Venture Knowledgist Quality Integration
QUALITY MANAGEMENT FOR ENHANCING THE FIRM'S FINANCIAL PERFORMANCE IN GLOBAL OPERATIONS
Quality management consists of coordinated activities to direct and control the firm with regard to fulfilling the needs and expectations that are generated by different interested parties in the firm’s business community . Different requirements should be considered broadly in a balanced way, but in this context this article focuses on the requirements of the financial performance, which many recognized references have emphasized as important quality aspects.
Financial and market position are important characteristics of the firms’ performance. The firm’s internal accounting supports decision-making by delivering relevant information to the management. The external accounting produces the legal bookkeeping, which gives a snapshot of the firm as a juridical financial entity. Financial indicators calculated from the profit and loss statement, balance sheet and cash flow serve the needs for the quantitative financial information of various interested parties (stakeholder groups) of the firm, especially those of the corporate management and the owners.
The financial performance forms a sustained foundation for the firm’s overall business continuity and success. However, understanding the quantification and dynamics of the firm’s performance, and their relationship with the firm’s profitability are tough but rewarding tasks.
Operations networks have a substantial impact on the financial performance. Globalization has radically changed the operational environment where the firms operate, and how firms organize the management of the related processes into their operations networks. This article considers how to create financial value in the firms’ global operations, describing how the splitting of the organization’s operational processes into its own global operations network has increased the challenges to manage and control its global operations and their interrelated risks in an effective and efficient, and profitable way.
In this article we follow Kaplan’s thinking , and present how external and internal analyses can be utilized in identifying strategic opportunities available for the firm. Kaplan’s concept TDABC has shown that at a minimum 20-40% of the firm’s customers and products are unprofitable, but the challenge is to know which ones. Related to these themes, we present here some results of our research “Making decisions on offshore outsourcing and backshoring: A case study in the bicycle industry”.
[This full text was prepared together with Kari Jussila, and will be presented at the World Quality Forum in Budapest, Hungary in 2015.]