Quality improvement is the process of increasing actual quality through mental and physical effort. This can be done by either reducing waste or developing new systems that increase both actual and potential quality. Because quality is value-added, it can be measured for any process that adds value. In any enterprise, all stakeholders engage in a value exchange. Employees exchange their labor and ideas for monetary compensation in the form of wages or bonuses.
Owners exchange their investments for a financial reward.
Managers exchange their organizational and planning systems for monetary compensation. Customers exchange their money for the benefit they derive from the product or service. These value exchanges are based on the belief that other parties in the exchange are performing to the best of their abilities. Investors assume that management utilizes the assets entrusted to them in the most effective way they know. Owners expect management to look for better ways to utilize the organization's assets.