Quality as a Differentiating Element in the B2B Market of Bosnia and Herzegovina

1025

QUALITY AS A DIFFERE�TIATI�G ELEME�T I� THE B2B

MARKET OF BOS�IA A�D HERZEGOVI�A

Zijada Rahimić The School of Economics and Business Sarajevo, Associate Professor

Trg Oslobođenja – Alija Izetbegović 1, Sarajevo

Bosnia and Herzegovina

Phone: ++ 387 33 275-998; Fax: ++ 387 33 275-994

E-mail: [email protected]

Kenan Uštović NCH Bosnia d.o.o. Sarajevo, General Director

Kaptol 32, Sarajevo

Bosnia and Herzegovina

Phone: ++ 387 61 349-679

E-mail: [email protected]

Abstract

Using quality as a basis for differentiation today has become much more demanding than

before. In order to achieve some competitive advantage these days it is not enough to build

only a quality management system according to ISO 9001:2000 requirements. Companies

need to invest much more resources and knowledge to upgrade their quality systems and

use that way like tool to attract and retain customers. We will explore some options that

companies can use on the BiH market, especially when we talk about B2B sales. During

the world economic crisis and severe refraction of entire national economies, companies

are faced with the questions of the applicability and sustainability of their business

strategies. Stuck in the unusual economic and financial environment, companies are forced

to react rapidly if they want to survive on the market. Their only goal is to keep the

econometric parameters within normal limits. Therefore, we have witnessed that many of

them are using short term and less efficient tools in order to stop or reduce the negative

trend. One of the short term and rapid method of reacting to the economic crisis is the

increasing number of persons employed in the sales sector, while companies are struggling

to keep the planned sales level. This situation is evident also on the market of Bosnia and

Herzegovina. Using the method of incomplete induction, we conducted a research for

employment supply in four countries: Bosnia and Herzegovina, Croatia, Slovenia and

Serbia. This paper includes research about companies’ willingness to use quality as

differentiation tool. Research was conducted through individual interview survey based of

pre-prepared questionnaire and includes companies engaged in B2B sales. Research results

should demonstrate differences in companies quality perception related to their products.

Research was implemented on the territory of Bosnia and Herzegovina. The sample size

was 44 companies (20 international and 24 domestic companies). Analyzing the results of

researches we make a conclusion about possibilities that companies keep or even achieve a

competitive advantage in a time of global economic crisis.

Keywords: B2B sales, competitiveness, differentiation, economics crisis, quality

JEL classification: L15, L81, C12, C14

1026

1. Introduction

In the increasingly harsh conditions of global hypercompetition, the only aim for

companies is the ceaseless growth and development in many business fields. If they want

to continuously manage their own growth, companies need to be prepared to respond to all

demands and requirements which are conditioned by market development. Certainly, the

main criteria for survival on the market are set by stakeholders (investors, costumers,

community...). The intensity of the development and distribution of new products and

services, today become the core competence for market-oriented companies. This is a

world of winner-take-all markets (Conti, T., Kondo, Y., Watson, G.H. 2003: 121).

Except for increasing customer satisfaction, quality of products and processes

directly (positively) affects the efficiency, productivity, profitability, motivation, image

and competitive position of the company. This paper presents unique research in Bosnia

and Herzegovina, about possibilities that companies, on this territory, use quality in the

differentiation process. Before we present results of this research, we will explore trend of

increasing the number of employees in sales (sales representatives) during the global

economic crisis. Increasing the number of sales representatives company are trying to

keep, at least, the same level of sales as it was before the crisis. But this is only short-term

and not very effective tool for overcoming sale problems. The aim of this review is to

demonstrate that companies should focus their resources on increasing the quality level,

rather than increasing the number of sales representatives who will sell the same products

and services. This paper will also discuss about possibilities and approaches for the

upgrading and improvement of quality system that companies need to achieve in order to

stay (become) competitive. Quality levels that provide an advantage for companies are

constantly increasing. Before, it was enough to fulfill requirements only for ISO 9001

standard, but this is not a guarantee for success anymore. If the company wants to achieve

long-term competitive advantage, upgrading the quality system through the methods like:

Kobayashi’s 20 keys, Six Sigma or Lean Management is advisable.

Although the paper has three parts it is easy to find their link. Short research about

employment supply has the task to show us the main focus of today’s companies:

expansion of sales network or focus on quality? In the second part of the paper through the

presentation of ISO standard we are giving an answer to the question: Do companies think

that ISO 9001:2000 standard is sufficient to say that they care about quality, and whether

the companies are familiar with modern methods of quality management that are presented

in this paper? In the last part we linked local research about importance of quality with the

findings that we presented in first two parts.

2. Literature review

The concept of the quality is immanent and difficult to define. Today the quality is not just

technical issue, it is the business requirement that pushes company to become better for

their customers, and need to be the duty of all employees. The definition depends on the

purpose and for whom you are talking. For customers quality is whatever they say it is, and

include the expected characteristics of the product or service. Deming (1986:168) suggests

that quality is defined by the customer and has many measurement scales, one for each of

the characteristics the customer considers important. On the other hand, Juran (1989:15)

defines quality as “fitness for use”, with each product having multiple quality

characteristics of two kinds: customer-desired product features and freedom from

deficiencies (Sparks, R.E. & Legault, R.D., 1993:16).

1027

The ISO 8402 (now ISO 9000) standard defines quality as “the set of characteristics

of an entity that gives that entity the ability to satisfy expressed and implicit needs.” Other

definition is that quality is the degree to which a set of inherent characteristics fulfils

requirements (Hoyle, 2006:8). Garvin (1987:104) treats his quality characteristics or

dimensions as a clear vocabulary with which to discuss quality as a strategy.

For Bowbrick (1992) the quality of goods or of a service (or at least a customer's

perception of it) can be significantly influenced by the customer's expectations from the

product, which in turn can be founded on a number of assumptions. Both these factors can

be influenced (and manipulated) significantly by the supplier as well as by a number of

other factors. For Riaz (2010) quality is a momentary perception that occurs when

something in environment interacts with human factor, in the pre-intellectual awareness

that comes before rational thought takes over and begins establishing order.

Many authors have written about the recession and the possibilities that companies

can use during this period (Canlon, F. 2011.; Krell, E. 2011.; Mavlutova, I., Mavlutov, B.

2011.; Srinivasan, S.R., Sivakumar, S.N.V. 2011.; Vojtovich, S. 2011.; Gulati, R., Nohria,

N., Wohlgezogen, F. 2010.; Ohanian, L. 2010.; Rhoads, C.J., Gupta, K. 2010.; Poulin,

L.M. 2009.; Poulin, L.M. 2009.; Pratt, M.K. 2009.; Polyak, I., 2008.; Sahin, A., Kitao, S.,

Cororaton, A., Laiu, S. 2001.). The biggest mistake we see every day is the lack of

understanding witch tools will help company to overcome recession and sales gap.

3. Research questions, data and methodology

At first we use method of incomplete and complete induction. Incomplete induction we

used when we analyze the employment supply in four different countries (Bosnia and

Herzegovina, Croatia, Slovenia and Serbia). We explored does world economic crisis

causes the high employment supply rate in sales. Complete induction we used for

analyzing the intensity of ISO 9001 standard in some geographical zones. To calculate

intensity we used formula:

�� (�� 9001) = �� !" (��!��y)/ GDP (��!��y)

�� !" (z�!�) / GDP (z�!�), (1)

The main objective of this paper is to acknowledge the level of awareness and

acceptance of quality issue like differentiation tool companies can use on the market. The

Design Production Sale DeliveryPerceived

quality

-Performance

-Features

-Aesthetics

-Reliability

-Durability

-Conformance

-Facilities

-Communication

-Process

-Transaction

System

-Quantity

-On-time

-Place

-Anticipated

Service

-Unanticipated

Service

Figure 1: A practical definition of quality for products

%ote: figure is adapted for by authors

Source: Garvin, D.A. 1987: 101-109; Sparks & Legault, 1993: 17

1028

general research hypothesis is: International companies, as opposed to domestic, use

quality like differentiation tool for building competitive advantages. As research form we

used data collection questionnaires (DCQ). The technique was written survey and way of

realization was individual research. The research process lasted five months (January-May

2010) on the territory of Bosnia and Herzegovina. The geographical scope of the survey

covers the following six cities: Banja Luka, Lukavac, Mostar, Prijedor, Sarajevo and

Tuzla. The sample consists of 44 companies in default and was composed of 20

international (45.45%) and 24 domestic (54.55%) companies. The companies used for

research were selected by simple random sampling from online database of companies1.

Questionnaires were distributed to companies in several ways, mostly through e-mail or

direct contact with company management. Companies that we used as research sample

have a various ownerships, work in different business sectors (industries), sell a wide

variety of products and services, they are geographically dispersed and different by size.

The sampling process required the following adjustments:

• International companies include companies with local offices, branches or

subsidiaries on the territory of Bosnia and Herzegovina, or domestic companies

where the control block of shares has some international company.

• Domestic companies include companies where the most of start-up capital is from

Bosnia and Herzegovina.

• Companies need to deal in B2B sector, selling goods and services through their

sales representatives.

• The research can be conducted only with the high management of companies.

During the processing and presentation of results obtained by research, we used few

methods, commonly non-parametric statistics, considering that research sample was

relatively small. In some cases when we were not able to use any statistical test we

presented our results through simple percentages or proportions. In case where this was

possible2 with the proportion we used Chi Square test to determine whether certain groups

(in this research, categories of domestic and international companies) are significantly

different from anticipated results or frequencies.

)* = + +,-./01./2

*

1.//. , (2)

Where, O – Observed frequencies; E – Expected frequencies.

For questions whose answers were scaled from 1 to 5 or 1 to 7, we followed two

procedures: Kolmogorov-Smirnov normality test (K-S) and Mann-Whitney-Wilcoxon test

(M-W). K-S test was needed to determine if two datasets differ significantly and had the

advantage of making no assumption about the distribution of data.

34 = 5678 9:(8) − :<4(8)9 , (3)

Where, n – number of (independent) observations; G<(x) – empirical cumulative

distribution function (cdf); G – completely specified continuous theoretical cdf.

M-W test like, non-parametric statistical hypothesis test, we used for assessing

whether two independent samples of observations have equally large values.

> = 4?4* + 4*(4*A?)

*− + B.

4*.C4?A? , (4)

Where, U – M-W U test; !D – sample size one; !E - sample size two; RG - rank of the

sample size.

1 As the primary online database of companies has been used: www.poslovni-adresar.ba

2 If any of the expected cell frequencies of Chi Square test are less then five.

1029

With M-W test we treated differences between the mean ranks, which indicated

statistically significant or insignificant differences between observed categories. K-S test

results are further checked by Shapiro-Wilk (S-W) test.

H =,+ I?8(.)

4.J? 2

*

+ (8.08K)*4.J?

, (5)

Where, XG – ith smallest number in the sample; sample mean is:

)M =(8?A⋯A84)

4 , (5.1)

The constants G are given by:

(O?, … OR) = STUV?

,STUV?UV?S2?/* , (5.2)

Where, � = (�D, … , �W)X and (�D, … , �W) are the expected values of the order statistics

of independent and identically-distributed random variables sampled from the standard

normal distribution, and V is the covariance matrix of those order statistics (Royston,

1983; Villasenor and Estrada, 2009; Tasdan and Sievers, 2009; Drezner, Turel and Zerom,

2010).

In some results presentations we excluded tables or diagrams, but they are

presented in text form: {M-W = X; p = X <> 0.05; Mean-rank ‘I%T/DOM’ = X/X, Median

(Md) ‘I%T/DOM’ = X/X}. In other cases, when it was apposite, we used cross-tabulation to

show answers dynamism for certain categories on two juxtaposed and adjacent questions.

4. Opportunities for sales and quality improvement in BiH

4.1. Research results and discussion about employment supply in region

It has be a few years since world went through the strongest recession. According to some

economists and researches it has been since 2001 that we have enjoyed tough economic

times. Many business people fear a recession or soft economy, reasoning that if the

economy is bad, clients and customers will reduce their projects, stop the consumption, and

even sacrifice quality or buy only from low price suppliers. But when most of the

companies see economic slowdown like a big problem, best and most success companies

recognize opportunity to gain new customers and boost their sales, developing special

marketing and sales methods that will help them in recessionary periods.

Today, companies very often increase the number of sales representatives with

hope that they will help them keeping the earlier sales level and/or improving their

competitive advantage. However this strategy is wrong, or gives results only in short-term

period. There are several reasons why this strategy is wrong: a) the companies are

increasing their costs, although they should decrease them in recession times, b) new sales

representatives need some time to demonstrate their abilities, c) international companies in

Bosnia and Herzegovina are investing more resources in sales team education than

domestic companies. Research we conducted at the state level of Bosnia and Herzegovina)

shows that domestic companies do not invest enough resources in their sales training. For

those companies is characteristic that 67% had never used external and 38% had never

used internal education. Cluster analysis of the summary results shows that more then 1/3

of domestic companies has never used any type of education for their sales team. The

(Table 1) shows results of short survey which was conducted using dates from web sites

that people use in searching employment process.

1030

Tab

le 1

: E

mplo

ym

ent

supply

by c

ountr

y

Co

un

try

BO

S�

IA A

�D

HE

RZ

EG

OV

I�A

CR

OA

TIA

SL

OV

E�

IA

SE

RB

IA

Ra

nk

C

ate

go

ry

f %

C

ate

go

ry

f %

C

ate

go

ry

f %

C

ate

go

ry

f %

1

Co

mm

erci

al

-

sale

s 2

59

38,89

Co

mm

erci

al

–

sale

s 1

53

17,75

Co

mm

erci

al

–

sale

s 1

93

22,16

Co

mm

erci

al

–

sale

s 1

45

10,98

2

Mar

ket

ing -

PR

8

1

12,16

Hea

lth

ser

vic

e 9

3

10,79

Mec

han

ical

en

gin

eeri

ng,

met

allu

rgy,

min

ing

87

9,99

Ch

emis

try,

ph

ysi

cs,

mat

hem

atic

s (n

atu

ral

scie

nce

s)

105

7,95

3

Info

rmat

ics

-

soft

war

e 5

0

7,51

Eco

nom

y,

fin

ance

,

insu

ran

ce

71

8,24

Man

ufa

ctu

rin

g

79

9,07

Mec

han

ical

en

gin

eeri

ng,

Ele

ctro

nic

s &

Tel

ecom

mu

nic

atio

ns

99

7,50

4

Job

s fr

om

ZZ

ZR

S*

4

3

6,46

Tou

rism

& h

osp

ital

ity

68

7,89

Tec

hn

ical

ser

vic

es

76

8,73

Tou

rism

& h

osp

ital

ity

86

6,52

5

Eco

nom

y,

fin

ance

,

insu

ran

ce

30

4,50

Ele

ctri

cal

&

mec

han

ical

engin

eeri

ng

61

7,08

Ele

ctri

cal

engin

eeri

ng,

Ele

ctro

nic

s &

Tel

ecom

mu

nic

atio

ns

54

6,20

Lan

gu

ages

, tr

ansl

atio

n,

lite

ratu

re

79

5,98

6

Sci

ence

&

Edu

cati

on

23

3,45

Sci

ence

& E

duca

tion

55

6,38

Bu

sin

ess

con

sult

ing

51

5,86

Info

rmat

ics

- so

ftw

are

78

5,91

7

Man

agem

ent

20

3,00

Inst

alla

tion

-

mai

nte

nan

ce -

rep

air

47

5,45

Com

pu

ters

, p

rogra

mm

ing

45

5,17

Eco

nom

y,

fin

ance

,

insu

ran

ce

73

5,53

8

Ele

ctri

cal

&

mec

han

ical

engin

eeri

ng

18

2,70

Tra

nsp

ort

- s

tora

ge

and

logis

tic

40

4,64

Ph

arm

acy &

Ch

emis

try

33

3,79

Man

agem

ent

63

4,77

9

Pu

bli

c se

rvic

e &

adm

inis

trat

ion

13

1,95

Civ

il e

ngin

eeri

ng -

geo

des

y

40

4,64

Tou

rism

& h

osp

ital

ity

31

3,56

Hea

lth

ser

vic

e 5

5

4,17

10

Oth

er

129

19,37

Oth

er

234

27,15

Oth

er

222

25,49

Oth

er

537

40,68

S

UM

6

66

100,00

SU

M

862

100,00

SU

M

871

100,00

SU

M

1320

100,00

ww

w.p

osa

o.b

a

ww

w.p

osa

o.h

r w

ww

.moje

del

o.c

om

w

ww

.posl

ovi

.rs

%o

te:

all

web

pag

es

are

vis

ited

at

22

/11

/201

1. T

he

nam

es a

nd

co

nte

nts

of

som

e ca

tego

ries

are

ad

apte

d f

or

the

rese

arch

. *Z

ZZ

RS

- R

epub

lic

of

Srp

ska E

mp

loym

ent

Inst

itute

So

urc

e: b

ased

on d

ata:

fo

r B

osn

ia a

nd

Her

zego

vin

a (h

ttp

://w

ww

.po

sao

.ba)

; C

roat

ia (

htt

p:/

/ww

w.p

osa

o.h

r);

Slo

venia

(htt

p:/

/ww

w.m

oje

del

o.c

om

) an

d S

erb

ia

(htt

p:/

/ww

w.p

osl

ovi.

rs),

tab

le a

nd

cal

cula

tio

ns

mad

e b

y a

uth

ors

1031

The results show the employment supply in four countries when the recession was

an integral part of the market. As we can see for all analyzed countries Commercial – sales

job offers are most frequent. This is especially noticeable in Bosnia and Herzegovina,

where approximately 40% of employment supply is related to sales. Increasing the number

of sales representatives without additional sales training is a multiple cost for the company.

At first, these representatives will not be able adequately to respond to all market needs,

and a lack of sales methods and tools will lead to their low motivation and poor

performances. But definitely, the largest loss is the opportunity cost for new sales

representatives. Instead of that, resources should be redirected in rationalization,

improvement and modernization of sales system, which will be more adapted and adjusted

for industrial customers. Also, investments in quality is very good opportunity for

companies to overcome market problems and differentiate themselves from competition.

4.2. Quality as a competitive advantage

Presumably, a firm’s capability to offer superior product quality is based on its willingness

to change structurally (Bettis, 1994), philosophically (Bounds, York, Adams, Ranney,

1994), transactionally (Bowen & Jones, 1986), or culturally (Cameron, 1994) in order to

enhance its level of customer orientation. We contend that a customer-oriented firm with

superior product quality not only may attain competitive advantage and increased returns

but also may be better capable of buffering itself against the threat of rivalries and

macroeconomic forces (Kroll & Wright, 1999).

Costumer needs are constantly growing and companies need to be able to handle

the demands of the modern era. The company's strategy in future will not be based solely

on the production of cheap and quality products and services then the competition, but a

better understanding of the global market. That means the struggling with the competition

and gaining new markets with the products that will offer different new values, best quality

and will satisfy unique and individual requirements. Because of this, companies need to

continually improve their quality. Gone are the days when the ISO standard was sufficient

indication of quality. Today, many competitors own ISO 9001:2000 certification, so

companies are obligated to seek new ways for differentiation. When we talk about quality,

modern differentiation is reflected in some new methods such as Kobayashi’s 20 keys, Six

Sigma or Lean Management. Further in this paper we will present ISO 9001:2000

Standard, but other new methods will be also discussed.

4.2.1. Quality management system (ISO 9001:2000) and competitiveness

Every company would like to improve the way it operates, whether that means increasing

market share, cutting costs, managing risk more effectively or improving customer

satisfaction. ISO 9000 has become a favored system for many organizations embarking on

quality improvement. ISO 9001:2000 is an information-sharing tool that an organization

can use to gain the knowledge needed to enhance quality and performance. It also provides

a ready framework for ordering and structuring an organization’s knowledge (Lin, C. &

Wu, C. 2005:657). ISO 9001:2000 specifies requirements for a quality management system

where an organization (a) needs to demonstrate its ability to consistently provide product

that meets customer and applicable regulatory requirements, and (b) aims to enhance

customer satisfaction through the effective application of the system, including processes

for continual improvement of the system and the assurance of conformity to customer and

applicable regulatory requirements (Zhou, M. 2011:19). Below, we will present two short

studies about ISO 9001:2000 Standard that will help us to understand its importance level.

1032

Table 2: Intensity of ISO 9001:2000 Standards by country – (2008)

%ote: Values of GDP are taken from CIA web page and converted to BAM using exchange rate

1USD=1,328599BAM (Currency exchange as at 01.01.2008. from Central Bank of Bosnia and

Herzegovina). Quantities of ISO are taken for ISO survey for 2008 available on web site www.iso.org.

Intensity, rank and GDP % are calculated by authors.

Sources:

• http://www.iso.org/iso/survey2009.pdf;

• http://www.iso.org/iso/survey2008.pdf;

• https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html

• http://www.cbbh.ba/index.php?id=4&year=2008&ex_rate=001.

*

(32)

RA

NK **

(27)

RA

NK ***

(28)

RA

NK ****

(6)

RA

NK

1 Austria � � � 553.522,24 2,25 4.272 0,4660 26 0,4665 21 0,4660 22

2 Belgium � � � 673.222,37 2,73 4.875 0,4373 27 0,4377 22 0,4372 23

3 BiH �� 24.580,41 0,10 811 1,9923 6 1,9922 6 1,5966 1

4 Bulgaria � � � 68.853,31 0,28 5.323 4,6682 1 4,6726 1 4,6680 1

5 Croatia � � 92.082,54 0,37 2.302 1,5096 13 1,2097 5

6 Cyprus � � � 33.800,89 0,14 555 0,9915 16 0,9924 11 0,9914 12

7 Czech Rep. � � � 287.095,63 1,17 10.089 2,1220 5 2,1240 5 2,1219 5

8 Denmark � � � 453.672,71 1,84 1.574 0,2095 31 0,2097 26 0,2095 27

9 Estonia � � � 31.493,11 0,13 691 1,3249 15 1,3262 10 1,3248 11

10 Finland � � � 361.048,11 1,47 1.975 0,3303 30 0,3306 25 0,3303 26

11 France � � � 3.806.727,10 15,46 23.837 0,3781 29 0,3785 24 0,3781 25

12 Germany � � � 4.851.575,88 19,71 48.324 0,6015 24 0,6020 19 0,6014 20

13 Greece � � � 463.247,93 1,88 6.747 0,8795 19 0,8803 14 0,8794 15

14 Hungary � � � 208.207,41 0,85 10.187 2,9544 2 2,9572 2 2,9542 2

15 Ireland � � � 351.935,25 1,43 2.237 0,3838 28 0,3842 23 0,3838 24

16 Italy � � � 3.065.472,49 12,45 118.309 2,3305 4 2,3327 4 2,3303 4

17 Latvia � � � 44.994,33 0,18 500 0,6710 23 0,6716 18 0,6710 19

18 Lithuania � � � 62.838,75 0,26 815 0,7832 20 0,7839 15 0,7831 16

19 Luxembourg � � � 77.507,81 0,31 246 0,1917 32 0,1918 27 0,1916 28

20 Macedonia � � 12.163,32 0,05 271 1,3454 14 1,0782 6

21 Malta � � � 11.544,20 0,05 355 1,8569 9 1,8586 7 1,8568 8

22 Montenegro � � 6.033,17 0,02 160 1,6014 12 1,2833 4

23 Netherlands � � � 1.165.811,08 4,74 13.597 0,7043 21 0,7049 16 0,7042 17

24 Poland � � � 703.361,64 2,86 10.965 0,9413 17 0,9422 12 0,9413 13

25 Portugal � � � 336.357,42 1,37 5.128 0,9206 18 0,9215 13 0,9205 14

26 Romania � � � 271.484,59 1,10 10.737 2,3881 3 2,3904 3 2,3880 3

27 Serbia � � 64.880,80 0,26 2.091 1,9461 8 1,5596 2

28 Slovakia � � � 126.143,83 0,51 3.476 1,6639 10 1,6655 8 1,6638 9

29 Slovenia � � � � 72.942,74 0,30 1.945 1,6101 11 1,6116 9 1,6100 10 1,2903 3

30 Spain � � � 2.127.629,07 8,64 68.730 1,9506 7 1,9525 6 1,9505 7

31 Sweden � � � 645.910,36 2,62 5.377 0,5027 25 0,5032 20 0,5026 21

32 UK � � � 3.559.333,99 14,46 41.150 0,6981 22 0,6988 17 0,6981 18

SUM SUM SUM AVG

* 24.615.474 100,00 407.651 1,2923

** 24.415.734 99,19 403.961 1,2219

*** 24.440.315 99,29 404.772 1,2482

**** 272.683 1,11 5.635 1,3363

All countries (32)

European Union (27)

European Union + BiH (28)

Ex-Yugoslavian Countries (6)

**

**

GDP

(billion

BAM)

Qu

an

tity

of

ISO

Intensity

No. Country

* **

**

*

GD

P %

(3

2)

1033

Tab

le 3

: S

tati

stic

al d

ata

about

num

ber

of

ISO

900

1:2

000 S

tandar

ds

in t

he

worl

d –

(2009)

S

ou

rce:

dat

e ar

e ad

apte

d f

rom

: htt

p:/

/ww

w.i

so.o

rg/i

so/s

urv

ey2

00

9.p

df

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

46.571

70.364

127.349

162.701

223.299

271.847

343.642

457.834

510.349

561.767

497.919

660.132

773.867

896.929

951.486

982.832

1.064.785

1.272

1.855

3.378

6.162

8.668

12.150

17.307

20.183

19.800

23.627

20.124

31.443

48.327

71.438

78.910

73.104

77.408

140

475

1.220

1.713

2.989

5.221

8.972

10.805

14.409

13.679

9.303

17.016

22.498

29.382

39.354

39.940

36.551

2.613

4.915

10.374

16.980

25.144

33.550

45.166

48.296

50.894

53.806

40.185

49.962

59.663

61.436

47.600

47.896

41.947

37.779

55.400

92.611

109.961

143.674

166.255

190.247

269.332

269.648

292.878

242.455

320.748

377.196

414.232

431.479

455.332

500.319

1.583

3.091

9.240

18.407

29.878

37.920

56.648

81.919

126.779

148.573

163.061

220.966

247.091

300.851

345.428

356.559

398.288

3.184

4.628

10.526

9.478

12.946

16.751

25.302

27.299

28.819

29.204

22.791

19.997

19.092

19.590

8.715

10.001

10.272

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

100,0%

100,0%

100,0%

100,0%

100,0%

100,0%

100,0%

100,0%

100,0%

100,0%

100,0%

100,0%

100,0%

100,0%

100,0%

100,0%

100,0%

2,7%

2,6%

2,7%

3,8%

3,9%

4,5%

5,0%

4,4%

3,9%

4,2%

4,0%

4,8%

6,2%

8,0%

8,3%

7,4%

7,3%

0,3%

0,7%

1,0%

1,1%

1,3%

1,9%

2,6%

2,4%

2,8%

2,4%

1,9%

2,6%

2,9%

3,3%

4,1%

4,1%

3,4%

5,6%

7,0%

8,1%

10,4%

11,3%

12,3%

13,1%

10,5%

10,0%

9,6%

8,1%

7,6%

7,7%

6,8%

5,0%

4,9%

3,9%

81,1%

78,7%

72,7%

67,6%

64,3%

61,2%

55,4%

58,8%

52,8%

52,1%

48,7%

48,6%

48,7%

46,2%

45,3%

46,3%

47,0%

3,4%

4,4%

7,3%

11,3%

13,4%

13,9%

16,5%

17,9%

24,8%

26,4%

32,7%

33,5%

31,9%

33,5%

36,3%

36,3%

37,4%

6,8%

6,6%

8,3%

5,8%

5,8%

6,2%

7,4%

6,0%

5,6%

5,2%

4,6%

3,0%

2,5%

2,2%

0,9%

1,0%

1,0%

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

23793

56985

35352

60598

48548

71795

114192

52515

51418

-63848

162213

113735

123062

54557

31346

81953

583

1523

2784

2506

3482

5157

2876

-383

3827

-3503

11319

16884

23111

7472

-5806

4304

335

745

493

1276

2232

3751

1833

3604

-730

-4376

7713

5482

6884

9972

586

-3389

2302

5459

6606

8164

8406

11616

3130

2598

2912

-13621

9777

9701

1773

-13836

296

-5949

17621

37211

17350

33713

22581

23992

79085

316

23230

-50423

78293

56448

37036

17247

23853

44987

1508

6149

9167

11471

8042

18728

25271

44860

21794

14488

57905

26125

53760

44577

11131

41729

1444

5898

-1048

3468

3805

8551

1997

1520

385

-6413

-2794

-905

498

-10875

1286

271

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

51,1%

81,0%

27,8%

37,2%

21,7%

26,4%

33,2%

11,5%

10,1%

-11,4%

32,6%

17,2%

15,9%

6,1%

3,3%

8,3%

45,8%

82,1%

82,4%

40,7%

40,2%

42,4%

16,6%

-1,9%

19,3%

-14,8%

56,2%

53,7%

47,8%

10,5%

-7,4%

5,9%

239,3%

156,8%

40,4%

74,5%

74,7%

71,8%

20,4%

33,4%

-5,1%

-32,0%

82,9%

32,2%

30,6%

33,9%

1,5%

-8,5%

88,1%

111,1%

63,7%

48,1%

33,4%

34,6%

6,9%

5,4%

5,7%

-25,3%

24,3%

19,4%

3,0%

-22,5%

0,6%

-12,4%

46,6%

67,2%

18,7%

30,7%

15,7%

14,4%

41,6%

0,1%

8,6%

-17,2%

32,3%

17,6%

9,8%

4,2%

5,5%

9,9%

95,3%

198,9%

99,2%

62,3%

26,9%

49,4%

44,6%

54,8%

17,2%

9,8%

35,5%

11,8%

21,8%

14,8%

3,2%

11,7%

45,4%

127,4%

-10,0%

36,6%

29,4%

51,0%

7,9%

5,6%

1,3%

-22,0%

-12,3%

-4,5%

2,6%

-55,5%

14,8%

2,7%

Au

stra

lia

/Ne

w Z

ea

lan

d

TO

TA

L

Afr

ica

/We

st A

sia

Ce

ntr

al/

So

uth

Am

eri

ca

No

rth

Am

eri

ca

Eu

rop

e

Fa

r E

ast

No

rth

Am

eri

ca

Eu

rop

e

Fa

r E

ast

Au

stra

lia

/Ne

w Z

ea

lan

d

AN

NU

AL

GR

OW

TH

- i

n %

YE

AR

Au

stra

lia

/Ne

w Z

ea

lan

d

AN

NU

AL

GR

OW

TH

- a

bso

lute

nu

mb

ers

Ce

ntr

al/

So

uth

Am

eri

ca

TO

TA

L

Afr

ica

/We

st A

sia

Ce

ntr

al/

So

uth

Am

eri

ca

No

rth

Am

eri

ca

Eu

rop

e

Fa

r E

ast

OV

ER

VIE

W

RE

GIO

NA

L S

HA

RE

- i

n %

YE

AR

TO

TA

L

Afr

ica

/We

st A

sia

YE

AR

YE

AR

TO

TA

L

Afr

ica

/We

st A

sia

Ce

ntr

al/

So

uth

Am

eri

ca

No

rth

Am

eri

ca

Eu

rop

e

Fa

r E

ast

Au

stra

lia

/Ne

w Z

ea

lan

d

1034

Exponential growth of ISO 9001:2000 Standard is caused by:

1. Government's efforts to promote its policies and active role in the economy,

2. Customer requirements,

3. Companies' wish to be competitive on the market.

However, after some time, many companies do not express an interest in certification,

because the perceived level of competitive advantage achieved through certificates

disappears. Today it is considered that the value of certificates is inversely proportional to

the number of issued certificates. Using the formula (1) we calculated intensity level by

country and as we can see on the (Table 2). Bosnia and Herzegovina (1.9923) ranks sixth

place of intensity of ISO 9001:2000 Standards, among countries of Europe, right after

Bulgaria (4.6682); Hungary (2.9544); Romania (2.3881); Italy (2.3305) and Czech

Republic (2.1220). The intensity was calculate in a manner that represents the quotient of

two ratios: for dividend we have ratio between number of ISO 9001: 2000 Standards for

one country and GDP of that country, and for divisor we have ratio between number of

ISO Standards 9001:2000 in some particularly zone and GDP of that zone. Among ex-

Yugoslavian countries best result has Bosnia and Herzegovina (1.5966), and after that

Serbia (1.5596); Slovenia (1.2903); Montenegro (1.2833); Croatia (1.2097), and

Macedonia (1.0782). Considering that the GDP of Bosnia and Herzegovina is one of four

lowest among 32 countries (lower GDP only in Montenegro, Macedonia and Malta), the

sixth place among European and first among ex-Yugoslavian countries is very good result.

When we talk about world share of ISO 9001:2000 Standards (Table 3), we can see

that Europe has the best average regional share in last sixteen years (57.4%), with average

annual growth of (19.1%). Taking into consideration all 178 countries that are included

into research average annual growth is (23.3%) and on the end of 2009 we had more than

one million certificated issued. From those results it is obvious that world reached its

saturation point, and possibility that some company achieves competitive advantage only

using ISO 9001:2000 Standard does not exist anymore. For this reason the efforts of

companies, at least for quality, should be directed to the other side. Below, we present the

possibilities that company can use to upgrade and improve its system of quality control,

like new opportunity for differentiation.

4.2.2. Kobayashi’s 20 Keys

The “20 Keys” were developed more than 12 years ago by Professor Iwao Kobayashi of

the Practical Program of Renewal in Factories Institute in Japan. The approach has been

implemented in several hundred Japanese companies and has spread to the South Africa.

This approach offers a way to look at the strength of organizations and to systematically

improve it, one step at a time, by focusing on 20 different but interrelated aspects

(Petrarolo, D. 1998:22). Kobayashi says: „Managers need to determine to what degree

their companies can rapidly respond to change, and to regard such responsiveness as a

standard for evaluating corporate strength. To have such a standard, they must have a

specific means of evaluation and specific items that can be improved. Managers cannot

make their companies stronger unless they know how to improve items that assessment

shows require improvement”. The 20 Keys system is designed to help companies

significantly improve their efficiency. The main objective of the program is to identify and

eliminate any type of activity which is not adding value. There are four pillar keys: (1)

Cleaning and Organizing; (2) Rationalizing the System/MBOs; (3) Improvement Team

1035

Activities and (4) Leading Technology and Site Technology. These keys enhance growth

and development of other 16 keys. All keys are presented in (Table 4).

Table 4: Kobayashi’s 20 keys and aims

Aim 20 keys

Energized

workplace

K1 Cleaning and Organizing

K2 Rationalizing the System/MBOs

K3 Improvement Team Activities

K4 Time Control and Commitment

Quality improvement

K5 Zero Monitor Manufacturing

K6 Maintaining Equipment

K7 Quality Assurance System

K8 Developing Your Suppliers

K9 Skill Versatility and Cross Training

Cost reducing (higher

productivity)

K10 Eliminating Waste (Treasure Map)

K11 Empowering Workers to Make Improvements

K12 Manufacturing Value Analysis (Methods Improvement)

K13 Efficiency Control

K14 Conserving Energy and Materials

Current processes

improvement /

Reducing inventory /

Faster delivery

K15 Quick Changeover Technology

K16 Reducing Inventory (Shortening Lead Times)

K17 Production Scheduling

K18 Coupled Manufacturing

Technological

development

K19 Using Information Systems

K20 Leading Technology and Site Technology

%ote: table is adapted by authors

Source: Priročnik za svetovalce 20 ključev. 2000. Interno gradivo GOSTOL-TST. Ljubljana: Delotte &

Touche, p. 22 and Jug, K. 2004. p. 18.

As we can see on (Table 4), the keys work in different areas and have a multiple

effects. Thus, some groups of keys increase motivation, some increase quality, while others

reduce costs, but all of them are focused on three main objectives (faster, better and

cheaper).3

Figure 2: The correct way of method development (harmony model)

%ote: figure is adapted by authors

Source: Koch, A. n.d. 20 Keys of Iwao Kobayashi-San. http://www.makigami.info/cms/20-keys-kobayashi.

Accessed: 8th December 2011

3 Faster – Improvement of lead time through lean manufacturing and lean process work; Better –

Improvement of quality through prevention of errors; Cheaper – Optimization of cost through improvement

of productivity and waste reduction.

1036

A very important learning from Kobayashi's approach is to keep as much as

possible balance among the development of the keys and he states we should not develop

one key without keeping track of the others. (Figure 2) shows us how company need to

develop all keys, while on the other hand (Figure 3) shows us the wrong approach.

Figure 3: The incorrect way of method development

%ote: figure is adapted by authors

Source: Koch, A. n.d. 20 Keys of Iwao Kobayashi-San. http://www.makigami.info/cms/20-keys-kobayashi.

Accessed: 8th December 2011

This approach is focused on continuous and sustained improvements and

development. The main idea is that many small steps are much better than a few large.

Improvements are introduced in small doses, and will thus be easier for all employees to

adapt. Author of this approach indicates that improvements are visible and come quickly,

and after six months results will be permanent. One of the best advantages of this approach

is that there is always something to improve at all levels at any time. If you increase some

key, there are some other keys that need to be increased too. Proera, professional education

and management consulting company from Moldova4, presents this approach like a

revolutionary program for enterprise transformation with those key advantages: a.

implement best practices to achieve world class, operational excellence; b. achieve the

strategic goals of the business; c. identify and eliminate all forms of waste (non value-

adding activities) to improve customer satisfaction and market share; d. energize and

motivate all employees to work towards the achievement of goals; e. improve productivity,

profitability and the long-term sustainable competitiveness of the business.

Like any methodology, this method is adapted to the needs of the organization. For

organizations that seek world-class quality and preservation of competitive position, this

method is one of the best solutions. It is important to note that in Bosnia and Herzegovina

this method is not popular yet, and it can be implemented only by using services of

Deloitte consulting company.

Research that was provide on the territory of Bosnia and Herzegovina do not

include implementation of any particularly method or approach which is mentioned, or will

be mentioned in the work, while it was focused on participation of quality issue among

companies. But we will see that some questions are directly related to few parts of some

approaches. At the beginning we tried to determine which of the two marketing mix

elements (price and quality) is more important for companies. For quality we have: M-W =

159.000, p<0.05; Mean-rank 'INT' = 26.55; Mean-rank 'DOM' = 19.33). For price: (M-W =

169.500, p<0.05; Mean-rank 'INT' = 18.98; Mean-rank 'DOM' = 24.44). The medians for

the first claim are: (Md'INT' = 5; Md'DOM' = 4), while for the second (Md'INT' = 1;

4 For more information see: http://proera.md/consulting/consulting_services/20keys/index.html

Md'DOM' = 3). From those results it is obvious, and statistically significant difference

proves, that international companies are much more focus on the quality, and at the same

time domestic companies are oriented to price reduction. Domestic companies’ perhaps

consider that cost leadership strategy will lead them to business success and help them to

attract new customers. It is important to notice that 29% of domestic companies believe

that they can have the best quality and the lowest price at the same time. This is the case

with only 5% of international companies.

15% of international companies believe

purchasing process. An even better indicator (Diagram 1), which tells

dominance of international companies, is that 30% of international and only 4% of

domestic companies consider that their customers do not pay attention to the price when

they are making purchase.

Diagram 1: Does the companies believe that the price has a crucial importance during the

customer purchase?

Source: authors' calculation

One of the Kobayashi’s pillar keys, with aim to energize workplace, is

Improvement of team activities. This key can be identified in s

that we explored how much companies invest re

Diagram 2: The frequencies of external and internal education


0%

20%

40%

60%

has a crucial

importance

15%

International companies

15

%

0%

0%

10

%

67

%

4%

38

%

17

%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Without

education

Once in

several years

International companies (External)Domestic companies (External)

1037

ose results it is obvious, and statistically significant difference



cost leadership strategy will lead them to business success and help them to



with only 5% of international companies. On the other hand 38% of domestic and only

15% of international companies believe that price has a crucial importance in customers

An even better indicator (Diagram 1), which tells



companies believe that the price has a crucial importance during the


Improvement of team activities. This key can be identified in sales process too. Because of

that we explored how much companies invest resources in sales education (Diagram 2).

The frequencies of external and internal education

has a crucial

importance very important

but not decisive not important

for their

customers

15%

55%

30%

38%

58%

4%

International companies Domestic companies

20

%

45

%

15

%

5%

5%

30

%

20

%

30

%

21

%

8%

0%

0%

17

%

8%

21

%

0%

several years

Once a year Once every

half year

Once a

month

Once every

fifteen days

International companies (External) International companies (Internal)Domestic companies (External) Domestic companies (Internal)

ose results it is obvious, and statistically significant difference



cost leadership strategy will lead them to business success and help them to



On the other hand 38% of domestic and only

that price has a crucial importance in customers

An even better indicator (Diagram 1), which tells us about the



companies believe that the price has a crucial importance during the


ales process too. Because of

(Diagram 2).

0% 5

%0

%

0%

0%

Once every

fifteen days

Once every

seven days

International companies (Internal)Domestic companies (Internal)

1038

According to the results present in (Diagram 2), it can be seen that international

companies often prefer external and internal education once every half year and internal

education once in fifteen days. Only 15% of international companies do not prefer any type

of education. For domestic companies is characteristic that two thirds had never use

external and 38% had never used internal education.

4.2.3. Six Sigma in sales

Six Sigma is a scientific, systematic and statistical approach to business process

improvement and is considered to be an important business strategy. It was developed by

company Motorola in 1980s as a methodology to improve manufacturing and quasi-

manufacturing processes and settings (Nakhai & Naves, 2009). The main goal of this

approach is to cut costs and boost productivity, while provides continuous improvement

that every company need in today’s turbulent environment. If company want to achieve Six

Sigma that requires transformation of business processes and organizational discipline. Six

Sigma goes light years beyond systems selling (the notion of providing clients with

integrated solutions) and even beyond simple consultative selling. It entails an

organizational symbiosis between a company and its customers, lining up the two

organizations' processes (Niemes, J. 1999:39). The same author emphasizes five steps in

implementing Six Sigma in a sales organization:

1. Think process – how some organization currently operates how it serves clients

and how many business functions need to interact with one other.

2. Forget about silos and stovepipes - implementing Six Sigma principles requires a

strong team effort inside the organization.

3. Develop a passion for measuring how well the company is performing - Six

Sigma is about comparing a company's process outputs to the needs of its

customers.

4. Invest in training and coaching at all levels - putting Six Sigma principles in place

in any organization requires a significant amount of time and organizational

resources. Therefore, employee training, coaching, and mentoring are essential.

5. Senior management must be on the "lunatic fringe" to make this work - a

company's top management must drive the implementation of Six Sigma.

Everyone has to participate in a Six Sigma effort, and that includes salespeople. Six

Sigma methods and tools are particularly well-suited to support the development of an

organization’s global sales capabilities. There are some huge benefits for all selling

organization if they implement this approach (Hesselschwerdt, P. 2003):

1. Significant increases in win rates on competitive bids. Applying this to a large

global industrial company can mean adding billions to the top line as well as

substantially improving the bottom line.

2. Improved customer penetration and retention. By systematically identifying

“critical to customer” (CTC) requirements – the baseline for developing Six Sigma

improvements – organizations ensure that all processes and activities deliver on the

known, measurable elements that ensure customer satisfaction. The result is

increased, customer these and other challenges will be based on an organization’s

specific situation.

3. Reduced non-selling time and increased sales force productivity.

organizations, non-selling time can make up more than half of the available time of

a sales person. Six Sigma techniques focus on identifying and eliminating waste and

non-value adding activities, resulting in significant increases in the time available

for key selling activities.

Successful implementation and organizational application of Six Sigma

methodology have been exploding in the last few years. This approach becomes a very

good driving force for many market oriented companies. Factors influencing

Sigma implementation include management involvement and organizational commitment,

cultural change and continuous training (Sumer, S. 2011:27).

an organization and it will go deep into its fabric and therefore ne

drive behind it. It must be seen as part of a total approach, and it demands a level of quality

competence from the organization before the benefits can begin to be delivered. Quality

improvement methods such as Six Sigma may be very pow

directed and need a clear strategy to measure and interpret its customers’ needs

successfully (Van Iwaarden V.J., Van der Wiele, T., Dale, B., Williams, R., Bertsch, B.

2008: 6756).

One of the requirements related to Six Sigma in sales, set by

retention or attrition rate of customers. Because of that, we explore the rate among

observed companies, and present results in

companies have attrition rate between 0%

domestic. Interesting result is that all international companies are familiar with their

attrition rate, but in the other hand we have 8% of domestic which are not sure abou

percentage.

Diagram 3: Customers attrition rate


In further research we include all four elements of marketing mix and test inter

correlation status among them. With next question we tried to gain a complete picture of

the capabilities that companies can use on the market and assume perception between

quality on the one side and other elements of marketing mix on the other.

55

%

35

%

29

%

13

%

0%-20% 21%-40%

International companies

1039

selling time and increased sales force productivity.

selling time can make up more than half of the available time of


value adding activities, resulting in significant increases in the time available

or key selling activities.



good driving force for many market oriented companies. Factors influencing


cultural change and continuous training (Sumer, S. 2011:27). Six Sigma can revolutionize

an organization and it will go deep into its fabric and therefore needs top management



improvement methods such as Six Sigma may be very powerful but they have to be



One of the requirements related to Six Sigma in sales, set by Hesselschwerdt, is


observed companies, and present results in (Diagram 3). As we see 90% of international

panies have attrition rate between 0%-40%, while this is the case with only 42% of


attrition rate, but in the other hand we have 8% of domestic which are not sure abou

Customers attrition rate




ality on the one side and other elements of marketing mix on the other.

5%

0%

5%

25

%

21

%

4%

41%-60% 61%-80% 81%-100%

percentage

International companies Domestic companies

selling time and increased sales force productivity. In many

selling time can make up more than half of the available time of


value adding activities, resulting in significant increases in the time available



good driving force for many market oriented companies. Factors influencing successful Six


Six Sigma can revolutionize

eds top management



erful but they have to be



Hesselschwerdt, is


. As we see 90% of international

40%, while this is the case with only 42% of


attrition rate, but in the other hand we have 8% of domestic which are not sure about the




ality on the one side and other elements of marketing mix on the other. Question was

0%

8%

Unknown

percentage

1040

composed like four statements where companies were obligated to rate importance level of

marketing mix element they consider that is most valuable for their customers. Statistical

correlation among these four parameters we can introduce in text form: Quality – M-W =

162.000; p = 0.018 < 0.05; Mean-rank ‘I%T/DOM’ = 26.40/19.25; Md ‘I%T/DOM’ =

5.00/4.00; Price – M-W = 167.500; p = 0.041 < 0.05; Mean-rank ‘I%T/DOM’ =

18.80/25.52; Md ‘I%T/DOM’ = 3.00/3.00; Distribution – M-W = 227.500; p = 0.384 >

0.05; Mean-rank ‘I%T/DOM’ = 21.88/23.02; Md ‘I%T/DOM’ = 4.00/3.00; Promotion – M-

W = 202.000; p = 0.185 > 0.05; Mean-rank ‘I%T/DOM’ = 24.40/20.92; Md ‘I%T/DOM’ =

4.00/4.00. Arithmetical mean results: Quality: I%T=4.70; DOM=4.00. Price: I%T: 2.55;

DOM: 3.25. Promotion: I%T=3.70; DOM: 3.83. Distribution: I%T=3.75; DOM=3.38.

These results unambiguously indicate that international companies pay lot more attention

to quality issue than domestic companies.

4.2.4. Lean management in sales

For a business perspective the term “lean” is used to describe a philosophy of management

which involves a set of tools and techniques used to optimize time, assets, and

productivity, while continually improving the quality of products and services for

customers (Atkinson, C., Linehan M. 2008:3). Lean is about focusing whole team's efforts

to increase the value that needs to be delivered to the customers, while eliminating

uneconomical activities. The shortest definition available in the literature says: “Lean is

about doing more for less." Every business function in the company can be developed

using lean techniques and sales is no different.

Lean approach in different from other approaches in four very important issues

(Headrick, B. 2011):

1. First responsibility is to get your costumers to want what they need,

2. You provide the solution to their pain “just in time” – when they are looking for it,

not when you are doing a big sales push,

3. It involves building relationships that mature and develop over time,

4. It involves low waste activities that are low cost – these activities are measurable,

repeatable and adaptable.

Womack and Jones (2003) have documented in company after company that lean

thinking made it possible to significantly reduce the time to make and deliver a product (or

service), lower costs, and increase the quality and value of what these companies deliver to

their customers. In fact, they confidently state that “if you can’t quickly take throughput

times down by half in product development, 75 percent in order processing, and 90 percent

in physical production, you are doing something wrong.”

In all lean implementations after some steps focus need to be moved to sales function.

This is very common in today’s business environment. The process of implementing will

result with capacity that is freed up, while waste is eliminated. Question is: “What the

company want to do with the available capacity?” Answer is simple. An organization need

to use the available capacity to produce and create more value for costumers by doing

proactive sales activities. This is the main goal for all lean market oriented companies.

For sales process according Lean Managements politics role of relationships is very

important. In our research, driven by the idea of linking functions between the customer

and seller, which is the base for establishing long term cooperation among companies, we

explored current and expected level of these relationships among companies. We used five

1041

functions (departments) in the company: Legal, Finance, Accounting, Marketing and

Purchasing.

Diagram 4: Current and expected relationships level among business functions


Results analysis, presented in (Diagram 4), which are related to the current

relationships level of linked business function, show that international companies, as

opposed to domestic, most often have linked legal, finance and procurement business

function in the selling process. When we talk about accounting and marketing departments,

there was no statistically significant difference, and we can conclude that both groups of

companies have similar results. It is interesting that the international companies consider

that all departments or business functions should be a maximum involved in the sales

process, while domestic companies consider this only for marketing and accounting

departments.

From the all above, especially from an analysis that directly oppose the perception

of the relation between the price and quality, it is clear that the hypothesis: International

companies, as opposed to domestic, use quality like differentiation tool for building

competitive advantages, is finally confirmed. International companies are much more

oriented towards establishing a high quality system framework through their products and

services, and they consider that this is the only way they can differentiate themselves from

their competitors.

5. CO�CLUSIO�

Today's business environment is very competitive. To be successful, companies need to

plan carefully and work very hard. One of the keys to a successful business is having

knowledge of the market conditions and possibilities. Companies often spend copious

amounts of time and effort developing a business and sales strategy. Current market

conditions are important when selecting sales strategy because customer needs fluctuate

depending on a lot of factors. This paper deals with three separate topics, which are

3,0

5,0

1,0

2,0

2,5

4,0

1,0

2,0

3,0

3,5

1,0

1,0

2,0

3,0

1,0

1,0

2,0

4,0

1,0

2,0

0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0

Median INTERNATIONAL COMPANIES

Median DOMESTIC COMPANIES

Median INTERNATIONAL COMPANIES

Median DOMESTIC COMPANIES

CURRENT

RELA

TIO

NSHIPS LEVEL

EXPECTED

RELA

TIO

NSHIPS LEVEL

Legal Finance Accounting Marketing Purchasing

1042

strongly associated to each other, and highly related with the role of quality. At first we

analyzed employment supply in four ex-Yugoslavian countries.

In a turbulent business environment, the natural tendency among business sales

leaders is to hire more sales representatives, but this is exactly the wrong thing to do. This

is only short term strategy, and there are few reasons for this theory. At begging new sales

representatives are new cost centers, and we are not sure about their skills. Like additional

problem we have unwillingness of companies’ management to invest resources in sales

team education. This just proves that the companies, in an effort to overcome the

difficulties of the economic crisis, react quickly and without planning, which leads to the

creation of even larger problems. Short research had done using information from four

countries, shows that companies in this area are making this mistake. Companies must

begin to set long term goals, and plan their activities in accordance with market demands.

The second part of the paper put the emphasis on the importance of recognition a

quality as a crucial factor of business development, both for individual companies and

entire economies. ISO Standard is not a guarantee of success anymore. Measuring the

intensity of ISO Standard we sow that Bosnia and Herzegovina ranks highly sixth place

among thirty-two countries. This is a very good result, but domestic companies need to

improve and upgrade their quality system if they intend to be competitive on the global

market.

At the end we presented few approaches for quality improvement and provide the

results of research done on the territory of Bosnia and Herzegovina. Approaches are

observed quite closely, just in the area of sales function, and we linked them with the

results obtained from own research. It is evident that there is lot of options for companies,

and global picture of quality perception is also available. After all of this we come to

conclusion that companies have a great opportunities for improvement, that lot of issues

need to be improved, and they need, as soon as possible, to recognize the values and

elements that need to be developed. Steve Jobs once said: "Be a yardstick of quality. Some

people aren’t used to an environment where excellence is expected."

REFERE�CES

Atkinson, C., Linehan M. 2008. An Analysis of Lean Management Procedures within Irish

Motor Dealerships. International Journal of Business and Management. 3(11): 3-

10.

Bettis, R.A. 1994. Reducing barriers to successful organization change: Restructuring and

reengineering. Annual Meeting of the Academy of Management, Dallas, TX.

Bounds, G., York, L., Adams, M., Ranney, G. 1994. Beyond Total Quality Management:

Toward the Emerging Paradigm. McGraw-Hill, New York.

Bowbrick, P. 1992. The Economics of Quality, Grades and Brands. London: Routledge.

Bowen, D.E., Jones, G.R. 1986. Transaction cost analysis of service organization –

customer exchange. Academy of Management Review. 11: 428-441.

Cameron, K.S. 1994. Strategies for successful organizational downsizing. Human

Resource Management. 33(S): 189-211.

Canlon, F. 2011. Professional and business services: employment trends in the 2007-09

recession. Monthly Labor Review. 134(4): 34-39.

Conti, T., Kondo, Y., Watson, G.H. 2003. Quality into the 21st Century: Percpetives on

Quality and Competitiveness for Sustained Performance. International Academy

for Quality, ASQ Quality Press: Milwaukee, Wisconsin.

Deming, W.E. 1986. Out of the Crisis. Cambridge MA: The MIT Press, Center for

Advanced Enginneering Study.

1043

Drezner, Z., Turel, O., Zerom, D., 2010. A Modified Kolmogorov-Smirnov Test for

Normality. Communications in Statistics: Simulation & Computation. 39(4): 693-

704.

Garvin, D.A. 1987. Competing on the eight dimensions of quality. Harvard Business

Review, 65(6): 101-109.

Gulati, R., Nohria, N., Wohlgezogen, F. 2010. Roaring Out of Recession. Harvard

Business Review. 88(3): 62-69.

Headrick, B. 2011. Lean Sales and Marketing 101.

http://leanmachineradio.com/2011/10/lean-sales-and-marketing-101/ Accessed 19th

December 2011.

Hesselschwerdt, P. 2003. Implementing Six Sigma in a Global Sales Organization.

Velocity Magazine. Q1. http://www.salesperformance.com/implementing-six-

sigma-in-a-global-sales-organization Accessed 18th December 2011.

Hoyle, D. 2006. ISO 9000 Quality System Handbook. 5th

edition. Oxford UK: Butterworth-

Heinemann.

Jug, K. 2004. Analiza uvajanja in učinkov metode 20 ključev na poslovanje izbranih

slovenskih podjetij. (master thesis). University of Ljubljana – Faculty of

Economics.

Juran, J.M. 1989. Juran on Leadership for Quality. New York: Free Press

Koch, A. n.d. 20 Keys of Iwao Kobayashi-San. http://www.makigami.info/cms/20-keys-

kobayashi Accessed 8th December 2011.

Krell, E. 2011. The State of Small Business. Baylor Business Review. 30(1): 4-9.

Kroll, M., Wright, P. 1999. The contribution of product quality to competitive advantage:

Impacts on systematic variance and unexplained variance in return. Strategic

Management Journal. 20(4): 375-384.

Lin, C., Wu, C. 2005. A knowledge creation model for ISO 9001:2000. Total Quality

Management & Business Excellence. 16(5): 657-670.

Mavlutova, I., Mavlutov, B. 2011. Possibilities of Business Restructuring Under the

Recession. Journal of Modern Accounting & Auditing. 7(3): 227-238.

Nakhai, B. & Neves, J.S. 2009. The challenges of six sigma in improving service quality.

Intemational Journal of Quality & Reliability Management. 26(7): 663 – 684.

Niemes, J. 1999. Taking Sales Success to New Heights With Six Sigma. %ational

Productivity Review (Wiley). 18(4): 37-41.

Ohanian, L. 2010. Understanding Economic Crises: The Great Depression and the 2008

Recession. Economic Record. 86: 2-6.

Petrarolo, D. 1998. The '20 keys' to workplace improvement. Industrial Management.

40(1): 22-29.

Polyak, I., 2008. Recession survival guide. Black Enterprise. 38(11): 86-92.

Poulin, L.M. 2009. Survival Strategies for Retailers in a Recession. Retail Merchandiser.

(49)4: 22-24.

Pratt, M.K. 2009. 5 recession survival skills. Computerworld. 43(9): 20-24.

Priročnik za svetovalce 20 ključev. 2000. Interno gradivo GOSTOL-TST. Ljubljana:

Delotte & Touche.

Rhoads, C.J., Gupta, K. 2010. An Empirical Look at Past Recessions: Strategy Lessons

Learned for the Business Community Proceedings Summary. Proceedings of the

%ortheast Business & Economics Association. pp: 559-564.

Riaz, S.A.A. 2010. An integrated and comprehensive approach to software quality.

International Journal of Engineering Science and Technology, 2(2): 59-66.

1044

Royston, J.P., 1983. Some Techniques for Assessing Multivariate Normality Based on the

Shapiro-Wilk W. Journal of the Royal Statistical Society: Series C (Applied

Statistic). 32(2): 121-134.

Sahin, A., Kitao, S., Cororaton, A., Laiu, S. 2001. Why Small Businesses Were Hit Harder

by the Recent Recession. Current Issues in Economics & Finance. 17(4): 1-7.

Sparks, R.E., Legault, R.D. 1993. A Definition of Quality for Total Customer Satisfaction:

The Bridge between Manufacturer and Customer. SAM Advanced Management

Journal, 58(1): 16-27.

Srinivasan, S.R., Sivakumar, S.N.V. 2011. Strategies for retailers during recession. Journal

of business & Retail Management Research. 5(2): 94-104.

Sumer, S. 2011. Implementing Six Sigma Techniques in Management Institutes. Advances

in Management. 4(2): 25-27.

Tasdan, F., Sievers, G., 2009. Smoothed Mann-Whitney-Wilcoxon Procedure for Two-

Sample Location Problem. Communications in Statistics: Theory and Methods.

38(6): 856-870.

Van Iwaarden V.J., Van der Wiele, T., Dale, B., Williams, R., Bertsch, B. 2008. The Six

Sigma improvement approach: a transnational comparison. International Journal of

Production Research. 46(23): 6739-6758.

Villasenor, A.J.A., Estrada, E.G. 2009. A Generalization of Shapiro-Wilk’s Test for

Multivariate Normality. Communications in Statistics: Theory & Methods. 38(11):

1870-1883.

Vojtovich, S. 2011. Economic development and the level of unemployment in the

conditions of economic recession. Economics & Management. 16: 459-464.

Womack, J.P., Jones, D.T. 2003. Lean Thinking: Banish Waste and Create Wealth in Your

Corporation. USA: Simon & Schuster, Inc.

Zhou, M. 2011. Regulated Bioanalytical Laboratories: Technical and regulatroy aspects

from global perspectives. London: Wiley.

Documents

Quality as a Differentiating Element in the B2B Market of Bosnia and Herzegovina