RETURN ON QUALITY (ROQ) - MAKING SERVICE QUALITY FINANCIALLY ACCOUNTABLE

Many companies have been disappointed by a lack of results from their quality efforts. The financial benefits of quality, which had been ass umed as a matter of faith in the ''religion of quality,'' are now bein g seriously questioned by cost-cutting executives, who cite the highly publicized financial failures of some companies prominent in the qual ity movement. In this increasingly results-oriented environment, manag ers must now justify their quality improvement efforts financially. Th e authors present the ''return on quality'' approach, which is based o n the assumptions that (1) quality is an investment, (2) quality effor ts must be financially accountable, (3) it is possible to spend too mu ch on quality, and (4) not all quality expenditures are equally valid. The authors then provide a managerial framework that can be used to g uide quality improvement efforts. This framework has several attractiv e features, including ensured managerial relevance and financial accou ntability.