It must be the mission of any organisation to produce products or services of the highest quality. Quality can not only help sell more products but more importantly can reduce losses.
Losses are the bane of the corporate world and can quickly wipe out profits. The last thing any organisation would want is to end up losing all their profits.
There are a number of losses that could be encountered including,
Organisations are under intense pressure by their owners and shareholders to consistently produce more and more profits. Any reduction in profit will simply not be tolerated. To increase profits, an organisation must increase its revenue and reduce its costs.
If a product fails to meet the expectations of the market then this product will not produce revenue as anticipated and the costs of remedying will increase, leading to a drop in potential profit.
Worse still, if the product has to be recalled, the costs involved could run into millions, seriously denting organisation profitability. No wonder the words 'product recall' strike fear in many a corporate boardroom.
Organisations are all too aware of the implications of being sued should their products fail to meet expectations. The costs of fighting a law suit can be very demanding, even on the largest of corporates and this must be avoided at all costs.
In an era when the media is king, anything that can create news irrespective of it being bad or good, is marketable. Organisations spend millions on Public Relations (PR) to ensure that their organisation is always seen in a good light. A few rash words about the quality of a product, can in the extreme destroy an empire.
Many industries and territories are governed by bodies that ensure that organisations adhere to certain standards and regulations. If these standards and regulations are not met then penalties may be enforced and restrictions applied.
The greatest loss of all is the loss of human life. Selling products that fail causing loss of life can lead to substantial costs in compensation claims.
In certain jurisdictions, corporate manslaughter legislation has been brought in to ensure that directors can be liable for deaths caused by faults in their products.
This has put an enormous amount of pressure on organisations and their directors to ensure that their products are safe.