0Many studies have focused on the relationships between particular quality dimensions and organisational outcomes.
Customer Satisfaction
Customer satisfaction has been addressed in quite an extensive literature in the field of marketing (Churchill and Surprenant, 1982; Oliver and DeSarbo, 1988; Anderson and Sullivan, 1993). Although empirical evidence is limited, increases in customer satisfaction are generally believed to shift the demand curve upward, reduce marketing costs, increase marketing costs for competitors (satisfied customers are more difficult for competitors to take away), lower transaction costs, reduce customer turnover, increase cross-selling (more products, larger accounts), lower employee turnover, enhance reputation, and reduce failure costs.
Competitiveness
Some claim that quality has a positive association with increased demand (Abbott, 1955) and with inelastic demand (Porter, 1980). Porter claimed that organisations differentiate themselves from their competitors mainly by providing more durable or reliable products, adding desirable features, providing high levels of customer service, and having an extensive dealer network—all aspects of TQM. The Profit Impact of Market Strategies (PIMS) analyses confirm this competitive advantage by showing perceived product quality to be the most potent predictor of corporate financial success when compared with market share, productivity, low-cost production, diversified product mix, and other common predictors of performance (e.g., Buzzell and Wiersma, 1981).
Productivity
Although a number of quality gurus have been writing extensively since the early 1970s that ''Quality is Free" because high-quality eliminates the costs associated with lost customers, rework, excess time, indirect engineering, modified specifications, data collection and analysis, field service, reinspection, and waste (Crosby, 1979; Deming, 1982; Schonenberger, 1982; Imai, 1986; Ferdows and DeMeyer, 1990; Cole, 1993), empirical evidence remains sparse. Ittner (1992) found that nonconformance costs go down simultaneously with reductions in conformance costs, thus enhancing productivity.
