This prize, like the Deming prize, is named in honour of someone regarded as being influential in the development of improvement in organisations. Malcolm Baldrige was the US Secretary of Commerce from 1981 until his death due to a rodeo accident in 1987, the year that the MBNQA was created as an American equivalent of the Deming prize. Specifically, this award was a direct response to the threat that was being perceived with regard to the quality of Japanese imports into America.
The creation of the MBNQA followed a number of studies ± carried out in 1982 and 1983 and sponsored by the American government ± into howto attempt to raise productivity and quality to compete with Japanese imports. As these studies concluded (most notably one by the American Productivity and Quality Cen- tre), there was a need to create an award which encouraged orga- nisations to recognise the need to adopt TQM in order to create competitive advantage. As a result, a committee chaired by Mal- colm Baldrige was established in 1985 to develop such an award.
Following work by this committee, the Malcolm Baldrige National Quality Improvement Act became lawon 20 August 1987. The MBNQA encourages the following:
Understanding of the requirements for performance excellence and competitiveness improvement, and sharing of information of successful performance strategies and the benefits to be derived from using these strategies. (Oakland, 1999: p. 97)
There are, in the MBNQA, seven main criteria and sub-criteria by which assessment of an application is carried out; these are shown in Table 7.1. The way in which these criteria relate to one another is
Table 7.1 The Malcolm Baldrige National Quality Award
Criteria/sub-criteria Sub-criteria score Criteria score 1. Leadership
1.1 Senior executive leadership 45
1.2 Leadership system and organisation 25 1.3 Public responsibility and corporate
citizenship 20 90
2. Information and analysis
2.1 Management of information and data 20 2.2 Competitive comparisons and
benchmarking 15
2.3 Analysis and uses of company-level
data 40 75
3. Strategic planning
3.1 Strategy development 35
3.2 Strategy deployment 20 55
4. Human resources development and management 4.1 Human resources planning and
evaluation 20
4.2 High-performance work systems 45
4.3 Employee education, training and
development 50
4.4 Employee well-being and satisfaction 25 140
5. Process management
5.1 Design and introduction of quality
products and services 40
5.2 Process management: product and
service production and delivery 40 5.3 Process management: support services 30
5.4 Management of supplier performance 30 140
6. Business results
6.1 Product and service quality results 75 6.2 Company operational and financial
results 110
6.3 Human resource results 35
6.4 Supplier performance results 30 250
7. Customer focus and satisfaction
7.1 Customer and market knowledge 30
7.2 Customer relationship management 30 7.3 Customer satisfaction determination 30
7.4 Customer satisfaction results 160 250
Total points 1000
shown in Fig. 7.2. As this diagram shows, each criterion is part of one of three elements:
(1) Driver (2) System (3) Goals
7.5.1 Driver
This element applies to what the managers in the organisation do in order to create direction, vision and objectives that will encourage excellence.
7.5.2 System
This is the assembly of all processes and mechanisms (procedures) that exist in order to ensure the organisation is capable of achieving customer expectations. As such, the use of a recognised quality assurance system would be helpful.
7.5.3 Goals
The aim of the driver and system is to achieve its objectives (goals).
These may be of two types:
DRIVER
SYSTEM GOALS
1. Leadership
Information and systems
Strategic planning Human resources development and management Process management 2.
3.
4.
5.
Business results
Customer focus and satisfaction 6.
7.
Fig. 7.2 The Baldrige Award criteria framework.
(1) Customer and marketplace performance ± providing what is required at high value and appropriate cost in order to achieve satisfaction
(2) Business performance ± the ability to attain all financial and non-financial objectives
As Porter and Tanner explain, these criteria have been developed on the basis of 11 core values and concepts which provide the
`foundation for integrating overall customer and [organisational58] operational performance requirements' (Porter & Tanner, 1996:
p. 58). These core values and concepts are as follows.
(1) Customer-driven quality
This is the effective measure of the customer's perception of the quality of the products or services that they receive. In carrying this out, the organisation should showwhat they are doing to satisfy existing customers, but also, to proactively identify future expectations.
(2) Leadership
Assessment of leadership under MBNQA considers how managers assist in setting strategic direction which ensures that there are `clear and visible values [which] develop high expectations' (Porter & Tanner, 1996: p. 7). This aspect of the model is, not surprisingly, regarded as being an essential part of creating an appropriate culture for organisational excel- lence. After all, if managers are unable (or unwilling) to be role models in this process, why should others be prepared to be committed to improvement efforts.59
(3) Continuous improvement and learning
The need to continuously improve is, of course, the bedrock of using benchmarking. Any organisation using MBNQA would, if the intention was to submit an application for assessment, showhowit investigates every aspect of its cur- rent methods of operation. The objective is, naturally, to search for ways of carrying them out more efficiently or in a way that ensures greater responsiveness to customer expec- tations. The word `learning' was added to this section in 1995 in order to emphasise the need to encourage every person to engage in attempting to learn howthe activity they carry out could be improved by finding out howprocesses are carried out elsewhere.
(4) Employee participation and development
If the ability of management to provide appropriate leader- ship is essential in creating an organisational culture in which excellence will flourish, then the corollary of this must be the way in which people are encouraged to be actively involved in the efforts needed to create improvement. In this section of MBNQA, there is an expectation that support will be pro- vided in the form of training and career development to assist employees to contribute to improvement of the organisation.
As a consequence, mechanisms exist to allowpeople to improve themselves.
(5) Fast response
This is something that MBNQA looks for in terms of howthe organisation is able to develop newmethods of operation, newproducts or services, and most especially, ability to get these to the customer more quickly.
(6) Design quality and prevention
In assessing an organisation under this section, there will be analysis of howwell quality and reliability is designed into the product or service as it is being developed. It has been found that the more time that is spent getting this stage right, the less money will be wasted later on attempting to rectify problems later ± in terms of both direct costs and customer dissatisfaction.
(7) Long-range view of the future
In this section of MBNQA, the emphasis will be on the abil- ity of the organisation's management to anticipate and cope with changes that occur in any context which may impact on the customer's needs or expectations. Organisations that, on the basis of good `intelligence', are able to predict change will be in a much better position than those who wait until it occurs.
(8) Management by fact
This section analyses the basis for decision-making; the assumption being that where robust processes and methods exist, the quality of information will be better. This section of MBNQA resonates with the central message contained in this book, i.e. that if improvement is to be seen to be occurring, its existence must be shown on the basis of objective data, not guesses or hunches.
(9) Partnership development
The word `partner' is one that has become commonplace in the lexicon of business ± whether this applies to customers or suppliers. The belief is that where partnerships exist with others, understanding will be enhanced. MBNQA assessment is looking for evidence of the existence of partnerships that are developed with the aim of creating improvement throughout the supplier chain.
(10) Corporate responsibility and citizenship
Effectively, this part of MBNQA considers the way that those who manage the organisation consider the impact of the activities undertaken upon all those who may be affected.
This responsibility includes those employed directly or indirectly by the organisation ± stakeholders. It will also include the local community in terms of residents near offices, factories or sites. If an organisation also shows that it creates links with education, by providing information and assis- tance, for instance, this would be viewed positively.
(11) Results orientation
This section of MBNQA is crucial for every organisation; that what they set out to do, they effectively achieve. For profit- making organisations, achieving adequate profit (or alter- natively, return on investment) is usually a prerequisite to continued survival. However, non-profit-making organisa- tions also set targets to be achieved. The ability to achieve anticipated results will be a key measure of the success of an organisation ± particularly if this organisation exists to assist certain members of society.
The British Quality Foundation60cites findings of research into the use of the MBNQA model by the General Accounting Office in a publication entitled Management Practices ± US Companies Improve Performance through Quality Efforts(GAC, 1992) which suggests that there are definite benefits:
high scoring MBNQA applicants had improved their perfor- mance in terms of employee relations, productivity, customer satisfaction, market share and profitability. (Cited in BQF, 1998a:
p. 35)