Effects of quality management on domestic and global competition

¶ … Quality Management on Domestic and Global Competition Paper

Effects of Quality Management

The globalized economy that characterizes the world nowadays has led to increased competition in all business areas, on domestic and international level. This situation helped large corporations increase their customer base at the expend of smaller companies that started to lose more and more ground on the market, being unable to keep up with their competitors.

Companies that activate on international level are obviously favored than those who activate on domestic level only. The airlines industry makes no exception. In this sector of activity, economic agents provide similar types of products. The difference between their products is represented by quality. This is where quality management interferes.

There are slight differences between domestic airlines operators and global ones. As a consequence, the manners in which they approach business processes, including quality management are different.

The domestic company has a smaller customer base, and it employs a smaller number of people. Also, the range of products is not diversified, since the company only offers local flights for its customers. The wages received by the company's employees are smaller than those earned by employees working in international airlines companies, and so are the performance bonuses.

In opposition, the global airlines company has more customers than the domestic one, and it also employs a greater number of people. The company also covers a larger geographical market due to its capabilities.

The international airlines company can afford to pay higher salaries, keeping employees motivated in order to maintain customer satisfaction. Due to the fact that the customer base is larger, the company can afford to lower prices for its products, without decreasing the quality level.

In such a market, with numerous operators that offer similar products and services, the competitive advantage is created by quality. In both companies' cases, the effects of quality management are represented by creating and delivering value to customers. Basically, both companies aim at improving existing processes in order for the outputs of these processes to meet the requirements of potential and existing customers.

Although both companies implement quality management strategies, their implementation is different. The quality management system developed by the global airlines company is more complex and more elaborated than that of the domestic one.

However, there are also several similarities between the quality management approaches of the two companies. For example, both companies rely on developing and implementing a strict quality policy. The quality policy is composed of a general quality policy, quality objectives, and department quality objectives in the case of the global airlines company (DTI, 2010).

The general quality policy is similar for both companies. Given the industry in which they activate, the two companies must meet a series of requirements, mainly referring to passenger safety. Also in addition to this, there are a series of general quality requirements raised by the market in case.

Furthermore, each company establishes a set of quality objectives that must be met by their services. Based on these quality objectives, the companies are then able to determine the costs that will be required by their services. Based on these calculations, the companies can establish financial target, sales targets, and can estimate the probable income for the following periods of time.

One of the differences between the two companies in relation with the implementation of the quality management system is represented by the equipment in which each of these companies has invested. The types of equipment used in the quality management process include R&D equipments, test equipment, measure equipment, and public equipment.

Given the size of the international airlines company, it has the financial capability of using expensive, efficient equipments that help implementing quality standards within the company. Although the domestic company uses a set of equipment, the company cannot afford to use high quality equipment like the international company does. As a consequence, the results will not be as impressive as more expensive equipment were used.

The quality objectives are established based on these results. Therefore, the domestic company will not benefit from the same results as the international one, determining lower quality services for its customers. In other words, in order to achieve high quality services, the company's investments must be in accordance with this. The domestic company does not present the financial capability that would allow for such investments, settling for less important ones.