Search the Web
Consumer
Stakeholders:
Product and
Service Issues
The American Society for Quality provides a
web site with an aray of information on quality
topics: www.asq.org
© 2005 by Nelson, a division of Thomson Canada Limited.
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Chapter Twelve Objectives
• Describe and discuss the two major product issues:
quality and safety
• Explain the role and functions of Health Canada
• Enumerate and discuss the reasons for the growing
concern about product liability and differentiate
strict liability, absolute liability, and market share
liability
• Outline business’s responses to consumer
stakeholders to include consumer affairs offices,
product safety offices, total quality management
(TQM) programs, and Six Sigma
© 2005 by Nelson, a division of Thomson Canada Limited.
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Chapter Twelve Outline
• Two Central Issues: Quality and Safety
• Health Canada
• Food and Drug Safety Administration in
Canada
• The U.S. Food and Drug Administration
FDA
• Business Response to Consumer
Stakeholders
• Summary
© 2005 by Nelson, a division of Thomson Canada Limited.
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Introduction to Chapter Twelve
The chapter focuses on product
quality and safety, product liability,
and business’s response to consumer
stakeholders.
© 2005 by Nelson, a division of Thomson Canada Limited.
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Quality and Safety
Two Central Issues
The Issue of Quality
Driven by an increase in
family income and
intense global
competition
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The Issue of Safety
Driven by the public’s
increasing concern with
safety and business’s
responsibility to address
this concern
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Quality Issues
Critical Dimensions of
Product Quality
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•
Performance
Features
Reliability
Conformance
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•
© 2005 by Nelson, a division of Thomson Canada Limited.
Durability
Serviceability
Aesthetics
Perceived quality
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Quality Issues
Ethical Dimensions of Quality
• Contractual theory
• Due care theory
• Social costs view
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Safety Issues
Historical View
• Caveat Emptor
• Caveat Vendor
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Product Liability
Reasons for the Growing Concern . .
FIRST . . . Product liability has
become a major issue because of the
sheer number of cases where products
resulted in injury, illness, or death and
of financial awards.
SECOND . . . We have become an
increasingly litigious society.
THIRD…Rise in the strict liability doctrine
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Product Liability
Extensions of the Strict Liability
• Absolute liability
• Market share liability
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Product Liability
Other Issues
• Product tampering and extortion
• Product liability reform
– Consuer Demands and Product Liability
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Health Canada
•
Administers Food and Drugs Act
–
•
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•
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Releases advisories and warnings on food, drugs, and
consumer products
Provide information and policies on genetically
modified foods
Nutrition Labelling
Health and safety risks posed by the sale and use
of drug products, natural health products, medical
devices, pesticides, etc.
Product Safety Programme (PSP)
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Product Safety Programme
(PSP)
• Protects the health of Canadians through
the management of health and safety risks
associated with consumer products.
– Consumer Product Safety (CPS)
– Product Safety Laboratory (PSL)
– Hazardous Products Act (HPA)
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Product Safety Programme –
Other Features
• Cosmetics – Manages the health risks
associated with the use of cosmetics and
personal-care products
• Workplace Hazardous Materials Information
System (WHMIS)
• Consumer and Clinical Radiation Protection
• New Substances and Products of
Biotechnology
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Food and Drug Safety
Administration in Canada
Healthy Environments and Consumer Safety
Branch (HECS)
– Promote safe living, working, and recreational
environments
– Assess and reduce health risks posed by
environmental factors
– Regulate tobacco and controlled substances
– Promote initiatives to reduce and prevent harm
caused by tobacco and controlled substances
– Regulate safety of industrial and consumer products
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HECS’s Principal Programs
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•
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Drug Strategy and Controlled Substances
Product Safety
Safe Environments
Sustainable Development
Tobacco Control
Workplace Health and Public Safety
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Health Products and Food
Branch (HPFB)
• Minimizing health risk factors to Canadians
• Promoting conditions that enable Canadians
to make healthy choices
• Major Programs:
– Therapeutic products
– Food, including all Health Canada nutrition
activities
– Natural health products
– Biologics and Genetics
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U.S. Food and Drug
Administration
Some major responsibilities . . .
• Regulate the labelling of foods
• Develop safety standards for drugs
• Conduct product recalls
• Premarket test new drugs
• Regulate safety of medical devices (implants, etc.)
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Business’s Response to
Consumers
Establishing
Consumer
Affairs Offices
Establishing
Product Safety
Offices
Instituting
Total Quality
Management
Programs
(TQM)
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Business’s Response to
Consumers
Consumer Affairs Offices (CAO)
• Basic mission is to heighten management’s
responsibilities to consumer stakeholders
• Essential functions
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Establish a database
Audit programs
Recommend programs, policies and practices
Establish effective communications
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Business’s Response to
Consumers
CAO Factors for Success or Failure
• Proximity to CEO’s office
• Clear access to all information about the company’s
customers and authority to create the information
• Availability of quantified information about
consumers
• Accessibility to effective performance measures to
evaluate all employees in the company
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Business’s Response to
Consumers
Product Safety Offices
Need for Greater Organization
1. Complexity of products
2. Subtlety of hazards generated during
product use
3. Coordination problems in large
organizations
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Business’s Response to
Consumers
Levels at Which to Locate Product
Safety Offices
• Divisional level
• Corporate level
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Business’s Response to
Consumers
Other Functions of Product Safety Offices
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Set the tone for the product safety effort
Structure and enforce penalties
Develop links to other quality and safety initiatives
Assist with product safety litigation
Assist the regulatory liaison
Set up product safety committees
Perform safety audits and tests
Design contingency plans for product recalls
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Total Quality Management
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Total Quality Management
Sigma Six Version of TQM
TQM on steroids
– 3.4 defects per million versus sigma four
6,000 defects per million
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Total Quality Management
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Selected Key Terms
• Absolute liability
• Consumer Product
Safety Commission
(CPSC)
• Contractual theory
• Delayed manifestation
cases
• Due care theory
• Food and Drug
Administration (FDA)
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•
•
•
•
•
© 2005 by Nelson, a division of Thomson Canada Limited.
Health Canada
Market share liability
Six sigma
Social costs
Strict liability
Total quality management
(TQM)
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