Total Quality Management Awards: Performance Acquisition

Transcription

1 Journal of US-China Public Administration, ISSN April 2012, Vol. 9, No. 4, D DAVID PUBLISHING Total Quality Management Awards: Performance Acquisition Gurhan Uysal Ondokuz Mayıs University, Samsun, Turkey This study investigates total quality management (TQM) Award models to determine the quality criterias for firms to achieve total quality management. TQM Awards are Malcolm Baldrige Quality Award, European Quality Award (EFQM), Deming Prize of Japan, and ISO9000 Series by International Organization for Standardization. Major focuses in TQM Awards are: the Baldrige aims to achieve organizational performance via business results, because American firms demand that TQM must have an impact on business results such as profit, market share, sales, and revenue; EFQM aims to achieve business excellence; Deming Prize aims to achieve organizational quality; and ISO9000 aims to set up quality system in organizations. This study recommends that firms practice quality criteria of Deming Prize and ISO9000. Both Awards apply a quality management system within organizations. Keywords: total quality management (TQM), TQM Awards, business performance This study explores TQM Awards and their models to question and answer which are acquainted for businesses. TQM changed made in Japan image that existed before World War II (Perincek et al., 2008). There are three essentials in TQM that increase total performance of businesses: suppliers, employees, and customers. TQM practices enable employees to solve quality problems inside organization. The suppliers provide of useful feedbacks and opinions for company s products that increase quality of products, and overall, qualities of organizations (quality products and quality services) increase the customer satisfaction. All they increase the performance of business. Therefore, firms acquire performance through TQM. This is called as performance acquisition in this study that is obtained by applying TQM. TQM Awards represent an integrated model of performance variables. Therefore, this study investigates the TQM Awards and their models, and assumes that businesses increase their performance if they apply TQM inside organization. This study suggests that a model of TQM Award should include and integrate those three variables above as suppliers, customers and employees. TQM Awards: Baldrige, EFQM, Deming, and ISO TQM Awards determine quality criteria for competing firms to assess quality performance of companies. Therefore, TQM Awards are: (1) Deming Prize (1951), Japan; (2) Malcolm Baldrige National Quality Award (1987), the USA; (3) European Quality Award (1992), the Europe; (4) ISO9000 Series (1987), International Organization for Standardization. Corresponding author: Gurhan Uysal, Ph.D., associate professor, School of Business, Ondokuz Mayıs University; research fields: human resource management, SME business, EU studies. uysal_g@omu.edu.tr; gurhanuysal@yahoo.com.

2 452 TOTAL QUALITY MANAGEMENT AWARDS: PERFORMANCE ACQUISITION The oldest and the most popular award is Japan s Deming Award. The USA started the quality efforts in TQM Awards aim to increase quality awaraness of companies. In Turkey, TUSIAD 1 -Kalder Award applied European Foundation for Quality Management Excellence Model (EFQM) for award nomination, and this award started to nominate companies in Major focuses in TQM Awards are: Malcolm Baldrige Quality Award aims to achieve performance excellence in organizations; Deming Prize aims to achieve organizational quality; ISO9000 aims to achieve quality management system; and EFQM is to obtain business excellence. So, the Baldrige focuses on organization s performance, while the EFQM focuses on business, and Deming Prize focuses on organization, and ISO focuses on quality system. Baldrige Award was developed to promote quality awareness for firms (Vokurka et al., 2000). Baldrige Award is a guide for companies to establish an integrated framework to achieve organizational performance for quality. The quality criteria of the award are named management practices to assess the performance. These management practices to achieve quality performance are: leadership, strategic planning, customer and market focus, information and analysis, human resource focus, process management and business results. The integrated framework of the award sets up relationship between these management practices. Those quality management criteria are designed to achieve customer value and organizational performance (Cazzell & Ulmer, 2009). Philosophy of this model is to obtain performance excellence in management practices to achieve organization s overall performance. Because American firms question that implementation of TQM must have impact on business results. Therefore, Baldrige model is oriented to performance excellence, organizational performance and business results. For example, outcomes of five manufacturing Baldrige Award winners demonstrate business results: market share, revenue, sales, customer satisfaction, employee productivity, and increased return on assets (Cazzell & Ulmer, 2009). Baldrige Award focuses on business results (Vokurka et al., 2000). Today, business results, customer and market focus account for more than 50% of Baldrige Award model weighting (Vokurka et al., 2000). However, at the beginning, Baldrige Award didn t allocate substantial weight to business results. EFQM Model includes nine enablers and results criteria. Five are enablers criteria and four are results criteria. Because each criterion has sub-criteria, EFQM has total 32 criteria. The quality improvement enablers include those categories: leadership, human resource management, policy and strategy, resources and processes. Effective implementation of these enablers impacts the results: employee satisfaction, customer satisfaction, impact on society and business results (Vokurka et al., 2000). EFQM set up a model for enablers-results relationship. Organizations use enablers to obtain business results. EFQM considers organizational processes as a link between enablers and results. Thus, EFQM is not only interested in quality but also in developing effective management system (Emanet, 2007). EFQM has outcome focus; therefore, the model desires to achieve employee-, customer- and performance-related outcomes. EFQM targets business excellence in the process of transformation from enablers to results. EFQM model focuses on the transformation process, while the Baldrige focuses on interrelated management practices. Both Baldrige and EFQM focus on business results. But EFQM recognizes priority to enablers to achieve 1 Association of Chambers of Trade and Industry of Turkey.

3 TOTAL QUALITY MANAGEMENT AWARDS: PERFORMANCE ACQUISITION 453 business results, while the Baldrige has management practices to achieve business results. On the other hand, Deming Prize focuses on organizational quality (Vokurka et al., 2000). Therefore, the Prize has 10 categories. All have an equal weight in award nomination: policies, organization, information, standardization, human resources, quality assurance, maintenance, improvement, effects and future plans. Those criteria are designed to achieve quality assurance in an organization. The philosophy of Deming is the key feature to the Deming Prize: continuous improvement and statistical process control. Deming considers that zero default can be achived through process control (Bumin & Erkutlu, 2002). In Deming Prize organizational process are more important than business results. In addition, Deming Prize considers application of TQM practices in organizations such as quality circle, PDAC cycle 2. ISO9000 Series was presented in 1987 as quality assurance standards, and it was revised twice in 1994 and in 2000 (Bekaroglu, 2005). To develop ISO9000: 2000 quality management system, ISO obtained organizational feedbacks from 1,120 institutions (Ilkay & Varinli, 2005). In 1987, ISO9000 was a quality assurance system but it turned to quality management system in 2000 in ISO9000: ISO9000: 2000 Quality Management System adopts process management approach to develop and practice effective quality management system in order to increase customer satisfaction. The term of management in quality management system refers to and covers employees, customers, suppliers, system and processes. ISO9000: 2000 has eight quality management principles: customer focus, leadership, employees, process approach, system approach, continuous improvement, rational decision-making and relations with suppliers. Therefore, quality management system of ISO9000: 2000 includes customer requirements, management responsibility, resource management, statistical quality control, process management, manufacturing product, and customer satisfaction. For example, process management in ISO9001 covers whole production process from product development and design, manufacturing, start-up of product to customer services (Ozcan, 2002). ISO9000 quality standards should be the first phase for firms to achieve total quality management (Duran, 2007). For example, American firms applied both ISO9000 and Baldrige Award quality standards together to achieve quality in organizations so that they can become quality competitors against Japanese firms (Duran, 2007). Discussion: Which Are Acquainted? This study recommends quality standards of Deming Prize and ISO9000 for firms to adopt total quality management, because ISO9000 and Deming Prize set up TQM in organizations. Deming Prize increases organizational quality inside the firms. ISO9000: 2000 quality system includes principles about suppliers, employees, processes and customers that are the key to achieve TQM. Therefore, ISO9000 provides a quality management system for firms to apply TQM practices within organizations. Deming Prize and ISO9000 emphasize quality assurance. Quality assurance, continuous improvement, and statistical process control lead to customer satisfaction. Deming Prize develops an organizational context for quality assurance. ISO9000: 2000 is widely accepted by customers worldwide. Therefore, for example, many companies in the USA obtain ISO9000: 2000 certificate. On the other hand, firms can apply all award models quality standards in step-by-step case. For example, 2 PDAC cycle is Plan-Do-Act-Check cycle that developed by W. Edwards Deming.

4 454 TOTAL QUALITY MANAGEMENT AWARDS: PERFORMANCE ACQUISITION ISO9000 sets up quality management system. Therefore, ISO9000 should be the first phase for organizations to apply among TQM Awards. Then, firms can apply Deming Prize criteria, because Deming Prize develops organizational quality for organizations. Firms, then, can apply Baldrige model to achieve business results and organizational performance. The Baldrige model aims to increase the impact of management practices on organizational performance. Finally, firm can practice EFQM Excellence Model. EFQM aims to achieve internal and external customer satisfaction, and business results through performance assessment in organizational variables. In addition, TQM Awards should be open to international competition. For example, firms with headquarters in the USA can only apply for Baldrige Award nomination. On the other hand, Deming Prize is open to international competition. The Award Committees should become an advisor for firms for application to Awards. For example, JUSE (i.e., Union of Japanese Scientist and Engineers) plays an advisory role for applicants for Deming Prize. Finally, the Baldrige, Deming, and EFQM include award nomination to the SMEs. SME nomination is important because spare parts are crucial to produce quality products for firms. European Studies: Alpen Countries and Regional Cluster Network The aim of this part of the study is to discuss Alpen Countries and regional clusters in Europe in terms of system, organization, and centrifugal and centripetal forces. Three methods are used in this analysis. One is system theory in management. Second is the linking-pin proposal in organization theory, and the third is centrifugal force and centripetal force in physics. EU is considered as a system, and regional clusters are considered as groups or sub-systems, and Alpen Region is considered as a center of the system. The linking-pin is considered as connecting-countries between the center and the groups. The linking-pin countries are selected from Alpen Region. It assumes that the center, the groups and the linking-pin generate centrifugal and centripetal force inside the system that results in negative entropy through systemic synergy. In organization theory, Rensis Likert proclaims the linking-pin proposal for organizations to effectively manage the entire organization. He says that organizations do not have hierarchical structure but groups to manage, and each group has a common member (linking-pin) with the other. Linking-pin employee links a group of employees with the other groups. Therefore, the linking-pin employee improves intergroup relationship within groups in the organization. The centrifugal force is an outward force in the system to get away from the center. The centripetal force is an inward force in the system toward the system. Centrifugal force provides the organization of establishing decentralization management, because centrifugal force might carry the power in the centre of the system to the sub-systems. The linking-pin country, which is a connecting country between the center and the group, returns this decentralized power back to the center. This is centralization via centripetal force. Therefore, decentralization and centralization exist together in the system through integrative impact of centrifugal and centripetal force on managerial system. In physics and organization, centrifugal and centripetal forces are opposite forces that push and compete with each other. However, linking-pin in organization theory makes those forces complement each other, because the linking-pin sets up connections between the center and the groups. The linking-pin carries the

5 TOTAL QUALITY MANAGEMENT AWARDS: PERFORMANCE ACQUISITION 455 power of the center to the groups through centrifugal force, and results in decentralization. Relationship between the center and the groups returns decentralized power back to the center through linking-pin and centripetal force, and this reproduces centralization. Therefore, both decentralization and centralization exist together in the organization that produces systemic synergie. Alpen Countries are France, Germany, Switzerland, Austria, Slovakia, Hungary and Romania in the North, and France, Italy, Slovenia, Croatia, Bosnia, Serbia, Albania, Montenegro, Macedonia, Kosova, Bulgaria and Turkey in the South. The groups (regional clusters) are Adriatics, Balkans, Baltics, Benelux, EuroMed, Islands and Scandinavia. Adriatic cluster includes Slovenia, Croatia, Bosnia, Serbia, Albania, Montenegro and Kosova. Balkan cluster contains Romania, Bulgaria, Turkey, Greece, Macedonia, Hungary and Moldova. Baltic cluster contains Estonia, Lithunia and Latvia. Benelux is Belgium, Holland and Luxembourg. EuroMed is North Africa and Portugal, Spain and southern Europe. Islands include Britain, Ireland and Iceland. Scandinavia cluster includes Norway, Sweden and Finland. In this system, regional clusters (groups) can be connected by a linking-pin country that is selected from Alpen Region for better European Union. Linking-pin is a connecting country that links a regional cluster with the center and other part of the system. Alpen Region is selected as a center in the system because Alpens have G-8 countries: Germany, France and Italy, and because Alpen Region holds European identity that can produce centripetal force. Therefore, for example, Italy can become a linking-pin country between the EU and EuroMed, and Serbia can become the linking-pin between the EU and Adriatics. Social psychology in management can help to determine the linking-pin countries between center and regional clusters, because social psychology reflects social reactions and social behaviors of a society. In addition, social psychology is personal emotion of individuals among the society. This system approach and networking through linking-pin are embarked on relationship between center and the groups. This linking-pin relation leads to systemic synergies that may provide of negative entropy. Systemic synergy is obtained by the linking-pins. Therefore, this study assumes that the system, the groups (regional clusters), linking-pin countries, intergroup relationship, centrifugal and centripetal forces lead to negative entropy for the system to last. Conclusions To conclude, this study explores TQM Awards to determine the quality criteria for firms to apply total quality management. TQM Awards are Malcolm Baldrige Quality Award, EFQM, Deming Prize of Japan, and ISO9000 Series by International Organization for Standardization. Major focuses in TQM Awards are: the Baldrige aims to achieve organizational performance via business results, because American firms demand that TQM must have an impact on business results such as profit, market share, sales, revenue; EFQM aims to achieve business excellence; Deming Prize aims to achieve organizational quality; and ISO9000 aims to set up quality system in organizations. This study recommends quality standards of Deming Prize and ISO9000 for firms to apply total quality management, because ISO9000 and Deming Prize set up TQM system in organizations. Deming Prize increases organizational quality inside the firms. ISO9000 quality system involves quality principles for suppliers, employees, processes and customers to achieve quality in organizations. In addition, Awards should be open to international competition. For example, firms with headquarters in

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