Academic journal article Business Economics

Quality Control and the Business Economist

Academic journal article Business Economics

Quality Control and the Business Economist

Article excerpt

This article provides a quality control overview for business economists. The importance to both businesses and individuals of high quality analysis is clear, yet the economist's role in ensuring the quality of his or her work is a frequently overlooked aspect of what business economists actually do on the job. Ideas and general steps to be considered when reviewing one's own analysis, as well as the work of others, are summarized.

QUALITY PRODUCTS - whether manufactured products or executive briefs relating economic conditions to corporate operations - are vital for both business and individual success. Questions of quality are most often described in the popular media as they relate to the manufacturing environment; for example, this company's cars are better than that company's cars, or XYZ industry's productivity increased 8 percent after better statistical quality controls were implemented. Yet quality control is no less important in the service sector. Indeed, many leading experts note that the need for increased quality control might be greater in the service sector than in the manufacturing sector.

Deming, for example, emphasizes the magnitude of the problem by noting that six out of every seven American jobs are now service jobs if support staffs of manufacturing firms are included in the calculation. (Deming, 1982) Drucker states that lack of good management in the public-service sector, whether in governments, graduate universities, or other environments is ". . . a glaring weakness." (Drucker, 1974) And Peters has estimated that only 10 percent of service firms have mastered even the basic stage of quality control, while 25 percent of manufacturing firms have done so. (Peters, 1990)

Business economists should not be immune from the constant quest for quality. just as economists can show that productivity and economic growth are related to quality in the workplace, it is equally important for economists to ensure the quality of their own work. Additionally, many economists ultimately assume top managerial and decisionmaking responsibilities in corporate and government hierarchies, achieving such roles as Chief Economist, Vice President for Economic Affairs, Division Director, and a host of other high ranking positions, which further focuses on the need for strong quality management among economists. Similarly, economists are undertaking an ever-widening variety of tasks. For example, economists are called upon to assess economic conditions, explain and forecast economic indicators, provide technical analyses, estimate intercompany transfer pricing, draft Congressional testimony, write policy papers, propose and analyze budgets, give briefings to other corporate or agency officers, or estimate costs for proposed projects. Each of these activities is likely to play a crucial role in the organizational decisionmaking process; hence, it is equally crucial for these products to be of high quality, that is, clear, concise and error-free.

The potential benefits for economists in thinking about quality, however, go beyond the obvious effects on corporate profits, efficiency and competitiveness. Economists do not need to be told that, because time is money, things should be done right the first time. For example, corporate confidence in economic analysis grows in proportion to the quality and clarity of the work, which in turn translates into increasing influence and effectiveness for all economists - not to mention more jobs for economists. Consistent attention to quality also will help individual economists in their career paths by leading to better performance evaluations, job promotions and salary increases. In addition, a job well-done will provide a boost to self-esteem and morale.

Even though quality control is as necessary a function in the economist's job description as running regressions or forecasting the unemployment rate, it is often understated (if not unstated). …

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