A group of governmental policy planners of Country ABC have just asked a foreign quality consultant to advise them on possible quality standards that they should consider applying for. Country ABC is a relatively medium sized developing country that relies a great deal on its foreign exports to bring in revenue to its growing economy. The size of the exports was fairly high until a small decline was observed in the last year.
Economists have argued that a possible explanation of this is that foreign companies were growing less willing to purchase goods/services from Country ABC because they had no means of quality assurance to ensure that the goods/services purchased were indeed qualified to be sold in international markets. Company ABC’s government has decided to make a proactive move based on the economists’ suggestion and has agreed to consider applying for a quality award.
However, they are currently in a dilemma as to which of the following steps to take – With the advent of the trend towards economic globalization and the concurrent increase in international trade, the need to compete on a worldwide scale has been recognized by governmental agencies all over the world. Initiatives have been launched to help local industries in improving their competitive edges, such as the funding of studies to identify key factors of success and to find ways to spread this knowledge to business organizations.
National quality awards have been sponsored by governmental agencies to emphasize that survival in global competition requires improvement to world-class status. The evaluation criteria have been publicized to provide guidelines for organizations to measure their processes. The public recognition of outstanding achievements by award winners has been conducted to serve as examples of the benefits of applying the principles of Total Quality Management. However, not all countries have caught on to this concept.
Many have understood it and appreciated it but not gone along to either adopt it or then create one of their own. Those that have developed their own Business Excellence Model have done so by using the evaluation criteria of the developed nations such as USA, Europe and Australia. 1 The next section of this report will provide a brief description of each of the above-mentioned national quality awards.
The European Foundation for Quality Management is a not-for-profit membership foundation that manages and directs the European Quality Awards and Levels of Excellence and run training courses, workshops, work groups and special projects on many different types of business improvement disciplines, tools and techniques. It was founded by the presidents of major European companies such as Philips & Volkswagen with the endorsement of the European Commission. This was initially designed to develop a framework for quality for European companies to adhere to in line with the Malcolm Baldrige Model in the USA and the Deming Prize in Japan.
The European Model for Business Excellence – now called the EFQM Excellence Model – was introduced in 1991 as the framework for organisational self assessment and as the basis for judging entrants to the European Quality Award, which was awarded for the first time in 1992. In all the three awards mentioned, companies operating within that country and/or companies that have headquarters based in those countries can apply to be evaluated for the award. The individual awarding bodies actually encourage companies to apply for the same.
However, the actual levels of encouragement and user-friendliness of the systems differ from award to award. The European and American based awards have the same mission that they stand by however, in both case, only 20% of the applications actually move forward to the site visit stage. 5 The ABEA, on the other hand, nearly always accompanies a site visit with the application, as mentioned in the table. From this itself it is quite evident that in the Western culture, the application and implementation of the award criteria is used as a basis of learning and not necessarily to prove something.
In Japan, for example, this would be totally shunned upon. No company in Japan would put forth an application to be evaluated for the Deming Prize unless they were internally fairly sure that they would pass the evaluation. Having the site assessors come and examine the firm and then fail them would result in an absolute shame or ‘loss of face’ for the Japanese firm. The European and American firms, on the other hand, would use the feedback obtained in case of not qualifying, as identification of areas for improvement. 3. 2 WHO FUNDS THE PROGRAM?
Earlier it was identified that the MBNQA and EQA were funded primarily or subsidized largely by the nation’s government and or governing commissions. The ABEA here offers a stark contrast of being completely applicant payable. This gives us a further insight into the insights of the governing countries involved. In America and Europe, the government itself takes a great interest in being able to improve the quality of firms operating there and hence make it the tax payer’s responsibility to pay for the quality they would like to receive in the products and services they use.
In Australia, however, the government does not intervene in this and makes it out to be the responsibility of individual firms to apply and maintain levels of quality to better serve their customers. While the former quality agencies make the criteria available freely on the websites for companies to download and self-assess themselves on these criteria, Australia requires applicants to pay even for the self-assessment criteria.
While this may help the assessors to receive only genuine and serious evaluation requests, it may also act as a deterrent for firms to consider applying for the same. After all, how can they decide the feasibility of such a move when they cannot even access the criteria for free. It may indeed cause some firms to believe that the entire process is indeed a financial drain right from downloading the assessment criteria.