Currently, trends in the development of society and the economy determine the need for the faster response of enterprises to the external environment and consumer demands. This, in turn, poses corresponding tasks to the scientific community in terms of search and development of fundamentally new approaches to ensure the efficiency of enterprises. One such scientific directions are quality management, which by the present moment has not only a high level of scientific study but also practical realization. Quality management is determined by a large number of approaches to content, which is mostly explained by dialectical features of this concept.
Nowadays, quality management is understood as a particular concept of enterprise management, which is connected not only with the provision of an appropriate level of quality of produced products or services but also with control of all processes and enterprise as a whole. An integrated approach to quality management includes several factors, including special attention to the customer, management leadership style, control based on processes and facts, and staff involvement.
Together, the factors mentioned above form the best practice of achieving business excellence, which is commonly referred to as business excellence. The purpose of this literature is to provide a literary overview of the issue of achieving business excellence by identifying the challenges faced by organizations and the role of management in addressing these challenges.
Developing the Concept of Quality Control
The reasons for the prolonged economic crisis and downtime of enterprises in developed modern countries are different. The creation and production of competitive products is a prerequisite for recovery from this situation. Indeed, not all enterprises will be able to withstand the competition, but it is beneficial for the economic system of any state that the enterprises work successfully. This formed the basis for a retrospective analysis of the most effective and productive enterprises.
Many managers, sociologists, and economists over the past century have gradually contributed to the problems of the success of enterprises. The most famous of them: Crosby, Deming, Feigenbaum, Ishikawa, and Juran. The works of the American scientist William Deming were the most famous. As a result of the study, the modern base of scientific research on the issues of success was quite full
According to the existing business philosophy, all responsibility for the quality of products and services lies with the manufacturer. The manufacturer has reacted differently to this responsibility at different historical intervals, implementing different quality philosophy. The original quality concepts included processes for rejecting useless materials. In other words, the heads of the enterprises proceeded from the assumption that the consumer should receive only suitable products, including those that fully correspond to quality standards.
The turning point in the history of quality management was the visit of Deming to Japan, where he was invited to take part in the program of restoration of the Japanese industry. It was there that he presented his first quality management program aimed at achieving business excellence (Unnikrishnan, Tikoria, & Agariya, 2017). The program was no longer based on the improvement of individual production processes, but on the improvement of the system as a whole, that is, the direct involvement of senior management in quality issues, training all employees of the company from top to bottom in basic methods of quality assurance, focusing on motivating employees to work of high quality..
Challenges of Achieving Excellence
Maintaining a certain level of business excellence should become the most crucial task of the organization, the main goal of its efforts. Achieving business excellence is accompanied by radical changes in both the way enterprises are managed and the way each employee works (Garbarova, 2017). A company’s future depends on the ability of its leaders to provide truly comprehensive, sustainable, trustworthy, and results-oriented management that gives it a competitive edge and preserves jobs for all employees (Garbarova, 2017).
However, the process of achieving business excellence appears to be one of the most sophisticated organizational processes. It is not so much a question of what researchers put into the concept of “excellence” as of what is quite practical difficulties. This issue was studied by Brown (2013), who identified several categories of problems faced by the organization is trying to achieve business excellence.
In particular, Brown wrote that the most significant problem is the lack of a consistent and developed leadership style within the company (Brown, 2013). The essence of the problem lies in the fact that heads of organizations tend not to provide employees with the necessary support. This, in turn, may be related to the leader’s uncertainty about his ideas. The responsible leader, who aims at achieving quality, must have knowledge, experience, and intuition.
The Importance of Leadership Style
The entire organization is managed by leaders who know how to set the direction of its activities, unite and motivate other leaders to encourage subordinates to act in the chosen direction. Ferdowsian contrasts a successful human leader by writing that “a heavy-handed top-down leadership approach nor a bottom-up grassroots effort is sufficient to nurture and develop a culture of ethics” (Ferdowsian, 2016, p. 973). Therefore, in order to succeed, there must be a person in the position of a leader who can articulate an organization’s value system, instill ethical standards and corporate culture, create an organizational structure that gives the enterprise identity and makes it attractive to all stakeholders (Carvalho, Sampaio, Rebentisch, Carvalho, & Saraiva, 2019).
In a perfect organization, managers at all levels guide and encourage the development of subordinates towards business excellence, and are role models in terms of their behavior and performance. By way of personal example, they show how to improve the company’s performance together with all stakeholders (Tickle, Mann, & Adebanjo, 2016). In volatile periods of company life, they demonstrate calmness and commitment to constant goals. At the same time, they can adapt quickly to an ever-changing environment, directing the organization’s activities in the right direction, and engaging their subordinates.
The importance of the Corporate Environment
All businesses that achieve business excellence face the same problem. This is the need to create a corporate culture of a learning organization where the ability to maintain structure and methods aimed at achieving optimum efficiency is in harmony with the desire to satisfy the interests of consumers and investors (Carvalho et al., 2019).
This idea is also reflected in the work of Brown (2013), which states that effective communication, involvement, and commitment of employees in the corporate mission environment is one of the most frequent challenges for organizations. The author leads the reader to the conclusion that achieving business excellence will always present additional challenges. A perfect organization attaches great importance to the current advanced level of staff skills required to implement strategies, policies, goals, and plans (Garbarova, 2017).
In such an organization, employees are trained to meet these needs and actively and continuously contribute to their individual development. An advanced organization is well aware of the importance of the intellectual capital it has in the person of its employees and the importance of using their knowledge for the benefit of the organization (Tickle et al., 2016). Organizations strive to make the most of their employees’ abilities and actively involve them in their tasks by creating a corporate culture based on shared values, trust, openness, and responsibility-sharing (Carvalho et al., 2019). The entire organization involves its employees in the development and implementation of ideas aimed at its further development.
The analysis of literary sources devoted to the study of emerging problems in foreign companies leads the reader to two conclusions at once. Firstly, it is not enough to have the skills of a successful leader and to design an environment for employee involvement for the company to achieve perfection. Aladwan and Forrester (2016) dedicated their work to this analysis by examining the challenges faced by leaders of organizations wishing to achieve business success. It was found that the range of challenges may include lack of continuity of ideas, lack of financial resources, and poor strategic planning (Aladwan, & Forrester, 2016).
In response to their study, it is worth noting that an entire organization has an effective management system in place that is based on and designed to address the needs and expectations of all stakeholders (Tickle et al., 2016). The systematic implementation of an organization’s strategy, policies, goals, and plans are carried out through a well-defined set of processes that are implemented, managed, and improved daily and efficiently.
Models of Excellence
Since the 1990s, the term “excellence” has been widely used to refer to the activities of organizations. This was due to the establishment of the European Foundation for Quality Management (EFQM) and the application of the business excellence model (Fonseca, 2015). This model was not the first one, but instead enriched the professional knowledge gained by that time. The real first prize awarded for quality was Japan’s national quality award, the Deming Award, established in 1951 (Unnikrishnan et al., 2017). This is a qualitatively quantitative award, the mechanism of which was based on assigning points to companies for achievements in ten categories.
To receive the Deming Award, 70 out of 100 points were sufficient. Awareness of the role played by the Deming Award in the growth of quality in Japan only later led U.S. specialists to establish their broad-based prestigious award – the Malcolm Baldridge National Quality Award (Eriksson et al., 2016).
Unlike the Deming Award, the evaluation was based on seven criteria. Three years later, the Baldrige Prize was established, the European Quality Award, which was initially an enriched version of the American prize (Eriksson et al., 2016). However, following a critical review of the award’s conceptual framework, changes were made, the most important of which was to separate the award from its performance. These changes moved the European quality award to a different conceptual basis from the Deming and Baldridge awards (Unnikrishnan et al., 2017).
The European Award, with its systemic view of the company through the TQM lens, can be seen as the perfect model of business excellence. The EFQM Business Excellence Model is a voluntary scheme used by organizations to assess their progress towards business excellence based on nine criteria (Garbarova, 2017).
As a logical extension of the U.S. version of the awards, the EFQM is based on the same principles of excellence as the ISO-9001:2015 standards, but also requires businesses to be aware of their social responsibility to society (Garbarova, 2017). However, the EFQM criteria do not include information on management systems, which is clearly stated in the ISO-9001:2015 standards. Most likely, this is because systematic management is quite the apparent fact of a successful company, so it is not specified. The principal difference between the EFQM model and ISO-9001:2015 standards is the need to evaluate specific performance results and, consequently, management results and their correlation with the available opportunities.
It is interesting to note the genetic relationship between the EFQM model and the ISO-9001:2015 standard. This issue was addressed by Fonseca (2015), which came to the expected conclusion that having ISO-9001:2015 certification increases an organization’s chances of receiving an EFQM award. In other words, there is some correlation between the two types of awards. At the same time, the answer does not seem mysterious – given that EFQM repeats and extends the concepts of ISO-9001, obtaining a narrower award lays the foundation for ambition.
In today’s fast-paced world, entire organizations are flexible and responsive to changes in the demands and expectations of all stakeholders that happen frequently and quickly. The history of quality is inseparable from that of civilization, and as it evolves, the concept of quality has changed. Quality management began with simple operations to control product parameters. Researchers have long been interested in the question of how to influence the quality of products.
Quality management theory has evolved, creating new types of awards, certifications, and distinctions. The study of awards reveals their similarities: this is because historically, new types of quality awards have been born based on existing awards. For the same reason, the new models have a more extensive range of evaluation criteria.
A summary of progressive global experience has allowed the development of principles for the concept of applying quality management systems and methods at all stages of the product life cycle, with the participation of all personnel and the leadership role of the manager. Any organization that is interested in improving the quality of its products, just as it is in achieving excellence, faces a number of challenges. These challenges are primarily determined by the management style of the company and the methods that the leader applies to his employees, as well as the degree of employee involvement in the corporate environment.
It is erroneous to think that there is a typical spectrum of problems that a company that decides to take the path of success will face. The range of problems is unique and depends on many factors. An organization that has achieved excellence evaluates and can anticipate the needs and expectations of its stakeholders, monitors their opinions and experience with it, monitors the work of other organizations, and analyzes their experience. It collects information on existing and future stakeholders and uses it to establish, and revise strategies, and plans in the short, medium, and long term.
Aladwan, S. A., & Forrester, P. (2016). The leadership criterion: challenges in pursuing excellence in the Jordanian public sector. The TQM Journal, 28(2), 295-316.
Breja, S. K., Banwet, D. K., & Iyer, K. C. (2016). Towards sustainable excellence: strategic analysis of Deming Prize winning companies. The TQM Journal, 28(3), 390-410.
Brown, A. (2013). Managing challenges in sustaining business excellence. International Journal of Quality & Reliability Management, 30(4), 461-475.
Carvalho, A. M., Sampaio, P., Rebentisch, E., Carvalho, J. Á., & Saraiva, P. (2019). Operational excellence, organisational culture and agility: the missing link? Total Quality Management & Business Excellence, 30(13-14), 1495-1514.
Eriksson, H., Gremyr, I., Bergquist, B., Garvare, R., Fundin, A., Wiklund, H.,… & Sörqvist, L. (2016). Exploring quality challenges and the validity of excellence models. International Journal of Operations & Production Management, 36(10), 1201-1221.
Fonseca, L. M. (2015). Relationship between ISO 9001 certification maturity and EFQM business excellence model results. Quality Innovation Prosperity, 19(1), 85-102.
Ferdowsian, M. C. (2016). Total business excellence – a new management model for operationalizing excellence. International Journal of Quality & Reliability Management, 33(7), 942-984.
Garbarova, M. (2017). Improving human resources management using the EFQM Excellence Model. International Journal of Organizational Leadership, 6(1), 335-340.
Tickle, M., Mann, R., & Adebanjo, D. (2016). Deploying business excellence–success factors for high performance. International Journal of Quality & Reliability Management, 33(2), 197-230.
Unnikrishnan, P. M., Tikoria, J., & Agariya, A. K. (2017). A Review of Select Business Excellence Models. In S. Bhattacharyya (Eds.), Evidence based management (pp. 358-365). Pilani, India: Excellent Publishing House.