Jorge Casas Novas

Management of quality-related costs: the case of Portuguese companies

The traditional view of quality-related costs (QRC) tries to justify investment in prevention as a way to reduce the costs of failure. But this static view must counter a more dynamic vision that fosters continuous improvement and assesses the costs and benefits of implementing techniques and methods of quality management, such as certification of ISO 9001systems. However, it is unknown whether such companies are also engaged in the management of QRC arising from activities undertaken, either at the level of monitoring, or coming from failures, and if such organisations verify (or not) the recovery of investments in quality. In this sense, the present article aims to provide insight into the procedures adopted by Portuguese companies in managing QRC, and to assess the extent to which management reports allow the analysis of quality costs and contribute to the related planning and control activities. The results of this study showed that there is hardly any assent to the implementation of formal mechanisms for planning and control of QRC, and to the explicit identification and segregation of those costs in management reports.

A Study on the Use of the Balanced Scorecard for Strategy Implementation in a Large Brazilian Mixed Economy Company

The research described in this paper has analyzed the use of the balanced scorecard (BSC) as part of a management control system for implementing strategies in a large mixed economy company. The shareholder structure of the company combines traditional shareholder interests with those of the government. Based on a case study in Brazil, the research innovates on analyzing BSC use and contributions to translate a company’s strategy (which requires bringing together different views) into objectives and goals aligned to the four BSC perspectives: financial, learning and growth, improvement of internal processes and customer. The results point out that: (1) BSC, when used as part of a MCS, provides effective improvement of the strategy implementation process and its diffusion across the different organizational levels; (2) in the company under analysis, the performance evaluation integrated qualitative, financial and productive dimensions; (3) BSC appeared as an important tool in strategy conception and implementation; and (4) BSC enables to translate the company’s strategy into objectives and goals aligned to the financial, learning and growth, improvement of internal processes and customer perspectives.

The role of management accounting systems in the development of intellectual capital

Purpose The purpose of this paper is to examine the role of management accounting systems (MAS) in the development of intellectual capital (IC) – i.e. human capital (HC), structural capital (SC) and relational capital (RC) – and the resultant effects on organizational performance. Design/methodology/approach A questionnaire was developed to conduct a survey of high-level managers of Portuguese companies. The data collected were analyzed through the use of structural equation modeling with AMOS. Findings Statistical support was found for six out of nine hypothesized relationships. The findings confirm the role of MAS in the development of HC and SC. Results also showed positive and statistically significant relationships between the three dimensions of IC, in line with previous research. Finally, results indicated that SC has a positive and significant link with organizational performance, in keeping with some research. Research limitations/implications The estimation procedure allowed only a partial validation of the proposed model because, although positive, the relationships between MAS and RC, between HC and performance and between RC and organizational performance were not statistically significant. Practical implications The study highlights the role of MAS as information networks that collect, process and communicate information that influences the development of IC, as well as networks of relationships that support the establishment of conditions for the creation and integration of organizational knowledge and the development of IC. Originality/value In this research, an arguably more complete framework of the relations between MAS, IC and performance is developed and empirically tested. Despite the existence of some literature addressing the relationship between MAS and IC, this is the first study, of which authors are aware, that focuses specifically on the relationships between MAS and the three dimensions of IC (HC, SC and RC), as well as their effects on organizational performance.

Knowledge management and intellectual capital in networks of small- and medium-sized enterprises

Purpose The purpose of this paper is to propose a theoretical-conceptual model supporting the analysis of the effects of small- and medium-sized enterprises (SMEs) networks on knowledge management (KM) and intellectual capital (IC). Design/methodology/approach The paper reviews literature on KM, IC and networks theories. The role of SMEs networks on KM and IC was discussed, analysing previous studies that supported the proposition of the model in question. In such model SMEs networks are seen as knowledge networks which are analysed in terms of the network formation process, the context, the strategy, the organisational culture and the stimuli for the sharing of knowledge. KM is observed in terms of knowledge creation, systematisation and sharing. Finally, IC encompasses human capital, structural capital and relational capital. It is noteworthy that KM and IC were considered deeply and closely related. Findings The conclusions obtained help to fill an important gap in the management, accounting, KM and IC literature, showing that the processes of creating, acquiring, maintaining, systematising and sharing information and knowledge and IC generation in SMEs networks can be influenced by the network formation process, by the organisational context, as well as by the strategy, organisational culture and stimuli to sharing knowledge. Research limitations/implications The paper provides a theoretical contribution by increasing understanding of the effect of SMEs networks on KM and IC practices – an understanding still at the early stages in the literature. Moreover, the originality of the model proposed extends the relevance of this research, as the literature does not contain a sufficiently established and tested approach that simultaneously provides a clear view of the relations between SMEs, networks, KM and IC, highlighting how SMEs can use networks as a strategy to achieve a more effective management of the knowledge assets forming IC. So, the paper offers several avenues for future research. Practical implications Based on previous empirical research, it was perceived that the original model presented in this paper is consistent, collaborating to improve management practice, providing a competitive benchmarking process. This can allow analysts, managers and other decision makers, by using SMEs networks to improve organisational performance, innovation, sustainability, competitiveness and value. Originality/value The paper presents an innovative theoretical-conceptual model focussed on the role of SMEs networks on KM and IC, indicating a strong link between the former and the latter in such enterprises in terms of performance, innovation, sustainability, competitiveness and value, an issue whose understanding, although quite relevant, is still incipient in the literature.

How companies use the information about quality-related costs

This work focuses on the broad topic of quality-related costs (QRC), which has been largely discussed in the literature. Nevertheless, one of the least studied issues relates to the way companies use QRC information. In this research the profile of use of QRC information is analysed considering the model proposed by Simons [(1991). Strategic orientation and top management attention to control systems. Strategic Management Journal, 12(1), 49–62], from which it is possible to distinguish between a diagnostic and an interactive profile of use. The analysis of the data collected through a questionnaire survey to a sample of Portuguese certified companies (PCCs) involved the application of principal component analysis, cluster analysis, one-way analysis of variance and discriminant analysis. The results showed that a substantial part of PCCs use the QRC information according to a diagnostic and interactive profile. Managers of these companies use QRC information to set goals, monitor their implementation and motivate participants (according to a diagnostic profile), but also to foster organisational learning, the emergence of new ideas and strategies (according to an interactive profile). About 30% of companies favour a diagnostic profile. However, about 32% of companies report negative values for both profiles, indicating that these companies undertake initiatives to prepare QRC information but their leaders do not use it in the management process.

How Communication and Control Processes Improve Quality

In order to achieve excellence, an organization should use two key instruments—quality and an efficient and effective communication process amongst all employees—so it can attain quality management. This chapter aims to examine whether organizational communication and quality are interrelated, in order to answer the following question: Is it necessary to improve communication within an organization so that quality management can be efficiently and effectively pursued? For this purpose, data were collected through the administration of a questionnaire to the staff of a Portuguese public organization. The findings showed that, in this organization, communication among employees of various sectors is satisfactory and that there is mutual help between them in order to improve the organizational performance.

An Integrated View of the Use of Quality Cost Information, the Improvement of the Quality Management System and Effects on Performance: A Study in Portuguese Companies

The literature focusing on quality costs has placed great importance on issues related to identifying, measuring and reporting quality cost information. Less attention has been paid to how this information is used in the management process and how it can enhance internal capabilities and thereby improve company performance. In addition to addressing this question, we analyse how the extensive use of quality costs can boost organisational learning and innovation in organisations’ internal processes, thus leading to an overall improvement in the quality management system that is reflected in financial and non-financial performance. The conceptual model developed involves these relationships and has been tested using the structural equation modelling technique. To this end, a questionnaire survey was conducted in Portuguese companies with the ISO 9000 certification. The results shed light on the causal links between the variables, and thus validate the conceptual model indicating that the use of quality cost information has a positive effect on both the development of quality management systems and performance.