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Quality management in service industry

Introduction
Business operations include different kinds of processes that are directed toward streamlining the team work. Everyone in a business needs to follow a set of well tested steps in order to minimize errors. Staff and customers can feel more satisfied when chances of mistakes and poor production are less. Business processes that do not work can cause several problems. For instance, customer complains increase, workers get frustrated, resources are wasted, cost increase happens and finally organization faces loss. Just take example of production; every time production steps are same and the way customer complaints are resolved are also similar. If pre-defined steps are not repeated, dysfunctional procedures can be followed that can result in a total disaster. Here it becomes important to bring continuous improvement in business by analyzing needs of stakeholders and quality of service delivery (Popova et al,. 2010). The importance of efficiency in business procedures has also been identified by other scholars. In this context Slack et al., (2005) write that business operations are designed to streamline ways in which a team works. Chances of errors are low when well-tested procedures are used and better satisfaction of employees, customers and shareholders is achieved. On the other hand, business activities that lead to poor result can cause customer complaints because of which resources are wasted and bottle necks are developed.
What is quality and quality standard
According to Goetsch (2014) in manufacturing quality refers to measure of excellence. It assures that something is free of defects significant variations and deficiencies are not present. Uniformity can be achieved in a system when quality is assures and this is done to satisfy customer needs.
ISO standards also define quality as standards that can help achieve uniformity in products in a way that can satisfy the needs of customers. For instance, in automobile industry when final product deviates from the standard, defects are seen and product recall takes place. This results in loss of trust of customers. In addition to this, the manufacturer also has to bear additional expenses of repair (Biazzo, 2003).

Total quality management and quality standards:
Total quality management is also referred as productive maintenance that helps in long term success achievement through customer satisfaction. This is a phenomenon that allows participation of all members of a company to improve business culture through better services (Willar et al., 2012). In a customer focused organization the phenomenon of total quality management involves bringing continuous improvement in the final product or service. This requires effective communication through integration of data about system management. There are some basic principles that can help in better quality management of a system.
Al-Musleh et al. (2011) say that quality management system should be customer focused. It means that customer is the final decision maker who tells whether or not the product is right so whatever a company does should be according to customer requirements. Then employee involvement is another important element. It means that employee s contribution can help achieving business targets more accurately. This can also be achieved by improving decision making though decentralization. When workers are empowered chances of self management are high and business can get better results (Al-Musleh, 2011).
Rabaya (2013) writes that business can show better results if process centered thinking is maintained. This needs taking inputs from employees and converting them to outputs to be delivered to customers. The process should be carried out with continuous monitoring to avoid any kind of unwanted variation. Another factor is integrated system or system integration. This involves alignment of different functional specialties. Critical process, objective actions, and quality procedures should be aligned together,. Everyone must work according to the vision and mission of the company. Performance of business should be monitored continuously to minimize the chances of hazards. This goal can be achieved with the help of a strategic and systemic approach. Formation of strategic plan also needs integration of quality as a core component of business. Continuous improvement is an integral part of TQM and this can be done through analytical thinking. It drives organization toward effective finding and help reaching the ways that can make it more competitive according to the expectations of stakeholders. Through analytical thinking fact based decision making can be done. It needs continuous data collection with accuracy to achieve consensus. Finally communication during day to day tasks and also during and after the time of organizational change plays a pivotal role. This helps in maintaining a good morale of employees at different levels in an organization.
Need for continuous assessment:
Carroll et al. (2014) write that business needs to identify and manage the interest of its stakeholders to keep them engaged and this can be done with the help of continuous assessment. Different stakeholders in a business have different priorities. For instance, company s employees need good working conditions, salaries and incentives. On the other hand, shareholders of the company need better returns to their profits. Government and public bodies would like to see how different environment issues are being addressed and corporate social responsibility is being fulfilled. Customers always want to enjoy good quality products or services. Conflict amongst stakeholders may arise because some companies tend to compromise the interest of one stakeholder group while rewarding another. For instance, cheaper supplies can reduce the cost of production that may help investors but the final quality will not be liked by customers. There are some activities that do not bring immediate financial return to the business but they can have long lasting positive impacts. It is the responsibility of the management of the company to communicate with its stakeholders in order to make them understand the final benefit of one imitative. When a company assesses its internal and external capacities it offers developmental opportunities to its people it needs to justify the need of investment to its stakeholders. Resources are allocated for the programs needed and downside of not training employees in a proper way must be highlighted. Investors must know that poor management of employee may result in losing good talent from the company and chances of poor production can also increase.

In the coming paragraphs business case of McDonalds will be analyzed. It will be seen how this company meets the needs of its stakeholder and what initiatives can be taken to reduce poor service delivery. Before going ahead it is important to indentify the stakeholders at McDonalds and their interest in the company s business.

Stakeholders of McDonalds and their interest in business:
Various stakeholders group of McDonalds include customers, employees, communities and investors. Good relation to these stakeholders is needed so they can contribute toward the success of the business. Employees at McDonalds need career development opportunities along with salary perks and incentives. Employees serve as the face of the company. They receive salaries for their work. People at McDonalds need to have competitive wages to work with interest. They also want to have chances of promotions, perks and bonuses on good performance. In addition to this, customers constitute another important group that has stake in McDonald s activities. The interest is healthy and high quality food that is low in calories. It is important for McDonalds to put in special efforts in order to satisfy customer group who is the major stakeholder group of the company. Investors as third most important stakeholder group of a company need better return of their share in the company. They want to earn profits and also good revenues. Finally, outside communities need support of the business operating in an area. Interest of these communities can be met with programs such as charities and innovative environmental continuations (Freeman, 2010).
How poor service affect stakeholders at McDonalds:
Employees of McDonalds are not happy with the wages they receive. Sometimes their salaries are even less than the minimum legal wage-limit. They have been seen to keep demanding higher salaries. It is the social responsibly of McDonalds to make its employees loyal by rewarding them. Although there are a number of training and development programs at McDonalds but there are chances of improvement. McDonalds can incorporate its global development facility by supporting its people to get benefit of getting career development all over the world.
Customers need good quality food at low price. People who come at McDonalds also need neat and clean environment where they are served good food. However, at some placed company does not come out to be successful in its standardization efforts. This company has partially satisfied the needs of people and it must do more to offer healthier meals that are of good quality.
Investors at McDonalds want to see the business growing. They can be made more satisfied with better business performance. Stable growth rate and better revenues can make them happier. Introduction of new products is less than required and more efforts are needed to address their interest. Corporate social responsibly efforts of the company also ask for better programs to satisfy investors. McDonalds operates in different communities and cultures. The company has participated in charity programs and financial support systems but because of lack of insight of local needs and poor assimilation in culture makes it unable to perform better CSR activities. McDonalds being a big name in food business needs to take up a wide verity of social activities to satisfy interest of communities and customers (Rajablue et al., 2015).

How needs of different stakeholders are met:
In order to meet the needs of its customers, McDonalds has taken up some important corporate social responsibility policies. The company s management says that we take our stakeholders seriously. The company tries to make its employee competent through programs that can enhance their working skills. These people are also given a chance to volunteer in football matches and other community activities. These community activities are also sponsored by McDonalds at various fronts. In addition to this, initiatives are taken for the maintenance of environmental sustainability. For example McDonalds conducts recycling of its carbon boxes and utilize LED lights in its outlets. Packaging is made from renewable boxes and the concept of biodiesel fuel is being introduced. Along with this, investors at McDonalds are called every year in order to present their opinions. They are asked for their interests. Briefing is given to them about organizational activities. The current position of the company is discussed and future activities are also mentioned. This is done to make investors aware of business operations. It also keeps them engaged in the business. In annual shareholder meetings at McDonalds rules and regulations of business are discussed. A detailed account of Strength and strategies of the company is also given. Finally the needs of customers at McDonalds are met through a series of advertising and marketing campaigns that are occasionally taken up. New offers are given and promotional benefits are also highlighted so more and more clients can be attracted. Company also claims to offer high quality and low cost food to the foodies all over the world, however some customers criticize it for not being health friendly (Bruhn et al, 2013).

Task 2. Analyses the concepts of quality and quality standards in relation to service delivery
2.1. Quality and quality standards:
In business, quality standards relate to meeting the needs of customer while remaining economically competitive. Understanding the demands of customer and improving operational commitment in relation to that help bring improvement. Performance measures and measurement of customer satisfaction is also needed. Personal needs, past experience, recommendation and perceived services are checked. Sometimes perceived services are not equally good as expected. For this sake, there are some important factors that are considered including reliability, access, competency, communication, credibility, customer needs understanding and courtesy. In business when it comes to quality maintenance and service system, it relates to how a service is delivered to customers. The procedures involved in this are discussed and forces that work together are also considered. The concept of service delivery also relates to the equipment used in production (Narayan et al., 2012).For instance, a person who comes to buy a power tool wants to get good quality equipment. In order to win the market standards quality of service will be required to be maintained in a way that can beat competitive manufacturers. This will help delivering goods according to promised standards.
At McDonalds service description succinctly defines the promise that is inherent to quality management. This includes implied promises that assure better quality standards. Customers who come to get fast food at McDonalds want their food to be fresh and hot. They need their order filled accurately and on time. McDonalds also get significantly advantages of its fast food delivery system because of the standards that it has maintained. Steps and recipes that are involved in production are pre-defined so activities are performed at the same level as they are promised. Nothing infuriates customer more than knowing that they have got wrong order or something other than they ordered (Need, 2006).
Best food businesses are those that can create customer loyalty. It should be assured that nothing disrupts the quality of final product that is being delivered to the customer. People will not come to buy from the same place if they find themselves getting poor quality services. So consistence model in product description is of great importance. Every employee is selling something but he must know the standard a company has to maintain each time. There can be many internal or external factors that can affect standards. Having strong control on these factors can assure right delivery at the right time, otherwise chances of customers to switch to other businesses are high (Bernard et al., 2010).

2.2. Evaluating approaches to quality management in service delivery:
When the example of McDonalds is taken, it is seen that service quality is controlled with timers, standards and equipment. There are not so many people who have to make decision instead there are pre-defined steps according to which workers have to operate the business. Speed and consistency is maintained every time to make goods according to standards. Here workers are reactors who have to listen to the sound of the buzzer, take burger out, put fries in the package with a scoop. This scoop gives equal measurement in each case. Things are mixed according to the recipe and controlled equipment and standards are used. Service quality is maintained each time because of the standardized system that works similar in each and every case. Service standards are also met at McDonalds by hiring people who are young and perhaps doing their first jobs. They are ready to work on low wages. These people get a chance to earn. Young staff that is ready to work according to the command is created. Logically, here staff turnover rate is high but because systems are well defined so the chances of variation in service delivery are low. Efficiency of layout and facilities at McDonald s service system are kept in a manner that each and every procedure is clearly defined. Responsibilities of staff members and their relevant outcomes are told. Every aspect of delivery system ties in with the concept of quality service, as a result of which consistency is achieved at low cost (Wilt et al, 2007).

2.3. Explain how quality standards are set and monitored
Quality of product has central role in making customer satisfied. Although low cost is important but it brings only initial customer flow. When cost and quality are put together excellence is achieved. Different geographic locations may expect different tastes but compromise in quality can prove to be disastrous at any locality for a multinational food chain (Manuj et al., 2008).
Mr. Kroc who is a business entrepreneur responsible to expand business of McDonalds across the borders has the main vision of quality maintenance. He needed consistency in the quality of food at different locations. The slogan he used was in business for yourself but not by yourself . The promoted commitment to this vision led to the introduction of new products in McDonalds supply chain. Most of these products came from different franchisees. However, quality norms were followed according to already established standards. It is important to note that these policies can prove to be useless if quality audit process is not kept in place. At McDonalds this audit process assures evaluation of each and every step of production (Cooper et al., 1993).

Hazard analysis and critical control point system (HACCP) is applied to keep food safety according to absolute standards. It also helps ascertain quality in all stores. This system assures that no biologically and physically hazardous products are used in the food production. It helps reducing the risk and maintenance of level of safety. For food outlets that are involved in production and retail of juice and meat related products in the US have to show compliance to this program. In addition to this, industries such pharmaceuticals and cosmetics are also applying this approach (Sun et al., 2009). The website o the McDonalds shows commitment to the high quality food at service areas through application of HACCP. Muscles cut from chicken is taken and deboned in the outlet. It is said that not preservatives are added and pure meat it sourced from the suppliers. Buns are also sourced from the suppliers after checking the quality of wheat they use. It is assured that these buns are fresh and for that standards are checked at each step. In addition to this, fresh vegetables are also bought from the market to maintain standards according to legal guidelines. For dairy products, regional and local suppliers are checked for their reputation and whole milk is sourced from them. The company assures that no compromise is done on the quality of food and for that attention is given to each and every detail. It is observed that each and every process is standardized according to already set limits (McDonald s Food service and catering, 2016).
Task 3: chances of continuous improvement
3.1. Continuous improvement in service delivery:
The concept of continuous improvement in service delivery sector relates to a long term approach that seeks to implementing continuous changes in order to enhance the efficiency and quality of system. This system has also been used in lean program management. Here it is assured that work of every employee shows improvement on continuous basis so the company s overall performance can be enhanced. The idea of continuous improvement has been derived from Japanese word Kaizen that mean a good change (Slack et la., 2009). This word was used by Japanese industrial leader Edward Deming who revolutionized the engineering sector of Japan after World War II. His contributions as a person who brought Japanese industry out from disaster are honored. The philosophy of continuous improvement is based on some principles that are discussed as under:
Continuous improvement needs consistency toward the procedures that are involved in production or service delivery. The aim is to stay in business in a competitive manner. This also requires adoption of new philosophy in the system and elimination of frequent needs of inspection. The practice of awarding business on the basis of price is discouraged here and focus is maintained over cost minimization. Continuation in productivity is assured with quality improvement and constant reduction in spending. This concept also encourages institutional hob training to make people able to work in a professional manner. Leadership is done in a way that can make people hold their working position according to the need. It does not require creation of fear within the system. Sales, production and search teams should work in collaboration with each other. This helps the entire management foresee issues that can be encountered in future. With this it becomes possible to find solution of these problems (Iwami et al., 2009).
The concept of continuous improvement does not ask for zero defects in working system because this only results in adversarial relations. It also causes low quality of product that goes beyond workforce powers. The key is that work barriers that cause low productivity should be eliminated with vigorous efforts. Everybody in the system must participate in transformation process and this needs encouragement of teamwork. Breaking of system in steps such as assessment, planning, implementation and evaluation can make things easier. Concentrated efforts help make changes happen in quicker way and hence short and long term goals are achieved.
3.2. Evaluate the need for continuous improvement in service delivery:
Although continuous improvement is supposed to be a technique used initially manufacturing industry but these principles are equally important to be applied in case of service sector. Lean thinking allows maintenance of focus on people systems and tools. In service based companies employee engagement and teamwork, are two main procedures that are perceived important. Standardizing, measuring and systemizing the process, is necessary to reduce the chances of variation. The product should be delivered to customer according to their needs and this requires mapping process at management levels (Langley et al., 2009). It is important to measure the effectiveness of improvement in a given environment and for this, right things should be measured in the right way in service industry. There are some unique challenges that are faced in each and every business so modification of plan is needed. Careful analysis is done and then solution is devised. Proper matrices are put in place to achieve long term and effective results that can help bring problems at surface (Rother et al., 2009). In service industry people are more important than machines and issues such as morale, team work and employee motivation are considered to be of top most importance. Further analysis and training is needed in order to bring a lasting change and sustain performance. Companies that are successful in continuous improvement, usually share lessons across different departments that allow them to maintain their functions in suitable limits of business.
The need of quality management and improvement has also been realized in service industry by other scholars as well. Because it is a customer oriented sector so establishment of smooth connectivity amongst various segments can be assured. Business processes that are well-connected assure better retention of customers. The quality improvement approach assures that all business activities are beneficial. Every aspect of quality is associated with employee in service industry so effective mechanism that can help improve patience and commitment of people can help in better management. This motivates employees to work according to standards that lead to satisfied customer response. In service industry customer bring revenue and future revenue impact profitability. Customer retention rate increase can positively affect profitability. If chances of complains are increased or customer have bad experience then service failure may result. This also leads to switching of customer to other businesses delivering similar services (Gould et al., 2009).
3.3. Implementation of continuous improvement:
Managers can bring improvement in service quality at McDonalds by simply walking around the manufacturing facility and finding out the defective parts in the system. Specific color and loud system codes can help identification of waste areas. These areas are otherwise not visible to naked eye. Waste occurs at many places in organization and it is important to highlight these areas. It will help rework bottlenecks and accelerate identification of gaps.
At McDonalds measuring of soft activities is also important. It is involved in delivering service to the client so integration of health and safety regulation is necessary. Continuous data collection can be done to measure the impact of initiatives this may involve using of prioritization tools. If such characteristics are powerfully integrated in the business then enhancement in service can be achieved.
McDonalds is a company that has high level of human involvement and behavior of workers can dramatically change the performance outcomes. Continuous improvement methodologies have human elements as well. Defining and setting people up for a change, and learning to eliminate activities that cause wastage can greatly help. This can be the most important step toward improvement journey. However unreasonable tasks should not be imposed over people. Win-win solutions should be devised in order to assure that activities end in fruitful results. Finally, customers are at the end of the production line. It is critical to regulate this line till end in order to prevent shipping of defective goods to customers. However, in service industry customers are also present at other stages too. They might be on counter trying to navigate through the window or through computer screens to see the monthly report of their bills. In such a situation chances of failure should be controlled properly in order to prevent unnecessary rework that can overburden employees.

 

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