1. Striving for the business-integrated
quality management - Quality Integration
Juhani Anttila
1
xxxx/25.2.2014/jan
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(Mention the origin)

2. Striving for the business-integrated quality management
Business-integrated quality management:
Quality management that consists of:
•
Coordinating activities embedded seamlessly in the organization's management
processes and
•
Professional quality practices within the organization’s normal business operations
One cannot distinguish the business-integrated quality management from the business
management of an organization.
•
The approach is a deliberate countermeasure to separate quality systems.
The business-integrated quality management is to reinforce an organizational business identity.
•
The approach is to stand out amongst the crowd of look-likes of standard image with regard
to quality in striving for business competitiveness.
2
Fundamental understanding of the topic:
- Without a proper answer to the following
questions, the business-integrated quality
management is not possible:
How to understand organization?
How to understand management?
How to understand quality?
How to understand quality management?
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Answers to these questions may be different
in different practical organizational cases.
Hence, also the solutions of the embedded
quality management may also differ greatly
among different organizations.

3. “In the beginning was the Word ...”(*)
The ontological basis of integration
Joseph Juran, Quality control handbook (1974):
“Any widespread discipline must identify and clarify the universal concepts, which underlie its
very existence as a discipline. In addition, it must evolve and standardize the key words and
phrases through witch the practitioners of the discipline can communicate with each other.
The quality function has taken some steps to identify and clarify these concepts to prepare
some glossaries of terms. Because they have not been widely adopted (or even circulated), there
is great difficulty in reaching a meeting of the minds when practitioners convene to solve
problems.
--The reader is urged to keep in mind that differences in meanings of key words and phrases are
a frequent source of confusion. The question “Just what do you mean by this word” is especially
important in those cases where someone else is drawing an “illogical” conclusion from the
identical set of facts. Such outward differences in conclusions are seldom the result of illogical
reasoning. More usually they are the result of logical reasoning from different concepts or
premises.”
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(*) Johannes 1:1

4. The key concepts of the business-integrated
quality management - A pragmatic approach
organization: person or group of people that has its own functions with responsibilities,
authorities and relationships to achieve its objectives (*)
management: coordinated activities to direct and control an organization (**)
- Management takes place through managing processes.
quality: degree to which a set of inherent characteristics fulfils requirements (**)
- Requirement: need or expectation that is stated, generally implied or obligatory (*)
- Interested party: person or organization that can affect, be affected by, or perceive
themselves to be affected by a decision or activity (*)
quality management: coordinated activities to direct and control an organization with regard
to quality (**)
- Quality management is an organization-internal engagement for ensuring business
results fulfilling the needs and expectations of the organization’s interested parties.
quality assurance: part of quality management focused on providing confidence that quality
requirements will be fulfilled (**)
- Quality assurance is a communication issue between the organization and its
interested parties.
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(*) ISO Directives Annex SL, (**) ISO 9000

5. Typical managing infrastructure and elements
of an organization
Action
plans
Development
projects,
”Becoming Better”
Policies
Mission
(Purpose,
justification
of the
existence)
Strategies
Resources,
Procedure
documents,
Tools
Operational
processes,
”Earning Money”
Realization means
0,4...1
year
Action
just now
Vision
SHARED BUSINESS VALUES
Purpose
of the
company
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Strategic plans
3...5
1...3
years
years
Separate quality (management) system within this typical business framework is
very artificial. All quality actions must be integrated with the management system.

6. Managing activities and responsibilities cover the whole
organization and different levels of the organization
Top management
Business establishments
Breakthrough activities
Division Directors
Business area establishments
Improvement activities
Routine
operational
and maintenance
activities
Unit / function managers
and professionals
Process owners
Process team members
Portion of time spent on activity
6
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(Ref.: The Itoh Model, Singh Soin)

7. What is business management all about?
Creators of the classical
schools of management theory:
7
H. Fayol 1841 –1925
Industrial administration (strategic management)
1. Division of work among individuals and groups to focus effort and
attention on special portions of the task
2. Authority of managers to give orders.
3. Discipline. Employees obey and respect the rules
F.W Taylor 1856 –1915
4. Unity of command. Every employee gets orders from only one
Scientific management (production
superior
operations)
5. Unity of direction. Each group with the same objective is directed
by one manager using one plan
1. Replace rule-of-thumb work
6. Subordinate individual interests to the general interest of the
methods with methods based
organization as a whole
on a scientific study of the
7. Remuneration. Workers must be paid a fair wage for their
tasks
services.
2. Scientifically select, train, and
8. Centralization to find the optimum degree of centralization for
develop each employee rather
than passively leaving them to 9. each situation line of authority from top management to the
Scalar chain. The
train themselves
lowest ranks represents the scalar chain. Communications follow
3. Provide detailed instruction
this chain
and supervision of each worker 10. Order. People and materials should be in the right place at the
in the performance of that
right time.
worker's discrete task
11. Equity. Managers should be kind and fair to their subordinates
4. Divide work between managers 12. Stability of tenure of personnel. High employee turnover is
and workers; the managers
inefficient. Management should provide orderly personnel
apply scientific management
planning
principles to plan the work and 13. Initiative. Employees who are allowed to originate and carry out
the workers perform the tasks.
plans will exert high levels of effort
14. Esprit de corps. Promoting team spirit will build harmony and
unity within the organization
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8. The 2013 “Thinkers50” global ranking
of management thinkers
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http://www.thinkers50.com/t50-ranking/2013-2/

9. Management methods / Management models
/ Management theories
STRATEGY - VALUE CREATION: 3C's model Ohmae 7 Ps Booms Bitner 7-S Framework McKinsey ADL Matrix Arthur D,Little, Ansoff product/market grid Acquisition Integration Approaches Haspeslagh Jemison BCG Matrix Blue Ocean Strategy Kim BPR
Business Process Reengineering Bricks and Clicks Business Assessment Array Capability Maturity Model CMM Change Dimensions Pettigrew Whipp Clarkson Principles Competitive Advantage Nations Porter Competitive Advantage framework Core
Competence Hamel Prahalad Core Groups Art Kleiner Cost-benefits analysis Cultural Dimensions Hofstede Delta Model Hax Deming cycle PDSA Dialectical Inquiry Diamond Model Porter Dimensions of Change Pettigrew Whipp Distinctive Capabilities Kay
ERG Theory Alderfer Experience Curve Extended Marketing Mix 7P's Five Forces Porter Force Field Analysis Lewin Growth Phases Greiner Game Theory Nash GE / McKinsey matrix GE Business Screen Growth Share Matrix BCG Hierarchy of Needs Maslow
Hofstede National Differences Impact/value Hammer Industry Change McGahan Industry Life Cycle Instrumental Approach of Stakeholder Theory Intrinsic Stakeholder Commitment Kaizen philosophy Learning Organization, The M&A approaches Management
by Objectives Drucker Managing for Value MfV Insead Marketing Mix 4P's 5P's McCarthy Modeling business simulation Normative Approach of Stakeholder Theory OODA Loop Boyd Organizational Configurations Mintzberg Organizational Learning
Outsourcing Parenting Advantage Goold Campbell Parenting Styles Goold Campbell PDSA Deming cycle Performance categories Baldrige Performance Prism PEST analysis Plausibility Theory Porter competitive advantage Porter Value Chain Portfolio
Analysis Product/market grid Ansoff Profit Pools Gadiesh, Gilbert Real Options Luehrman SDG Relative Value of Growth Mass Resource-Based View Barney Root Cause Analysis Scenario Planning Simulation modeling Six Thinking Hats de Bono Spiral
Dynamics Graves Strategic Alignment Venkatraman Strategic Intent Hamel Prahalad Strategic Stakeholder Management Strategic Triangle Ohmae Strategic Thrusts Wiseman Strategy Map Kaplan Norton STRATPORT Larreche SWOT analysis Systems
Thinking / Dynamics TDC matrix Internet value Theory of Constraints Goldratt Twelve Principles of the Network Economy Kelly Value Chain Porter Value Disciplines Treacy Wiersema Value Mapping Jack Value Stream Mapping VRIN Barney
VALUATION - DECISION MAKING: Absorption Costing Activity Based Costing ABC ABM ARIMA Box and Jenkins Balanced Scorecard Kaplan Norton Baldrige categories of performance Benchmarking Brainstorming Break-even Point Capital Asset Pricing
Model CAPM CAPM Capital Asset Pricing Model Cash Flow from Operations Cash Flow Return on Investment Cash Ratio Cash Value Added CVA Anelda CFROI Contingency Theory Vroom Corporate Reputation Harris-Fombrun Cost-benefits analysis
Current Ratio measuring liquidity Debt to Equity Ratio measuring solvency Direct Costing Discounted Cash Flow DCF Dividend Payout Ratio Dynamic Regression Earnings Per Share EPS Enronitis EBIT EBITDA Economic Margin EM Economic Value Added
EVA EFQM EFQM EPS Earnings Per Share EVA Economic Value Added EVM CPM Excess Return ER Suggest a theory Exponential Smoothing Fair Value accounting Free Cash Flow Full Costing Game Theory Nash Gross Profit Percentage Groupthink Janis
Human Capital Index HCI IAS Accounting Standards IC-Rating Intellectual Capital Impact/value Hammer ICT value Inclusive Value Measurement IVM Intangible Assets Monitor IAM Sveiby IRR (Internal Rate of Return) Leveraged Buy-Out Liquidation value
M&A approaches Management buy-out MAGIC QPR Marginal Costing Market Value Added MVA Net Present Value NPV NOPAT Operating Cash Flow Operating Profit Percentage Operations Research P/E ratio Payback Period Performance categories
Baldrige Performance Prism Plausibility Theory Portfolio Analysis PRVit Quick Ratio RAROC Risk-Adjusted Return on Capital Real Options Luehrman SDG Real Ratio Regression Analysis Relative Value of Growth Mass Reputation Quotient Harris Fornbrun
Return on Capital Employed ROCE Return on Equity ROE Return on Invested Capital ROIC Return on Investment ROI Return on Net Assets RONA Risk Management Simulation business modeling Six Sigma GE Six Thinking Hats de Bono Skandia Navigator
Leif Edvinsson Strategic Thrusts Wiseman TDC matrix Internet value Time-Based Activity Based Costing Kaplan Total Business Return TBR BCG Total Shareholder Return TSR US GAAP Accounting Principles ValueReporting Framework PWC Value Creation
Index CGE&Y CBI Variable Costing VRIN Barney WACC Z-Score Altman
ORGANIZATION - CHANGE - CULTURE: 7-S Framework McKinsey Acquisition Integration Approaches Haspeslagh Jemison Attributes of Management Excellence Peters Balanced Scorecard Kaplan Norton Baldrige categories of performance Bases of
Social Power French Raven BPR Hammer Champy Business Process Reengineering BPR Capability Maturity Model CMM Change Approaches Kotter Change Behavior Ajzen Change Dimensions Pettigrew Whipp Change Management Iceberg Change Model
Beckhard Change Phases Kotter Changing Organization Cultures Trice Beyer Cultural Intelligence Early Clarkson Principles Competing Values Framework Quinn Core Groups Kleiner Corporate Governance OECD Crisis Management tips Cultural Dimensions
Hofstede Culture Change Trice Beyer Culture Levels Schein Deming cycle PDSA Dialectical Inquiry Dimensions of Change Pettigrew Whipp Eight Attributes of Management Excellence Peters Entrepreneurial Government Osborne EVM CPM EFQM EFQM
Expectancy Theory Vroom Industry Change McGahan Five Disciplines Senge Force Field Analysis Lewin Fourteen Points of Management Deming Gestalt theory Growth Phases Greiner Hierarchy of Needs Maslow Implementation Management Krüger
Innovation Adoption Curve Rogers Intrinsic Stakeholder Commitment Intangible Assets Monitor Sveiby Kaizen change philosophy Learning Organization Senge Levels of Culture Schein Levers of Control Simons Management by Objectives Managing for Value
MfV Insead Organic Organization Burns Organizational Configurations Mintzberg Organizational Learning Outsourcing Parenting Advantage Goold Campbell Parenting Styles Goold Campbell Path-Goal Theory House PDSA Deming cycle People CMM CM-SEI
Performance categories Baldrige Performance Prism Planned Behavior Theory Ajzen Points of Management Deming RACI (RASCI) Result Oriented Management Seven Habits Covey Seven Surprises Porter Six Change Approaches Kotter Six Sigma GE
Skandia Navigator Leif Edvinsson SMART Drucker Stakeholder Management Strategic Alignment Venkatraman Strategic Stakeholder Management Strategy Map Kaplan Norton System Dynamics / Thinking Forrester Ten Principles of Reinvention Osborne
Theory of Planned Behavior Ajzen Theory of Reasoned Action Ajzen Fishbein TQM Total Quality Management Two Factor Theory Hertzberg ValueReporting Framework PWC
COMMUNICATION - MARKETING: 7 Ps Booms Bitner ADL Matrix Arthur D. Little Ansoff product/market grid ARIMA Time Series Analysis Balanced Scorecard Kaplan Norton Bass Diffusion model Bass BCG Matrix Brand Asset Valuator Brand Personality
Aaker Bricks and Clicks Business Assessment Array Business Process Reengineering BPR Change Behavior Ajzen Change Management Iceberg Change Phases Kotter Core Groups Kleiner Corporate Reputation Harris-Fombrun Crisis Management tips
Distinctive Capabilities Kay Enterprise Architecture Zachman Extended Marketing Mix 7P's Missing a method? <../opinion.html> Framing Tversky Gestalt theory Groupthink Janis Implementation Management Krüger Industry Life Cycle Innovation Adoption
Curve Rogers Intrinsic Stakeholder Commitment Kaizen change philosophy Leadership Styles Goleman Learning Organization, The Levers of Control Simons Marketing Mix 4P's 5P's McCarthy Organizational Learning PEST analysis Planned Behavior Theory
Ajzen Positioning Trout Product/market grid Ansoff Product Life Cycle Profit Pools Gadiesh, Gilbert Reputation Quotient Harris Fornbrun Strategy Map Kaplan Norton STRATPORT Larreche Theory of Planned Behavior Ajzen Theory of Reasoned Action Ajzen
Fishbein Twelve Principles of the Network Economy Kelly Value Disciplines Treacy Wiersema
LEADERSHIP - MANAGEMENT: 4 Dimensions of Relational Work Butler Activity Based Costing ABC ABM Bases of Social Power French Raven Benchmarking Brainstorming Business Process Reengineering BPR Change Management Iceberg Competing
Values Framework Quinn Contingency Theory Fiedler Cost-benefits analysis Crisis Management tips Cultural Intelligence Early Deming cycle PDSA Emotional Intelligence Goleman Enterprise Architecture Zachman ERG Theory Alderfer Expectancy Theory
Vroom Five Disciplines Senge Framing Tversky Groupthink Janis Growth Phases Greiner Hierarchic Organization Burns Hofstede National Differences Human Capital Index HCI Just-in-time JIT Kepner-Tregoe Matrix Leadership Continuum Leadership Styles
Goleman Levels of Culture Schein M&A approaches Management by Objectives Modeling business simulation Organic Organization Burns PAEI management roles Parenting Styles Goold Campbell Path-Goal Theory House PDSA Deming cycle PDCA Power
Bases French Raven Results-Based Leadership Ulrich Result Oriented Management Risk Management Root Cause Analysis Seven Habits Covey Seven Surprises Porter Simulation modeling Six Sigma GE SMART Drucker Social Intelligence SWOT analysis
TDC matrix Internet value Theory of Constraints Goldratt Theory X Theory Y McGregor Theory Z Ouchi TQM Total Quality Management Two Factor Theory Hertzberg Value Chain Michael Porter
9
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http://www.valuebasedmanagement.net/

10. The challenge of the integration
The business-integrated quality management:
•
Is applicable in all and any kind of organizations
•
Is a natural and professional way to improve an organization’s business competitiveness
with regard to quality
•
Is based on organizations’ existing practices of management and quality, which factually
means that every organization always has a certain level of quality management
•
May always be improved according an organization’s business needs and business
decisions. A foundation for recognizing and developing an organization’s businessintegrated quality management is to identify the organization’s business system and
managing processes (The “organizational profile”)
•
Is always ready but may never get finished
•
Is flexible to make creatively use of all concepts, principles and methodologies of the whole
recognized quality discipline
•
Is able to cover, in addition to quality management, also all other managerial disciplines,
e.g. according to the corresponding management system standards
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The business-integrated approach is in principle and in practice
different from the integrated management systems where several
separated management systems based on different management
system standards are realized as one single management system.

11. Business-integrated quality management embeds wellknown quality management methodologies
PEM = Performance
Excellence Model
(Quality award criteria)
Business
System
PEM
Strategic direction
Kaizen
ISO 9001
BSC
Six
Sigma
Lean
ISO 9004
Operational direction
11
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BSC = Business
Strategy-Card
(e.g. Balanced
Scorecard)

12. The business-integration is always
an organization-specific solution
All organizations have
•
Different business needs
•
Different interested parties
•
Different business management approaches
•
Different emphases, selections, and applications in quality policies, principles,
practices, and methodologies
Hence, the business-integration is an organization-specific solution.
Particularly startups and small organizations need a special reflection but in these
cases quality, quality management and business integration are more important.
12
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13. Business-quality trade-off
High Authoritative Successful
power
integration
Strength and Low integration
effectiveness
of the business
management
“Laissez-faire” “Geek activity”
Low
Low integration
Weak
Strong
Genuine quality
management awareness
and engagement
13
Business driven development
Business solutions
Implementation policy
Quality solutions
Articulation
Business
Quality
Balance
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14. Effective dialogue and cooperation is needed
between business leaders and experts
Business leaders know the right things and experts know the best means to
do things right:
• Business leaders are generalists and strongly acting individuals with
strong organizational positions. Normally they don’t have a deep
knowledge of quality management.
• Experts are specialists and deeply knowing individuals with low positionbased authority.
Clear responsibility / authority roles should be established between business
leaders and experts, and an effective dialogue and cooperation between
them made possible.
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15. Promoting business-integrated quality management
as a regional approach
Geographical regions, e.g. a country, are networked communities of various organizational
and individual actors. Organizations, which may be private business companies, public civil
service organizations, and the third sector voluntary organizations, are independent but in
many complicated ways interlinked with each other. Business-integrated quality management
approach is applicable in all types of organizations, but each organization makes its own
decisions and selections by itself.
Business-integrated quality management may be promoted region-widely by:
•
Shared experiences of the pioneer companies
•
Organizations educating, training, coaching, and supporting professional quality and
quality management practices
•
Collaboration among organizations
•
Related research activities
In all cases the approaches of business-integrated quality management should be
realized in accordance of the business situations and needs of the particular
organizations.
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16. An instantiation of the business-integrated quality
management: Quality Integration
The Quality Integration approach:
- The integration covers all the subject areas considered within the ISO 9000
standards and performance excellence models (quality awards criteria).
- Also the topics of many other specialized management areas, e.g. environmental
management, safety management, risk management, and information security
management, etc., are typical sub-domains of Quality Integration.
- One can also find significant ideas of Quality Integration from teachings of
recognized gurus of quality profession and through benchmarking from the practices
of world class organizations.
- Quality management equals quality of management.
We call this Quality Integration. It was invented as a concept and introduced to practical
business solutions at Sonera Corporation in the 1990's.
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17. Our approach - Quality Integration
Domain of action of the organization with Quality Integration:
Competitiveness
Sustained success
Innovatory management
Infrastructure (3)
An
organization
with Quality
Integration
(2) Effective methods
and tools
(1) Sound management
principles
Quality Integration makes use of the principles of learning organization (*).
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(*) P. Senge

18. The managerial foundation of all organizations
and basis for Quality Integration
All organizations strive for competitiveness and sustained success with certain (*):
 Principles
• propositions that serve as the foundation for the organization’s business and
belief or behavior; guiding ideas that drive the whole business
 Methodology
• methods used for managing the organization; practical soft and hard
instrumental means for the organizational operations
 Infrastructure
• basic physical and organizational structures and facilities needed for the
operation and management of the organization; the means through which the
organization makes available resources to support operations
that are selected and decided by the organizations themselves.
The domain of action (*) that defines the identity of the organization’s management approach.
18
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(*) P. Senge

19. Cornerstones of Quality Integration
Elements of the Quality Integration for an organization’s domain of action:
Principles
• ISO 9000 quality concepts and quality
management principles (QMPs)
• Fundamental concepts, core values, and
principles of the recognized performance
excellence models
• Principles of the quality related other
disciplines
• Integration, focus and alignment,
consistency, responsiveness, innovation,
and collaboration
• Organization-specific articulation of the
guiding principles
19
Infrastructure
• System / process structure
• Structure of the ISO Directives Annex SL
• Strategic and operational management
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Methodology
•
Process management model
•
“3-in-1” self-assessment model
•
Process performance assessment
methodology (auditing)
•
Benchmarking
•
Business strategy card, BSC (tailored
with Balanced Scorecard, Hoshin Kanri
and MIDO)
•
Problem solving and improvement
methodology (“ProbEl”)
•
Project management model
•
Other tools for financial management,
human resource management,
technology management, risk
management, purchase and logistics,
marketing, etc.

20. Understanding the benefits from Quality Integration
contributions (EEM - Enabler-Effect Map)
Enabler / effect map
Beneficial features and phenomena in
processes, procedures, activities, etc.
and their results:
E4
E1
A Quality
Integration
contribution,
investment,
etc.
Operational
benefits
Enhancing
customer
perceived
value
E5
E2
E6
E3
E = Enabler / Effect
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(Ref.: Lillrank, Laulajainen)
Driving
innovative
opportunities
and real
option
values
Risk
factors
Strategic
results
Actions
of the
business
management
Behavior
Increasing
of the
operational markets &
efficiency or customers
decreasing
cost
Business
bottom
line
results

21. Flexibility of the business integration: Organization’s
capabilities tailored to customer’s individuality
Customer’ individuality
Uniform
lll
lV
l
ll
Customer’s needs
Uniform
Differentiated
The tailored (121) 1 to 1 business relationships.
21
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(Ref.: D Peppers, M Rogers)
High
Communications
flexibility
Customer’s value
creation
Differentiated
Organization’s capabilities
Low
lll
lV
l
ll
Flexibility in production
and delivery
Low
High

22. Quality Integration (QI) process,
QI expert process in an organization
Customers’ activity (internal & external
Customer
needs
Clarifying the
needs,
Defining the
issue
Creating the
solution
QI product:
• Added value
outcome to the
customer
Establishing
the solution
into practice
Maintaining QI knowledge foundation
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Following-up
• Customer’s
business
develops
• Customer’s
satisfaction
increases
Organizationinternal
QI expert
service
process

23. Bridging the chasm between theory and practice
in Quality Integration (Vee heuristics)
Conceptual / theoretical
THINKING
Methodological
DOING
FOCUS QUESTION
Introducing and developing
Ontology:
quality integration in any
Evaluating the examination and
-The nature of reality of quality
organization for enhancing
the achieved results
integration, existence and
competitiveness and
relationships of the key entities
business success
Conclusions that answer the focus
-Principles that govern the properties
questions
of quality integration
-Basic concepts for considering
quality integration in events and
Creating information and knowledge from
objects
observation data with analyses and
-Validity of and motivation for solving
discussion
the focus questions
23
Epistemology:
Observing the facts and recording data from
-Theories, methodology, and models, to
the examined events or objects
get and process knowledge of quality
integration
EVENTS OR OBJECTS
Organization, performance development,
quality integration implementation, business performance
4267/19.1.2014/jan (Ref. Gowin, Novak, Åhlberg)