(anticipated) effects of the proposed process changes (improvements)
or the goals of carried out audit (cost controlling, identification or
elimination of waste). If:
− proposed changes introduced to the model generate the ex-
pected improvement effects (positive validation result) and, at
the same time,
− the scope of their implementation in operation practice is not
time-consuming and does not require incurring significant costs
and,
184
− introduced modifications do not require starting the procedure
of technological corrections, budget changes in order to finance
investments and decisions of higher management,
then, at this stage of modeling, quality engineer with the process owner
takes the decision about potential practical verification of the imple-
mented changes. Positive outcome of the improvement’s evaluation re-
sults in its implementation and procedural documentation and, at the
same time finishes PDCA cycle (stage 6). Launch of the new process
standardization is the subsequent task. Negative result—which despite
simulation being carried out, because of too simplified assumptions or
errors in simulation model can also occur—leads to suspension or re-
jection of change proposal, or its archiving for the use in the future.
6. Graphic presentation of the right version of a result simulation. Man-
agement decision. The last stage of continuous improvement is imple-
mentation of the improvement. In the case of model solutions going, in
terms of scope, cost or competencies, beyond lower and middle man-
agement, simulation is presented in a graphic form (at present some
software offers 3D rendering) with analysis results to adequate level of
management who finally accept or reject (suspend) the project’s im-
plementation.
4. EXAMPLE OF THE USE OF SIMULATION MODELING IN PROCESS

OPTIMIZATION
Process simulation and optimization analysis software has been evolving

for years, like operation systems, management systems, managerial decision-
support systems, office applications for vector graphics, finance management,
documentation etc.
An example of the use of simulation modeling for process optimization
problems will be presented on the basis of the use of one of the most commonly
used software in the USA, i.e. Flexism from Flexism Software.
Flexism is classified as software for discreet events simulation. It means it
is used in system modeling in which, in the result of certain events, the state in is
individual points (areas) changes in time. Current state of point data (system ele-
ments) may be classified as follows: idle, busy, locked, while client order recep-
tion, product movement, machine breakdown etc. Elements, which are processed
in discrete simulation model, can be physical products, but they can also be cli-
ents, documents, tasks, drawings, telephone conversations, emails. These elements
185 185
go through various processing series, queues, transportation which are defined as
process flow.
Each step of this process can require one or more of assets such as ma-
chines, conveyors, operators, vehicles or various kinds of tools. Some of these
assets are stationary, some movable, some dedicated to specific tasks, some multi-
task.
Summing this short characteristics up, there are three basic problems
which may be solved with the use of this software:
− Customer service problems: the need for customers and their requirements
service at the highest satisfaction level at the lowest price;
− Production problems: the necessity to manufacture the right product at the
right time and at the lowest possible price;
− Logistic problems: the necessity to deliver the right product to the right
place at the right time at the lowest possible price.
Presented case study comes from the project realized by the team of Jona-
than Carter, Preston Cauley and Selvarani Radhakrishnan.
The main goal of selected door assembly process simulation was the veri-
fication of possibility of adjusting its organization in such a way that enables to
carry out production plan within 5 working days and 7,5 hours working day, com-
pared to current state of 10 hour working day and work on some Saturdays.
Figure 6. Diagram of the door assembly process and assembly components

Source: http://faculty.mercer.edu/schultz_sr/courses/ise403/casestudy/ (23.03.2012).
The achievement of the assumed effects was verified by checking the val-
ues of basic variables in four experiments. The first concerned introduction of
186
only one queue to the process (elements storage area) in front of assembly work-
stations. The second included hiring an extra person responsible for so called
setup, that is, preparation of elements for assembly. The third added a worker to
the putty and clamping stations to eliminate all bottle necks. The fourth in turn
combined all the above scenarios in order to minimize total process time and cost.
The basic variables optimized in the process were: total daily operation
time (activities) and total daily labor cost. The diagram of performed activities has
been presented in drawing 6.
Figure 7. Object Flow Diagram Example of the door assembly process.

Source: Carter J., Cauley P. Radhakrishnan S., Door Assembly Process Improvement Simulation,
Flexsim Software Products, 2011, s. 8.
Simulation modeling uses similar situation analysis and diagnosis tech-

niques as the ones known in logistic management concepts or in total flow man-
agement. The use of graphic presentation of the process including fixed objects,
187 187
process activities, flow direction and optimization indicators is an example of that.
The diagram is called OFD (Object Flow Diagram) and in essence conveys simi-
lar information to process analyst as a diagram presented in classic VSM method
(Value Stream Mapping) or in a block diagram (flowchart). An example of a sim-
ple flow diagram for door assembly process has been presented in drawing 7.
In drawing 8 an image of input model created in Flexism simulation has
been presented showing all fixed process assets (input, waiting queues, worksta-
tions, output) and the network of their interconnections with the product flow di-
rection (door components) indicated.
Figure 8. Screenshot 3D view of the basic simulation model in Flexsim.

Source: Carter J., Cauley P. Radhakrishnan S., Door Assembly Process Improvement Simulation,
Flexsim Software Products, 2011, s. 11.
The values of the analyzed variables in individual simulation experiments

have been presented table 1.
Table 1. The results of base case and four simulation experiments.

Base case Scenario 1 Scenario 2 Scenario 1 Scenario 2
Bonus Bonus
Average time 360.349 348.3615 267.5478 354.3583 260.266
(in minutes)
Standard deviation 17.435597 11.165589 6.8253656 14.048779 3.3528748
(in minutes) 37 12 35 53
Minimum value 339.273 331.871 256.543 324.065 254.798
(in minutes)
Maximum value 394.542 368.139 283.245 371.93 265.386
(in minutes)
Average assembly cost $180.30 $174 $133.80 $177 $130.20
Average clamb cost $120.20 $116 $89.20 $118 $86.80
Average mud and putty $90.15 $87 $66.90 $88.50 $65.10
cost
Average setup operator $33.45 $32.55
cost
188
Bonus clamp + mud * * * $118 *
and putty operator cost
Total Average Daily $390.65 $377 $323.35 $501.50 $314.65
Cost
T-Test for Process * 0.16503 4.15 0.42255 1.70766
Time
Significant Difference * No Yes No Yes
from Base Case?
Source: Own study on basing Carter J., Cauley P. Radhakrishnan S., Door Assembly Process
Improvement Simulation, Flexsim Software Products, 2011, s. 13-14.
The obtained results have been subjected to the following analysis. If in

the result of carried out experiment, the average work time decreases significantly
with 90% certainty (reliability, checked with statistical tests) and the average cost
decreases as well, then the solution can be indicated as optimal.
The simulation results led the analysts to the conclusion that the best solu-
tion is the choice of experiment 2, suggesting hiring an extra worker in the area of
assembly preparation and additionally, considering introduction to the process of
only one waiting queue before assembly workstations. The values of the average
operation time and average total cost in relation to other scenarios were in this
case the lowest (see table 1).
CONCLUSIONS
The main goal of this study was to present the possibility or even necessity
of integration of IT solutions, which support process improvement and optimiza-
tion with the classic low-cost process quality management concepts. As a result of
the above KMS system model characteristics and simulation modeling methodol-
ogy, the following conclusions have been formulated:
1. Methodology of preparation and analysis of simulation model inte-
grates with PDCA cycle—basic and key system improvement method
based on KSM, particularly TQM concept
2. The most common objections of kazein actors to simulation modeling
concentrate mainly around the features of simplicity, common sense,
easy and quick introduction of changes and improvements in gemba
(value creation place), the use of uncomplicated and visual tools, the
features not attributed to computer simulation.
3. Computer process simulation modeling undoubtedly requires specialist
competencies, which may not be had by quality engineers and the ac-
189 189
quisition of which on intermediate level requires at least several dozens
of training hours.
4. Process simulation models constitute perfect complementation to proc-
ess documentation and with the changes applied can be easily modified
and updated. Efficiency of this process analysis and improvement
method’s utilization to the great extent depends on basic model prepa-
ration—reflecting current standards (which requires time and money).
5. Simulation models constitute an excellent dynamic tool of process
analysis and change. It is possible to utilize it in activity sequence
simulation of a single workstation. From this perspective, its basic
functionality though, is the analysis of the influence of introduced im-
provements (changes) on the whole supply chain and not only on ex-
pected effects in observation area.
6. Simulation models more often refer to multi-station processes, for ex-
ample production lines, logistic flows, and allow to make extensive
analyses on the basis of experiments combining changes in quality
standards, system times, labor cost and machines effectiveness.
7. With regard to competence scope and analysis object, system modeling
can be compared to the methods and techniques of Total Flow Man-
agement concept devoted to process flow optimization.
REFERENCES
[1] Beaverstock M., Greenwood A., Lavery E., Nordgren W., Applied Simulation. Modeling
and Analysis using Flexsim, Flexsim Software Products, Inc., Canyon Park Technology
Center, Orem, USA, 2011.
[2] Carter J., Cauley P. Radhakrishnan S., Door Assembly Process Improvement Simulation,
Flexsim Software Products, Oren 2011.
[3] Imai M., Gemba Kaizen. Zdroworozsądkowe, niskokosztowe podejście do zarządzania,
Wydawnictwo MT Biznes, Warszawa 2006.
[4] Imai M., Kaizen. Klucz do konkurencyjnego sukcesu Japonii, Wydawnictwo MT Biznes,
Warszawa 2007.
[5] User Guide Flexsim 5, Flexsim Software Products Incorporation, Oren, Utah 2010.
[6] http://faculty.mercer.edu/schultz_sr/courses/ise403/casestudy/ (23.03.2012).
[7] http://fr.kaizen.com/nos-competences/consulting/le-kaizen-management-system.html
(27.03.2012)
190
Bożydar Ziółkowski
Rzeszow University of Technology, Poland
THE ASPECTS OF QUALITY IN ECO-

MANAGEMENT AND AUDIT SCHEMES OF GREAT
BRITAIN
Key words: Total Quality Management, EMAS, ISO 14001, environmental

management system
ABSTRACT
Due to the benefits resulting from adoption of standards for quality management systems the idea
of environmental management systems emerged in International Organization for Standardization.
It is difficult however to assess the impact of ISO 9001 principles on environmental management
systems in organizations. This paper aims at scrutinizing the popularity of principles used for de-
signing ISO quality standards among organizations who adopted Eco-Management and Audit
Scheme (EMAS) in Great Britain.
INTRODUCTION
Quality has become a critical strategic issue rather than an operational

1
one . It aims at satisfying numerous and differentiated consumer needs. Today it
is being introduced by many sophisticated management systems, including first of
all ISO 9001 standard. However, this concept had also very significant impact on
creation of environmental management systems (EMS) like e.g. ISO 14001 and
Eco-Management and Audit Scheme (EMAS). In spite of that, many organiza-
tions which introduced EMS are not aware of existing in this environmental man-
agement systems the quality determinants (called in this paper also like: aspects,
components, elements, drivers). The skillful promotion and propagation of this
quality aspects could yield in satisfying benefits. However the lack of knowledge
on available quality components (embedded into their EMS) and the wrong as-
sumptions on the costs of introduction of quality management systems are a seri-
ous barrier in their activity.
The aim of this paper is identifying the scale of quality aspects dissemina-
tion among environmental management systems. This paper is a result of re-
1
See: Lai K., Cheng T.C. E., Effects of quality management and marketing on organizational
performance, Journal of Business Research 58, 2005, s. 446-456.
searches realized already for the Polish EMAS registered places. For the purpose
of the earlier study the presentation and analysis of quality aspects in management
systems was already performed. Thus, this paper is introducing just the main re-
sults of literature studies collected in the context of EMAS registered places of
Poland.
The research results presented in this paper were collected after content
analysis performed for environmental statements (called also in this paper as envi-
ronmental reports) issued by organizations who adopted Eco-Management and
Audit Scheme (EMAS) in Great Britain.
1. BASIC ASPECTS IN QUALITY MANAGEMENT SYSTEMS
As noticed K. Lai i T. C. E. Cheng what a quality management system

emphasizes is the organizational ability to satisfy customer needs precisely and
profitably involving all members of an organization2. In the practice there are
known very differentiated and in the same time very similar in parallel quality
aspects.
Researches on the Total Quality Management (TQM) define the following
basic aspects of this system3:
1) Management support and leadership,
2) Relationship with suppliers,
3) Information and evaluation for quality,
4) Training, instruction and learning,
5) Process management,
6) Organizational design, communication and strategies,
7) Product design,
8) Management and integration of human resources,
9) Empowerment and workers’ fulfillment,
10) Relationships with customers,
11) Consumer satisfaction,
12) Product quality,
13) Continual improvement/Kaizen,
14) Benchmarking,
15) Availability and use of technology,
16) Financial, operational and social results,
2
Lai K., Cheng T.C. E., op. cit.
3
Perdomo-Ortiz J., Gonzalez-Benito J., Galende J., Total quality management as a forerunner of
business innovation capability, Technovation 26, 2006, s. 1170–1185.
192
17) Flexible manufacturing.
As noted J. J. Tari i V. Sabater the TQM has been developed around a
number of critical factors which vary from one author to another, although the
core factors are leadership, quality planning, human resources management (train-
ing, work teams, employee involvement, etc.), process management, cooperation
with customers and suppliers, and continuous improvement4.
Temponi C. has defined the following three fundamental principles of
quality management5:
a) A focus on customers: Customers are the principal judges of quality6.
Many factors influence customers’ perception of value and satisfaction
for the products and services received. Customer focus means organiza-
tional commitment to external customers, employees, vendors and sup-
pliers, and society at large. Thus, customer focus means providing op-
portunities for development and growth of employees, improving prod-
ucts and services that account for customers needs and wants, and gain-
ing society approval and thrust7. World-class enterprises view society as
a stakeholder.
b) Participation and teamwork: When managers give employees the tools to
make good decisions and the freedom and encouragement to make con-
tributions, quality products and efficient processes follow. Nevertheless,
management must demonstrate commitment and act to formulate proce-
dures and policies that ensure the participation and teamwork that be-
come part of the enterprise culture8. The focus of customer–supplier re-
lationships encourages the involvement of employees at different levels
4
Tari J. J., Sabater J. J., Quality tools and techniques: Are they necessary for quality manage-
ment? Int. J. Production Economics 92, 2004, s. 267–280.
5
Temponi C., Scalable enterprise systems: Quality management issues, International Journal of
Production Economics 99, 2006, s. 222–235.
6
Evans J. R., Lindsay W., The Management and Control of Quality, fifth ed. South-Western Col-
lege Publishing, Cincinnati 2002.
7
Cameron K., Freeman S., Mishra A., Best practices in white-collar downsizing: Managing con-
tradictions. Academy of Management Executive 5, 1991, s. 57–73; Jaffe D., Scott C. D., Reengi-
neering in practice: Where are the people? Where is the learning? Journal of Applied Behavioral
Science 34, 1998, s. 250–267.
8
Attaran M., Information technology and business process redesign. Business Process Manage-
ment Journal 9 (4), 2003, s. 440–459; Bashein B., Markus L., Riley P., Preconditions for BPR
success and how to prevent failures. Information System Management (Spring), 1994, s. 7–13;
Terziovski M., Fitzpatrick P., O’Neill P., Successful predictors of business process reengineering
(BPR) in financial services, International Journal of Production Economics 84 (1), 2003, s. 35–51.
193 193
of decision-making and across functional boundaries9. Thus, the use of
teamwork and empowerment has evolved from self-managed teams,
which are a powerful enabler of quality management initiatives.
c) Process focus and continuous improvement: A process perspective links
all necessary activities together and increases one’s understanding of the
entire system. Understanding the entire system requires a continuous
improvement. Continuous improvement refers to incremental improve-
ments that can be small, gradual and breakthrough, or can be large and
rapid. Improvements enhance value to the customer through new and
improved products and services, reduce defects and errors and related
costs, and increase productivity and effectiveness in the use of re-
sources10.
Another categorization of quality includes the following seven categories
implemented by The Baldrige Award, these are11:
1) Leadership. The company's leadership system, values, expectations, and
public responsibilities.
2) Information and analysis. The effectiveness of information collection and
analysis to support customer-driven performance.
3) Strategic planning. The effectiveness of strategic and business planning
and deployment of plans, with a strong focus on customer and operational
performance requirements.
4) Human resource focus. The success of efforts to realize the full potential
of the work force to create a high performance organization.
5) Process management. The effectiveness of systems and processes for as-
suring the quality of products and services.
6) Business results. Performance results, trends and comparison to competi-
9
Dennis A. R., Carte T. A., Kelly C. G., Breaking the rules: Success and failure in group-ware-
supported BRP, Decision Support Systems 36 (1), 2003, s. 31–48; Dooley K., Flor R., Perceptions
of success and failure in TQM initiatives, Journal of Quality Management 3, 1998, s. 157–174;
Evans J. R., Lindsay W., op. cit.
10
Barber K. D., Dewhurst F. W., Burns R. L., Rogers J. B. B., Business-process modeling and
simulation for manufacturing management: A practical way forward, Business Process Manage-
ment Journal 9 (4), 2003, s. 527–543; Evans J. R., Lindsay W., op. cit.; Foster, Managing Quality:
An Integrative Approach, second ed. Prentice Hall, Inc., Upper Saddle, New York 2004; Heikkila
J., Successful Re-engineering – learning by doing, International Journal of Logistics: Research and
Applications 4 (3), 2001, s. 329–345; Temponi C., The impact of general system theory in evolving
organizations, Journal of Advances in System Science & Applications, Inaugural 1997, s. 415–
423.
11
Anderson R. D., Jerman R. E., Crum M. R., Quality management influences on logistics per-
formance, Transpn Res.-E, (Logistics and Transpn Rev.) 34(2), 1998, s. 137-148.
194
tors in key business areas customer satisfaction, financial and marketplace,
human resources, supplier and partners and operations.
7) Customer and market focus. How the company determines customer and
market requirements and expectations, enhances relationships with cus-
tomers and determines their satisfaction.
According to Lai K.-h. and Cheng T.C.E. the ten critical factors of quality
management include12:
1) People and customer management,
2) Supplier partnerships,
3) Communication of improvement information,
4) Customer satisfaction orientation,
5) External interface management,
6) Strategic quality management,
7) Teamwork structures for improvement,
8) Operational quality planning,
9) Quality improvement measurement systems,
10) Corporate quality culture.
In the result of own researches based on the literature review the following
group of seven main quality indicators was formulated:
1) Leadership,
2) A focus on client/customer,
3) Participation and teamwork (defined also as: employee engage-
ment/training, empowerment),
4) Process focus/management,
5) continuous improvement (defined also as: innovations),
6) Strategic planning,
7) Quality culture.
The presented components have been utilized during analysis of environ-
mental statements presented in third chapter of this paper. In the next section there
was presented the idea and main assumption of Eco-Management and Audit
Scheme (EMAS).
12
Lai K.-h., Cheng T.C.E., Initiatives and outcomes of quality management implementation across
industries, Omega 31, 2003, s. 141–154.
195 195
2. ECO-MANAGEMENT AND AUDIT SCHEME (EMAS)
IN THE EUROPEAN UNION
The subject of researches presented in this paper are environmental state-

ments. These are documents created obligatory by organizations enrolled into
European Union’s Eco-Management and Audit Scheme, so called EMAS.
This environmental management system was introduced by The
REGULATION (EC) No 1221/2009 OF THE EUROPEAN PARLIAMENT AND
OF THE COUNCIL of 25 November 2009 on the voluntary participation by or-
ganisations in a Community eco-management and audit scheme (EMAS), repeal-
ing Regulation (EC) No 761/2001 and Commission Decisions 2001/681/EC and
2006/193/EC.
The general provision of EMAS as an instrument of the Sustainable Con-
sumption and Production and Sustainable Industrial Policy Action Plan, is to pro-
mote continuous improvements in the environmental performance of organisa-
tions by13:
a) the establishment and implementation of environmental management sys-
tems by organisations,
b) the systematic, objective and periodic evaluation of the performance of such
systems,
c) the provision of information on environmental performance, an open dia-
logue with the public and other interested parties
d) the active involvement of employees in organisations and appropriate train-
ing.
Environmental statements aim at informing on the environmental perform-
ance in organizations. By this way the organization is encouraged and obliged to
present annually the results of its continuous improvement. This report can be
used as significant marketing tool for promotion of quality issues however it is not
always utilized for this purpose. The results of own researches in this field was
presented in the next section.
13
REGULATION (EC) No 1221/2009 OF THE EUROPEAN PARLIAMENT AND OF THE
COUNCIL of 25 November 2009 on the voluntary participation by organisations in a Community
eco-management and audit scheme (EMAS), repealing Regulation (EC) No 761/2001 and Com-
mission Decisions 2001/681/EC and 2006/193/EC
196
3. QUALITY ASPECTS IN EMAS
The own research of quality aspects presence in Eco-Management and

Audit Scheme was performed at the beginning of the year 2012. The method of
content analysis was used for scrutinizing the environmental statements of 23 or-
ganizations registered in EMAS of the United Kingdom (UK).
The method used for analyses was not a simple summarizing but context
analysis. In many cases even the lack of precise phrase e.g. „strategic planning”
was not assessed as the lack of reference. The context of one word (e.g. strategy)
was very often sufficient to assume the presence of „strategic planning” in organi-
zation. On the other side, when the word was introduced in the headline of each
separate page in environmental statement it was not included into the analyses.
During the research preparation it has emerged some limitation in access
to principle document for EMAS i.e. environmental statement. It is very common
practice among UK organizations putting at their websites just notice on achieve-
ment possibility of EMAS statement upon request. Moreover, numerous organiza-
tions fail to even inform on their web pages the fact of EMAS registration. Also,
the logo of EMAS is not perceived and used as a factor for competitive advantage
(in many cases it is not visible on the homepage).
The own researches proved that among 23 entities the most comprehensive
environmental statement was presented by 5 organizations. In their cases all scru-
tinized quality factors have been included. Nevertheless, other organizations re-
ferred to majority of analyzed quality drivers.
When assessing the frequency of references to the quality factors it is re-
markable that the highest attention was directed in the reports to the continuous
improvement and than to quality culture and strategic planning.
It is also interesting that in case of leadership the nearly 50% of analyzed
reports did not refer at all to this quality factor. The lack of reference by environ-
mental statements (ES) to other quality factors was as follows:
26% ES – focus on client/customer,
26% ES – process focus/management,
17% ES – participation and teamwork (defined also as: employee en-
gagement/training, empowerment),
13% ES – strategic planning,
13% ES – quality culture.
Among the analyzed environmental statements the most impressive num-
ber of references was identified in Cambrian Printers.
It is worth stressing that many organizations included into the research
possessed already quality management systems. However, high percentage of
197 197
quality factors omitted in environmental statements gave indication of areas which
require improvement. This can yield in numerous competitive benefits for organi-
zations.
CONCLUSIONS
The subject for analysis were environmental statements of organizations

register in Eco-Management and Audit Scheme (EMAS) of Great Britain in Euro-
pean Union.
The process of collecting environmental statements was not as easy as it
could be supposed at the beginning of the research. In the result of reviewing
internet databases there have been collected 23 environmental statements.
The own researches proved that the following quality aspects have been
omitted in many reports (indicated in brackets): focus on client/customer (26%),
process focus/management (26%), participation and teamwork (defined also as:
employee engagement/training, empowerment) (17%), strategic planning (13%),
quality culture (13%).
It is striking that the continuous improvement was a factor included in all
environmental statements. Unfortunately, other quality factors which have been
put into analysis have not been always mentioned by organizations. This can in-
form on low attribution of this factors to the competitive advantage.
REFERENCES
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199 199
Radmila Živković
Milena Ilić
Jelena Miljković
Zoran D. Živković
Public Utility Service "Gradsko stambeno", Belgrade, Serbia
QUALITY MANAGEMENT OF PUBLIC SERVICES IN

THE CITY OF BELGRADE - ASPECT OF CUSTOMER
SATISFACTION
Key words: public goods, public services, marketing in public sector, the public
sector, consumers, quality, quality management, satisfaction
ABSTRACT
Roughly, the public good is the result of joint decision-making, joint decisions which express the
interests and values of a community or the greater part of the community in order to achieve well-
being of citizens. Today than in the past, there is understanding and expanding the notion of public
good, both in terms of meaning and in terms of responses to the question of who provides / creates
a public good and who determines the status and use of public property regimes. There are changes
of approach to public services, as services of general interest to provide public sector bodies and
public administration.
On the one hand there is the fact that public administration has the right to prescribe the modes of
use of public and private goods, in order to protect the public interest and public good on one side,
and the protection of private property on the other side. Also, when public services are concerned,
under the strict scrutiny of the local community and the state is providing them with the price limit
and control distribution. On the other hand, also, the fact is a public company in certain areas of
activity lose their monopoly or oligopoly position and must be market-oriented, and to build posi-
tions in today's business world demands reliability, showing respect for customer service and qual-
ity of services, companies and organizations committed to its business policy based on primary
values. Today, when it comes to the application of the postulates of marketing at public sector,
quality plays a key role. Regarding the marketing in public sector, or marketing of public service,
the focus stands on implementation of the basic and proven marketing principles and techniques in
order to achieve the goals and activities that contribute to the common good. Many companies and
public sector organizations uses the strategies of external suppliers (outsourcing) as well as models
of public-private partnerships in order to achieve that the delivery of public services to become
more effective and efficient, and quality of services to be satisfying, and even more than that.
The concept of affordable and quality living and housing and various forms of public sector sup-
port to raising the quality of living and its accessibility for citizens is a kind of public good of the
community and the services provided to enable the functioning and life of the citizens of Belgrade
in terms of providers of these services - Public Enterprises city of Belgrade considered ad public
services, and as such expanded subject of this paper.
Consumer satisfaction with quality of service in the work presented public enterprises founded by
the city of Belgrade delivered through sourcing or the activities carried out and provided from
various sources: internal, external or a combination thereof, makes a narrower subject of this pa-
per.
INTRODUCTION
Customer satisfaction is one of the most important tasks of any service

providing organization, and an important strategic weapon, but also from the en-
suring the satisfaction level of the consumers and everything that satisfaction gen-
erates, the future company business success depend on. To determine the level of
customer satisfaction it is necessary to systematically collect data from consum-
ers, to make analyses of their work satisfaction and to make overview of these
analyses. Satisfaction i.e. customer satisfaction depends primarily on the benefits
obtained by the delivery of value, but also of consumer expectations that are
based on the experience, opinions of friends but also on the accuracy of marketing
information given by the public companies. The specificity in the public sector
covering different expectations which evolves under the influence of different
factors1
Determination of attributes of customer satisfaction implies the existence
of models for leading of consumer satisfaction overviews, obtaining information
from employees, make overview based on repetition and tracking trends and sta-
tistic valuation of data received from employees and consumers.
When it comes to effective communication and feedback information as
part of the process of measuring customer satisfaction, it is necessary to ensure a
process that includes management and measures for getting feedback information
from the consumers. First of all, find appropriate and affordable enough, method
of communication with consumers is necessary, and to ensure that the research
data and other feedback information regularly be generated and processed for the
appropriate services within the organization or company, or to obtain and process
the information externally, by engaging the services of specialized agencies. It is
necessary to find a satisfactory media for communication. Considering the great
potential of the Internet and the usage of web portals for two way marketing
communications company with your prospects and customers is huge and impor-
tant. Web portals tend to become the primary tool for realization of coupling be-
tween the company and its customers because of their efficiency and effective-
1
Živković, Ilić M, "The triad quality-satisfaction-loyalty in tourism", Anthology of the Festival of
quality 2008 , the National Conference on Quality, Kragujevac
201 201
ness, accessibility and quality of information, which on the one hand, the com-
pany provides consumers, on the other hand, consumers give to company.2
Total satisfaction creates loyal customers and increase customer satisfac-
tion is most often achieved through continuous quality improvement. The fact is
that customer satisfaction is closely connected with quality. To ensure satisfac-
tion, specific techniques related to quality management are used. In fact, many
public companies accepting the programs for management total quality (Total
Quality Management), which aims are to continually improve products, services
and marketing process, and refers to the involvement of all employees in the com-
pany for improve the quality of products and services. The goal of total quality is,
of course, the complete satisfaction of consumers.
1. PUBLIC PROPERTY AND PUBLIC SERVICES
Public needs or public goods and services are an expression of public ac-
tivity that generates the state through its mechanisms which operating within the
economic and social space that is in the public sector. The mechanism has several
features that serve to satisfy the needs of all members of the community, and from
the category so-called public needs.
Materialization of the public needs is realized by creating a specific market
supply of public goods and services. It is, for example, the different services of fie
of defence, judiciary, education, science, culture, health, housing and communal
services, general legal regulations and the like.
Characteristic for the public good is joint consumption and the lack of ri-
valry in consumption goods. Another characteristic is that public resources are
used to meet public needs that are common to all members of society. No one
shall be excluded from the consumption of public goods and no one can acquire
the appropriate use and ownership of public goods.
Public good can occur as a pure, mixed (public and incomplete private
good) and well merits. Its effects are usually achieved in the future.
Regarding the mechanism of discovering the need for public goods, the
fact is that in democratic states citizen’s needs are expressed by voting followed
by certain expectations.
Public goods are any goods that serve to multiple users, and it is very im-
portant that the inclusion of a new customer does not reduce their current and pre-
2 Ilić M, Radnović B, "Using the Web site for two-way marketing communication with consumers
for the purpose of the extradition of superior quality", Festival of Quality, Collection of the Natio-
nal Conference on Quality, Kragujevac, 2009.
202
vious level of use.3 Public goods are characterized by the difficulty to perform
their price setting and this is one reason why private bidders cannot provide it. On
the other hand, if the public goods are given to one user they will be available to
everyone else, and it is very difficult to assign those goods to consumers who pay.
Therefore, the consumer is not inclined to buy it well. For private company it is
extremely hard to produce and present to the market public goods, because it is
impossible to deliver a public good only to one buyer who will pay for it i.e. the
consumer is not inclined to buy it, there is a clear economic interest in its produc-
tion and extradition.4 On the other hand, there may be a very clear effect of the
economic interest of private firms in manufacturing and the extradition of certain
public goods, but the state these tasks entrusted to the public sector to protect its
citizens. As a result, the state has the mechanisms for the delivering public goods
to their customer, with the help of public sector or direct operations of public en-
terprises.
If we take into account the fact that the state and the market are comple-
ments they must be each other supplemented, because the market is not perfect in
its operations and as such, produces certain imperfect externalities i.e. series of
imperfections. In this case, the state appears just as a regulator of market imper-
fections. One of the fundamental flaws of action emerging markets is reflected in
the supply of public goods. In the case of private goods every citizen expressing
their preferences through the quantity of goods he wants to buy, as well as the
available money for buying private goods, but when it comes to public goods the
fact is that citizens do not directly express their preferences for public goods and
the state must discover consumer preferences for public goods.
The state now provides many goods but the fact is as how countries were
developed and as people became richer, their preferences are becoming more
complex, respectively they wanted better quality and wider range of public goods,
and they want costs lowest as possible, in other words for a particular public good,
they want to pay the least possible taxes. While always claiming that they are
willing to pay more taxes for a specific public good, in the end always vote for
anyone who promises them tax cuts. The activity of public companies relating to
the operation of public services, production of basic industrial products, banking,
insurance, education and health, respectively:5
3 Jurković P, Public Finance, Masmedia, Zagreb, 2002, pp.

4 Mankju G, Principles of Economics, Harvard University, Center for Publishing work, Faculty of
Economics in Belgrade, 2007, pp. 213
5 Mankju G, Principles of Economics, Harvard University, Center for Publishing work, School of
Economics in Belgrade, 2007, pp.
203 203
− Public goods - energy, communications, transportation (electricity, gas,
water, railways, TV, telecommunication, urban transport)
− The production of strategic products - coal, oil, atomic energy, steel
− Finance - Savings Bank, a public insurance company
− Education and health, public schools and universities, public hospitals.
There is great importance and necessity of the existence of public enter-
prises, especially when it comes to the area in which are manifested shortcomings
of the market mechanism, such as public goods, natural monopolies and activities
with external effects.6 Main objectives of establishing the existence of these com-
panies is reflected in higher profit, and maximizing well-being and fulfilment of
political goals.
2. QUALITY OF PUBLIC SERVICES
The concept of service quality is based on expediency, such as and the

concept of product quality. The relationship between the person who provides the
service and the user is constructive only if the service, price, duration, and con-
venience is a response to the needs and requests. The importance of service qual-
ity must not be underestimated. Results in one study, conducted by the American
Association for Management (American Management Association), showed that
companies are on average lose 35% of beneficiaries each year, of which two
thirds are because of the poor quality of services, this result is defeating when it is
known that is three times harder to win new customer than keep existing.7 Con-
cept of quality is closely related to the concept of a comprehensive marketing. The
trends and forces which are shaping the XXI century lead companies towards the
adoption and implementation of new beliefs and practices.
Today's managers recognize the need to formulate a much more compre-
hensive approach to business that goes beyond the traditional marketing concept.
According to Kotler and Keller, "holistic marketing concept is based on the de-
velopment, design and implementation of marketing programs, processes and ac-
tivities that recognize their breadth and interdependence"8. This means that a ho-
listic marketing assumes that everything is important for marketing and it is there-
fore necessary to apply a broader, integrated approach in business.
6 Nikolić M., N. Malenović, Pokrajčić D., Paunović B, Economics of the company, Faculty of
Economics, 2005, p. 88
7 Dick T. V., Service Management, European University, Belgrade, 2006, p. 93
8 Kotler Ph., Keller KL, Marketing Management, Pearson / Prentice Hall, Upper Saddle River, N.
J, 2009, pp. 59-68
204
Providing of the public services is under strict scrutiny of the local com-
munity and the state, with price limits and control distribution. In addition we
need to have in mind the fact that there is a loss of monopoly power in certain
areas of activity public enterprises, and therefore these companies need to be mar-
ket oriented. To achieve this, public companies must be reliable, to show respect
for service users and provide quality services, which obligates the companies and
organizations to inform about their policy based on primary values. Today, from
the application of the postulates of marketing and public sectors, quality is the
key. The most important part of business strategy for the management and all em-
ployees in the implementation of business processes is a quality management sys-
tem.
It is important to remark, in order to consistently deliver satisfactory ser-
vice on the basis that it can assess the quality of services, it is necessary that the
entire organization must be focused on a specific task. User needs must be thor-
oughly understood, as well as the restrictions in which service provider works.
Service providers must focus on quality; also the system that is properly con-
trolled should be designed to support the mission of the company and to deliver
services as designed.9
In order to continue the discussions on the quality of service, we first need
to distinguish between service quality and customer satisfaction. Most experts
agree that the customer satisfaction is a short-term measure based on a specific
transaction, while the quality of service is a measure formed on the basis of long-
term, overall assessment of performance.
The concepts of customer satisfaction and service quality are undoubtedly
intertwined with each other. However, the relationship between these two con-
cepts is not clear. Some believe that customer satisfaction leads to a perceived
service quality, while others believe that service quality leads to customer satis-
faction. In addition, the relationship between customer satisfaction and service
quality and the way these two concepts associated with the buyer’s behaviour
mostly remains unexplained.
One possible explanation is that the customer satisfaction is helping users
to change the perception of service quality. The logic of this statement is consisted
of the following10:
1. The user's perception of quality of service provided by a company the user
did not have the previous experience with, is based on user’s expectations;
9 Bateson J, Hoffman D, Marketing Services, Data Status, Beograd, 2012, pp. 129.
10 Bateson J, Hoffman D, Marketing Services, Data Status, Beograd, 2012, pp. 129.
205 205
2. The next contact with the company leads the user through the process of
agreement (in which he compares his expectations and perceptions) and
creates a changed perception of service quality;
3. Each subsequent contact with the company further changes or reinforces
the perception of service quality. In other words, if over time we add cus-
tomer satisfaction with certain company, it will give us the user's percep-
tion of service quality (eg. SAT1 + SAT2 SAT3 + SAT4 + SATn = Qual-
ity of Service);
4. Changed perception of service quality changes the future intentions of us-
ers to buy from that company.
Quality service is the way to achieve success among competitive firms, es-
pecially in service sector where large number of companies offers almost identical
services in particular area (eg. dry cleaning, local banks, restaurants, insurance).
In fact, achieving the quality of service may be the only way to differentiate the
company. For example, some restaurants have found that "eco-management" im-
proved their reputation on the quality of service (see Sustainability in action and
service). Differentiation based on service quality can lead to greater market share
and finally to point out the difference between financial success and failure.
Implementation and evaluation of service quality is a difficult task. First,
the user's perception of quality usually relies on repeated comparisons with certain
expectations of service. If the service, no matter how good, does not consistently
meet customer expectations, the user will perceive that the service is poor quality.
Second, in contrast to the marketing of goods, in which consumers evaluate only
the final product, in services, the user estimates utility and final result of the proc-
ess. The process of building the service quality can be measured based on five
gaps (differences) between expectations and perceptions of management, employ-
ees and customers. The most important gap, the user gap, describes the user's ex-
pectations of service and his perceptions of delivered service. Finally, the goal of
utility companies is to close the gap, or at least to narrow it down as much as pos-
sible. Therefore, the research of user gaps is similar to the expectations model.
However, it is important to remember that the quality of services depends on the
cumulative customer satisfaction with the company, which is collected in a num-
ber of successful and unsuccessful service processes. When employees follow
standards set by the management in order to deliver an excellent service, the gap
does not exist. Before the company closes the user gap it has to close or to narrow
the other four gaps:
Knowledge gap – Gap 1: The result of misunderstanding the actual expec-
tations of consumers. Represents the difference between what users expect from a
service and management's perception of users’ expectations;
206
Standard gap - Gap 2: Shows the discrepancies between the way the com-
pany understands consumer expectations and the way it has created services and
its quality standards. The difference between what the managements' perception
of users’ expectations is and specific quality of service provided.
Delivery gap - Gap 3: Indicates the discrepancy between what managers
defined as service (in terms of quality, standards, methods of delivery) and how
the service is actually delivered. Here, the main characteristic is the variability of
providing services, because every encounter is a 'new product' and new event,
which involves ‘first-line’ employees and customers. It represents the difference
between the quality of deliveries and the actual quality of delivered services.
Communication gap - Gap 4: The difference between delivered services
and what was promised to the consumer through different forms of communica-
tions (external). It represents the discrepancy between the actual quality of service
and described quality in the company’s media.
Therefore, the user gap is a function of knowledge gap, standard gap, de-
livery gap and communication gap. In other words, Gap 5 = f (Gap 1 + Gap 2 +
Gap 3 + Gap 4). When any of these gaps increases or decreases, it directly affects
the user gap.
3. SATISFACTION OF PUBLIC SERVICE
Consumer is a member of the community, social and cultural being, who

seeks to purchase and use the specific products / services meet your needs/ de-
sires.11 In the analysis of terms related to the behaviour of final consumers and
industry are obvious differences between the customer, user and consumer prod-
ucts and services. The buyer is the person who made the actual purchase of prod-
ucts and services, but not always, or is not the only user of the purchased products
or services; Final user is a consumer, the consumer is a person who uses the prod-
ucts and services to meet personal and family needs. Very often it is said that the
customer is a person who constantly makes the decisions about buying products
and services and solves their problems.
Marketing concepts focused on consumers, as main postulates have the
principles of customer identification and partnership development between com-
panies and consumers. Two-way communication is imperative. It is insisted on
quality service and superior product delivery. Thanks to this approach, the loyalty
to the company itself, not just to the product or service, is ensured. The impor-
11 Maričić B, Consumer Behaviour, fifth revised edition, Modern administration, Belgrade, 2008.
, pp. 16
207 207
tance of loyal customers for the functioning of market-oriented businesses is ex-
tremely high, regardless of whether it is a private or public sector, especially
given the fact that due to the emergence of competition and privatization of some
public sector enterprises, they are increasingly turning to the market and market
way of thinking. It can be argued that strategic response of companies is increas-
ingly focusing on the development of long-term relationships with customers and
creating custom values for strategically significant customers. Quality guidelines
refer to the usual, irrevocable criteria which are of great importance to the con-
sumer, regardless of the category and class of product, or service sophistication in
the public sector. The basic standard of quality public services is a satisfied cus-
tomer and by providing customer satisfaction the stability of sales and profits in
the long run, even if the public sector is concerned, is ensured. Determinants of
quality establish a minimum level of consumer protection below which quality
cannot be achieved.
Satisfaction or dissatisfaction is actually an emotional response in con-
sumers experience with a product or service that is purchased. Specifically, satis-
faction bundles an emotional response of consumers (the feeling of pleasure),
generated by comparing the expectations formed before buying and perceived
(perceived) performance of the products / services.12 It depends on how much this
purchase, changes the consumer expectations, such as performance products, rele-
vancy of the product or service in relation to the alternative etc...13 It is necessary
to have in mind that the assessment of satisfaction is a very individual process,
based on individual needs of the structure, the previous behaviour, social impacts
and the gained experience.
Till today, there have been many attempts to measure the degree of con-
sumer satisfaction / dissatisfaction with the purchased product or service. Difficul-
ties in measurement come out from the fact that the level of satisfaction depends
on the consumer's aspirations and expectations. Because of that it’s believed that
the measure of satisfaction is ultimately subjective. It is believed also that the
measure of satisfaction at the macro level (national economies) is highly subjec-
tive, but in the measurements of consumer satisfaction / dissatisfaction in relation
to purchased products or services of the firm (micro level), has the less subjectiv-
ity. Most authors believe that measuring satisfaction at the micro level, in fact, is a
measuring the effectiveness and efficiency of marketing efforts company.14 Meas-
12 Veljković, S., Marketing services, third revised edition, CID Faculty of Economics, Belgrade
2009, pp. 10
13 Maricić, Consumer Behaviour, fifth revised edition, Modern administration, Belgrade, 2008,
pp. 282
14 Živković R, Consumer Behaviour, Singidunum University , Belgrade, 2010, pp. 183
208
uring customer satisfaction is a continuous process that includes several ele-
ments15:
1. Determination of attributes of customer satisfaction;
2. Effective communication and feedback;
3. Develop and implement solutions based on feedback.
Determination of attributes of customer satisfaction implies the existence
of models for conducting overview of consumer satisfaction, obtaining informa-
tion from employees, the review based on repetition and tracking trends and sta-
tistical evaluation of data obtained from employees and consumers.
Develop and implement solutions based on feedback from consumers in-
volves introducing new business practices based on information provided by con-
sumers themselves.
The fact is that the organization and its products or services have specific
performance which has been verified, but also thing that the every consumer will
evaluate performance and assess the quality of the companies, products and ser-
vices it delivers in a different way. Therefore as consumer observes and evaluates
the performance of the organization and its products, it is necessary to know the
basic elements of the consumer’s assessments and evaluations the aforementioned
performances. We can relate the performance of quality of products i.e. services
and organizations, and customer satisfaction with the product or service, and also
the level of organisation services 16 Point is that the performance of quality of the
products will contain a higher level of consumer expectations, is not sufficient to
meet or even surpass only expected needs, but it is necessary to identify and meet
the needs of the hidden and unknown to consumers. Specifically, the aim of the
company is to establish much more expected, unreported consumer needs and its
unknown and hidden needs, and to clearly define them and meet. In this way
raises the level of performance that meets or exceeds customer expectations and
raises the level of high quality.
However, if the supplier fails to determine the hidden expectations of con-
sumers, as much as to increase performance that meet the expected demands can
only lead to unnecessary excessive quality and price of individual properties, leav-
ing the overall level of quality – low.
Companies often need to balance the conflicting criteria, such as profit on
the one hand and the needs and desires of consumers and public interests on the
other. However, according to Kotler, many companies have failed to achieve sig-
15 Group by "EFQM, customer satisfaction" - Quality Working Group, Section Two, March -
October 1994, p. 11th
16 Heleta M, "Quality Management", University Singidunum, Belgrade 2008, pp. 128
209 209
nificant success in sales and profit through the application of the concept of Cor-
porate Social Responsibility.17 Concept of socially responsible marketing avoids
potential conflicts between the needs of consumers, consumer interests and long-
term social well-being.
The main goal of every public company must meet the needs of existing
and potential customers - the consumers. Marketing management of public com-
panies must seek to achieve this goal through proper management of marketing
mix instruments, especially the service. One of the instruments of service market-
ing mix, which is the basic start of planning, designing and implementing market-
ing strategy, is based on the service or service product. Today, more and more
public companies enter the market competition and particularly in areas attractive
to the private sector more intensive competitive struggle can be expected. There-
fore, it is necessary to increase the level of user satisfaction with the rationaliza-
tion of operations especially in emergency conditions, what they are today. Users
of public services must obtain a product or service of higher quality at lower cost
or more favourable payment terms, with shorter delivery periods and other bene-
fits which are manifested through the care of people and achieve the concept of
corporate social responsibility.18
4. CITY OF BELGRADE
Many utilities in the domain of urban local governments require the existence
of a large number of specialized companies and institutions. City of Belgrade, in
accordance with this, the founder is19:
− A total of 11 public utility companies;
− Total of nine companies and one organization;
− A total of 36 cultural institutions (theatres, cultural centers, museums,
libraries, organizations);
− A total of 17 child-care institutions (preschool);
− Total three social care institutions;
− Total 3 institutions of physical education (sports facilities);
− A total of 27 health facilities (health centers, pharmacies, offices, clinical-
17 Kotler Ph, Marketing Management, the Mate, Zagreb, 2001, pp. 27-29.
18 Ilić M, Radnović B, Živković Z, "Corporate Social Responsibility and the nonprofit sector - and
unethical marketing strategy or genuine concern," 3rd InternationalConference of Economic
Science, 2011 Kaposvár
19 Official presentation of the Belgrade City Assembly www.beograd.rs (22/03/2012)
210
hospital centers).
In urban municipalities Barajevo, Grocka, Mladenovac, Lazarevac,
Obrenovac and Sopot operate an independent public utility companies. City of
Belgrade certain tasks entrusted to the companies and organizations which he did
not found.
For public utility operations in the territory of the city municipalities, city
of Belgrade has established the following public utilities: PUC "Belgrade water
supply and sewerage"; PUC "Belgrade power plant"; PUC "Funeral services";
PUC "City Markets"; PUC "Belgrade green"; PUC "Sanitation"; PUC "Parking
servis"; PUC "Infostan"; PUC "Beograd put"; UTC "Beograd". The suburban mu-
nicipalities operate an independent public utility companies that have established
municipalities, except for jobs that are the decisions of the City of Beograd De-
termination attributes of customer satisfaction implies the existence of models for
leading overviews of consumer satisfaction, obtaining information from employ-
ees, make overview based on repetition and tracking trends and valuation of sta-
tistic data received from employees and delegated consumers. Assembly of Bel-
grade is the founder the following public companies (PC) that provide utility ser-
vices in Belgrade: PC "City Housing", "Agency for Building Land and Construc-
tion of Belgrade" PC, "Town Planning Institute of Belgrade" PC, City of Belgrade
is the founder of the following companies and organizations too: Public broad-
caster RTV "Studio B"; Tourist Organization of Belgrade, PC "Sava Center",
"Ada Ciganlija", PC "Belgrade Fortress", "Belgrade Arena" doo PC "Belgrade
Hippodrome", Public Water Management Company "Beogradvode" and Veteri-
nary Institutions "Veterinary Medicine, Belgrade." Belgrade City Council has
delegated certain utilities the following companies: TC "Swallow" - the activity of
local and suburban public transport of passengers in scheduled traffic in the City
of Belgrade; EPS 'Electricity Belgrade "- maintenance of public lighting facilities;
Company" Funeral "- chimney-sweeping services; Veterinary Station Belgrade -
public animal hygiene activity; "Srbija šume" - maintenance and landscaping of
Forest Park in the City of Belgrade. The activities of public interest perform
"Telekom Serbia" and PC "Srbija gas". For this companies founder is not the Bel-
grade City Council. They are authorized by the Republic of Serbia.
The complexity of the maintenance of municipal infrastructure Belgrade
often requires synchronized action over public utilities. In some cases there is
overlapping of their responsibilities for practical reasons or because of lack of
precise regulations. That is the so-called border jurisdiction where it is necessary
to distinguish what and whose obligations are, so that the present problem would
be solved.
211 211
An opinion poll resident of Belgrade with the central theme of the relation-
ship to public companies was conducted between 25 April to 1 May 2009th on a
sample of 1000 households (respondents) in central Belgrade territory on the 10
municipalities (Phase 1). The second phase was conducted from 22 to 29 Decem-
ber 2009th on a sample of 1000 households (respondents) in the territory of Bel-
grade's 10 municipalities. At issue are the following companies: PUC "Sanita-
tion," PUC "Belgrade Power" (power plants), PC 'Belgrade Fortress', Public traf-
fic company (PTC), PUC "Belgrade market," JP "Belgrade water supply and sani-
tation," PUC " Infostan "and JP" City Housing ". The study was conducted ac-
cording to the methodology and research in the first phase (May 2009), in order to
compare the obtained data and monitor changes in public opinion till the second
phase. Research provided by the agency CESID. The sample was made on the
base of service users of PC "City Housing", and the sample was representative of
the population of users of this company. The sample was multistage, proportion-
ate share of each municipality based on service user PC "City Housing" (each of
10 municipalities in the sample entered in proportion to their share-based users of
the company, which is the first step in choosing the sample). Here, special empha-
sis was placed on evaluating the quality of eight public companies in the capital
and inevitably bound up with that question which of them best and worst perform-
ing their jobs. Citizens of the least known work, "Belgrade Fortress" and "Bel-
grade power plant" - one in four or five citizens do not have the opinion or did not
know the work of these companies (what is expected, because every citizen
doesn’t have a central heating system, and everybody doesn’t go to visit the Bel-
grade Fortress). Behind them followed by "City Housing", whose activity has no
opinion or did not know one in ten respondents as compared to the spring survey
by 5% or less. The smallest problems with the perception have a companies like
"Sanitation" and "Belgrade water supply and sewage", where on the level of sta-
tistical errors are those who have no opinion about their work.
Perception Survey of urban public utilities is unavoidably and mostly re-
lated to the issue of a quality assessment of their work. However, this leads to
another question: How well do people know those companies, have they heard
about them, what is the level of recognition and distinction of their activities and
do they have any opinion about their work? To round up the whole, there was a
question which of these companies is the best and worst performing their jobs.
Specifically, to the respondents were given the tables, like a school evaluation,
from 1 to 5, to evaluate the work of public companies, or to choose a zero if they
do not know how to make that evaluation. In this context, the number of those
who knew (or didn’t knew) to evaluate the different companies varied, depending
on which services they are using and in what extent.
212
In assessing the quality of urban enterprises there were no significant dif-
ferences compared to the previous survey - the highest average rating (considering
only the responses of those who had an opinion about their work) have the 'Bel-
grade Fortress' (3.90) and "Belgrade Power" ie "Belgrade market" with an average
score of 3.53. Although the quality of the "City Housing" improved compared to
the previous study (with 2.74 to 2.89), this company is at this time again the low-
est rated of all public companies. One of the biggest reasons for this is the incom-
plete picture of their activities and the positive effects stems from it. Lack of rec-
ognition of the company caused the evaluation of the low quality of their work.
On the issue do the public companies perform their job the best; we got a
very balanced distribution of responses. So even the six companies placed at a
distance of only 8% as the best value for the work received the "Sanitation" (one
in five feel that they best perform a delegated task), followed by "Belgrade
Power" and "The Belgrade Fortress," which in the spring survey was rated as a
best company. Only 4% of citizens think that "City Housing" is doing its job the
best, and no better data are not for "Infostan" (5%).
In the survey people were asked the opposite question: which company, in
their opinion, the worst performing their job? As in previous research, two com-
panies stand out as the worst-rated - "City Housing" (fifth of those surveyed
thought that the worst work) and "Infostan" with 18% of those with negative per-
ceptions of their work. Thing that is the difference between the spring results is
more even distribution of responses for other companies, because the five compa-
nies located in more than 10%.
CONCLUSIONS
Service company depends on the user who is a participant in the manufac-

turing process and quality control measures which are based on eliminating errors
before the user sees that the product is not available for service. Therefore, service
quality is not the purpose or program that can be achieved or fulfilled, but must be
an integral part of the everyday management of the entire process of service deliv-
ery. Finally, service quality must be considered as the art and science at the same
time.
When it comes to the relationship between quality and satisfaction, there ar
five gaps. The quickest and most obvious gap is the difference between what users
want and what managers think customers want. In fact, many managers think they
know what their customers want but often they make mistakes. The knowledge
gap usually leads to a number of other errors. Wrong objects could be acquired,
wrong staff could be hired or they can be wrongly trained. Users can be provided
213 213
with the services that they have not used before, and not the one they want. Clos-
ing these gaps requires precise knowledge of what users want and insert the an-
swer into an operating system utility. Even if the users expectations are precisely
determined it is possible that the company has to deal with standard gap (Gap 2)
between what is perceived as management's expectations and actual service deliv-
ery standards. Gap 3 occurs between the actual services and standards set by man-
agement. The existence of three gaps depends on the willingness and capacity of
employees to provide service in accordance with the specification. Gap 4 is the
difference between the promises that company gives thru its impersonal commu-
nication channels and the actual services provided to users. If advertising or sales
promotion measures promise one type of service and the user gets a different type
of service, gap number 4 becomes wider and wider. In order to avoid gaps, or at
least reduce the risk of their occurrence and their effects it is necessary to con-
stantly perform market research and evaluation of customer satisfaction.
By satisfying the general requirements are means those forms of consumption that
must be organized together. This primarily includes the needs of public admini-
stration, national defence, judiciary, education, health care, cultural activities, so-
cial welfare and the like.
The work of public companies as its primary goal has ensuring the func-
tioning of enterprises in the public (general) interest, in order to effect the provi-
sion of quality products and services, achieving reasonable prices, meeting the
needs of all citizens and to prevent discrimination against consumers.
A prerequisite for survival of every company and imperative for every business
success is the application of marketing concepts. Of great importance is the rela-
tionship between service companies and consumers, regardless of whether they
are companies in private or public sector.
When it comes to service users from a company whose founder is the City of Bel-
grade, the results of polls conducted by the agency CESID in two phases (May
2009 And December 2009) give a clear picture of the perception of the citizens of
Belgrade on the quality of these companies. We believe that the received informa-
tion produced positive effects, and that the worse rated companies wanted to in-
crease the quality of their work, which will be the subject of a new public opinion
polls and re-audit by the consumer - service users.
Based on the information received from consumers or service users,
through various media, of analysed company made the development and imple-
mentation of solutions based on feedback, how it would not only met the expecta-
tions of consumers, but also to determine and fulfil hidden - unknown needs of
consumers.
214
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[1] Bateson J, Hoffman D, Marketing Services, Data Status, Belgrade, 2012th

[2] Group by "EFQM, customer satisfaction" - Quality Working Group, Section Two, March
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consumers for the purpose of the transfers of superior quality", Proceedings of the
National Conference on Quality, Kragujevac, 2009.
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sector - and unethical marketing strategy or genuine concern," 3rd International
Conference of Economic Science, Kaposvár 2011th
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Challenges of quality management

Book · June 2012

Paweł Nowicki Tadeusz Sikora

The user has requested enhancement of the downloaded file.

Challenges of quality management

prof. dr hab. Wacław Adamczyk

prof. dr hab. Tadeusz Sikora

prof. dr hab. Tadeusz Trziszka

prof. dr hab. Tadeusz Wawak

© Copyright by Uniwersytet Ekonomiczny w Krakowie

PTTŻ Publishing House

Digital Printing KSERKOP, Cracow

This book is issued

Amalia Venera Todorut

Paweł Nowicki Tadeusz Sikora

Cracow, June 2012 r.

A view on quality is changing, from period before year 1980 to today.

1. NEEDS FOR QUALITY IMPROVEMENT

Figure 2: Connection between quality of life and organization quality, process

Figure 3: Basic model of the quality of future

Depending on the intensity of impact within basic model of the quality of

In variant 1, positive impacts prevails and we can expect „bright future“;

2. MANAGEMENT'S CHALLENGES IN THE NEW ERA

According the Theory of Systems on enterprise (organization) is viewed as

Figure 5: Value stream

Core processes is related to creation of the new value. Group Work

Subject of this paper is the process P1: Process of strategic management.

3. QUALITY IMPROVEMENT AS CHALENGE

A sistematic approach to continuos quality improvement is provided by

Figure 6: Strategic map

Educational component of managers’ competence includes the knowledge from

Table 1: Synergic effect of management process

From the above-mentioned, we can draw the following conclusions:

LEVEL OF QUALITY OF EDUCATION SERVICES

1. HIGHER EDUCATION IN POLAND

Higher education institutions have to fulfill an important mission con-

Many private universities offer education at undergraduate only. These

2. THE IMPORTANCE OF QUALITY IN HIGHER EDUCATION

According to most experts, the future belongs to a knowledge-based econ-

3. APPLICATION OF THE SERVQUAL METHOD

Clearly from a best value perspective the measurement of service quality

Table 2. The importance of individual components of an educational service.

The results indicate a divergence of expectations of students studying at

1 -1,22 -1,22 -0,9 -0,93

Table 5. The weighted and unweighted average measure of SQ.

Overall weighted Servqual measure -2,13 -2,13 -1,86 -1,71

Overall unweighted Servqual measure -2,13 -2,13 -1,9 -1,87

Source: own research.

SELECTED IMPACTS OF QUALITY COSTS

effort for percepcion of

Fig.Cycle of continuous improvement by staff

1. THE ECONOMIC CRISIS

Fig. Cycle of impacts of economic crisis

2. QUALITY MANAGEMENT AND ECONOMIC CRISIS RELATIONS

Economic crisis puts pressure on shifts in the understanding and manage-

Fig. 3 "Fixes That Fail" archetype

3. ADDRESSING THE DIRECT IMPACT OF THE CRISIS BY

Onset of the crisis always activates the managements of firms to action. In

effort for percepcion of

Fig. 4 Cycles of cost-orientation

Management of direct and overhead costs during the crisis is important,

DOL = (% ∆EBIT) / (% ∆S) (1)