My fellow colleague Anna Zhao has recently perked my interest on the true definition of quality. After discussing brand and value propositioning, as well as managerial accounting, in our lectures, I now wonder what truly constitutes great quality. As Anna writes, quality can be anything from a sleek design, brand propositioning, to simply cost management – that is, ‘where quality has not been compromised for price’!
I fully agree with her statements, and would also like to take it one step further – after discussing explicit and implicit costs, I wondered why both would be taken into account in such a factor in managerial accounting. Surely, one can’t quantify the implicit cost of better allocated labour?
Take, for example, an entrepreneur who starts his own handbag line. The value of his time spent could be better spent invested in other venture. In addition, he does not pay himself for the cost of his time, labour, and innovation. I believe this speaks to quality, as well – the image of the management and the company. Surely, this must mean something to the customers who choose to buy particular brands.
It seems that customers are more inclined to spend more money on handmade items and crafts, rather than generic factory produced items from the supermarket. (For example – street market items and handmade jewellery sell well). Is this a paradox of value? Why do companies advertise products as “hand-made” as much as they can? I believe the personal touch is also a contributing factor to quality, and my colleague has otherwise hit on many great points of this topic.
