OVERVIEW OF PRESIDENT JONES ACCOUNTING SERVICE

OPERATIONS SYSTEM
ENVIRONMENT
Customers

Competitors Government Technology

Economy

INPUTS

TRANSFORMATION PROCESS

Accounting staff

AR/AP transactions

Computers/Equipment

Handling customer
complaints

Accounting Software

Front desk transaction

Customer Info

OUTPUTS

AR/AP Services to
small and medium
Scale businesses

Facility
MONITORING & CONTROL
FEEDBACK CONTROL SYSTEM

Key findings from the Case Study

It is seen that Jones Accounting Service organization is one that provides Accounts Receivable
(AR) and Accounts Payable (AP) services for small and medium scale businesses. The
operations system could be described in the diagram above.
For some time, their business was booming and profitable as there was no competition in the
area that they operated. However, with time, there were easy entry barriers to their business
industry with the springing up of other firms who ended up winning their long-term key
customers.
However, the owner Jones decided to find out the cause of the loss of customers and ascertained
from key customers of their firm who had left. The main reasons that they left were as follows;
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Percentage of Customers

Reason

45

Inaccurate accounting (errors in accounting)

35

Poor response time to customer complaints and delay in

correction action

30

Poor attitude of Jones customer service representatives

10

Cost of Service

From the above reasons, it could be seen that those customers were no longer satisfied with the
quality of service that they are receiving from Jones Accounting service. For instance, their
major reason was that there was inaccurate accounting (errors in accounting) and poor response
time to customer complaints and delay in correction action. These were key to customer
satisfaction. Probably, they were getting those services from other competitor firms.
Theoretical Reason
They were not ensuring total quality management (TQM) with time. One measure of TQM is a
product or service free from defect or deficiencies. And there should be continuous improvement
to at least satisfy the customer who is paying for the service thus, there should be value for
money.
Jones Accounting service organization did not ensure TQM approach of satisfying the customer
in terms of understanding that;
the customer defines quality.
the customer is always right.
the customer always comes first.
the customer is king.
quality begins and ends with the customer
They failed to understand the customer in these way which ended in them losing such customers.
Then, there was the need to introduce some TQM measures to curb the situation.
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TQM measures adopted by Jones includes;

Install new bonus plan that is 5% tied to employees efforts to handling at least 10
customer complaints.

Let departments know that they are responsible for quality Empowering department
heads to ensure quality is enforced in their department as their job will be on line if they
cant fire subordinates who do not comply with quality standards.

Reduce cost of services that is, customers should not pay too much or more than
enough for the output they receive.

Invite customers to offer their comments on service quality after every service encounter
that is, customers are to evaluate the service they receive after every meeting with a
customer service rep. There will be a service card or evaluation form given to customers
to comment.

Questions
1. Does the Plan offered by President Jones embrace any of the TQM Principles? Identify
which ones it does and how. Identify which ones it does not embrace and what might be
done to include them.
2. If you were appointed by President Jones as an operations manager to help solve the
problems of Jones Accounting Services is facing, what would you do differently? Discuss
any TWO of the things you will do.

QUESTION ONE SOLUTION

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TQM is a philosophy that focuses relentlessly on the needs of the customer, both internal and
external, realigns the organisation from detection to prevention and aims to improve
continuously via the use of statistical monitoring. The main goal of TQM is customer
satisfaction. The key principles of Total Quality Management includes;
i.

Management Responsibility and Commitment: the top management must provide the
leadership for quality.

ii.

Customer Focus or Orientation: the customer defines quality, and customer satisfaction
is the top priority.

iii.

Employee Participation and Team Work: its the responsibility of all employees at all
levels of the organization.

iv.

Education and Training: for all employees are the bases for continuous quality
improvement.

v.
vi.

Quality management system: Quality is a strategic issue, and requires a strategic plan.
All functions of the company must focus on continuous quality improvement to achieve
strategic goals.

vii.

Quality problems are solved through cooperation among employees and management.

viii.

Problem solving and continuous quality improvement use statistical quality control
methods.

The TQM step-wise plan as outlined by President Jones include;

i.

Install a new bonus plan.

ii.

Let department managers know that they are responsible for quality.

iii.

Reduce cost of services to customers.

iv. Invite customers to offer their comments on service quality after every service encounter.
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President Jones embraced some of the TQM principles in his step-wise plan for Jones
Accounting Services. TQM, unlike other quality concepts, involves a whole company getting
organized in every department, in every activity, with every single person at every level not only
in solving problems but also in preventing them. TQM aims chiefly at changing behaviour,
attitudes and skills so that the culture of the organization becomes one of preventing failures and
doing things right first time every time.
From the case, TQM principles embraced include customer focus and employee empowerment.
For instance, the second step-wise plan which was that Heads of Department would be in charge
of quality in their departments deduces that they are empowering their employees to an extent
which is a TQM principle. In addition, with the installation of bonus plan and the reduction of
cost of service which are tied to customer satisfaction and listening to customers comments on
all service encounters also implies that they are focusing on the customer and attempting to build
customer relationships which are also requirements for TQM principle.
However, the TQM plan by President Jones did not embrace other TQM principles such as
ensuring continuous improvement, benchmarking and establishment of effective measurement
metrics (standards). It is necessary that Jones Accounting Service embrace continuous
improvement which would eliminate customer problems and complaints. They could do this by
benchmarking other firms and this would even help to even eliminate the bonus plan for staff.

QUESTION B SOLUTION
TQM is a strategic approach to producing the best products and services through a process of
continuous improvement of every aspect of a companys operations with the involvement of staff
at all levels. Total Quality Management (TQM) is a comprehensive and structured approach to
organizational management that seeks to improve the quality of products and services through
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ongoing refinements in response to continuous feedback. If I were appointed Operations

Manager of Jones Accounting Services, in order to solve the problems at stake, I would consider
the following;
Customer-focus: TQM is a way of managing to improve the effectiveness, flexibility and
competitiveness of a business as a whole. It also serves as a means of improving company
bottom-line performance by creating a sense of purpose shared by everyone in the company and
geared towards the needs of the customer. It requires the company to check customers' attitudes
regularly and includes the idea of internal customers as well as external ones. This means
avoiding rework, i.e., cutting the amount of defective work. This would go a long way to satisfy
or even delight the customers.
Staff Involvement: The highest level of development of a system for quality management is the
concept and practice of Total Quality Management. Everyone has to be committed to quality.
That means changing the attitude of the entire workforce, and altering the way the company
operates. This involves improved communication. The TQM concept puts much emphasis on the
involvement of every worker from the Company Chief Executive Officer to the lowest shop floor
worker in ensuring that products/services continually meet customer expectations. So TQM is
directed at enhancing competitive edge and thereby increasing job security. Improving quality is
the most cost-effective and less capital intensive way of improving productivity.
Continuous Process Improvement: there is the need to focus on internal business processes to
improve all anomalies and satisfy the ultimate customers. The elimination of waste in all forms is
a major objective of any companys TQM process. But the aim should be to re-deploy resources
away from wasteful activities into value added activities. This will improve customer service,

flexibility and responsiveness and reduce product development lead times. Continuous
improvement means bringing perfection in all organization function and process.
Measuring Performance: Measuring performance means judging what have been planned
either achieved or not. Objective behind performance management indicate the process gain or
loss, compare the goal with what been achieved, determine what process need to improve and
determine the overall performance of the organization. There should be a measurement scale that
performance would be compared to and I would adopt the balanced scorecard which measures
performance based of four criteria finance, process, customer and organizational learning).