Juhani Anttila
Venture Knowledgist Quality Integration
Helsinki, Finland





Quality is the most important business factor for organizations' performance and competitiveness, and this is still more valid issue when the business has changed more and more dynamic and organizations are operating flexibly in complex networks of heterogeneous partners. This is not only situation of business companies but also of public civil service organizations and third sector not-for-profit organizations.

Quality concept is primarily related to organizations' outputs (products) to other parties. However, this necessarily reflects organizations' internal business management/leadership, business processes, innovations, and relationships with external interested parties, especially customers, suppliers and partners. All these aspects are - especially in flexible networked business cases - crucially related to the management of business information and knowledge. Tacit (implicit) knowledge is more significant than the explicit information from the organization's success point of view. Solutions of ICT (Information and Communication Technology), especially based on Internet technology (e-business), have today a very essential role in realizing all business fundamentals and increasing networking of the organizations. All these aspects have radical effects in all major principles and practices of the professional quality discipline. Therefore new creative solutions are required and are also possible for the needs of business-integrated quality management (QM) and quality assurance (QA).

Fundamentally quality emerges from the different parties' interactions. The risk is to rashly design and install procedures and systems based on taken-for-granted ways of thinking in the situations where, in fact, real-time doing, creativeness, and learning are more important for success than formalized planning. Especially multifarious collaborative innovations are the new foundations for success of business and also quality management.


A professional quality approach is in dynamic networked business environments at least as important as in conventional business environments but very apparently in many cases more important but also more difficult to get realized. Dynamic business environments are characterized by continuous changes and effects of global interactive independent actors especially involving competing or conflicting political, social, and psychological factors. In general quality is understood as fulfilling the needs and expectations of all interested parties of an organization effectively and efficiently through organization's products. In general those products consist of goods and services, and they are realized through business processes. Quality in products, business activities, and the whole organizations is always affected by general situation and culture of the business community and society (see figure 1).

Dynamics of the business breed many difficulties for realizing quality management in a professional way but it also gives very new and extraordinary possibilities related to new technological and collaborative tools if only the foundations of the new business behaviors are understood deeply. A core issue of quality management, the company-wide business integrated realization of quality, is primarily based on the beneficial use of data, information, and knowledge, and including corporate wisdom. Means of information technology especially related to Internet and e-business are very promising for professional quality applications, and even quality experts should be familiar about their general development situation and able to use their possibilities.

Due to competitiveness also in these environments companies must strive towards excellence of business performance. That is also the major intention of all modern quality efforts. Business excellence can be achieved by deploying appropriate professional means with superior effectiveness and efficiency irrespective of the dynamics of business environments. The crucial issue is that organizations realize the vital requirements of the new changed business environments. That is also a necessity for the development and implementation of new practical methodology and tools for quality management and quality assurance.

Figure 1. Comprehensive connections between quality relating factors

Dynamic and networked world of business

Organizations living and working in blurry world are driven by three major forces:
- Speed - All aspects of organizations operate and change in real time.
- Connectivity - Everything is electronically connected to everything else: processes, products, people, businesses, companies, countries, etc.
- Intangibles - Every offer has both tangible and intangible economic value based on organizations' innovations. The intangible is growing faster. Information and knowledge issues (especially tacit knowledge) are emphasized.

These factors have significant effects in all management structures and actions (including quality management), and the business can't any more be managed in traditional ways.

Organizations in the business networks are heterogeneous, and the local rules organize their interaction. Key concepts are self-organization and emergence. Diversity is essential when anything novel and creative is emerging in a network. There is no common strategic plan, blueprint, program, or anything of that sort. However, there is the ongoing coherent pattern of some form of order. Nobody will never see or understand the full pattern of what is emerging. However, developing more reflective conversations with each other on what people feel is emerging will inevitably alter what does emerge. In this sense the great importance is the conversational life of organizations and understanding oneself in group contexts.

Power is an aspect of relating to each other. As soon as one enters into relationship with anyone, he/she is being constrained by them and is constraining them at the same time. Paradoxically people and organizations, at the same time, we are enabling and being enabled. This is important to understand in cooperating organizations.

Within organizations there is no single one person to control the organization - not even the CEO may have this ability. Nevertheless, with a lot of people interacting, there are still coherent patterns of behavior that keep emerging - both good and bad. Human freedom is paradoxical. Authorities can call a meeting and force us to follow the procedure. But what they can't force is to make it meaningful. What they can force is to have people follow procedures, but they cannot force them to produce something that has value and quality.

Organizations are complex responsive processes of relating. In this situation it is better to use the term active processes rather than to talk about passive systems (or organizational structures). Central to these complex responsive processes of relating are communicative interactions among people and power relating among people.

Paradoxes are normal and natural in organizations' dynamic operational patterns. These patterns are both stable and unstable, and predictable and unpredictable, at the same time. All this gives a different paradoxical attitude about control because in complex responsive processes, although nobody is to control the processes and nobody is to control the conversation, it is nevertheless controlled - self-organization is itself a form of control. In the interactions with each other people constrain and enable each other, and that is control.

Two examples are very central issues from the quality management's point of view in networked situation, the concepts of organization and management. These both concepts have very changed states when compared with the traditional business environments. Corporations have changed into virtual business communities whose borders are rather vague (see figure 2). There is no more any single clear organization where one could implement e.g. a quality management system. Nobody is any more managing this kind of complex organizational entity but there are many individual actors with different roles and performance options depending on access, reach, and control characteristics of the actors. There may be always also disturbing or even hostile agents in the business networks.

Figure 2. In networked business environments there is no more any single organization. Individual actors of the network have different roles and performance options depending on access, reach, and control characteristics of the actors.

Agility versus maturity is a hot question of the management and the quality management of dynamic organizations. Agility means dynamic, context-specific, aggressively change-embracing, and growth-oriented issues. The maturity school is on the contrary appreciating established planning, documentation, systems, etc. World wide discussion is in a situation of dilemma bringing forward on one side requirements of maturity-models and standards, and on the other side the manifesto for agile development (see figure 3). In fact, the both approaches are needed simultaneously, but the big question is how. Flexible and agile systematic approach is seen possible even from the quality point of view when using new modern principles for business process management and advanced information technology.

One of the most common practices in organizational management is planning. However, accomplished organizational activities often turn out to be different from the plans that were formulated. A major reason to this is that planning cannot reflect organizations' real dynamic nature. Typically organizations pay too little attention to the present. It is mostly only about the vision for the future or understanding of the past, so that one can make predictions. However, we are always acting in the present. The present is actually the only time in which one can ever do anything. The future is actually in the present, in the form of expectations. But we are also always acting in the present on the basis of our past. So the past is in the present, in the form of the particular story we are telling ourselves as we are doing what we are doing. Present time focus means that we should try to understand what everyone is actually doing - and not doing - and why this is happening. To clearly understand just what it is that we are doing together in groups, or in organizations, that leads to the emergent patterns that are our experience. These patterns of behavior are just the core of an organization. They happen as a result of all the things that people are thinking and feeling and doing.

Figure 3. The maturity and agility schools represent contradictory approaches as expressed by the well-known Agility Manifesto

Why then do we design various control systems - including quality management systems - and put together strategic plans? The purpose being served is that they are social defense against anxiety, to find some kind of defense mechanism or procedure to avoid the anxiety. The problem is that we seem to mindlessly design and install procedures and systems that are based on totally taken-for-granted ways of thinking. A lot of the systems that we put in place today actually make people ill.

Knowledge issues are emphasized when moving from traditional to the new quality management approach

Professional quality principles and methodology for quality management has long roots and development around the world during decades since 1920s. Now major recognized sources of contemporary quality approaches include especially:
- ISO 9000 standards and their derivatives
- Quality awards criteria and business excellence models

These quality management references are still useful. The most essential guiding principle and strategy for their realization is integration. That means that genuinely achievements of quality can take place only within normal business activities. Standards and business excellence models are guidance documents that emphasize systematic managerial responsibilities and actions. These reference materials consider key aspects of business systems, organizational structures, business environments, interested parties (stakeholders), business performance and targets, management and leadership, technology, products (goods and services), business processes, work and "employeeship", customs and customers, and company culture. All these aspects are still relevant in the new business circumstances but their substances should be understood in new ways (e.g. see figure 2). This means that remarkable innovations are necessary also in quality thinking and practices.

Especially information and knowledge issues should be taken seriously into account. Traditionally particular stress in quality management has been placed on explicit management information including manuals, procedure documents, instructions, etc. In dynamic businesses, however, tacit (implicit) knowledge contents are more significant (see figure 4). In fact, tacit knowledge-based management is the core issue characterizing dynamic businesses (e.g. see figure 3). Some examples that, however, are very central issues for quality management are questioned here:
- What is the essence of real responsibility of a top manager?
- What is the role of "hidden" structure of a business organization?
- What are the weak signals anticipating changes in the business environments and among the partners?
- How could we understand continual improvement as organizational learning?
- How to manage immaterial parts of our products, especially services and knowledge contents?
- What are the linkages between the explicit business processes and the internal mental processes of our workers?
- How to manage with rational, non-rational (emotional), and irrational (spiritual) intelligence in the business situations?
- How to achieve benefits from innovativeness of the personal?
- What does it mean and require creating and strengthening confidence among our stakeholders (i.e. achieving quality assurance happen in reality)?

Figure 4. The real quality management system is predominantly a mental system and a common managerial thinking / behavior model or managerial memory of an organization.

Thus, the major challenge of the new approach of quality management is how to manage with information and knowledge. An organization needs to share information and knowledge among employees and people in the interested parties, locate information and knowledge sources, push information to users, or create a central location to navigate through data that one can benefit from. This is also most essential for quality management and quality assurance.

In these contexts conventional quality systems, quality manuals or quality records, traditional work of quality managers, or third party certifications have very little or no beneficial role for quality management. In fact, they may even cause more harm than advantage. Quality management system should be understood primarily as a mental system, a common behavior model (see figure 4), or organizational memory, and as an organization's general concept for a good systematic management. For the same reason also texts of the quality management standards and criteria of the quality awards represent only a very minor part of the entireties those documents imply in real practice in organizations. That is also reason why there are so many different opinions about those documents. Deep tacit knowledge gives us good bases also for understanding the standards and business excellence models as the very same substance but only seen from different perspectives.

Quality management system means quality of management carried out in a systematic way covering the whole organization. There are management actions on several levels in an organization including the whole organization, its business units or functions, business processes, and individuals and teams. Both strategic management and operational management are needed. Leadership emphasizes managers' or superiors' personal and human aspects in conducting their business actions. Business leaders are typically generalists and strongly acting individuals with strong organizational positions. They know the right things but are not necessarily interested in right methodologies. Therefore their tacit knowledge is being highlighted in their managing actions. Their strengths especially consist of awareness and self-management. Thus, top executives always give their own personalized insight and flavors into the organization's management system. This is also very essential element increasing dynamics and flexibility in managing.

Also on the operational employee level tacit knowledge has a crucial importance for the personal performance in carrying out the work. That is additionally emphasized by the fact that nowadays all organizations are knowledge-based businesses, and all workers are knowledge workers because the work is based typically on knowledge, competence, skills, creativity, and even wisdom of the workers when they are handling different kinds of data and information in their work, and doing interpretations, judgments, and decisions for producing valuable outputs to the interested parties. Requirements and conditions of the job have been changed from old-fashioned "tailorism" to more human centered.

Modern information and communication technology is challenging for dynamic businesses

In order to manage blurry and strongly information / knowledge content situations, organizations have invested in IT solutions. However the development and use of the IT solutions has very often been problematic in practice. During the past years nearly every new application and idea created by software industry has made the jobs of people more complex and difficult for them, rather than simplifying their duties. Corporate-wide systems are complex and typically designed for a specific purpose and function, and the IT department has deployed many different and often unrelated applications and modules to fulfill the information and processing needs of the entire organization. An incredible amount of training time is needed for employees to learn how use such a complex suite of applications. The corporate intranets were originally designed and implemented to meet the needs for shared information across the organization. As intranet sites grew larger, a new set of problems created chaotic situations with information access, information maintenance, knowledge-sharing, and security. There are a lot of doubts about the real benefits of the existing business Internet, intranet, and extranet solutions.

Modern electronic business solutions, especially related to Internet (e-business), have become almost obligatory in all kinds of organizations but typically they have only not necessarily made the total situation easier because e-business is much more than only technological issue. Typically researchers, implementers, and promoters of the e-business are not at all familiar with systematic professional quality management principles and practices. Practical business people don't see the real problem or they see the business situations too chaotic in order to have possibilities to touch the quality of applications systematically. On the other hand, normally the quality practitioners don't know even fundamentals basics of the the e-business. Therefore one can report very little practical and effective implementations of quality and quality management in the field of e-business or they are very trivial. E-business provides, however, much bigger challenges for quality management and quality assurance.

Portal is a modern solution for knowledge-content businesses. Portal is a single, Web-based interface into the world of heterogeneous and incompatible information and knowledge sources distributed across the telecommunication network. The key quality management related solution is an organizational portal with quality management applications: "A cutting-edge gateway to quality-related business reality for enhancing quality awareness, improved use of expertise, performance management and interested party confidence." This kind of portal provides automatic services for quality management to the members of an organization as well as to its partners. Portals use Internet technology, but basically a portal is very different from simple Internet or intranet pages of organizations. Portal has general features that are beneficial for all kinds of knowledge-based activities including:
- A consistent view of the relevant business community
- Information organization and search capabilities
- Direct access to knowledge and resources
- Direct links to relative data and knowledge experts
- Individual identity and personalized access to content

Although information systems were originally developed for the needs of explicit data and information, the modern ICT solutions are, however, very useful also in the area of tacit knowledge. That is based on the fact that new technology makes possible effective cooperation and collaboration between knowing individuals and collaborating groups around the world.

An interesting topic is to enhance the effectiveness and efficiency of the use of knowledge and information via a portal. The biggest challenge for these solutions is the poor use of business related knowledge and information that may appear in many forms (see figures 4 and 5). Important knowledge may be missing. It may be unused because the needed knowledge is not available or accessible when needed or is not in a useful form. It may be used but not appropriately or at opportune time and place, or it may be misused. As one can see, a greater challenge than to stretch the usefulness of explicit knowledge, information and data to its extreme is to bring about a radical improvement of utilization of tacit knowledge. Internet technology makes it possible to create multifarious access interfaces to the business information and knowledge, and related shared services. Especially information security aspects are emphasized when developing the quality management of information and knowledge.

Figure 5. Challenging to enhance the effectiveness and efficiency of the use of knowledge and information

Web-based collaborative learning and group work environments emphasize the word group work. The system has a wide variety of uses such as personal management, computer-supported collaborative cooperation and learning, carrying out projects, and setting up communities. Its main strengths include a customizable group system which allows many groups to work simultaneously on a shared database with tools for projects, calendar, tasks, forums, links, chat, reviews, voting, files, instant messages, profiles, and many more. System's abilities offer a work ground for various kinds of organizations. Designed to ease the problems with group based working, the solution makes it possible to work in groups, inside and outside the organization. This gives advantages to organizations which have a lot of work groups that have to be in contact with each other around the globe. As an example, a virtual network of experts, e.g. quality managers, of a corporate may be created on this basis.

Quality assurance (QA) aims at creating and strengthening confidence among organization's partners, especially customers. Traditionally QA practices have been very inflexible and standard-based solutions that are not fulfilling the needs of dynamic businesses. Genuinely QA should be realized in a way that is most efficient and suitable in the light of a customer-case requirements and taking into account the competitive aspects of the marketplace. Thus quality assurance can be seen as a value-adding part (i.e. a service-element) in a company's products-offerings (see figure 6). The e-business technology creates completely new "e-certificate" solutions for quality assurance that may be useful also for dynamic business cases. E-certificate is also an essential QA feature of a quality management portal.

Figure 6. QA is based on factual process-based information for customers' confidence. It is a communicational service-element to the customer for which Internet possibilities may be effectively and efficiently used.


Flexibility and networking are today very essential requirements for all kinds of organizations to react against dynamic changes of society and business environments. Especially e-business based on electronic technology has enormous effects and consequences to everything including the behavior of individuals, groups, organizations, corporations, and societies. Quality management and quality assurance are still crucial issues for business competitiveness and may be handled in a professional way also in these changed conditions. One should only have profound knowledge on realities of e-business and professional principles and methodology of the modern quality approach. All this is a challenge for quality professionals who are developing business integrated quality solutions for the new business situations. Organizations' difficulties in adapting to these challenges are normally originated from stagnant and passive systems of management. Point of departure to respond to the flexibility requirements is just in the minds of the key persons of the organizations, flexibility in thinking and seeing new opportunities, and to facilitate learning of the whole organizations.


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[This paper was prented as a conference paper at the International Conference on Quality Management in Tehran in December 2004. - Click the link: http://www.qmconf.com/Chekide.aspx?id=204 ]