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MG311 Tutorial - Quality Award

1. At the FNTC sponsored 8th National Convention on Quality (1999), a powerful panel,
comprising an expert from the private sector, one from academia and two from prominent
training institutions, were posed with the following questions:
 Why has not the quality/productivity efforts in Fiji been embraced to the extent seen in
some of the Asian countries?
 What are some ways in which this challenge could be faced in the new millennium?

List and discuss some of the issues that come to mind in addressing each of the two questions
posed above.

Solution: For this, one should note that there is low level of competition in the country amongst
manufacturers in comparison to the Asian countries; there is lack of public awareness of quality
in Fiji in comparison to many Asian nations, subsistence living in rural area [implies no need to
manufacture and export items, thereby, paying less emphasis on quality related issues, etc.], etc.

2. Why do countries have quality awards?

1. The purposes of the Malcolm Baldrige Award that Fiji is using are to:

 Help stimulate companies to improve quality and productivity for the pride of
recognition while obtaining a competitive edge through increased profits.
 Recognize the achievements of those companies that improve the quality of their
goods and services and provide an example to others.
 Establish guidelines and criteria that can be used by business, industrial,
governmental, and other enterprises in evaluating their own quality improvement
efforts.
 Provide specific guidance for other business enterprises that wish to learn how to
manage for high quality by making available detailed information on how winning
enterprises were able to change their cultures and achieve eminence.

The seven categories [that are amended regularly, etc.] in the Baldrige Criteria for Performance
Excellence and the key issues that are addressed include:

 Leadership: This category examines how an organization’s senior leader’s personal

actions guide and sustain the organization. Also examined are an organization’s
governance system and how the organization fulfills its ethical, legal, and societal
responsibilities, and supports its key communities.

 Strategic Planning: This category examines how an organization develops strategic

objectives and action plans. Also examined is how the chosen objectives and plans
are deployed and changed if circumstances require, and how progress is measured.
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 Customer Focus: This category examines how an organization engages its customers
for long-term marketplace success and builds a customer-focused culture. Also
examined is how the organization listens to the voice of its customers and uses this
information to improve and identify opportunities for innovation.

 Measurement, Analysis, and Improvement of Organizational Performance: This

category examines how an organization selects, gathers, analyzes, manages, and
improves its data, information, and knowledge assets, and how it manages its
information technology. Also examined is how the organization reviews and uses
reviews to improve its performance.

 Workforce Focus: This category examines how an organization engages, manages,

and develops its workforce to utilize its full potential in alignment with the
organization’s overall mission, strategy, and action plans. Also examined is the
organization’s ability to assess workforce capability and capacity needs and to build a
workforce environment conducive to high performance.

 Operations Focus: This category examines how an organization designs its work
systems, and how it designs, manages and improves its key processes for
implementing those work systems to deliver customer value and achieve
organizational success and sustainability. It also examines an organization’s
readiness for emergencies.

 Results: This category examines an organization’s performance results in key

business areas— product and process effectiveness outcomes, customer-focused
outcomes, workforce-focused outcomes, leadership and governance outcomes, and
financial and market outcomes. Performance levels are examined relative to those of
competitors and other organizations providing similar products and services.

3. What are the merits and demerits for organizations participating in the Fiji Business
Excellence Award?

BENEFITS OF QUALITY AWARDS

• Raises the profile of the firm, recognition for excellence
• Generates pride among employees
• Raises national consciousness
• Facilitates sharing of good practices
• Great feedback from peer reviewers
• Opportunity to self-study when preparing application
Detriments
• Lots of effort to prepare the application
• May lose focus to business
• Beware of FORMALISM
• Quite expensive to compete in many countries
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4. What is the role of culture in adopting the Baldrige framework to a particular country?

Solution
A study of national cultural differences can help to understand and explain why the MBNQA has
been adapted in various ways in various countries. Research has shown that the Baldrige award
is better suited to some national cultures than to others. Receptiveness to change differs greatly
among cultures, suggesting the need for countries to adapt their quality award programs to local
conditions to ensure effectively implementing them. Perhaps surprisingly, Baldrige is a better fit
to the national culture of Japan than it is to the U.S. Some of the reasons for this are that the
Baldrige framework was initially influenced heavily by Japanese quality management practices,
and that changes to the criteria over the years are focused on changing U.S. management culture,
not reflecting its current practice. These results provide even more validation of Deming’s
observation related to the Theory of Knowledge, that best practices cannot be copied blindly, but
must be understood and adapted intelligently. This is an important lesson for managing in
today’s global environment.

5. What are some of impacts that the Baldrige program has provided, both in the United States
and around the world?

An economic evaluation study of the Baldrige program by the U.S. Department of Commerce
released in December 2011 estimated the net social value of the Baldrige Performance
Excellence Program. The study concluded that the benefit-to-cost ratio for the group of surveyed
applicants was 820 to 1, supporting the belief that the program creates great value for the U.S.
economy. More importantly, the program changed the way in which many organizations around
the world manage their operations, and helped significantly to bring the principles of TQ into the
daily culture of these organizations. The true benefactors are the customers and other
stakeholders who received better products and services.

Many U.S. states have developed award programs similar to the Baldrige Award. State award
programs generally are designed to promote an awareness of productivity and quality, foster an
information exchange, encourage firms to adopt quality and productivity improvement strategies,
recognize firms that have instituted successful strategies, provide role models for other
businesses in the state, encourage new industry to locate in the state, and establish a quality-of-
life culture that will benefit all residents of the state. Jim Collins (author of Good to Great: Why
Some Companies Make the Leap . . . and Others Don’t) endorsed Baldrige with the following
statement: “I see the Baldrige process as a powerful set of mechanisms for disciplined people
engaged in disciplined thought and taking disciplined action to create great organizations that
produce exceptional results.”