Chapter 2

Quality and Competitiveness

Relationship Between Quality and Competitiveness

Quality and competitiveness has a positive relationship.

Higher quality will lead to an increase in competitiveness, vice versa.

This relationship applies in any situation especially in business sector.

For a business organization, the degree of competitiveness can be more intense if it decides to compete globally.

This is because at each successive level of competition, the quality of the competitors is likely to be increased.

Factors That Inhibit Competitiveness

Principles of total quality are essential to ensure that the business can compete in the global marketplace competitively.

There are a few factors that inhibit competitiveness, which every manager must know. These factors are:

Business/Government-Related Factors

Education-Related Factors Family-Related Factors

Business/Government-Related Factors

In W. Edwards Deming's Seven Deadly Diseases, there are three diseases that can add cost to a company's product without adding value. The three diseases are:

Emphasis on short term profits fed by fear of unfriendly takeover attempts and pressure from enders or shareholders

Excessive medical costs Excessive costs of liability inflated by lawyers

working on contingency fees Both business and government need to work together to

reduce these diseases so that the non-value-added cost will be at minimum.

Both business and government can develop a positive, constructive partnership to enact policies or even reconstruct the financial, legal and medical systems so that these costs can be reduced.

 

Education-Related Factors

The quality of a country's education system is a major determinant of the quality of its labor pool.

There is a positive relationship between the quality of the education system and the quality of the labor pool.

The higher the quality of the education system will increase the quality of the labor pool.

This situation will result in the increased level of competitiveness in the labor.

Business can reduce the cost in the training development for their employees if the employees have higher education level.

Family-Related Factors

More knowledgeable, skilled and motivated and able to learn members of the labor pool is a critical part of the competitive equation.

According to Ray Marshall and Marc Tucker, family is the most important human-resource development agency in any country.

Family has a strong influence on the attitudes of children toward learning and working.

Therefore, knowledgeable, skilled and motivated and able to learn members of the labor pool can be derived if the problem in the family unit can be reduced.

Comparisons of International Competitors

There are four critical indicators of a country's competitive status used to make comparisons between nations;

standard of living, manufacturing productivity, investment and trade.

All of these indicators have a positive relationship with the competitive level.

Most competitive countries

The 19th annual World Competitiveness Yearbook, published by the International Institute for Management Development (IMD) survey:

1. USA 2. Singapore 3. Hong Kong 4. Luxembourg 5. Denmark ……. 23. Malaysia

Industrial Policy and Competitiveness

Industrial policy plays a significant role in ensuring that business can compete in the global marketplace competitively.

Examples of industrial policies that can increase competitiveness are tax incentives, investments in research, development, education reform, equipment and facilities.

Furthermore, a close relationship between government and business can also promote competitiveness in the global marketplace.

A good industrial policy must also fulfil two complimentary goals; it provides incentives that encourage business to be more competitive and also removes barriers that can reduce competitiveness.

Technology and Competitiveness

Technology is designed to help enhance human capabilities in increasing an organization's competitiveness.

A country must outperform foreign competitors to be able to succeed in the global marketplace.

Being a high quality and productive manufactured products exporter can ensure a country's competitiveness.

This is where technology plays its role. Using state-of-the-art technology can help produce high

quality products. This in turn will increase the level of competitiveness of

the manufacturer and the country itself.

Human Resources and Competitiveness

Human resources are the most valuable asset in enhancing competitiveness.

Developing human resources can be in term of cooperation among businesses, labor and government, high-quality of education and training, employee involvement and empowerment, leadership at all levels and also teamwork.

ISO 9000 and Competitiveness

ISO 9000 is an internationally uniform quality standard developed by International Organization for Standardization, in Geneva, Switzerland.

It provides a uniform framework for quality assurance that can be used worldwide. Certification of ISO 9000 involves establishing a quality program that meets the requirements set forth by ISO 9000.

An ISO-9000-certified organization can enjoy benefits that extend beyond access to foreign markets and compatibility with foreign suppliers.

Furthermore, the organization also tends to improve quality, uniformity of work and also productivity while in the process of achieving certification.