A business excellence model is a framework, which a corporation can apply to help in focusing its actions and philosophies in a way that is more organized and efficient in order to generate to improved performances. The models should be able to put the focus on all dimensions of a company and the most important factors that contribute to the organization’s success.
Major concepts or theories
The main aim is promoting excellence in organizations in order to produce improvements in the economic performance of the nations. The award programs at national, regional and local levels are for recognition and celebration of the achievements the organizations make as they move towards maturity. These awards are meant for assessing an organization and justifying that the organizations’ performances are World Class. However, an independent group of assessors evaluates several organizations and any of such organizations rated as “excellent” receives the award (Mann 2014).
There are several models in operation in various parts of the world. Some of the most commonly known is the Malcolm Baldrige National Quality Award (MBNQ) which operates in the United States of America, and the European Foundation for Quality Management (EFQM) operational in various countries in Europe.
The EFQM award has eight core concepts that it is based upon. The concepts include the orientation on results, focus on the customer, leadership, a fact and processes oriented management. Additional concepts incorporate the involvement and development of people, continued innovation, learning and improvement, corporate social responsibility (CSR) and partnership development. The model used in the EFQM award lays out nine criteria, which are categorized into two namely the enablers and results. However, the enablers state the criteria for doing things while the results state the targeted outcomes and achievements.
There are six classes of organizations recognized by the Baldridge accolade every year including charitable organizations, healthcare, learning institutions, SMEs, service, and industrial sectors. The award uses various criteria in evaluating excellence (Inaki & Landin 2006). These criteria are the performance results of the organization, strategic planning, the management and development of the human resource, focus on the customer, information, and analysis, as well as leadership.
The applications of the awards
The European Foundation for Quality Management (EFQM) is a global foundation that has its base in Brussels Belgium but has membership from a number of countries. It was set up with a mission of promoting excellence among companies in Europe by helping organizations to evaluate their efforts in improving and recognizing companies that act as role models for other companies.
The United States’ Congress set up the Malcolm Baldridge National Quality Award in the financial year 1987 for the recognition of companies with quality systems of management. The award has two major aims namely advocating for excellent performance as an integral part of competitiveness as well as the promotion of sharing information on the successfully implemented strategies for success and advantages gotten from the application of the strategies (Porter & Tanner 2003).
Substantial analysis of the philosophies and dynamics of the excellence program
The similarities between the principles of the awards
The first similarity between MBNQ and EFQM is that both of them are non-prescriptive. In fact, none of these models dictates the way that organizations have to follow to attain excellence. The journey to excellence is unique to each organization. However, both the models have standards that they have set up for evaluating the organizations. When assessing any organization for an award under any of the above models, the assessors use the same criteria in all the organizations that they are evaluating (The University of Warnick 2009).
On the other hand, both models are aimed at establishing criteria for assessing the excellence and quality of organizations besides recognizing exemplary performing organizations through the awards that they give (Inaki & Landin 2006). The models call for applying the set criteria by the organizations in self-evaluation to help them in the identification of their strengths and areas in which they need to improve.
The MBNQ and EFQM are set on the principal concepts of excellence. The aim is that the organizations that rely on the set concepts should be able to attain success in their performance. The concepts set by the models as the fundamentals are what provide the criteria for evaluating the organizations (The University of Warnick 2009). The models use these criteria in evaluating how the organization has managed to improve by driving the principal of excellent concepts.
A standing similarity between the two is also that they both stand for continuous improvement as a way of attaining sustainable excellence. In fact, the models have the aim of building a learning organization. The models have the principle that the improvements and the success journey are more important to an organization in the end than just winning an award (Krivokapic & Petropoulos 2006).
Both models also apply a holistic approach. The models identify various parts of the organizations that are evaluated as a whole structure implying that the shortages occurring in each segment of the arrangement must have an impact on the other parts of the whole scheme. The models hardly disagree that each organization has various aspects. Thus, the models centre on the entire arrangement that is bigger than all parts. The argument is founded on the fact that the main aim of the model is the excellence of the unabridged classification and not just a fragment of it (Inaki & Landin 2006).
The differences among these models
There is little difference in the criteria of these models. For instance, the EFQM has nine dimensions in which its criteria are based. The first five, which are called enablers, give an indication of how things are carried out within an organization including products and services, resources and processes, people, strategy, and leadership (Krivokapic & Petropoulos 2006). The last four indicate what the enablers achieve including the key results, society, people, and customers.
The MBNQ model, on the other hand, has seven sources for its evaluation. The first is leadership, which evaluates how the top management is working towards achieving organizational quality. Strategic planning is the second step and involves the search for strategic mechanisms that organizations establish towards achieving high excellence. The third criterion is apparently founded on the market and customers. The step focuses on the methods that organizations employ to amass data about their clients and marketplace (Biekzadeh & Dodangeh 2012).
The fourth basis is on information and analysis. In most cases, the criterion is used in assessing the criteria an organization uses in acquiring data and how it makes use of the information accrued. The fifth criterion deals with the human resource management processes while the sixth phase deals with process management. The fifth basis focuses on how employees participate in various processes geared towards achieving excellence for the organization. The sixth ground deals more with the ways of recording processes and tools that are used in ensuring that there is an improvement in quality. The last focal area for MBNQ deals with the business results. The phase focuses on several performance measures illustrating the journey towards excellence (Biekzadeh & Dodangeh 2012).
Critical analysis and personal opinion
From the analysis of the criteria set by the models, it is evident that MBNQ places more focus on several aspects of an organization that contributed towards its success than just the success itself. However, EFQM, on the other hand, places equal emphasis on both the enablers and the results. The MBNQ also focuses on the ways organizations use to acquire critical information and how they analyze and utilize such information. The EFQM does not put much focus on information. The evidence is also shown from the criteria used (Inaki & Landin, 2006). For example, Inaki and Landin, (2006) found that MBNQ focuses on customers and market as a drive towards achieving the desired results. Nevertheless, EFQM uses the market and customers as the ultimate result of what the organization has achieved in terms of quality and excellence.
It is also notable that EFQM puts the focus on excellence in the business not only in the results but also from the whole process starting from the ‘enablers’ to the ‘results’. The assertion implies that it (the EFQM model) has a lot of focus on the process of transformation (Inaki & Landin, 2006). The MBQN, on the other hand, focuses on the related practices in management that help to achieve the results.
Each of the approaches that have been discussed has both benefits and limitations. In fact, each organization should consider these when considering an approach to use for its evaluation. In fact, the two important areas to consider are the resources required and the quality of learning. A more advanced organizational and personal learning will need more resources even though at times diminishing returns can result.
The cost benefits analysis of embracing the awards
Researches show that organizations that have embraced a business excellence model usually realize numerous benefits whether they win an award or not. The notable paybacks entail the creation of knowledge and invention, the gratification of workers, clients, managerial success, efficiency, products consistency, and commercial performance developments. Even if an organization does not get all these benefits, it gets the criteria for evaluating its performance and comparing it with that of other organizations or the world set standards (Mann 2014).
The EFQM, for instance, helps an organization to achieve excellent results. The most achievable results include financial stability, effectiveness and efficiency in operations, promotion of innovation, and constant progressive change. Besides, corporations that have adopted the EFQM model boast of a sense of a common purpose for everyone in the organization, as well as the achievement of satisfaction and loyalty of customers. The report from the evaluation of the company also helps the company to know more about its areas of strengths and the areas in which it needs to improve to achieve better performance (Mann 2014). Through good practice sharing, the organization also gets to learn from others and in a case where the organization becomes a finalist in the awards it will ensure that it gets a large publicity that would help it market itself.
The MBQA similarly helps organizations to develop strategic thinking, bring together customer needs, resources, people, and processes and ensure the achievement of quality results even in the modern challenging markets. An example of an impact of the MBQA on a company can be demonstrated using the Branch-Smith Printing, which is one of the winners of the awards. The company embraced the MBQA criteria in the mid-nineties. As a result, the MBQA model enabled them to develop the company for just a poorly home-managed enterprise to a professional level of management that ensured a great rise in the achievement of the business results. For example, between the years 1997 and 2001 they expanded their customer base from 91 to 167 clients. The company also managed to triple its market share in the same period thus increasing the volume of its sales by 72 percent (Krivokapic & Petropoulos, 2006). The remarkable results took place at a time when other companies in the same sector were experiencing declines in their sales across the globe.
Another study was also done for the comparison of the winners of the MBQA and other benchmark organizations. The comparison was done on the performance of both categories of organizations five years before the award and five years after the award. Several variables including market shares, revenues, return on assets, as well as sales growth, were incorporated in the study. The results of the study showed that there were no major differences in the performance of the organizations prior to the awards. However, a notable finding from the study was that in the period after the awards there was a notable difference between the two categories. For instance, the results indicated that the ones that had received the awards improved in their performance as demonstrated by the returns on assets, sales revenues and operating incomes (Porter & Tanner 2003).
As the findings discussed in the study have shown, any time an organization embraces a business excellence model a change must be felt. All the organizations that have not yet embraced any model should strive to do so to ensure that they are on the way to achieving excellence in their areas of operation.
Biekzadeh, M & Dodangeh J 2012, ‘A review on major business excellence frameworks’, Technics Technologies Education Management, vol. 7, no. 3, pp. 1386-1393.
Inaki, H & Landin, G 2006, ‘Delphi study on motivation for ISO 9000 and EFQM’, International Journal of Quality & Reliability Management, vol. 23, no. 7, pp. 807-827.
Krivokapic, Z & Petropoulos G, 2006, An overview and a comparison of ISO 9000:2000 quality system standards with related automotive ones and TQM models (MBNQA and EFQM), Faculty of Engineering Hunedoara, Romania.
Mann, R 2014, Business excellence tools, Web.
Porter, L & Tanner S 2003, Assessing Business Excellence, Routledge, Oxford, United Kingdom.
The University of Warnick 2009, Excellence models: comparison and relationship, Web.