Main Article Content
Quality cost management has a positive impact on enterprise performance, through strengthening quality management for products and services. In the process of quality cost management, increasing the prevention cost and inspection cost (preventive input) for quality can effectively reduce both internal and external quality losses, and contribute to a reduction in the total cost of quality and an increase in the profitability. Such a relationship between quality cost management and firm performance is conceptually accepted but few empirical evidence is available in the literature. Therefore we aim to empirically investigate the positive impact of quality cost management on quality management and firm performance in the context of business practice in China. By taking a questionnaire survey with a sample of enterprises in different regions across China, we perform regression analysis to evaluate the important relationships among quality cost management, quality management and firm performance. The results show that the preventive quality control and input are positively correlated to the efficiency of quality management. Furthermore, quality management and quality cost management are positively associated with firms’ operating performance. We therefore draw out some recommendations on strengthening quality cost management and quality management.
State Council of China, 2016, Implementation of Quality Development Action Plan; 2016.
Xi JP. Report on the 19th National Congress of CCP, October (in Chinese), People’s Publishing House. Beijing; 2017
Satanova A, Sedliacikova M. Model for controlling the total costs of quality. Procedia. 2015;26:2-6.
Dahlgaard-Park SM, Reyes L, Chen CK. The evolution and convergence of total quality management and management theories. Total Quality Management & Business Excellence. 2018;29(9-10):1108-1128.
Juran JM, Godfrey AB. Juran’s quality control Handbook, New York. McGraw-Hill; 1998.
Juran JM. Quality control handbook. 1st edition. New York. McGraw-Hill; 1951.
Feigenbaum AV. Total quality control. Harvard Business Review. 1956;34(6):93-101.
Crossby P. Quality is free. McGraw-Hill. New York, US; 1979.
International Organization of Standards (ISO). ISQ/TS 16949. Quality Management Systems-Practical Requirements for the Application of IAQ 9001. June. Geneva; 1999.
Conti T. How should quality-related concepts evolve to face the challenges of world globalization? The TQM Journal. 2013;25(6): 641-658.
Shank JK, Govindarajan V. Measuring the ‘cost of quality’: A strategic cost management perspective. Journal of Cost Management. 1994;8(2):5-17.
Love PED, Irani Z. A project management quality cost information system for the construction industry. Information & Management. 2003;40(7):649-661.
Desai DA. Cost of quality in small- and medium-sized enterprises: Case of an Indian engineering company. Production Planning & Control. 2008;19(1):25-34.
Zakluta H. Cost of quality tradeoffs in manufacturing process and inspection strategy selection. Massachusetts Institute of Technology; 2011.
Waisarayutt C, Wongwiwat T. Potential application of a quality cost model for fresh produce packhouses. Agriculture and Agricultural Science Procedia. 2015;3:26-31.
Williams AR, Wiele AV, Der Dale BG, Quality costing: a management review. International Journal of Management Review. 2000;1:441-460.
Sethi R, Sethi A. Can quality‐oriented firms develop innovative new products? Journal of Product Innovation Management. 2009;26(2): 206-221
Omar K, Murgan S. An improved model for the cost of quality, International Journal of Quality & Reliability Management. 2014;31(4): 395-418.
Slater SF, Mohr JJ, Sengupta S. Radical product innovation capability: Literature review, synthesis, and illustrative research propositions. Journal of Product Innovation Management. 2014;31(3):552-566.
Farooq MA, Kirchain R, Novoa H, Araujo A. Cost of quality: Evaluating cost-quality trade-offs for inspection strategies of manufacturing processes. International Journal of Production Economics. 2017;188:156-166.
Sower VE, Quarles R, Broussard E. Cost of quality usage and its relationship to quality system maturity. International Journal of Quality Reliability & Management. 2007;24: 121-140.
Staiculescu O. A new vision of quality cost: An essential optimization tool for managerial accounting. Procedia - Social and Behavioral Sciences. 2012;62:1276-1280.
Mashwama N, Aigbavboa C, Thwala D. An assessment of the critical success factor for the reduction of Cost of poor quality in construction projects In Swaziland. Procedia Engineering. 2017;196:447-453.
Rezaei AR, Çelik T, Baalousha Y. Performance measurement in a quality management system. Scientia Iranica. 2011;18(3):742-752.
Al-Dujaili MAA. Study of the relation between types of the quality costs and its impact on productivity and costs: Verification in manu-facturing industries. Total Quality Management & Business Excellence. 2013;24(3-4):397-419.
Panuwatwanich K, Nguyen TT. Influence of total quality management on performance of Vietnamese construction Firms. Procedia Engineering. 2017;182:548-555.
Miller JR, Morris JS. Is quality free or profitable? (A company’s efforts to improve may bring both economic and external social benefit), Quality Progress. 2000;33(1):50-53.
Weinstein L, Vokurka RJ, Graman GA. Cost of quality and maintenance: Improvement approaches. Total Quality Management & Business Excellence. 2009;20(5):497-507.
Kim DY, Kumar V, Kumar U. Relationship between quality management practices and innovation. Journal of Operations Management. 2012;30(4):295-315.
James T, Orea L, Pollitt M. Estimating the marginal cost of quality improvements: The case of the UK electricity distribution companies. Energy Economics. 2012;34(5): 1498-1506.
Shafiq M, Lasrado F, Hafeez K. The effect of TQM on organizational performance: Empirical evidence from the textile sector of a developing country using SEM. Total Quality Management & Business Excellence. 2019; 30(1-2):31-52.
Wang YZ. Enhancing quality cost management to implement the quality responsibility accounting. Studies on Economics and Management (in Chinese). 1990;6:28-34.
Sun QB. A few issues on the theoretical system of cost of quality. Advances in Science and Technology and Policy. (in Chinese) 2002;5: 116-117
Huang XY, Xu XQ, Zhang XZ. Control and analysis of cost of quality, Value Engineering (in Chinese). 2004;6:76-79.
Wang PX, Liu SW. Comparative study on quality cost control modeling, Journal of Haerbing Industrial University (in Chinese). 2006;9:98-102.
Wang G, Gao ZM, Lin WX. Improving CoQ management to enhance firms’ competitive advantages. Journal of Shanghai Lixin Accounting School. (in Chinese). 2009;1:26-30.
Huang Mei. The application status and development of CoQ management in Chinese enterprises, Times Financing. (in Chinese). 2013;9:186-187.
Shang SS, You JX. Relationship among the components of CoQ and analysis modeling, Management Review, (in Chinese). 2011;9: 160-166.
Wang YM, Zhao DZ. Control modeling for cost of quality in supply chain with the risk transformation mechanism. Research on Science and Technological Management (in Chinese). 2009;3:155-157.
Duan YG. Studies on strategic CoQ management for business enterprises. Journal of Beijing United University (Social Science version). (in Chinese). 2017;1:64-69.
Tang XF. Investigation on quality management maturity of Shanghai enterprises, The TOQ Journal. 2015;25(4):417-430.
Lari A, Asllani A. Quality cost management support system: An effective tool for organization performance improvement. Total Quality Management & Business Excellence. 2013;24(3-4):432-451.
Schiffaurova A, Thomson V. A review of research on cost of quality models and best practices, International Journal of Quality Reliability Management. 2006;23(4): 56-69.