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International Journal of Project Management 30 (2012) 827 – 838

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Contractors' perception of the use of costs of quality system in Malaysian

building construction projects
Samiaah M. Hassen Al-Tmeemy a,⁎, Hamzah Abdul- Rahman b , Zakaria Harun a

a
Faculty of Engineering, University of Malaya, 50603 Kuala Lumpur, Malaysia
b
Research & Innovation, University of Malaya, 50603 Kuala Lumpur, Malaysia

Received 14 March 2011; received in revised form 1 December 2011; accepted 8 December 2011

Abstract

While conforming on the findings of prior researches regarding quality cost system in building companies, current research successfully illus-
trates the contractors' perceptions on the importance of the quality cost system and the barriers that may constrain the implementation of the system
for recording and collecting quality cost data. A postal and email surveys were undertaken on Malaysian building companies, focusing on the ben-
efits and difficulties associated with the implementation of quality cost system. Statistical analyses based on Chi-Squared test and Relative Impor-
tance Index techniques were used to investigate the significance of the findings and determine the relative importance of the factors. The most
important benefit of measuring quality costs is “getting management attention and increase quality awareness” as perceived by the sample of
the study. The possible barriers that may affect the management's decision to implement quality cost system are identified and grouped into three
categories, which are culture and knowledge; system; and company. The study suggests that the level of the site staff's knowledge should be as
important as that of the management to successfully collect and record quality costs data. The findings of this research will raise the level of aware-
ness and sensitize managers and those involved with building industry about the importance of quality cost system and collecting quality costs
data.
© 2011 Elsevier Ltd. APM and IPMA. All rights reserved.

Keywords: Cost of quality; Quality cost system; Building construction; Quality management; Relative Importance Index

1. Introduction costs; for example: Quality Performance Management System

(CII, 1990); Quality Performed Tracking System (Davis et al.,
The main purpose of project management is to address the 1989); Quality Cost Matrix (Abdul-Rahman, 1995); Process
stakeholder needs and expectations; thus, dissatisfactions of a Cost Model (Aoieong et al., 2002); and Construction Quality
project's stakeholders lead to extra time and cost (Tam and Costs Quantifying System (Low and Yeo, 1998). Unfortunately,
Le, 2007). In addition, the successful companies must deliver these models have been of little use and many companies still do
projects on time and within budget, and meet specifications not have a quality cost system in place (Kazaz et al., 2005; Love
while managing project risk (Raymond and Bergeron, 2008). and Irani, 2003; Miguel and Pontel, 2004).
Achieving the stakeholder's satisfaction and the completion of The importance of quality management is quite noticeable in
project within predefined time, cost and quality constraints is project management literature (Choi et al., 2009; Din et al.,
not an easy task in building construction (Al-Tmeemy et al., 2010). Also the need for companies to capture and assess qual-
2011). Likewise, the process of measuring quality costs is ity costs data has been well-established in previously published
often difficult due largely to the complexity of construction literatures (Abdelsalam and Gad, 2009; Dale and Plunkett,
processes (Aoieong et al., 2002). Hence, many economic and 1999; Morse and Roth, 1987; Tam and Le, 2007). Several re-
mathematical models have been developed to track quality searchers (Miguel and Pontel, 2004; Schiffauerova and

⁎ Corresponding author.

0263-7863/$36.00 © 2011 Elsevier Ltd. APM and IPMA. All rights reserved.
doi:10.1016/j.ijproman.2011.12.001
828 S.M.H. Al-Tmeemy et al. / International Journal of Project Management 30 (2012) 827–838

Thomson, 2006b; Sower and Quarles, 2003) stated that many to keep defects from occurring in the first place by assuring that
companies appreciate the necessity of the quality cost system; standards of organizational quality and customer satisfaction are
however, they continue to lack one. As a result, the companies met.
are not able to recognize how much they lose because of poor With appraisal costs come the costs of necessary activities to
quality (Schiffauerova and Thomson, 2006b). This implies a determine the actual level of quality achieved relative to the de-
gap between existing theory and practical application regarding sired levels of customer satisfaction and organizational quality
quality management. standards (Gilmore, 1990). Appraisal costs are incurred to iden-
In Malaysia, the application of the cost of quality concept in tify nonconforming units before these are shipped to the cus-
the construction industry is a relatively new field of interest. tomer (Morse and Roth, 1987).
Hence, the economics' sense of improving quality is not well un- Failure costs are incurred resulting from the existence of
derstood within the players of the building construction industry. poor quality. These costs are typically classified as either inter-
It is no surprise therefore that some building contractors may nal or external. Internal failure costs occur when defective
avoid quality improvement processes believing that these pro- goods are identified before shipment to customers (Morse,
cesses add only time and cost to the process of construction. In 1993). Conversely external failure costs incur when noncon-
the same time, less satisfactory performance in the construction forming products are shipped to the customers (Morse and
industry has led to the belief that construction projects cannot Roth, 1987).
be completed within budget and desired quality (Abdul- Crosby (1979) divided quality costs into price of confor-
Rahman et al., 1996). This paper attempts to gain a deeper under- mance (POC) and price of non-conformance (PONC). POC
standing of quality cost practices in the Malaysian building con- pertains to the price paid for doing things right, and examples
struction projects. Major issues that this study set out to include inspection and quality appraisal. PONC is the cost of
establish were to study the perceptions of the contractors as to poor quality caused by product and service failure, and examples
the benefits of collecting quality cost measurements and the bar- are rework and returns. The opportunity and intangible cost
riers to adopt quality cost system. This study is very timely as model includes the cost of a missed opportunity, such as profits
CIDB of Malaysia has mandated ISO 9001 certification as a re- not earned because of lost customers and reduction in revenue
quirement for G7 contractors since first January 2009. It is there- owing to non-conformance (Schiffauerova and Thomson,
fore anticipated that registration with ISO 9000 will be increased 2006b). With the PCM, the focus is on the quality costs of a par-
and will become a norm rather than an exception. This implies ticular process rather than the total quality costs of an entire pro-
that it is imperative for construction companies to adopt continu- ject (Tang et al., 2004). The last generic model is ABC, which
ous improvement and change conventional management prac- provides data on how costs are actually consumed. The main
tices into a new paradigm to achieve high performance. idea behind ABC is that not all activities (and thus resource con-
A literature search was used to generate the usefulness of col- sumption rates) are proportional to the number of units produced
lecting quality costs and the possible barriers for adopting quality (Raz and Elnathan, 1999).
cost system, which were administered to the building construc- To sum it up, COQ is the total of all resources spent by an or-
tion companies via a postal and e-mail surveys. The findings ganization to ensure that the established quality plan consistently
from this research significantly contributed towards enriching achieves or exceeds standards (Bamford and Land, 2006). These
the boundary of existing knowledge to achieve a quality costs resources are spent either for achieving quality or incurred due to
culture within building construction. Understanding the signifi- lack of quality.
cance of quality costs system inspires the managers and contrac-
tors to effectively track and report the quality cost data. Indeed, 3. The significance of cost of quality
this will alert all those involved with building industry to the ex-
tent to which quality costs can reduce the costs of construction. The quality costs are important because these costs can be
On the other hand, knowing the barriers that halted the adoption extensive and could be 20% of the total sales turnover (Dale
of the quality system will assist the contractors to overcome and Plunkett, 1999). Previous studies in North America have
their struggle against these barriers. indicated that the costs of quality are typically at 20–30% of
the total sales (Campenella, 1999; Hansen and Mowen, 1997;
2. Review of cost of quality models Krisham et al., 2000).
In construction, Lam (1994) has claimed that quality costs
Several models have been developed in previous literature. can make up from 8 to 15% of the total construction costs. In
Schiffauerova and Thomson (2006b) classified COQ models 1978, these costs were estimated by the UK Government to
into four groups of generic models, namely, prevention- be 10% of the UK's gross national product (Low and Yeo,
appraisal-failure (PAF) or Crosby's model; opportunity cost 1998). Low and Yeo further stated that in the USA, direct
models; process cost models (PCM); and activity-based cost costs incurred for rework alone have been estimated to be great-
(ABC) models. er than 12% of any project costs. Hagan (1986) has warned that
A most noticeable categorization model for quality costs is the lack of knowledge regarding quality costs will likely lead to
PAF, which was first simplified by Feigenbaum (1956). Preven- unbalancing the inter-relationship of quality, schedule, and
tion costs are incurred to prevent nonconforming units from being cost. This imbalance will continue to exist as long as the real
produced (Morse and Roth, 1987). The purpose of those costs is cost of quality remains hidden among total costs.
 S.M.H. Al-Tmeemy et al. / International Journal of Project Management 30 (2012) 827–838 829

The uses of quality costs data have been expounded by a (1992), these barriers include: an extensive mathematical com-
number of scholars (Albright and Roth, 1992; Dale and plexity; a lack of documentation to accompany the analytical der-
Plunkett, 1999; Hagan, 1986; Lin and Johnson, 2004; Morse ivation; and incompatibility with the existing corporate cost
and Roth, 1987) and these are alerting management on the po- structures. Rodchua (2006) identified similar factors affecting its
tential impact of poor quality on the financial performance of implementation such as, management support, effective applica-
the company; helping management to determine the types of tion and system, cooperation from other departments and under-
activities that are most beneficial in reducing quality costs and standing of the concepts of the cost of quality. Serpell (1999)
prioritizing quality improvement activities; establishing priorities stated the most important barriers to implementation quality sys-
for the corrective actions needed, promoting the concept that tem that faced the contractors include: lack of knowledge of the
quality is everyone's responsibility; allowing quality-related ac- concepts and tools of quality cost systems, deficient communica-
tivities to be expressed in the language of management; establish- tion, lack of coordination between the main office and site, im-
ing bases for budgets with a view to exercising budgetary control proper organization, lack interest of top management and site
over the entire quality operation, assisting managers to compre- personnel, and problems regarding quality cost system definition.
hend the financial consequences of quality and arming them In construction projects, measuring quality costs is often dif-
with information to formulate better strategic decisions in quality ficult due to the complexity of construction processes (Aoieong
control and management; and reducing quality costs by altering et al., 2002). Love and Irani (2003) found that measuring and
the process in a particular project. analyzing quality costs is complex and problematic because of
To summarize the concept and significances of COQ, Fig. 1 the large number of activities and organizations involved with
illustrates the objectives; targets; associated activities; and the procurement. Low and Yeo (1998) stated that the implementation
expected output of each COQ category. This summary demon- of COQ system involves the efforts of many site personnel and
strates how COQ can be an effective tool for evaluating the suc- needs further administrative work. Therefore, it is likely to be
cess of a quality management program and clearly points out met with resistance from those involved and affected by it.
the importance of knowing how and where quality costs are in-
curred so that remedial actions may be taken to prevent the re- 5. COQ as a quality improvement tool
currence of errors.
The need for construction industry to improve quality per-
4. Barriers to cost of quality system implementation formance has been well established in the previous literature
(Tam and Le, 2008; Tam et al., 2008). Hence, quality manage-
Quality costs in the construction industry as a whole are con- ment philosophy has gained prominence in research area (Zhao,
sidered high in terms of percentage of total project costs 2000). Therefore, various approaches have been used for qual-
(Aoieong et al., 2002). Therefore, developing and assessing of ity management such as Total Quality Management, Lean Con-
quality costs are extremely beneficial for construction compa- struction; Supply Chain Management; Continuous Quality
nies especially at the onset of their quality journey (Tatikonda Improvement; Just in Time; and Total Quality Control. To pro-
and Tatikonda, 1996). Realizing the importance of quality vide problem-solving and facility for these approaches, several
costs is insufficient (Low and Yeo, 1998) as quality costs data techniques and tools have been used such as seven tools of
must be collected. Achieving conformance to requirements quality (histograms, cause and effect diagrams, checklists, Pa-
consists of a series of quality management activities during reto analysis, control charts, flowcharts, and scatter diagrams);
the various phases of a project (Battikha, 2003). In this sense, Six Sigma programs (Parast, 2011; Tam et al., 2008); Cost of
companies need to implement a strategy to track quality failure Quality (Abdelsalam and Gad, 2009; Tam and Le, 2007); fail-
costs, measure quality performance, and thus achieve continu- ure mode and effects analysis (Hawkins and Woollons, 1998;
ous improvement in construction. Such a strategy requires a Yang and Peng, 2008); Quality Function Deployment
system that reports, monitors, and controls quality costs. This (Dikmen et al., 2005); and value-added analysis (East and
system does not only report quality costs, but likewise deter- Love, 2011). To achieve the objective of total quality manage-
mines the level of quality that minimizes total cost of quality ment that accomplish customer satisfaction at the lowest cost
(Schiffauerova and Thomson, 2006a). possible, it is necessary to do things correctly the first time.
Miguel and Pontel (2004) posted similar view that many This is only possible if the cost of quality is measured and ana-
companies did not have a quality cost system despite their ac- lyzed (Selles et al., 2008).
knowledgement of its necessity. Previous survey studies showed The quality performance of the construction industry is still
that only 39% of companies certified with ISO 9000 adopted a unsatisfactory and serious problems continue to happen in the
quality cost system (Kumar and Brittain, 1995; Mattos and industry (Miguel and Pontel, 2004; Tam and Le, 2008). The
Toledo, 1997). The reason for the deficiency in adopting the main reason behind the failure of several companies in imple-
COQ system has much to do with the onerous task of implement- mentation of total quality programs is the lack of effective qual-
ing such a system. Many quality experts have become aware of ity costs methods (Miguel and Pontel, 2004). According to
this issue and therefore have attempted to write about the installa- Chang (2005), the ambiguity of the relationship between quality
tion process of the quality costs system (Low and Yeo, 1998). and quality cost influences managers' decisions on quality im-
Several authors documented the barriers and difficulties in provement efforts. On the other hand, due to great complexity
COQ system implementation. According to Chen and Tang of construction, the possibilities and interrelations become so
830 S.M.H. Al-Tmeemy et al. / International Journal of Project Management 30 (2012) 827–838

Fig. 1. Mechanism of quality cost system.

fuzzy that they entail access to a decision-making aid model According to Dale and Plunkett (1999), quality costs can be
based on relevant performance evaluation (Marques et al., reduced by a third when a cost-effective quality management
2010). Ultimately, construction managers need to direct toward system is implemented. Similarly, Crosby (1979) has found
quantitative approaches for clear and accurate decision-making. that a well-planned and suitably implemented cost of quality
COQ can be leveraged to support this strategy (Walker and program can reduce quality costs to 2.5% of total revenue.
Tobias, 2006). Implementing an effective quality cost program allows most
The reporting of COQ with detailed information on the three companies to reduce scraps/rework and poor quality costs.
categories of quality costs (i.e. prevention, appraisal and failure) Moreover, it leads to the development of a strategic quality im-
outlines a clear picture of the relative distribution of quality provement plan consistent with overall organizational goals
costs incurred within a given period (Lin and Johnson, 2004). (Rodchua, 2006).
This information serves three purposes (Willis and Willis,
1996). First, it helps to track quality problems by identifying 6. Methodology
the nature of these problems. Second, it shows the effectiveness
of control efforts and highlights where improvements must be fo- In order to investigate the perceptions of the contractors and
cused. Third, it provides a baseline measure for evaluating quality managers of construction building about the benefits and the
improvement efforts in future projects. constraints of implementation of quality cost system, a cross
The previous studies showed the implication of COQ for sectional survey involving building contractors in Kuala Lumpur,
construction projects and how can use it to improve the quality Malaysia was used. The targeted respondents for this study were
performance of projects. For example, Love and Irani (2003) drawn from Construction Industry Development Board Malaysia
reviewed the quality costing systems and developed a prototype (CIDB, 2008b) registered list of contractors categorized under
project management quality cost system to determine quality Class G6 (tendering capacity 10 million Ringgit Malaysia) and
costs in construction projects. They used the system to determine Class G7 (tendering capacity of more than 10 million Ringgit
the various causes of rework that occurred to monitor the progress Malaysia). Kuala Lumpur was chosen as the sampling city
of client change requirements. since it comprises the largest number of registered Class G7
 S.M.H. Al-Tmeemy et al. / International Journal of Project Management 30 (2012) 827–838 831

and G6 contractors. The percentage of registered contractors in Systematic sampling consists of picking one company every
this area is around 31.25% of the total number distributed within certain interval from a complete list of population (Czaja and
the 15 Malaysian states (CIDB, 2008a), postal and email surveys Blair, 2005; Vaus, 2002). First step, the names of companies
were used. for both G6 and G7 contractors were randomly listed in sepa-
rate lists. The next step, the sampling interval was calculated
6.1. Sample size by dividing the population size by required sample size. The
sampling interval was 193/95 = 2 for G6 contractors. Likewise,
To choose the sample for this research, the stratified sam- the sampling interval for G7 contractors was 1003/499 = 2, as
pling method was used to divide the sampling frame into two shown in Table 1. The starting point was randomly chosen
groups; G6 and G7 contractors. This method yields precise es- based on either the first or second company in the list. Then,
timation and more accurate than those produced by simple ran- the sampling was conducted by choosing every second compa-
dom sampling; particularly, when the sampling frame is ny in each list and added to the sample to obtain of 95 of G6
available in the form of a list (Kothari, 2004). Furthermore it contractors and 499 of G7 contractors.
is simple and convenient (Pedhazur and Schmelkin, 1991).
According to CIDB statistics, there were 1329 active con- 6.2. Questionnaire development
tractors of grade G6 and G7 in Kuala Lumpur. Of this total,
1196 contractors are involved in building construction, which The questionnaire survey has been drawn up to get maxi-
represented the population of this study. This population com- mum information for minimum cost (Ader et al., 2008). The
prises 193 (16%) contractors of G6, and 1003 (84%) contractors questionnaire is self-completing/sufficient and contained a
of G7. In order to determine a suitable sample size, the following range of structure questions. The self-completion questionnaire
equation from Czaja and Blair (2005) was applied: can be sent to a large number of respondents with a relatively
lower cost. However, its success depends on the cooperation
ss ¼ z2  pð1−pÞ=c2 ð1Þ of the respondents (Adams and Brace, 2006). To attain an in-
where ss = sample size, z = standardized variable, p = percentage creased success rate of the survey, prior meetings were held
picking a choice, expressed as a decimal, c = confidence interval, with a group of experts to judge and assess the quality of survey
expressed as a decimal. items and its content. According to Ader et al. (2008), four to
For this research, a value of 95% was established for confi- five experts are adequate to judge the survey items. Therefore,
dence level (i.e. significance level of α = 0.05, z = 1.96), and a experts consisting of two academics and three project managers
confidence interval (c) of ± 10% was assumed. The value of with more than 20 years work experience in the building con-
0.5 was chosen for (p) to assume the worst case percentage struction field have vetted this survey questionnaire.
picking a choice (Czaja and Blair, 2005). Based on these as- To ensure that respondents accurately able to answer the ques-
sumptions, the required sample size for the questionnaire sur- tions and receive the same stimuli, the questionnaire included clear
vey is 96 contractors. However, this figure requires a further definitions of the terms that related to quality cost. In addition, the
correction for the finite population correction. The equation initial paper/hard copy version of the questionnaire was used to
for this is given in Czaja and Blair (2005) as follows: conduct a pilot study prior to the full distribution of the question-
naires. According to Ader et al. (2008), the pilot survey provides
New ss ¼ ss=½1 þ ðss−1=popÞ: ð2Þ feedback on errors, unexpected problems, and respondents' will-
ingness to participate in the survey. A total of twenty building con-
Therefore, the required sample size for the questionnaire sur- struction companies listed under Classes G6 and G7 of the CIDB
vey is 89 contractors. Construction industry is well-known for database were selected for this purpose. The results of the pilot
the poor response to questionnaire surveys; (20–30)% is be- survey provided information that was used to further improve
lieved to be the norm (Akintoye, 2000; Dulaimi et al., 2003). the final version of the survey questionnaire where some questions
For this reason, it was necessary to adjust the sample size were revised. Specific ideas were gained prompting some changes
to account for non-response. Assuming a response rate of to the sentence structures and wording in order to provide more
15%, the appropriate sample size is derived from the follow- clarity to the intended original purpose of the questions.
ing calculation: The questionnaire survey was conducted in 2008 (March–
Survey ss ¼ new ss=response rate: ð3Þ October). It was divided into two parts. The first part was
designed to gather general respondent's demographics character-
Therefore, the sample size is duly adjusted whereby 594 istics (e.g. educational level, age, experience, and occupation) of
contractors are targeted for the questionnaire survey. The sam- the participating companies. The second part investigated the
pling frame was structured in such a way that it represents the benefits and barriers of adopting quality cost system to measure
population and included all companies that have a chance to and track quality costs data.
be selected. As shown in Table 1, the sample was selected
according to the proportion of each group in the population 6.3. Data analysis
(Adams and Brace, 2006; Czaja and Blair, 2005). Therefore,
the sample contained 95 contractors G6 and 499 contractors The chi-square (χ 2) test was performed on the significance
G7, as shown in Table 1. of findings. Chi-squared test is used to examine the difference
832 S.M.H. Al-Tmeemy et al. / International Journal of Project Management 30 (2012) 827–838

Table 1 7. Research findings

Sampling frame.
Grade Population Percentage Sample size Interval 7.1. Response rate
G6 193 16% 95 2
G7 1003 84% 499 2 Of the 594 questionnaires dispatched to the selected sample,
Total 1196 1005 594 153 were satisfactorily completed, pegging the total response
rate at 25.7%. This figure is acceptable according to Akintoye
(2000) and Dulaimi et al. (2003). Both of who have stated
between observed and expected frequency's distribution that normal response rate in the construction industry for postal
according to randomness outcome assumption (Field, 2009) questionnaires is within the range of 20–30%.
using the following formula:
7.2. General respondents' demographics characteristics
X2 ¼ ∑ðOi −Ei Þ2 =Ei 2 ð4Þ
Frequency distribution is conducted to show four main pro-
where Oi = an observed frequency, Ei = an expected (theoreti- files namely: educational level, age, occupation, and period of
cal) frequency, i = response category index. experience as shown in Table 2. The General Respondents' De-
To further investigate the data, a relative importance is deter- mographics (GRD) revealed that the majority of (90.2%) held a
mined to quantify the contributions of individual explanatory Bachelor's degree as shown in Table 2. The highest frequency
variables to a response variable (Soofi et al., 2000). Several of respondents (40.5%) was aged between (40 and 49) years.
methods have been used to determine the relative importance. Regarding the occupation of respondents, manager occupation
For example, the statistical significance has been used as an in- accounted for the largest percentage (55.6%). Majority of re-
dicator of importance (Al-Harbi, 2001; Chan et al., 2011a,b). spondents (96.1%) had more than 10 years of experience.
The interpretation of statistical significance is unfounded;
therefore this method is inappropriate to assess relative impor- 7.3. The benefits of quality cost measurements
tance (Soofi et al., 2000).
Other researchers used AHP (Analytic Hierarchy Process) to The first question addressed the issues of surrounding bene-
prioritize attributes, decision alternatives, and factors of a com- fits of quality cost system implementation and quality costs
plex problem (Tsai et al., 2006). However AHP is a powerful measurement. A scale of 1–4 (1 = disagree, 4 = strongly agree)
and widely-used technique for eliciting the importance of fac- was provided for the respondents to rate their choices.
tors, it is useful in circumstances which necessitate the identifi- Table 3 provides a visual breakdown of the answers to this sur-
cation of a preferred alternative from a set of alternatives (Saaty, vey question (depicted in percentage).
1980). The highest rank with RII of 0.99 was accorded to the ben-
In this study the Relative Importance Index (RII) was used efit of “getting management attention and increase quality
to assess the relative importance of each factor based on the nu- awareness”. This was based on the finding that the majority
merical scores from the questionnaire responses RII was de- of respondents (92.8%) strongly agreed that quality cost mea-
fined as “the average percentage of total explained variance surement is a useful tool for gaining management attention.
contributed by each variable across all possible subsets” The remaining benefits listed according to their downward
(Baltes et al., 2004, p. 330). It can be performed for individual ranks are as follows: “changing the way the employees think
variables as well as for groups (Carpio et al., 2007). Moreover, about errors” (RII = 0.96); “providing means to measure the
RII was successfully used in the previous researches to deter- true impact of corrective action” (RII = 0.96); “Quality cost
mine the relative importance (Alwi and Hampson, 2003; measurement is an effective tool for the implementation of
Assaf and Al-Hejji, 2006; Chan and Kumaraswamy, 1997; TQM” (RII = 0.96); and “helps in identifying problem areas”
Kometa et al., 1994; Le and Tam, 2008; Zeng et al., 2005) (RII = 0.90). Other benefits of implementation of quality cost
using the following equations: system are less significant, which are duly given low ranking as
shown in Table 3. A highly significant difference was recorded
RII ¼ ∑ai xi =A  N ð5Þ at P b 0.01 between observed and expected frequency distribution
according to randomness outcomes assumption.
where ai = constant expressing the weight of the ith response, xi =
level of the response given as a percentage of the total responses 7.4. The barriers to adopt quality system in building projects
for each factor, A = highest weight, N = total number of respon-
dents. The value of RII ranges from 0 to 1; a higher RII indicates The second question was used to explore the viewpoint of
that a particular factor is more significant than those with relative- respondents on the barriers that prevent adoption of the quality
ly lower RIIs. The RII for groups was determined by averaging system. Respondents were asked to provide their opinions per-
the RIIs of all individual factors within the same category taining to the barriers listed in the questionnaire based on a four
(Aibinu and Jagboro, 2002; Chan and Kumaraswamy, 2002; point Likert scale (1 = most unlikely, 2 = unlikely, 3 = likely, 4 =
Soofi et al., 2000). most likely).
 S.M.H. Al-Tmeemy et al. / International Journal of Project Management 30 (2012) 827–838 833

Table 2
Descriptive statistics of some general respondent demographic (GRD).
GRD Groups Frequency Percent Cumulative percent
Educational Diploma 0 0 0
Bachelor 138 90.2 90.2
Master 13 8.5 98.7
PhD 2 1.3 100
Age 20–29 years 12 7.8 7.8
30–39 years 59 38.6 46.4
40–49 years 62 40.5 86.9
50–59 years 10 6.5 93.5
60 + years 10 6.5 100
Occupation Quantity survey 5 3.3 3.3
Project (construction) engineer 5 3.3 6.5
Quality assurance/quality control 7 4.6 11.1
Resident/site engineer 41 26.8 37.9
Manager 85 55.6 93.5
Director 10 6.5 100
Experience 5–9 years 6 3.9 3.9
10–14 years 37 24.2 28.1
15–19 years 25 16.3 44.4
20–24 years 60 39.2 83.7
25+ years 25 16.3 100

Seven barriers were listed in the questionnaire form. Survey most likely to prevent the adoption of the quality system. The
results indicate that the barrier that ranked the highest barrier with the second highest ranking (RII = 0.95) was “lack
(RII = 0.96) was “lack of knowledge”. As shown in Table 4, of cooperation of contractor and sub-contractor”, where more
majority of respondents (83%) agreed that this barrier is the than three-quarters of respondents (77.8%) believed the

Table 3
The benefits of quality cost system and measuring quality costs.
Benefits Choices Frequency Percent Cumulative percent RII Rank CS P-value
Helps in identifying problem areas 1 0 0.0 0.0 0.90 5 χ2 = 81.9 P = 0.000
2 8 5.2 5.2
3 46 30.1 35.3
4 99 64.7 100
Helps in reducing the cost of non-conformances. 1 0 0.0 0.0 0.80 6 χ2 = 7.8 P = 0.020
2 36 23.5 23.5
3 53 34.6 58.2
4 64 41.8 100
It is an effective tool for the implementation of TQM. 1 0 0.0 0.0 0.96 4 χ2 = 180.4 P = 0.000
2 6 3.9 3.9
3 18 11.8 15.7
4 129 84.3 100
It is a tool to drive continuous improvement 1 0 0.0 0.0 0.80 7 χ2 = 8.98 P = 0.011
2 34 22.2 22.2
3 56 36.6 58.8
4 63 41.2 100
Getting management attention and increase quality awareness 1 0 0.0 0.0 0.99 1 χ2 = 244.0 P = 0.000
2 2 1.3 1.3
3 9 5.9 7.2
4 142 92.8 100
Changing the way the employees think about errors. 1 0 0.0 0.0 0.96 2 χ2 = 182.1 P = 0.000
2 3 2 2
3 21 13.7 15.7
4 129 84.3 100
Providing better return on the problem solving efforts. 1 16 10.5 10.5 0.73 8 χ2 = 47.4 P = 0.000
2 25 16.3 26.8
3 72 47.1 73.9
4 40 26.1 100
Providing means to measure the true impact of corrective action 1 0 0.0 0.0 0.96 3 χ2 = 181.5 P = 0.000
2 4 2.6 2.6
3 20 13.1 15.7
4 129 84.3 100
834 S.M.H. Al-Tmeemy et al. / International Journal of Project Management 30 (2012) 827–838

Table 4
The barriers to adopt quality system.
Barriers Choices Frequency Percent Cumulative percent RII Rank CS P-value
Lack of resources 1 11 7.2 7.2 0.65 5 χ2 = 87.2 P = 0.000
2 39 25.5 32.7
3 103 67.3 100
4 0 0 100
Lack of knowledge 1 0 0 0 0.96 1 χ2 = 66.7 P = 0.000
2 0 0 0
3 26 17 17
4 127 83 100
Least Important 1 111 72.5 72.5 0.33 7 χ2 = 113.6 P = 0.000
2 35 22.9 95.4
3 7 4.6 100
4 0 0
System design constrain 1 0 0 0 0.93 3 χ2 = 113.6 P = 0.000
2 7 4.6 4.6
3 35 22.9 27.5
4 111 72.5 100
Lack of management interest 1 0 0 0 0.74 4 χ2 = 9.3 P = 0.010
2 47 30.7 30.7
3 68 44.4 75.2
4 38 24.8 100
Luck of cooperation of contractor and sub-contractor 1 0 0 0 0.95 2 χ2 = 146.0 P = 0.000
2 1 0.7 0.7
3 33 21.6 22.2
4 119 77.8 100
Troublesome 1 31 20.3 20.3 0.53 6 χ2 = 77.8 P = 0.000
2 77 50.3 70.6
3 44 28.8 99.3
4 1 0.7 100

contractor and sub-contractor would most likely not provide indicated (Abdul-Rahman et al., 1996) because the records of
such data. Meanwhile, 72.5% of respondents confirmed that de- most construction companies only show a limited amount of re-
sign for such a system is most likely difficult to achieve, mak- work (failure), which is less than the actual incurred failure
ing “System design constrain” the third highest ranked (Barber et al., 2000). Therefore, the quality cost system is nec-
(RII = 0.93). The remaining barriers that were ranked fourth to essary to get the attention of the management by separating
seventh were “lack of management interest”, “lack of re- quality cost from conventional accounts for cost assessment.
sources”, “troublesome”, and “least important”. As shown in The results substantiated the usefulness of quality cost mea-
Table 4, the significant difference at P b 0.01 was recorded. surement in changing the way the employees think about errors
This implies that the observed frequencies did not differ from by displaying the cost of rework. This measurement allows the
their expected values. employees to understand the cost of the errors they make. This
understanding will never eliminate the errors completely, but it
8. Discussion would help in preventing or reducing the future occurrence of
the errors. The information on quality cost provides an adequate
8.1. Benefits of quality costs measurement visual of the potential for improvement, as well as the impact of
the corrective action. This information demonstrates that savings
Based on the results of the present research, quality cost through quality management depreciate with time. In other
measurement is needed to get the attention of the management words, the cost and time required to overcome a building failure
and increase quality awareness. These results are consistent to are considerably less when the failure is detected earlier. Thus,
some extent to previous management studies (Chong and the cost of failure data during the construction must be collected
Low, 2006; Hagan, 1986; Low and Yeo, 1998; Morse and as soon as it occurs, or at least on a weekly basis (Abdul-Rahman,
Roth, 1987; Schiffauerova and Thomson, 2006a). No matter 1997).
how these studies identified the role of quality cost in alerting The measurement of quality cost is also perceived as an effec-
the management on the potential impact of poor quality on tive tool for the successful implementation of a TQM. The TQM is
the company's financial performance, the quality improve- mainly focused on the continuous improvement of the products
ments are still difficult for managers to justify and accept. and services. Construction managers must link the achievement
This difficulty is mainly ascribed to the benefits, which are of quality with cost to achieve the objectives of continuous im-
not always apparent from a strategic and economic perspective provement programs (Abdelsalam and Gad, 2009; Schiffauerova
(Czuchry et al., 1999). In addition, the potential cost of quality and Thomson, 2006b). Quality must be managed. One of the ef-
failure may be — and probably is — considerably higher than fective tools in managing quality is COQ, which associates the
 S.M.H. Al-Tmeemy et al. / International Journal of Project Management 30 (2012) 827–838 835

achievement of the quality target with the economics of the the situation, the top management is often unconvinced of its use-
company. fulness (Low and Yeo, 1998). However, huge expenditures on
materials, money, and time are wasted yearly because of ineffi-
8.2. Barriers to the adoption of quality cost system in building cient or nonexistent quality management procedures (Arditi and
construction companies Gunaydin, 1997). Despite the similarity of reasons cited in pre-
vious literature for not adopting a quality cost system, an addi-
The results seem contradictory as a majority of the respon- tional investigation within contractors would give a clearer
dents acknowledged the importance of collecting quality cost view of the COQ awareness in Malaysian building and con-
data; however, the “lack of knowledge” was the most significant struction companies.
barrier. The logical premise is that the person who has answered To provide framework and better understanding for expres-
the questionnaire does not work on site. To collect quality cost sing the barriers to the implementation of a quality cost system,
data, a company needs to implement a system (Oliver and Qu, according to their interpretation, the barriers can be linked up to
1999) and understand the elements and principles of quality three groups or categories, namely, “culture and knowledge”,
cost (Sower and Quarles, 2003). Therefore, this process requires “system”, and “company” as shown in Fig. 2. Culture has
skilled labor to understand the collection and classification of been considered as an indicator of how things get done within
quality cost. The importance of the skills of the laborer has an organization (Garrett and Teizer, 2009). Culture comprises
been acknowledged in several previous researches (Abdul- teamwork, loyalty, commitment, participation of employees
Rahman et al., 1996; Azim et al., 2010; Hiyassat, 2000; Low (Fong and Kwok, 2009), behavior, and attitude (Abdul-
and Goh, 1994; Tabassi and Bakar, 2009). Abdul-Rahman et al. Rahman et al., 1996). To some researchers, culture is an inte-
(1996) claimed that most of the nonconformances could be pre- grated product of social interaction and organizational life
vented either by appropriate inspections or by the employment (Harvey and Stensaker, 2008), and is associated with knowledge
of skilled employees. In the same line, Low and Goh (1994) (Cetina, 2007; Fong and Kwok, 2009). Therefore, the barriers of
claimed that in the shortage of skilled labor, a large number of “lack of knowledge” and “lack of cooperation” can be placed
semi-skilled and poorly trained laborers are employed in the pro- under the first category (i.e., culture and knowledge). This cate-
ject, which creates barriers to the implementation of a quality sys- gory obtained the highest RII of 0.96.
tem during the construction. However, the low level of skills The second group includes the barriers related to the system,
among laborers is still one of the factors affecting the low produc- which include “system design constrain”, “troublesome”, and
tivity in the Malaysian construction industry (Ibrahim et al., 2010). “least important”. This group is ranked lowest, with an RII of
Another significant barrier in reporting quality cost data is 0.60. The third group, which refers to the barriers related to
the reluctance of contractors and subcontractors to provide the company, has an RII of 0.7. This group includes “lack of
data, probably because the contractual arrangement does not in- management interest” and “lack of resources”.
cite the contractor and subcontractors to announce the true ex-
tent of the problems (Barber et al., 2000). Another possible 9. Conclusion
reason is their lack of awareness of the real significance of qual-
ity costs and to what extent these costs can affect the project The present study is concerned with the assessment of the
performance (Selles et al., 2008). Apart from this factor, there awareness of the Malaysian building construction industry re-
is the issue of inaccurate reporting within companies, where garding quality costs and investigating the barriers that may
the failure cost recorded is not a true reflection of the actual sce- constrain the implementation of the system for recording and
nario. For example, reporting of defective works on site is collecting quality cost data. However the majority of the re-
sometimes skipped for fear of being held responsible for the spondents acknowledged the importance of collecting quality
rectification costs. Too often, site engineers promise to rectify cost data, the level of quality cost knowledge among the site
the problem immediately to prevent the formal recording of staff was relatively low. The present study suggests that the
the defect and halt the issuance of a nonconformance report level of the site staff's knowledge should be as important as
by consultants. These engineers would then hide the cost of that of the management to successfully collect and record quality
the rectification by other unauthorized cost-saving measures, cost data. Therefore, there is a high demand on quality cost train-
such as cutting corners. Thus, the instances where the project ing to enhance the site staff's knowledge and skill.
appears to have been completed within the cost and with minimal The necessity of establishing a quality cost system stems
wastage due to rework may not be entirely true. from the fact that the implication of COQ cannot be realized
The results indicated that the process of designing and without reporting and establishing all the true quality costs.
implementing a quality cost system is not an easy task. However, However, the implementation of such a system is not an easy
most respondents denied viewing such a system with reduced im- task and it is normally met with barriers. The barriers are not
portance. This acknowledgement indicates that the Malaysian known, so overcoming them is difficult. The current research
building construction fraternity is on the right track toward under- provided managers and participants a more informed sense to
standing and realizing the importance and usefulness of managing weigh the benefits against the barriers in the process of elimi-
quality cost. In general, the quality cost system implementation is nating to or removing them.
met with resistance from the affected working level personnel be- To obtain a quantum leap with regard to achieving the resul-
cause of the additional workload it entailed. To further exacerbate tant gain from the benefits of collecting quality cost data, it is
836 S.M.H. Al-Tmeemy et al. / International Journal of Project Management 30 (2012) 827–838

Fig. 2. Categorization of the adopt quality cost system barriers.

important that the management enhance its awareness, take the Adams, K., Brace, I., 2006. An Introduction to Market & Social Research: Plan-
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