With the staggering rise of businesses over the last years in
the UK, Averaging around a record pace of 80 companies per hour in 2016. 1 Several
of these companies become successful, however many of these companies tend to
fail, around 25% fail within their first year. You may think it’s a small
number but 40 to 50% fail within 5 years which is very shocking. 2
So why are they failing you may ask, there are a vast number
of factors that can lead to a business failing. These can be: running out of
cash, no market need for service or product or didn’t have the right team and
there are many more. 2
This specific report we will be looking in depth at why quality is crucial within a business, as
it’s another major factor in business failure and how companies can benefit
The purpose of this report is to understand why companies
may use quality to improve their businesses and why others do not. Also, why it
is recommended to use good quality in a business with the research given.
What is quality?
The definition of quality can vary in the context you are
looking at, the definition of quality within businesses or manufacturing. Means
“a measure of excellence or a state of being free from defects.” This could be products
or services that companies offer to customers and ensuring that they meet those standards that have been set out. 3
Why use quality?
From the definition given we understand that companies would
use this for their products and services. Currently,
records show only 3% of 75 companies meet basic quality standards. 4
So, what do these companies do differently to the rest? Well,
quality helps companies to maintain customer satisfaction, however, this can
only be achieved if the company is motivated to make more effort with their
business and it improves their reputation
as organizations such as ISO (International Organization for Standardization)
9001 can accredit them. 5
Different aspects of quality
The customer often expects companies to deliver the high-quality
standard products however if they do not customers often would look for other
companies. So, quality is crucial to making customers loyal to using your service and this is better for
the long run as companies will start gaining more profit.
Another way is providing them with a great quality of service,
for example, a simple smile at the customers and asking how they are can make
customers feel more welcome. However, some staff often do not ask this and it
could impact the company’s quality of
their service as a customer would think
that they are rude or not professional. 5
If a customer expects great quality they will then recommend
to others and that is one way to increase customers and make more money.
However, if companies are not meeting the demand for the quality it could lead
them in the opposite position. They’re for companies need to keep up their
quality in order to satisfy the customer
but some employees may find this stressing as they need to maintain this
Quality may have a great impact on company’s reputation as a
customer that give feedback on networking
sites such as Facebook or Twitter can be reviewed by a wider audience. This
could affect the company as the reviews may be excellent or terrible depending
on customers input, however, the comment can spread quicker on social media
which will affect company’s reputation. 5
I believe that social networking is great for increasing a
company’s reputation as they can stay in competition with other companies. Also,
it will help with maintaining marker shares by quality products and services.
Companies that recognize quality as a standard and
legislation will most likely produce a better
product and offer services which customers are greatly satisfied. Quality can
also protect your customers as they know that the quality regulation has been
met. By doing this quality legislation organisations can provide you with
accreditation and therefore it will help your business enter new markets to
supply high-quality products. 5
However, these can be quite difficult to achieve as
companies need to time to train employees, put more money in to help with
quality control, find high-quality
materials and machines to produce products. Some employees may not like
following too many policies and this can
lead to unhappy staff.
I believe this method of quality can be quite hard as
companies are looked upon a lot by organizations that legislate these rules and
it would mean that they could end up closing due to problems they may have.
Another point is introducing new policies step by step as it would have less
impact on employees.
Cost is vital throughout
quality as if companies produce poor quality products it will increase their
cost. If they don’t have a great effective quality control system then they may
need to analyse the product again and find where the problem lies to fix it. If
companies come across defected product then they will need to scrap those or
replace them. Finally, the biggest threat is legal costs in failure to satisfy
customers and meet industry standards. 5
Therefore, the cost
could lead you to close down your company
due to lack of effort in quality products, so it’s crucial to keep maintaining
a standard so that prices of products are fixed and this will ensure customers
are satisfied. Another way to maintain is by investing more money in quality control system ensuring that each
product made is inspected to reach quality standards.
From my perspective, I
would strongly agree that companies do invest money in quality as it would help
them make more and increase their popularity which will pay them over the
years. It would also help them avoid legal actions by customers or organisation
which saves them more money. The more money put into quality would result in
higher quality products produced and price increase.
Poor quality can affect productivity as quality measures are
not taken then employees will spend time on removing or reworking defected
products. This will mean that product will go to waste which can impact
company’s revenue. It is recommended that every company should focus on
producing a high-quality product which
will make them more efficient and productive. 6
However, the downfall of productivity would mean that the workload will increase and this would mean
employees will need more training. Bad quality products can be bad so companies
may need to think of how to reuse this product to be eco-friendlier. More time
is taken to find a suitable method on producing quality products and testing is
From what has been said I think that companies should have
an efficient method which suite employee’s ability to produce quality products.
I strongly agree that bad defected products should be recycled or reused which
will help save material and more economical.
After investigating different types of ways quality could
affect a business I have found out that quality will have a significant impact
on how a well a company will perform. How it could impact customers and
employees in different ways when they are consuming or producing products and
I truly believe that business should strongly consider
investing in quality within their business as it would help them gain more
profit, customers and increase their reputation. Not only that but in
productivity to meet standards, plan out efficient ways of producing products and services which will help them with legal
standards that have been set out.
Recommendations and implementation
The fining and conclusion of the report support the following recommendations:
control system is recommended in business in order
to produce great quality products to consumers.
Companies should spend more time on quality control
measure to provide excellent services to customers in order to keep loyalty and
Training staff to improve their quality skills of
production and to teach them the standards against organisation policies.
need to make regular quality checks and improve products over time by customer feedback.
More investment in an efficient productivity plan
which will help the growth of products and the flow of work.
1 – Kate Palmer (2016), “Record 80 new companies being
born an hour in 2016”, URL: http://www.telegraph.co.uk/business/2016/07/12/record-80-new-companies-being-born-an-hour-in-2016/,
(Visited on 15/01/18)
2 – Georgia McIntyre (2017), “What percentage of small
businesses fail?”, URL: https://www.fundera.com/blog/what-percentage-of-small-businesses-fail,
(Visited on 15/01/18)
3 – “Quality”, URL: http://www.businessdictionary.com/definition/quality.html
(Visited on 16/01/18)
4 – Tadhg Nagle, Thomas C. Redman and David Sammon, “Only
3% of Companies’ Data Meets Basic Quality Standards”, URL: https://hbr.org/2017/09/only-3-of-companies-data-meets-basic-quality-standards,
(visited on 16/01/18)
5 – Ian Linton, “Why is quality important for a
business?”, URL: http://smallbusiness.chron.com/quality-important-business-57470.html,
(visited on 16/01/18)
6 – “How does quality management affect the workplace”,
(Visited on 20/01/18)