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The Power of Internal Guarantees. Export

Harvard Business Review, Vol. 73, No. 1. (1995), pp. 64-73.

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Internal quality problems rarely stay internal for long. Customers and the bottom line quickly feel their impact as interdepartmental dissension spills over into cost or product-quality problems. Even companies that have worked to perfect internal processes through reengineering or such techniques as TQM still suffer from many "holes in the hose" that these tools have not eliminated. Whatever their source, internal guarantees can plug the leaks permanently. Simply put, an internal guarantee is a commitment by one part of an organization to another to deliver its product or service to the complete satisfaction of the internal customer. If it fails to do so, it will incur a meaningful penalty, monetary or otherwise. Moreover, it is the employees involved--not management--who devise the commitment. The result? A spirit of partnership develops between different parts of the organization, and an environment of blameless error takes hold in which employees are rewarded, not punished, for id


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