Introduction
Achieving business excellence is an essential concern for companies all over the globe. By applying the tools and techniques related to business excellence, companies can enhance productivity, profitability, and efficiency of their operations. As explained by Ghicajanua, Irimie, Marica, and Munteanu (2015), excellent companies show better financial and economic results than other companies despite having “the same opportunities and similar resources” (p. 446).
Business excellence provides a way for companies to continuously improve their activities, products, and services to achieve sustainable competitive advantage (Lasrado & Pereira, 2018). Moreover, being recognised for business excellence adds value and status to the company, making it potentially more attractive for investors, competent employees, and clients.
In order to assist companies in developing business excellence, various models of excellence have been proposed over the years. These models serve as frameworks for both local improvement efforts and for business excellence awards. The three most famous awards in the field of business excellence are the Deming Prize, the MBNQA-Malcolm Baldrige National Quality Awards, and the EFQM Business Excellence Awards. Each of these awards is based on a different model of business excellence, which fosters considerable variation in the characteristics of prize-winning companies. The present paper will focus on exploring each of the awards and the models serving as frameworks for them to determine similarities and differences affecting their application and benefits for businesses.
Analysis
Comparing the three awards requires developing an in-depth understanding of each award’s and model’s purpose and background since this information defines how business excellence is interpreted from three different perspectives. Hence, the present section will focus on the history of each award, its purpose, requirements, and categories, as well as on the criteria used in the respective business excellence frameworks. Based on this information, a comprehensive critique will be provided, including the author’s personal opinions about the awards.
History and Emergence
First of all, the Deming Prize was named after the American statistician, engineer, and quality expert W. Edwards Deming, who was recognised for his efforts to develop statistical product quality management methods. The award is given annually to companies that showed outstanding performance by implementing the principles of total quality management (TQM) comprehensively and in line with their business objectives (Dahlgaard-Park, 2015).
The Deming Prize was established in 1951 as a result of Deming’s work in post-war Japan, which has helped organisations to develop and apply statistical quality control methods (Dahlgaard-Park, 2015). The primary purpose that drove the establishment of the award was the promotion of effective, cost-efficient quality control methods throughout Japan, which would contribute to the country’s economic development (Dahlgaard-Park, 2015).
The Deming Award is the oldest business excellence award, and it had a significant influence on the popularisation of quality awards worldwide. Today, the award is recognised as one of the most prestigious awards in business excellence with a focus on quality management. The award is given in Japan by the Deming Prize Committee, which is sponsored by the Union of Japanese Scientists and Engineers.
The Malcolm Baldrige National Quality Award was established in the United States in 1987. The United States Congress founded the award in an effort to popularise quality control and performance excellence among American businesses (Toma & Marinescu, 2018). The award is based on the Baldrige Excellence Framework, which covers the values and concepts integral to performance management and quality improvement.
The stated purpose of the award is to “improve business performance through focusing on what is needed to improve organisational performance outcomes and enhance organisational business processes while engaging and empowering employees to achieve a cultural transformation for business excellence” (Dahlgaard-Park, 2015 p. 383). Although the model is only awarded to U.S. organisations, it became a famous symbol of achievement in business and contributed to the development of many organisations. This award is presented annually in America by the American Society for Quality.
The European Foundation for Quality Management Global Award is also among the most prestigious awards in business excellence. The award was initially established in 1991, with the first prize awarded in 1992 (Dahlgaard-Park, 2015). The award is based on the EFQM business excellence framework, which has been implemented by businesses all over the world both for self-assessment and for achieving recognition in the industry (Dahlgaard-Park, 2015).
The award is given to organisations operating in public and private sectors alike and is available to both European and non-European businesses. Hence, in contrast with the MBNQA, the EFQM award has an international reach. The primary purpose of the award’s establishment was “to recognise outstanding organisations worldwide, whether private, public or not-for-profit” (EFQM, 2020, para. 1). Hence, the award process seeks to stimulate business excellence in companies throughout the world, regardless of their size, industry sector, location and other characteristics. The EFQM Global prize is awarded in Brussels, Belgium, by the EFQM on an annual basis.
Model Criteria
As evident from the discussion above, each model is based on a specific business excellence framework, and the frameworks differ from one another significantly. The Deming Prize is based on total quality management model, whereas the MBNQA and the EFQM award are based on the Baldrige Excellence framework and the EFQM Business Excellence framework, respectively. The criteria used in these models are different, although there are some overlapping concepts and themes in the models.
Total quality management is not considered to be a specific framework for business operations and evaluation. Instead, most scholars consider it to be a management philosophy comprised of a set of principles and tools to achieve operational excellence (Sternad, Krenn, & Schmid, 2017).
TQM is based on the Japanese concept of kaizen, which means continuous improvement, and hence, it encourages organisations to strive for development on an on-going basis. This approach also provides a multitude of tools and resources that companies can utilise to implement and leverage TQM. These tools concern quality control, waste reduction, operational management, inventory management and many other aspects of organisational functioning. Therefore, the TQM offers a holistic, organised approach to quality improvement and organisational excellence based on continuous enhancement of operations.
Despite the complexity of TQM and its almost philosophical nature, there are some model criteria that apply to the evaluation of applicants for the Deming Prize. Specifically, there are ten criteria, each of which is given equal weight during the scoring process: Policies, Organisation, Information, Standardisation, Human Resources, Quality Assurance, Maintenance, Improvement, Effects and Future Plans (Ghicajanu, Irimie, Marica, & Munteanu, 2015).
Based on a firm’s performance in each of these areas, the possibility of it receiving the Deming Prize is judged by the Committee. For each criterion, there are particular performance and outcome standards, which assist in the process of assessment. For example, the degree of standardisation is assessed based on whether or not processes follow the same framework from one product to another, as this helps to decrease variation in product outcomes. Policies are also judged on whether or not they promote standardisation, accountability and quality control (Ghicajanu et al., 2015). Thus, the criteria embedded in the model are drawn from the TQM philosophy and evaluated based on TQM principles.
The EFQM and Baldrige frameworks are different from TQM because they provide a structured set of principles and objectives for businesses to follow while developing excellence. Moreover, the frameworks are holistic in the way that they concern the organisation as a whole rather than focusing on quality and operations. Still, the frameworks are slightly different in terms of their content and thus require different approaches to implementation and evaluation.
The EFQM excellence model consists of nine primary elements, which are grouped into Enablers and Results. The Enablers in the EFQM model are Leadership, People, Strategy, Partnerships and Resources and Processes, Products, and Services (Adamek, 2018).
The Results part of the model is represented by People results, Customer results, Society results, and Business results (Adamek, 2018). Here, an essential difference between TQM and the EFQM model is that the latter encompasses customers and society alongside intraorganisational concerns and results. Moreover, this model is also concerned with resources and partnerships developed by businesses and views them as crucial components of business excellence (Enquist, Johnson, & Rönnbäck, 2015). Each of the four areas of the EFQM model is relevant to the EFQM Award since they are used as performance criteria to judge applicants.
The Baldrige framework of excellence contains some aspects that overlap with the EFQM model, but the number of criteria is lower. The seven core elements of the model are Leadership, Strategic Planning, Customer Focus, Workforce Focus, Operations focus, Results, and Measurement, Analysis, and Knowledge Management (Peng & Prybutok, 2015). One of the most apparent differences between the Baldrige framework and the EFQM is that the results are not differentiated by the parties benefitting from them. There is also less focus on social value resulting from the business, as the three core focal areas are customers, workforce and the organisation.
For this reason, the Baldrige framework can be applied to organisations that focus more on the value delivered to major stakeholders, whereas the EFQM is relevant to businesses that are actively applying corporate social responsibility and triple bottom line concepts (Adamek, 2018; Jankal & Jankalova, 2016; Wagner, 2015). The Leadership and Strategic Planning dimensions are present in both models, which distinguishes them from the TQM model.
Based on the criteria included in all three models, some similarities can also be drawn. First of all, all three models promote the focus on process improvement in one way or another. Whereas in the TQM model, operational performance is the core focus, the two other models consider it alongside other criteria of business excellence. Secondly, the comparison shows that all models consider the effect of workforce characteristics on business excellence since human resource management is featured in each of the frameworks (Ghicajanu et al., 2015). Nevertheless, there are some differences in the way these criteria are applied to organisations.
For example, as explained by Ghicajanu et al. (2015), human resource management in TQM is focused on the development of skills and employee training, whereas the Baldrige model focuses on empowerment and engagement of employees, and the EFQM framework is concerned with corporate culture and mutually beneficial employer-employee relationships.
Another critical difference between the models is the weight of the different criteria since it affects the focus of business excellence as interpreted in every award. As mentioned above, the Deming Prize considers each of the criteria as having equal weight, which requires the comprehensive implementation of TQM in all aspects of the organisation identified in the model. However, in the EFQM and the Baldrige frameworks, the weight of individual items ranges from 5-6% to 20-24% (Ghicajanu et al., 2015). The heaviest criterion in the Baldrige model is Business Results and Company Performance, whereas in the EFQM, the most attention is given to Customer Results (20%).
This affects the types of business practices that each model promotes and the characteristics of businesses receiving these awards, as companies awarded the MBNQA are likely to be more financially-oriented than those recognised by the EFQM Global Award (Lee & Ooi, 2015). Therefore, the differences between model criteria affect the application of the three models in practice and the focus of businesses striving to receive the awards.
Categories and Participation Requirements
The categories applied in the three awards differ in terms of number and scope. The EFQM Global Excellence Awards offers a total of eight awards, including the main award, award runner-up and awards for outstanding achievement in leadership, culture, people, society, innovation, sustainability and customer experience. The MBNQA is awarded in six categories based on the industry sector, which include Manufacturing, Service Company, Small Business, Education, Healthcare, and Non-Profit. Lastly, the Deming Prize does not have separate categories and is awarded to one or more companies who meet the requirements in terms of evaluation.
However, there are other categories of the Deming Award, including the Deming Prize for Individuals, the Deming Distinguished Service Award, and the Deming Grand Prize. The first award is offered to individuals who have achieved significant results in the study, implementation or dissemination of TQM (Dahlgaard-Park, 2015). The second award is available to persons outside of Japan who have made outstanding progress in disseminating TQM in other countries (Dahlgaard-Park, 2015). The Deming Grand Prize is awarded to companies who have maintained or improved their TQM practices after winning the Deming Prize.
The eligibility requirements for the three awards also have similarities and differences. One similarity is that all three awards require businesses to show evidence of the successful application of the related business excellence model or framework (Ghicajanu et al., 2015). This ensures that the panel of judges can evaluate each application using the same criteria and based on similar information. However, the global scope of the awards is very different. The EFQM award and the Deming Prize accept applications from companies all over the globe, whereas the Baldrige award requires applicants to operate in the United States (Dahlgaard-Park, 2015).
Additionally, in the Deming Prize, eligible organisations include companies, institutions, divisions, headquarters and operational units, whereas the other two awards are open to companies as a whole rather than to their individual units (Dahlgaard-Park, 2015; Lee & Ooi, 2015). Hence, the eligibility requirements set by each award affect the scope of its impact and the nature of organisations that can receive the award.
Critique
The analysis of the awards and their underlying models produced significant results that can be used to identify and explain their similarities and differences. Based on the information above, it is evident that the differences between the awards can be grouped into three core factors: foundations, scope and focus. First of all, the comparison of the models that form the foundations of the three awards shows significant variations in terms of their nature and applications.
As such, the TQM model acts as a guiding philosophy for managers to leverage the quality of operations, whereas the EFQM and the Baldrige models are concerned with organisational performance and value aside in addition to operational processes. This has a significant effect on the criteria applied as part of each award since different models will be rewarding different aspects of a company’s performance.
The primary reason to this difference lies in the different interpretations of business excellence in the three international concepts. In Japan, business excellence is highly dependent on internal organisation and standardisation of processes and procedures, and the award translates these values into the business world. In European and American contexts, business excellence is viewed in a more comprehensive light, which is why more organisational aspects are considered.
The differences in the interpretation of business excellence also explain the differences in the focus of the awards, resulting in variations in criteria weight. In the Deming Prize, all criteria have equal weight because they all have an equal impact on operational performance and outcomes, which is the focus of business excellence in the Japanese context. However, the EFQM focuses more on the customer outcomes of a business, which suggests a more socially-oriented business structure and activity. In the American context, the MBNQA values organisational performance above other factors, which is explained by the highly competitive nature of American businesses and the culturally-driven focus on financial achievements.
The differences in the scope of the awards largely stem from their purpose, as well as from the focus of the three models. The Deming Prize was initially established to popularise TQM as a comprehensive and flexible approach to quality control that could leverage businesses in Japan and other countries. Therefore, the award focuses on TQM implementation in various organisational contexts. Since TQM can be applied in just one unit, the eligibility requirements regarding applicants’ structure are different from those of the EFQM and the MBNQA awards. The latter, on the contrary, was designed to support American businesses by promoting healthy competition based on good business practice (Dahlgaard-Park, 2015; Lee & Ooi, 2015).
This justifies the fact that the prize is only awarded to American companies and considers them in industry-specific settings. Lastly, the EFQM Global Award’s primary purpose was to facilitate outstanding business practices in all types of businesses and industries globally (Dahlgaard-Park, 2015). This explains why this award is more focused on social value and considers companies from all over the globe.
Despite the vast differences between the awards and the underlying models, there are also some similarities in terms of evaluation, criteria and impact on businesses. For instance, process performance and human resource management are considered among the core criteria of all three awards. Moreover, the awards follow a similar procedure for the evaluation and recognition of performance, which consists of pre-assessment, assessment, comparison and decision (Dahlgaard-Park, 2015). The main reason as to why these similarities between models exist is that they share the goals of promoting good business practices and focus on supporting business excellence development.
My opinion on the models is that they are all useful in promoting business excellence, although each model has different advantages and disadvantages for organisations. Total quality management was shown to have a significant effect on operational performance when applied correctly (Al-Dhaafri, Al-Swidi, & Yusoff, 2016). Similarly, the Baldrige framework and the EFQM model can potentially benefit businesses by leveraging corporate culture and performance (Enquist et al., 2015; Lee & Ooi, 2015; Wagner, 2015).
Still, each of the models comes with certain risks and disadvantages. The culture promoted as part of TQM may not be applicable in non-Japanese contexts as it limits the scope of human resource management activities and is focused on operational effectiveness above all else. The Baldrige model, in a similar way, does not consider the social value of businesses, focusing on financial outcomes and the core stakeholders instead. In the modern business environment, companies’ image and reputation depend a lot on their culture, goals and corporate social responsibility, which is why the EFQM model appears to be more relevant and comprehensive (Adamek, 2018). While the implementation of this model may be more challenging and financially expensive to companies, I believe that it is more beneficial in the current business environment.
Conclusions
Overall, the three awards have many similarities and difference in terms of their purpose, scope, the underlying models, criteria and eligibility requirements. It can be said that each award occupies a specific niche in business excellence recognition, and thus all three awards are equally important in the business world. The analysis of the models and awards has helped to explain the differences, which appear to stem from variations in the interpretation of business excellence.
It is also suggested that these interpretations are based mainly on the cultural and business contexts in which each model was developed. Although the models have advantages and disadvantages, the EFQM model is particularly relevant in the contemporary business environment due to its focus on business’s social impact along with other crucial organisational performance aspects.
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