Venture Knowledgist Quality Integration
INNOVATING REGIONAL QUALITY
A lot of projects
all over the world have been realized for improving quality in cities
or other kinds of local geographical territories initiated and controlled
mainly by the respective authorities. Normally they have applied traditional
quality approaches originally developed for companies or organizations.
However, the regional conditions are essentially apart from the single
organization's environments. New innovations are needed. The regional
quality should be considered from the viewpoints of both the whole
regional community and the individual actors. This paper considers
how the traditional quality and quality management concepts and approaches
should be expanded, modified, or redefined for these environments,
There are quite little innovative examples available from different
countries for regional quality. However, some of these will be highlighted
in the paper and additionally some practical experiences will be presented
from the case of South-Karelian Province in Finland.
Regions and their actors creating and
There are many different kinds of acting parties (actors) in a geographical
region. They all interact with each other, and they all are important
from the regional quality point of view as individual actors and through
their cooperation. The region is not any single organization, but
a network of independent actors. The individual actors may also operate
simultaneously in different regions. Each actor has its own reason
and interest to exist in the region. Each actor's existence in the
region has its own individual life-cycle (see figure 1). In fact,
the basic image of a region is created by its actors.
Actors are staying in the region permanently or they are visitors.
Permanent actors belong to the following major categories:
- Private manufacturing or service companies
- Public civil service providers
- The third sector voluntary organizations
- Nature, the entire physical universe of a region including landscape,
flora, and fauna and their diverse phenomena
A region is in a larger national and international neighborhood with
which region's active actors strive for useful interactions. Especially
new means of information / communication technology (ICT) link regions
efficiently to the other parts of the whole world. Thus, borders of
regions are rather vague and larger than the geographical borders
of a region. Developing regional quality is very significantly linked
with the development of information society as a whole.
Figure 1. Quality offerings to the actors of a regional community
consist of services from cradle to grave produced by the organizations
of the region
How can we talk about the quality of a region? It is useful to apply
the general ISO 9000 definition of the quality concept also in this
context: "Degree to which a set of inherent characteristics fulfils
requirements". Thus on this basis quality of a particular region
means: "Degree to which a set of inherent characteristics of
a particular region fulfils the requirements". This definition
- quality is a relative concept ("degree"), and obviously
quality of different regions may represent a great variety of levels
- one should recognize region's inherent characteristics in order
to understand and promote its quality performance
- requirements mean all needs and expectations of all interested parties
of the region that include region's all internal actors and also certain
- fulfillment is based on genuine perception by the interested parties
With this general quality definition one may further approach to
develop measures and indicators for regional quality that may be used
to evaluate the development from quality point of view. Performance
indicators should cover the whole quality performance of a region,
e.g. to indicate the total accumulated value to the region's actors
originated in region's total offering to its members. This characterizes
the overall quality of the region. Similarly one could consider the
corresponding value to region's single individual actors.
Actors of a region perceive regional quality through products being
available in the region. Regional organizations produce products (goods,
services, and combinations) to the other actors of the region through
their business systems.
Regions compete with each others through their offerings. Regions'
successful development is very strongly depending on how their actors
are increasing and developing. That is motivating especially public
bodies to invest to the favorite developments within the region. Regional
quality in order to be competitive should be much more than only fulfilling
certain minimum requirements or avoiding drawbacks. Performance of
competitive regions should be excellent. That means that its overall
performance is better than the relevant references and therefore it
is appealing to new citizens and companies to move to the region.
Also visitors are being lured by this fact.
The entirety of a regional offering ("regional product")
may consist of different elements of personal or automatic (Internet)
services, or material goods. It may be characterized like any product
- substantial content of the product
- easiness to use the product
- serviceability (accessibility and sustainability)
- safety and security
- aesthetic aspects
- ethical aspects
Professional quality management of
New innovations are needed for realizing quality management covering
a whole region because regional conditions differ from company environments.
One should apply new or at least modified fundamental principles,
tools (including methods), and infrastructure solutions when striving
for excellent results and performance in quality considering comprehensively
whole geographical regions. Traditionally significant quality management
related concepts and aspects, e.g. management, organization, customer,
and product, should be redefined for regional quality purposes. Also
modern communicational realities should be taken into consideration.
Especially e-business penetration - being indicated e.g. through initiatives
like eCity, eCounty, eRegion, eChurch, eEurope, etc. - has significant
impacts on regional quality.
Figure 2. Regional community and its actors as a network. An actor's
role can be characterized by its centrality in the network related
to the activity, betweenness, and closeness of the actors
Regional quality management, i.e. how to get through management actions
quality happening and developing favorably within a region, is a challenging
issue. The reason is that traditional quality management practices,
e.g. when applying the ISO 9000 standards and business excellence
models, cannot be directly applied in a regional context. Those practices
are based on an organization's quality management system and top management's
responsibility. However, in a region there is not any single organization
but a network of many different and independent actors, and quality
is the result of all actors' impact on the characteristics and performance
of the whole region (see figure 2). These impacts are based on individual
actors' activity, reach, access, control, and power characteristics.
The regional network is an ambiguous virtual organization without
any clearly defined business entity or structure and without any single
top management. Regional networks are unplanned, emergent systems.
Their growth is sporadic and self-organizing. In all regional networks
there may even be hostile actors, e.g. information hackers or terrorists.
In a regional network there is always a great variety and many different
degrees of cooperation. Actors within a region may be each others'
interested parties (stakeholders) with their own independent interests,
e.g. in the relationship of supplier and buyer. The most useful principle
for the mutual benefits and success among the actors is the win /
win principle (see figure 3). According to that different actors create
added-value to the others through their business realization logics
of "management / leadership => business processes => products
=> satisfaction". Transaction costs of interacting parties
are strongly affecting on how regional organizations are operating
together and developing.
Figure 3. Win / Win -principle for the sustaining success to the partners
(interested parties). The parties have their own interests articulated
by their own terms. Value and cost scales of the parties are different,
it is essential that both get net value V - C.
One could draw a conclusion that traditional type of quality management
is not possible for regional quality but the key responsibility is
squarely on many individual and independent actors and on their willingness
to contribute for the benefits of the whole regional community. There
may be reactive and proactive actions by the members of a regional
society that affect positively to the development of regional quality.
However, there may also be negative impacts on the offering of a region.
As the regional networks are developing as emergent systems, thus,
also regional quality is an emergent issue.
Regional quality is related to the cultural development of the region.
Quality awareness may be enhanced in a region by professional quality
promoting organizations although they have not necessarily any strong
authoritative power or position.
There have been a lot of initiatives in different countries for improving
performance in cities, provinces, local areas, or other kinds of geographical
territories initiated and controlled mainly by the respective authorities.
Normally traditional quality approaches that have been originally
developed for individual companies or organizations have been applied
in these programs.
Most often these initiatives have covered only some restricted -
although important - or specialized areas of the regional performance,
e.g. environment, nature, culture, employment, training and education,
agriculture, traveling and tourism, high tech innovations, aging questions,
business clusters, SME promotion, heath care, logistics, etc. There
is very little information available on cases where regional development
has been considered from a comprehensive quality point of view taking
into account all different kinds of actors in the region and extensively
the regional performance aspects. Also using professional quality
approach or applying modern network-based principles have very seldom
been under discussion in these cases.
One may recognize already almost as classical cases those American
local area quality developments that were based on Dr. Deming's philosophy
and also contributed by him. These cases include e.g.:
- Growth opportunity alliance of greater Lawrence, Lawrence, Massachusetts
- Philadelphia area council for excellence, Philadelphia, Pennsylvania
- Tri-Cities: Kingsport, Johnson City and Bristol, Tennessee
One may find extensive descriptions of these cases e.g. from Deming
related literature. In addition to Dr. Deming the group GOAL and its
key person Bob King was strongly promoting and facilitating quality
development in these regions.
A different example is from Bahia region in Brazil. In this case the
core issue was to enhance tourism in the region, and the key agent
to promote development was a third-sector organization, The Instituto
de Hospitalidade, for providing the necessary tools for society to
develop a virtuous cycle based on education and sustainable development.
This movement was activated through the improvement of services provided
to visitors that directly benefits citizens and the community in general
- creating and widening working opportunities
- enabling the development of careers in the tourism sector
- generating income
- improving quality of life
South Karelia as a practical example
The province of South Karelia lies next to the Russian border in
South East Finland. Karelia has been a borderland between eastern
and western cultures for centuries. The province is a mixture of high-tech
industry, growing businesses, commerce and a natural environment on
the shores of Lake Saimaa. The capital of Finland, Helsinki, is about
two hundred kilometers away.
The province covers an area of 7,200 Sqkm, water accounting for 1,600
Sqkm. It has about 137,000 inhabitants in two towns, Lappeenranta
and Imatra, and 12 other municipalities. There are numerous holiday
homes in the lake district. Lappeenranta has a technical university,
a technology centre and an airport.
The vast forests of eastern Finland, good floating channels and the
proximity of coastal ports attracted heavy wood-processing industry.
There are also heavy basic industry and food industry in South Karelia.
Due to the industry and the location there is the threat to the environment
- pollution of the waters and particularly the air by Finnish industry,
the industrial centers across the border and by cities Vyborg and
St. Petersburg. Recently the infrastructure of South Karelia has been
purposefully built for innovation, IT and communications, and industry
and commerce. There is a growing number of ICT companies in South
Karelia. About 7% of the region's inhabitants are employed in agriculture
The Russian frontier is an opportunity. The political climate and
the position of the border have always affected trade in South Karelia.
Finland's accession to the European Union in 1995 further increased
South Karelia's attraction as a meeting place for businessmen from
East and West. Businesses in Western Europe often approach the Russian
market through South Karelia.
The major agent for a professional quality approach in South Karelian
region is the local quality section of the national quality association.
It has members from the major industrial companies, service organizations,
cities, and from the university of the region. The key leaders of
the both cities of the region are also actively contributing to the
As most important measures for enhancing multifaceted regional quality
the local quality section has strived for increasing quality awareness
within local actors, supporting change of experiences through benchmarking,
and facilitating collaboration between the different organizations.
Also the section has been well-connected with the key quality experts
outside the region in Finland and also with important partners behind
the border in Russian side. One of the most significant events organized
already in the four consecutive years has been the "summer camp"
event for considering together central topics of quality management
and developing initiatives for the regional development. In these
events e.g. the following topics have been considered:
- business excellence models and their application
- use of balanced scorecards for strategic regional development projects
- partnership performance development
- innovation and human issues
- possibilities of the information society
Regional quality is a new challenging and comprehensive development
area of quality management extending over the single enterprises.
Traditional quality concepts and principles may still be used in these
cases but one should need redefinitions and new innovative solutions
in order to take into account the regional conditions where the organizational
structure is a virtual network and the entirety is not managed by
a single "top management".
Very essential factor for a successful regional quality development
is a recognized quality promoting agent that is an organization that
has genuine will and professional competence for the development but
that does not necessarily possess a strong formal authoritative power
Regional quality is a challenge for all nations. It may be seen as
a natural issue particularly in Europe because its origins may be
found already from the local societies of ancient Greece. The key
quality message also to a modern regional community was articulated
by Pericles in his well-known speech to the dead after the Peloponnesian
war: "It should create people living with beauty and wisdom,
and loving the mutual good."
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for modern advanced organizations, EOQ Conference, Harrogate UK 2002
2. J. Anttila, J. Vakkuri: ISO 9000 for the Creative Leader, Sonera
Corporation, Helsinki 2001
3. J. Anttila, J. Vakkuri: Good Better Best, Sonera Corporation, Helsinki
4. D. Seghezzi: Europe as part of the triad, EOQ Conference, Helsinki
5. B. Stenberg: Quality means value - Value means progress, EOQ Conference,
6. M. Walton: The Deming management method, Perigee Books, New York
7. M. Walton: Deming management at work, Perigee Books, New York 1990
8. S. Foguel: Quality as a critical factor for sustainable development,
IAQ General Meeting, Budapest 2000
9. V. Krebs: Social network analysis software and services for organizations
and their consultants, www.orgnet.com
10. www.eKarjala.fi , South Karelian web pages
[This text was presented as a conference paper at the EOQ 2004
Annual Congress in Moscow, Russia in September, 2004]