Glossary

Six Sigma was first launched by Motorola in 1987, where it yielded more than 10-fold improvement. Tomkins defined Six Sigma as a program aimed at the near elimination of defects from every product, process, and transaction. Others defined it as a strategic initiative to boost profitability, increase market share, and improve customer satisfaction through the use of statistical tools that can lead to breakthrough quantum gains in quality. Professor Park believed that Six Sigma is a new strategic paradigm of management innovation for company survival in this 21st century, which involves statistical measurement, management strategy, and quality culture.” If deployed correctly, Six Sigma has the ability to generate a host of benefits to businesses, e.g., improving process speed, raising quality levels, reducing costs, increasing revenues, and deepening customer relationships, among others. Six Sigma is implemented in major companies such as GE, AlliedSignal, Dow, DuPont, Ford Motor Company, Merrill Lynch, Toshiba, and the Samsung and LG Group. Six Sigma reportedly enabled billions of dollars in savings as well as sustained earning improvement. Thus Six Sigma is widely regarded as a strategic paradigm for management innovation and business survival. It is used in a variety of industries and business models, from manufacturing to services.

Securitization is a financial tool that relies on cash flows of underlying assets. Under a securitization scheme, a company raises money by issuing securities that are backed by specific underlying assets. These underlying assets vary from collateral real estate to loans such as mortgages and auto loans. Cash flows borne by the underlying assets are the sources of funds for investors in securities.

Depending on the differences in underlying assets, securitization products can be classified as asset-backed securities, residential mortgage-backed securities, commercial mortgage-backed securities, collateralized debt obligations, and asset-backed commercial paper.

The scatter diagram is one of the seven basic tools of quality control, which include the histogram, Pareto chart, check sheet, control chart, cause-and-effect diagram, and flow chart. Scatter diagrams show the relationship between two variables. They are basically a graphic tool depicting the influence that one variable has on another. A common diagram of this type usually displays points representing the observed value of one variable corresponding to the value of another variable. The scatter diagram is a very broad picture of the relationship and will only help to confirm that a relationship exists and how strong it is. It provides a visual and statistical test of how strong or weak the relationship is (see accompanying figure). The stronger the tie or dependency, the greater the likelihood that a change in one will impact the other. A scatter diagram is very useful when it is necessary to adjust the value of a variable but one is not sure of the effects of this variable on the other.

Sanitary and phytosanitary (SPS) measures deal with food safety and animal and plant health standards. SPS measures (standards) are set by international organizations (the FAO-WHO Codex Alimentarius Commission for food safety; the International Office for Epizootics for animal health; the FAO’s Secretariat of the International Plant Protection Convention for plant health).

The Social Accountability (SA) 8000 standard is a global social accountability standard for decent working conditions based on international workplace norms of the International Labour Organization (ILO) conventions, Universal Declaration of Human Rights, and UN Convention on the Rights of the Child. The standard was developed by Social Accountability International (SAI), established in 1997. Under the auspices of SAI, representatives of all stakeholders including trade unions, human rights organizations, academia, retailers, manufacturers, and contractors as well as consulting, accounting, and certification firms cooperated to develop SA 8000 in 1999 and revise it in 2001. The SA 8000 standard and verification system is a credible, comprehensive, efficient tool for assuring humane workplaces. The major elements of SA 8000 are:

1. Child labor (no workers under the age of 15 years)

2. Forced labor

3. Health and safety

4. Freedom of association and right to collective bargaining

5. Discrimination (no discrimination based on race, caste, origin, religion, disability, gender, sexual orientation, union or political affiliation, or age)

6. Working hours (comply with applicable laws but in any event no more than 48 hours per week with at least one day off for every seven-day period)

7. Compensation

8. Management systems (encourage integration of the standard into organizational management systems and practices)