The Relation of Quality Management and Risk Management - Thesis Proposal Example

The future of quality management with risk management The future of quality management with risk management Problem statement The present study seeks to conceptualize the future of quality management with risk management. Williams et al (2006, p.67) argues that the extent of effectiveness, efficiency and economy of a business strategy defines the point at which quality management meets risk management. According to Kuhn and Youngberg (2002, p.158) there are practices of quality management including quality improvement and quality optimization that would work well for risk management. Gow (2005, 2) observes that integrating quality management with risk management is an expensive endeavour. Widdop et al (2007, p.2) observes that integrating the two approaches to management requires communication. There is a gap in the existing literature of the lack of a framework of enhancing the integration of quality management with risk management and this is the focus of this study. Developing this integrative framework will make it easy for organizations to manoeuvre these important approaches to management. Aims The present study will seek: To examine the point(s) at which quality management can be integrated with risk management To document the impediments of integrating the two management approaches To develop an integrative approach that combines quality and risk management surmounting the challenges of making the two one together Literature review According to Williams et al (2006, p.68) risk management intersects with quality management at the point at which it seeks to ensure the effectiveness, efficiency and economy of a business strategy or process. Quality management is the design and execution of products and services with the objective of meeting and preferably exceeding customers’ expectations without the wastage of available resources (Williams et al 2006, p.68). Risk management identifies, prioritizes, addresses, and eliminates potential sources of failure of the services and products to meet their set objectives. In this context, risk management is a pre-emptive, proactive, predictive, and preventive endeavour. After studying a number of companies, Williams et al (2006, p.69) found that reducing risk deltas reduces objective gaps and variation hence increasing process quality. Kuhn and Youngberg (2002, p.159) asserted quality is one of the important issues in risk-based approach to management alongside health, safety and environment. After examining five organizations, Kuhn and Youngberg (2002, p.159) found that continuous improvement, stakeholder satisfaction, adherence to standards and checks and balances, optimizing the quality of every investor’s dollar and prevention are quality principles and practices that seamlessly fit into risk management. Kuhn and Youngberg (2002, p.160) observe that the Six Sigma is an exemplar case of how to integrate quality management with risk management. For example, he notes that Six Sigma’s DMAIC (Define, Measure, Analyze, Improve, Control) project methodology has a control element that helps detect deviations and correct them before they elicit defects. In addition, the DMADV (Define, Measure, Analyze, Design, Verify) project methodology incorporates a measurement element that checks for risks in a business strategy and proposes design alternatives to help avoid adverse project situations (Kuhn and Youngberg 2002, p.159). Gow (2005, p.2) concurred with Williams et al (2006, p.70) on the fact that integrating risk management and quality management helps in executing a business strategy while identifying potential problems and deploying corrective strategies in order to ensure the success of the strategy. Gow (2005, p.2) went a step further to observe that it is costly to integrate quality and risk management in terms of time, effort and monetary resources. However, after surveying organizations that use the integrated approach, he concludes that the benefits that accrue from using this approach make the cost involved worthwhile. He identified reduced error rate, decreased litigation risk and more efficient operations as some of the benefits that come with using such an integrated approach. Gow (2005, p.7) cautions that the approach works well when understood and internalized by all the employees of an organization and not by just the top management. This understanding should incorporate knowledge of the individual roles and the roles’ contribution to the success of the entire strategy (Gow 2005, p.10). Different from other the aforementioned authors, Widdop et al (2007, p.2) looked at quality management and risk management as working differently for the same goal. According to Widdop et al (2007, p.2) quality management seeks to improve the quality of services and products so that they inherently circumvent adverse situations. Widdop et al (2007, p.1) observes that quality managers do not have a primary concern with litigation or financial loss. On the other hand, his case study of six hospitals showed that risk managers are focused, primarily, on the liability associated with a strategy and how to mitigate it. Interestingly, Widdop et al (2007, p.2) traces the genesis of the need to integrate quality management with risk management observing that this integration has been impeded by the lack of communication between different departments (Widdop et al 2007, p.1). Theoretical orientation Agency theory, financial economics theory and stakeholder theory are some of the theories that have been used to study quality and risk management. The current study will use the stakeholder theory because it postulates that stakeholder interests are the basis of every corporate policy. The theory brings together consumer trust and a company’s expected costs of financial distress and bankruptcy. Corporate risk management practices reduce a company’s expected costs (Popescu & Dascalu 2011, p.50). The current study will use systems theory in its conceptual framework. Systems approach will be suitable for this study because both quality and risk management are practices that touch on the operations of the whole organization. Using systems approach, the resultant conceptual framework will take into account the input, processes and output within an organization and how they exemplify the working of quality and risk management (Rooney 2011, p.9). One of the trends that this study will follow is the innovative ways of integrating quality management and risk management surmounting the pitfalls to success integration. The other trend are the ways that existing organizations use to come up with an integrative approach to management and the basis of competitive advantage that arise from such an approach (Frenkel et al 2005, p.46). The organizational structure is one of the areas expected to provide findings into the success or failure of merging quality and risk management practices. The other area that will have important findings in this study is the nature of the industry and it is expected that organizations from different industries employ varying degrees of quality and risk management (Thornton 2004, p.102). Method Data The industry in which the organizations under study operate will be one element of data that will be collected. Information on the organization design and structure will be collected. Hallmarks of an organization’s business strategy will be gathered seeking to examine elements of quality and risk management (Westgard & Westgard 2013, p.34). Sources of information Managers and employees will be the key sources of information on the issues researched in this study. Resources needed Research assistants are the key human resource that will be needed in this study to help in the collection and recording of data. There will be need for funds to help compensate research assistants, purchase stationeries and deploy them to the ground where they will be needed for use (Rooney 2011, p.10). Research design The study will use a grounded theory research design in order to complement the proposed phenomenological theoretical orientation. This design will help develop a framework for conceptualizing how future organizations will use quality management integrated with risk management (Popescu & Dascalu 2011, p.50). Interviews and questionnaires will be used in data collection. Confidentiality is one of the ethical and safety issues that will be associated with this study. The issue will be addressed by using pseudonyms instead of real names and guarding the information from unauthorized access. Reference List Frenkel, M., Hommel, U., Rudolf, M., & Dufey, G. (2005). Risk management challenge and opportunity. Berlin, Springer. pp. 45 – 57. Gow, J. (2005). Quality Management and Organizational Innovation in Canada. The Innovation Journal: The Public Sector Innovation Journal, 11(1): pp.1 – 38. Kuhn, A. M. & Youngberg, B.J. (2002). The need for risk management to evolve to assure a culture of safety. Qual Saf Health Care,11(2): pp.158-62. Popescu, M. & Dascalu, A. (2011). Considerations on Integrating Risk and Quality Management. EIA, 1: pp. 49 – 54. Rooney, J. (2011). Future of Quality Study. The Global Voice of Quality, 2011: pp. 8 – 42. Thornton, A. C. (2004). Variation risk management: focusing quality improvements in product development and production. Hoboken, NJ, Wiley. pp.101 -108. Westgard, J. O., & Westgard, S. A. (2013). Quality control in the age of risk management. Philadelphia, PA, Saunders. pp. 33 – 40. Widdop, D., D’Antonio, L. & DiPasquale, A. (2007). Integrating Risk Management and Quality Improvement. Health Providers Service Organization Risk Advisor, 3: pp. 1 – 2. Williams, R., Bertsch, B., Dale, B., Wiele, T., Iwaarden, J., Smith, M. & Vissel, R. (2006). Quality and risk management: what are the key issues? The TQM, 18(1): pp. 67 – 86. Read More