ORGANIZATION'S STRATEGIC OBJECTIVES

Organization's Strategic Objectives

Organization's strategic objectives

Introduction

Intense global competition has highlighted the increasing importance of quality (Lawrence, 1980; Schonberger, 1982). Superior quality no longer differentiates competitors; instead, it validates a company's worthiness to compete (Giffi et al., 1990). Once recognized as an order-winner, high product quality is now considered an order-qualifier (Handfield and Ghosh, 1994).

In the operations literature, quality is often treated as multi-dimensional in nature. For example, Garvin (1987) identified eight dimensions of quality that can be used individually or collectively to obtain a competitive advantage. In contrast, Sinha and Willborn (1985) framed the concept of quality in life cycle terms, focusing on three stages - conformance, performance, and design - where contributions to product quality are made and evaluated.

More recently, Madu et al. (1995) examined three dimensions of quality (customer satisfaction, employee satisfaction, and employee service quality) in relationship to organizational performance. Other scholars have routinely made distinctions between different aspects of quality performance, such as product reliability, product durability, and conformance to specifications (e.g. Krajewski and Ritzman, 1996). While the literature suggests that quality is a multi-dimensional construct, the empirical evidence supporting this claim is scant.

The purpose of this research is two-fold. First, we examine empirically the dimensions of quality in the automotive supply industry. The dimensionality of quality performance is explored in a single industry study of first tier suppliers to the Big 3 automakers (General Motors, Ford, Chrysler) in North America. A single industry study was deemed appropriate for two major reasons:

(1) The dimensions of quality may differ in number or identity from one industry to another.

(2) A single industry study allows researchers to reduce variability (e.g. industry effects).

The second purpose of the research is to establish the predictive validity of the quality dimensions identified in this study by examining their relationship with overall firm performance. We examine asset based, investment based, and market based measures of firm performance.

This paper is organized as follows. First, the strategic operations literature is reviewed to develop a theoretically relevant set of quality variables. The methodology is then described, including the sampling procedure and measurement process. The set of quality variables is then factor analyzed to identify the core dimensions of quality in the automotive supply industry. The reliability of these quality constructs are also examined. Next, we examine the relationships between the core dimensions of quality and six measures of overall firm performance. Finally, the managerial implications of this study are presented along with suggestions for future research.

Discussion

Researchers and practitioners from philosophy, economics, marketing, and operations management have differing viewpoints concerning quality. For example, definitions of quality provided by engineering, marketing, and manufacturing scholars are often conflicting. Forker (1991) observed that these varying perspectives could be classified into five major categories of quality approaches: transcendent; product-based; user-based; manufacturing-based; and value-based. The transcendent approach equates quality with "innate excellence" and claims that although quality is difficult to define, it is absolute and is identifiable through ...