ABSTRACT
While it is argued in the literature that product quality is incompatible with profits because of incurring high levels of costs and needing different sets of actions (Philips et al., 1983), significant evidence also suggests that this apparent incompatibility of quality and profits can be false (Smith, 1980; Wheelwright, 1981). Indeed the quality notion emerged in 1980s as a fundamental competitive strategy for organizations (Zeithaml and Bitner, 2003). In other words, quality is considered one of the key methods to attain a differential position and advantage over competitors in order to achieve high levels of revenues and profits (Hall, 1980; Porter, 1980). As a result, the concept of quality has been adopted by researchers and practitioners as a major theme in the service sector (Parasuraman et al., 1988) in order to deliver a positive impact on business performance and profitability (Harrington and Akehurst, 1996).
