Bagdonienė, Diana; Daunorienė, Asta; Abramavičienė, Irma
August 2007
Economics & Management;2007, p959
Academic Journal
Business environment in the whole world gets more and more complex, rapid development of technologies shortens lifecycle of different products and raises requirements for new products and services. This kind of environment makes it necessary for managers of organizations to think strategically and plan their moves for the future. Strategic thinking and considered strategic management provides organizations with many advantages. Managers that aim at business success must assess their ever-changing environment and plan strategically, organize operation of the company in such a manner that it could remain competitive and increase its market share. Profitability measured in terms of higher sales revenue or higher than usual return on investment, which is characteristic to organizations offering goods or services of high quality, overtakes production and business indicators of other companies offering lower quality (Ross, 1999). Therefore it comes by no surprise that managers perceiving quality as a powerful competitive weapon attempt to transfer its management into the strategic level. The most common mistake of many organizations is that strategic quality management usually is limited to inclusion of several elements of quality control and assurance into the process management. The gap between quality and strategy is determined by the fact that many organizations do not realize links that could possibly relate every-day actions of quality management to strategic business objectives and tasks. Atkinson (1994) suggests that quality costs are considered to be a tool that associates quality with strategic objectives of the organization. Quality costs that can possibly constitute 20 to 40 per cent of the total revenue of organization are not assessed in the strategic planning of the operation, although the quality is considered to be one of the most important elements in the planning. Given the importance of strategic planning and quality for the operation of organizations the purpose of this paper is to find out possibilities of quality cost use in strategic planning. The object of research: process of strategic planning in organizations with the aim to suggest recommendations on quality costs use in strategic planning that should help managers of organizations to assess efficiency of strategy implementation and identify critical fields for improvement of organization's performance. Research methodology: logical, systematic analysis of scientific works, analysis of internal documentation of the organization, questionnaire interview. The participants of research: joint stock company "Realtus". Quality cost management starts with the recognition that quality improvement can have a significant impact on strategic business indicators such as sales and market share, and also with the perception that quality improvement of the product and quality cost optimization are synonymous (Campanella, 1999). The major purpose of quality cost system management is to improve quality by reducing directly associated costs. Aiming at the succession of its activity trough reduction of costs of bad quality the organization must develop and constantly improve its internal potential, to track and assess the ever-changing environment. This can be reached through effective strategic planning. Strategic planning is the process of problem resolution aimed at adaptation of organization to its future environment. It is the process in which it is necessary to anticipate events and decide what is possible and what must be done in order for the organization to use possibilities and to benefit from and protect itself against everything that could prevent it from reaching success and threatening to its survival (Makštutis, 2001). To assess possibilities of quality cost use in strategic planning the research in joint stock company "Realtus" was carried out.…


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