TQM BASED BUSINESS EXCELLENCE

MODELS

0.ABSTRACT
In this era of Competition & Uncertainty only Excellent Organisations can survive. To be
an Excellent Organisation one has to Continuously Innovate, Improve and Balance the Needs &
Expectations of All the Stakeholders. This is what Total Quality Management (TQM) aims at.
TQM started during Sixties and based on TQM philosophy the Business Excellence Models
started in Eighties. These models are Comprehensive and talks of every aspect of an
Organisation from Leadership to Strategy, People, Partnerships, Resources, Processes and
results related to all stakeholders. Today, many countries view business excellence models as a
key mechanism for improving the performance of organisations, as well as national
competitiveness

During nineteen fifties Japan had a reputation for inferior quality goods .Japanese
welcomed input from foreign companies and lectures from different Quality Gurus, including two
American quality experts. As a result, during nineteen seventies Japan was able to produce
higher-quality exports at lower prices, benefiting consumers throughout the world. Americans
started calling this style of Management as “Japanese Style of Management” and also as “Total
Quality Management”.

This article covers different definitions of TQM as given by different Quality Guru’s and
working definitions used by industry. Also it briefly discusses the Popular Business Excellence
Models like The Malcolm Baldrige National Quality Award (MBNQA) of USA , European
Foundation for Quality Management (EFQM) model of Europe and Deming Award of Japan. It
discusses the Indian models like Tata Business Excellence Model (TBEM) which is based on
MBNQA model, CII-EXIM Bank Award model which is based on EFQM model , Rajiv Gandhi
National Quality Award , IMC Ramkrishna Bajaj National Quality Award and Golden Peacock
National Quality Award are also referred in this article. These Awards are based on MBNQA &
EFQM Models.

Most popular award among these in India is CII-EXIM Award which was started in 1994
and in this last 16 years only 7 organisations could get Award. We discuss more about CII-EXIM
Award Model here. It has 9 criteria, each criteria has sub-criteria (32) and every sub-criteria
has Areas to Address (304). As it is not possible to explain about the total criteria and it’s
interpretation, the paper gives a small example of 2 areas to address out of 304 Areas to
address

Also the paper gives the benefits by adopting these models and winning the awards.
Also findings of some International researches are given in this paper.
 1.0 - INTRODUCTION

1.1 Birth of TQM:

During nineteen fifties Japan had a reputation for inferior quality goods and were
shunned by international markets. This led Japanese organizations to explore new ways of
thinking about quality. Then Japanese welcomed input from foreign companies and lectures
from different Quality Gurus, including two American quality experts W Edwards Deming and
Joseph M Juran. Japan’s strategies represented the new “total quality” approach. Rather than
relying purely on product inspection, Japanese manufacturers focused on improving all
organizational processes through the people who used them. As a result, during nineteen
seventies Japan was able to produce higher-quality exports at lower prices, benefiting
consumers throughout the world. Americans started calling this style of Management as
“Japanese Style of Management” and also as “Total Quality Management”.

TQM is a management approach/ philosophy/ process adopted by many organizations in

the world for achieving excellence. Different Quality Gurus and TQM implementers defined it in
different ways. Some definitions as defined by Quality Gurus’ are discussed here:
• As defined by Dr.W.E Deming is "TQM is a theory of management for improvement of
Quality, productivity and competitive position."
• Dr.Kaoru Ishikawa of Japan in his book, Introduction to Quality Control, has stated "TQC is
not a fast acting drug like penicillin, but a slow acting herbal remedy that will gradually
improve a company's
constitution if taken
over a long period".
• The famous Juran
Institute USA of Joseph
Juran, a contemporary
of Deming states " TQM
is the set of
management
processes and systems
that create delighted
customers through
empowered employees,
leading to higher
revenue and lower
cost"
• Another exponent of quality, Hutchins, in his book, Achieve Total Quality, says " The
objective of TQM is to make use of the brain power, creativity and work experience of the
entire work force to create an unbeatable organisation in the market place."

Other working definitions used in industry are:

• “Doing the right things, right, the first time and every time”..
• TQM focus on processes and product together, the big ‘Q’ approach (unlike old tradition
of focus on product quality only, the small ‘q’ approach).
• TQM aims at balancing the needs and expectations of all the stakeholders.
 Many companies add assets, manpower, and new machinery to increase profits, which
calls for additional finances. But, TQM helps in generating profits even without additional
investments.

1.2 Birth of Business Excellence Models:

Over time, the term “Business Excellence” started to replace the terms “Quality” and
“TQM”, partly as a result of the considerable confusion as to the meaning of TQM, since all
types of business improvement programmes were being called TQM. The first business
excellence models were developed in the mid-1980s and came about as a result of the quality
movement in the West. Today, many countries view business excellence models as a key
mechanism for improving the performance of organisations, as well as national competitiveness.
Popular Models are MBNQA,EFQM and Deming.

2.0 - BRIEF ABOUT MBNQA

• Initiated by the then-President Reagan after recognizing the declining productivity and
quality standards in USA.
• Law passed in August 1987.
• Named after the then-Secretary-of-Commerce.
• Baldrige Award was designed to raise awareness of quality management and recognize
U.S. companies that have implemented successful quality-management systems.

The Malcolm Baldrige National Quality Award (MBNQA) is presented annually by the President
of the United States to organizations that demonstrate quality and performance excellence. The
U.S. Commerce Department's National Institute of Standards and Technology manages the
award and ASQ administers it.

Organizations that apply for the Baldrige Award are judged by an independent board of
examiners. Recipients are selected based on achievement and improvement in seven areas,
known as the Baldrige Criteria for Performance Excellence:
1. Leadership: How upper management leads the organization, and how the organization
leads within the community.
2. Strategic planning: How the organization establishes and plans to implement strategic
directions.
3. Customer and market focus: How the organization builds and maintains strong, lasting
relationships with customers.
4. Measurement, analysis, and knowledge management: How the organization uses
data to support key processes and manage performance.
5. Human resource focus: How the organization empowers and involves its workforce.
6. Process management: How the organization designs, manages and improves key
processes.
7. Business/organizational performance results: How the organization performs in
terms of customer satisfaction, finances, human resources, supplier and partner
performance, operations, governance and social responsibility, and how the organization
compares to its competitors
 3.0 - BRIEF ABOUT EFQM
During 1988 The Presidents of 14 European companies came together to create the 'European
Foundation for Quality Management' - later to be renamed simply 'EFQM'. EFQM was formally
established on 15 September 1988 in Brussels. During 1991 The EFQM Excellence Model was
born. The first European Quality Award was presented by the King of Spain at the EFQM Forum
in Madrid in 1992.

The EFQM Excellence Model is the most widely used organisational framework in Europe and it
is the basis for the majority of national and regional Quality Awards. Used as a tool for
assessment, it delivers a picture of how well the organisation compares to similar or very
different kinds of organisation. Used as a management model it can be used to define
aspirations for the organisation’s capability and performance.

The EFQM Excellence Model:

• Is a structure for the organisation's management system
• Can be used as part of a self-assessment
• Provides a framework for comparison with other organisations
• Helps to identify areas for Improvement

The EFQM Excellence Model is a non-prescriptive framework based on 9 criteria. Five of these
are 'Enablers' and four are 'Results'. The 'Enabler' criteria cover what an organisation does and
how it does it. The 'Results' criteria cover what an organisation achieves. 'Results' are caused
by 'Enablers' and 'Enablers' are improved using feedback from 'Results'.

The Model, which recognises there are many approaches to achieving sustainability, is based
on the premise that: Excellent Key Results, Customer Results, People Results and Society
Results are achieved through Leadership driving the Strategy, that is delivered through People,
Partnerships and Resources, and Processes, Products and Services.

The EFQM Model is presented in the diagram form below. The arrows emphasise the dynamic
nature of the Model. They show innovation and learning helping to improve enablers that in turn
lead to improved results.
 4.0 - BRIEF ABOUT DEMING PRIZE
The Deming Application Prize: An annual award is presented to an organisation that has
achieved distinctive performance improvements through the application of TQM. The prize is
open to organisations in all sectors - public or private, large or small, or domestic or overseas.

Unlike the previous two models, the Deming Prize does not specify set criteria for examination
during the award process, and therefore is not used for self-assessment. The applicant
organisation is expected to show an understanding of its current situation, establish its own
themes and objectives, and improve and transform itself company-wide. The award process
examines not only the current results that have been achieved, but also the effectiveness that is
expected in the future. The examiners assess whether the themes established by the
organisation were commensurate to its situation, whether its activities were suitable to its
circumstances, and whether or not its activities are likely to lead it to achieving its future
objectives. The Prize Committee views the examination process as an opportunity for “mutual-
development” rather than “examination.”

In recent years in Japan, the Japan Quality Award has become more popular than the Deming
Prize . The Japan Quality Award was established in 1995 and is based on the Baldrige Criteria
for Performance Excellence.

5.0 - INDIAN AWARD MODELS

TISCO adopted MBNQA
model as JN Tata Quality SIMILARINDIANBUSINESSEXCELLENCE
Award in 1993 and was AWARDMODELS
limited to the Divisions &
Departments of TISCO. MBNQA EFQM Deming
The Tata Son’s adopted
same model as JRDQV TBEM/JRDQV CII -EXIM
Award in 1994. At the Deming
same time CII adopted RGNQA -BIS
EFQM model as CII-EXIM ICM -BNQA (JUSE)
Award. BIS started Rajiv GPNQA
Gandhi National Quality Figure:3 – IndianPopularModels
Award in 1991. IMC Ramkrishna Bajaj National Quality Award was started by Indian Merchants’
Chamber in 1996. Institute of Directors has started Golden Peacock National Quality Award.
These Awards are based on MBNQA & EFQM Models. Most popular award among these in
India is CII-EXIM Award. We discuss more about CII-EXIM Award Model here.

6.0 - CII-EXIM AWARD FOR BUSINESS EXCELLENCE

6.1 – Introduction :

In 1994, CII and the EXIM

Bank of India joined hands to
institute this Award to
enhance the competitiveness
of India Inc. The Award
recognizes companies which
have achieved exemplary
levels of business excellence
and can be considered to be
role models for other
corporate.The Award is
based on the European
Foundation for Quality
Management (EFQM)
modelThe award is being administered by CII with the technical support from European
Foundation for Quality management.

The Award was established to promote the awareness of business excellence as an

increasingly important element in competitiveness. Award also increases the understanding of
the elements critical for business excellence. To accomplish this, the Award promotes
information sharing of successful performance strategies and the benefits derived from pursuing
these strategies. The Assessment Process is shown in Fig.4

6.2 Levels of recognition:

• Commendation for Strong Commitment to Excel
• Commendation for Significant Achievement
• Prizes (in each category)
• The Award (Best of prize winners)

6.3 Winners so far - Award & Prize

Bosch, Bangalore - Diesel Systems business 2009

The Tinplate Company of India Limited(Prize) 2008
Tata Consulting Services Ltd (TCS) 2006
BHEL Haridwar (Prize) 2006
Commercial Vehicles Business Unit Tata Motors Ltd. 2005
Infosys Technologies Limited 2002
Tata Iron & Steel Co. Limited 2000
Maruti Udyog Limited 1998
Hewlett Packard (India) Limited 1997
6.4 Fundamental Concepts:

This Model is based upon the Fundamental Concepts of Excellence as detailed below:
1. Achieving Balanced Results
2. Adding Value for Customers
3. Leading with Vison, Inspiration and Integrity
4. Managing by Processes
5. Succeeding through People
6. Nurturing Creativity and Innovation
7. Building Partnerships
8. Taking Responsibility for Sustainable Future

The Model Structure: It has 9 criteria, each criteria has sub-criteria (32) and every sub-criteria
has Areas to Address (304) as shown in Fig.5.For Sample we see one Criteria.

6.5 Criteria 1:‘LEADERSHIP’

Definition

Excellent organisations have leaders who shape the future and

make it happen, acting as role models for its values and ethics
and inspiring trust at all times. They are flexible, enabling the
organisation to anticipate and react in a timely manner to ensure
the ongoing success of the organisation.

Sub-Criteria
1a. Leaders develop the mission, vision, values and ethics and ac as role models
1b. Leaders define, monitor, review and drive the improvement o the organisation’s
management system and performance.
1c. Leaders engage with customers, partners and representatives of society
1d. Leaders reinforce a culture of excellence with the organisation’people
1e. Leaders ensure that the organisation is flexible and manage change effectively

Areas to address under 1a.:

 1. Developing the organization’s mission vision and culture;
2. Developing and role modelling values, ethics and Public responsibilities that support the
culture;
3. Reviewing and improving the effectiveness of personal leadership behaviors;
4. Being actively involved in improvement activities;
5. Stimulating and encouraging empowerment, creativity and innovation, e.g. by changing
the organization's structure, funding learning and improvement activities;
6. Encouraging, supporting and acting upon the findings of learning activities;
7. Prioritizing improvement activities;
8. Stimulating and encouraging collaboration within the organization.

6.6 A sample case showing how an organization addresses 1a.1&2:

Mission, Vision and Values are ABC Vision, Mission & Values
developed by ABC Corporate Vision:
Leadership after wide consultation "A world class integrated power major, powering
India’s growth, with increasing global presence"
within the organization and also Mission:
with stakeholders. The GM, ABC Develop and provide reliable power, related products
participated in formulation of and services at competitive prices, integrating
Vision, mission and core values multiple energy sources with innovative and eco –
friendly technologies and contribute to society"
along with ABC Corporate
Core Values
Leadership, Regional EDs and • Business Ethics
Other BUHs. ABC first revisited • Customer Focus
Core Values in 2000 taking into • Organisational. & Professional Pride
account the changing business • Mutual Respect & Trust
• Initiative & Speed
scenario. Then in Nov 2005 • Total Quality for Excellence
revisited and revised Core Values Exhibit –O-1
as detailed in Exhibit 1a-3. Major Communication
Print & Worksho
addition was Business Ethics Value Audio-
Visual impact-
Screen Saver p on
and modification of Organisational visual Display Boards
Value
media
pride as Organizational and Actualisa D
e
Professional Pride “ and addition of Distributi Disseminating tion p
Value l
on of Mission, Vision and
“for Excellence” to Total Quality value component o
Handboo Core Values in y
Value. Organisational Mission was k performance m
e
revisited again in 2004 at ABC level Appraisals n
Values audit and
with the learning’s drawn from ESS Surveys ABC
t

reviews conducted across the Reward Periodic

communicat
organisation, external consultants Scheme ion meeting
& reviews
advice external environment and
Corporate Vision. Review
Exhibit-1a-1
Vision, Mission and Values are given
in Exhibit-O.1. The Mission, Vision and Core values are communicated, deployed and
evaluated as indicated in Exhibit-1a-1 and 1a-2
 CORE
VALUES
DEPLOYME
NT
Business Customer Focus Organization Mutual Innovation and Total Quality
Ethics al and Respect and Speed for Excellence
Professional Trust
Pride
D High level of Conviction that Holding the High regard Thinking new Believing in
e Morality & the Customer company in for and faith and ahead and pursuing
f Fairness in all (External & high esteem in the fellow being swift excellence in
n the actions. Internal) is and a sense organization without all spheres of
Transperency in centre of all of ownership al members; compromising on activity;
dealings. activity with it,; beleiving in quality; creative making
Compliance to allCourteous, holding the collaboration and innovative continuous
guidelines Sincere, Patient profssion in and and willingness efforts in
relating to and Sensitive to high esteem openness to experiment improving
disclosures the Customer. and taking and good and taking risk. standards of
under various Honouring the pride in team spirit performance,
acts and rules Commitments on belonging to systems and
time it. processes
B Courteous, • Honor Sense of Acknowledgi Believe in action Pursuing
e responsive to commitm belongingnes ng dignity and ready to Excellence in
h stakeholder ents s and take first step all spheres of
a needs, sharing • Fulfilling Projecting individuality Self driven and acitivity
v Best Practices customer positive of All self motivated -Bringing
-needs
i image of ABC Having Willingness to highest Quality
like
o service, Loyality and Regard and experiment and involving
u promptn commitment faith in take risks stakeholders
r ess, to fellow -Continuously
Quality organization members improving
and Cherish performance,
value virtues of systems and
Achieve
team processes
customer delight
P • Transpar • Daily • ABC flag, • Conducts • NOCET, KOCET •Implementatio
r ency in communi ABC logo open house • First Station to n of CII Exc.
a accounti cation • Starting sessions implement 5’S’ Model
c ng/financ • Started the day and in Camp, •QCs, PCs,
ial External with Dialogue Shops, Banks Suggestion
t
reporting customer rendition meetings and Schools. scheme etc.
i . perceptio of ABC • Sharing of • First to start •-Performance
c • PIE n ‘Geet’. information Quality Circles Improvemen
e group surveys • Represent on intranet. in Schools and t Projects
formatio • Waival of ation in • Increase in nearby villages •Best Practices
n to interest Local Delegation Booklets
improve on long profession of Powers
performa standing al bodies in 2003.
nce of dues
SEBs. • Internal
• DDGs Custome
r Meets
•Assesment and Review through Value Audit, Employees Satisfaction Survey and as a part of Executives PMS.
Exhibit 1a-2

7.0 - WHAT DOES A COMPANY RECEIVE FOR APPLYING

7.1 Benefits:
• Get external perspective on organisation.
• More than 1000 man hours go into each application before the final decision is made.
• Every applicant gets a detailed feedback report based on the findings of the assessment
team,
• Feedback report covers
• Strengths,
• Opportunities for improvement (OFIs) and
• Scoring profile of the applicant organization.
• Feedback reports become input for Strategy Planning
• Feedback reports can guide the organisational Improvement programmes
• Award winning Companies can use logos of CII-EXIM Bank Award in corporate literature

7.2 United States Research

A study of 600 worldwide quality award-winning organisations (using the Baldrige Criteria for
Performance Excellence) was conducted over five years and published in 1999 by Singhal and
Hendricks [26]. The results were compared to a control group of companies (of similar size and
industrial sectors) and revealed a marked positive difference for the award-winning companies
in every key measure against the control companies (see Figure 6).

7.3 European Research

Research published in 2005 by the Centre of Quality Excellence, the University of Leicester,
and jointly sponsored by the European Foundation for Quality Management (EFQM) and the
British Quality Foundation, provides evidence that the effective implementation of the principles
of the EFQM Excellence Model impacts bottom-line business results.
After extensive study of award winners, the team compared the financial performance of 120
award-winning companies that met specific criteria against comparison companies similar in
size and operating in the same industries. The financial performance of the companies was
tracked over an 11-year period.
The study found that compared to the comparison companies, award-winning companies
experienced higher increases in share values, sales, capital expenditure over assets and capital
expenditure over sales, higher growth in assets, and further reduction in costs over sales within
a short period of time (one year) after having received their first award (see Figure 7 below)
Figure:7
8.0 - CONCLUSION
For longer term survival of any organization they have to adopt TQM philosophy for continual
improvement of their products & processes by utilizing the full potential of their employees. Also
they have to do self assessment based on these Business Excellence Models. They can also
participate in the Awards where they get external perspective on their Strengths & OFIs. It is
considered that participating in the Award Assessment is the cheapest Consultancy available to
the industry. By this they can Benchmark their practices with Best in Industry also.

9.0 REFERENCES/ SOURCES:

1. http://www.bpir.com/business-excellence-bpir.com/menu-id-71/expert-opinion.html
2. Baldrige Criteria for Performance Excellence. Visit NIST at http://www.quality.nist.gov/.
3. EFQM Excellence Model. Visit EFQM at http://www.efqm.org/.
4. Deming Prize. Visit http://www.deming.org/.
5. CII-EXIM Award visit http://cii-iq.in
6. Goasdoué, J. (2001), Is Quality Taken for Granted? The British Journal of
Administrative Management. Vol. 23. pp. 10
7. Mann, R.S and S. Nishide (2001), Impressions from a Quality Tour in Japan: Deming
to Knowledge Management. NZ Q-Newz – Official Newsletter of the New Zealand
Organisation for Quality, August.
8. Centre for Quality Excellence (2005). Report on EFQM and BQF Funded Study into
the Impact of the Effective Implementation of Organisational Excellence Strategies
on Key Performance Results, University of Leicester.
9. Hendricks, K.B. and Singhal, V.R. (1999). Don’t count TQM out. Quality Progress. Vol.
32, Iss. 4; pg. 35, 8 pgs
10. Author’s Personal experience with TISCO, Tata Projects and NTPC.

Author:
A.Ajaya Shankar Gupta, B.E (Mining) from Osmania University passed out
in1981, in First Division with Distinction.MBA (Technology Management) from
Osmania University during 2005-2007.

Presently Research Scholar (part time) in SMS,HCU under the guidance of Dr. V Sita

Contact details: ajaygupta@ainapur.com, Mobile: +919440826763