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Usefulness of the EFQM excellence


model: Theoretical explanation of
some conceptual and methodological
issues
a
Faculty of Economics Borut Rusjan
a
Department for Management and Organisation, University of
Ljubljana, Faculty of Economics, Ljubljana, Slovenia
Version of record first published: 16 Aug 2006.

To cite this article: Faculty of Economics Borut Rusjan (2005): Usefulness of the EFQM excellence
model: Theoretical explanation of some conceptual and methodological issues, Total Quality
Management & Business Excellence, 16:3, 363-380

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Total Quality Management
Vol. 16, No. 3, 363 380, May 2005

Usefulness of the EFQM Excellence


Model: Theoretical Explanation of Some
Conceptual and Methodological Issues

BORUT RUSJAN
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Department for Management and Organisation, University of Ljubljana, Faculty of Economics, Ljubljana,
Slovenia

ABSTRACT This paper assesses the usefulness of the EFQM Excellence Model for decision-making
on organizational improvement activities. The paper does this by studying the procedures of the
EFQM model in practice, and based on definitions of the object, criteria for decision making,
the object goals and levers for the EFQM Excellence Model and their relationship this paper
discusses some methodological issues related to the use of the EFQM model. These procedures
are studied in order to analyse their appropriateness for identification of problematic situations
and, based on that, for identification of problems. The paper concludes that the EFQM
Excellence Model is appropriately structured to perform the first phase of the analysis, i.e.
identification of a problematic situation, but on the other hand the model does not offer any
specific guidelines about the second phase, i.e. problem identification. The model offers no
structured approach about how to exploit strengths or about how to classify or prioritize areas of
improvement. From these methodological questions of applicability of the EFQM model two
important conceptual issues arise. The first conceptual issue is related to the question of whether
the organizational excellence is appropriately reflected in the sub-criteria used for the purpose of
measuring excellence. The second conceptual issue is that of clarifications of the relationship
between decisions made on the basis of the EFQM model self-assessment results and other
strategic, business, organizational, etc, decisions.

KEY WORDS : EFQM excellence model, self-assessment, organizational analysis

Introduction
How to assess the performance of a company using an excellence model, and what benefits
it brings to an organization, are subjects discussed frequently in the literature (Samuelsson
& Nilsson, 2002). The EFQM excellence model approach contains a number of criteria
that are divided into sub-criteria and are designed to address every aspect of a
company. The EFQM Excellence Model was introduced in 1991 as the framework for

Correspondence Address: Borut Rusjan, Department for Management and Organisation, University of Ljubljana,
Faculty of Economics, Kardeljeva ploscad 17, 1001 Ljubljana, Slovenia. Email: borut.rusjan@ef.uni-lj.si

1478-3363 Print=1478-3371 Online=05=03036318 # 2005 Taylor & Francis Group Ltd


DOI: 10.1080=14783360500053972
364 B. Rusjan

organizational self-assessment and as the basis for judging entrants to the European
Quality Award, which was awarded for the first time in 1992 (www.efqm.org). A
number of factors have encouraged many western countries to introduce quality awards.
Among these were: the importance of quality for competitiveness, and contribution of
benchmarking and self-assessment techniques to improving performance (Ghobadian &
Woo, 1996). The award models are used extensively throughout the world by leading
companies and can thus be used for international benchmarking comparisons (Leonard
& McAdam, 2002).
The EFQM Excellence Model is a non-prescriptive framework that recognizes there are
many approaches to achieving sustainable organizational excellence. Excellence can be
defined as the outstanding practice in managing the organization and achieving results
based on fundamental concepts, which include: results orientation, customer focus, leader-
ship and constancy of purpose, processes and facts, involvement of people, continuous
improvement and innovation, mutually beneficial partnerships, and public responsibility.
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Behaviours, activities or initiatives based on these concepts are often referred to as Quality
Management.
The EFQM model is based on nine criteria and argues that excellent results with respect
to Performance, Customers, People and Society are achieved through Leadership driving
Policy and Strategy, People, Partnership and Resources, as well as Processes (see
Figure 1). The arrows emphasize the dynamic nature of the model. They show that inno-
vation and learning help to improve enablers, which in turn lead to improved results.
The self-assessment process based on the EFQM Excellence Model allows the organiz-
ation to discern its strengths, as well as areas in which improvement can be made. There-
fore, the EFQM Excellence Model could be used as an engine of improvement, as
comparisons of result with internal targets, competitors or similar organizations and
best in class organizations could (should) be used to prioritize and drive improvement.
Ideally, the self-assessment process culminates in planned improvement actions, which
are then monitored for progress. Regular use of self-assessment ensures that sound

Figure 1. The EFQM excellence model


Usefulness of the EFQM Excellence Model 365

approaches are used and developed in the organization (Samuelsson & Nilsson, 2002). The
emphasis of self-assessment should therefore be on diagnostic self-assessment instead of
on determining a score on the scale of excellence (however, this latter emphasis is created
by the other use of the EFQM model a score from which a prize can be awarded). The
diagnostic self-assessment should be used whenever the aim is identifying organizational
causes of performance gaps, or more generally, areas for improvement (Conti, 2002).
Literature suggests that a self-assessment tool based on business excellence models is
helpful, as ongoing self-assessment using the EFQM excellence model, for example, is
systematically helping companies identify and correct gaps in their performance. The
use of a recognized model will help carry out self-assessment quickly and effectively
(Lee & Quazi, 2001).
Despite the general acceptance of the EFQM model among academics and practitioners,
researchers warn that organizations have encountered problems applying the model (Black
& Crumley, 1997; Sandbrook, 2001; Lee & Quazi, 2001; Hughes & Halsall, 2002: Li &
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Yang, 2003). Kanji warns that despite the fact that TQM and Business Excellence became
very popular ideas during the last decade, organizations face considerable difficulties and
problems when trying to measure their overall performance in a bid to identify strengths,
as well as areas for improvement, and to prioritize efforts (Kanji, 2001).
The purpose of the paper is to identify the possible cause of problems in the application
of the EFQM model, by studying the self-assessment procedure of the EFQM model. The
self-assessment procedure of the EFQM model will be analysed based on the comparison
with a construct of an idealized procedure the generalized theoretical analytical pro-
cedure. This will result in identification of deviations of the EFQM model procedure
from the generalized theoretical procedure. The assessment of these deviations will
allow us to define weaknesses of the EFQM self-assessment procedure and, based on
these, to identify problems in the application of the EFQM model. The methodology
used in the paper follows its purpose. First we present the self-assessment procedure of
the EFQM Excellence Model. This is followed by a discussion about the procedure of
an ideal the generalized theoretical method of analysis. The comparison between the
two procedures will enable us to identify some methodological and conceptual issues
related to analysis based on the EFQM Excellence Model.

Use of the EFQM Excellence Model as an Analytical Self-assessment Tool


Self-assessment is a comprehensive, systematic and regular review of an organizations
activities and results, which are referenced against the EFQM Excellence Model. The
self-assessment process allows the organization to discern clearly its strengths, as well
as areas in which improvement can be made and, in addition, allow it to measure progress
periodically (www.efqm.org). In the EFQM model, nine criteria need to be assessed to
generate a final score. Furthermore, there are 32 sub-criteria available under the nine cri-
teria and many areas to address (Li & Yang, 2003). Therefore, the EFQM excellence
model is structured into three levels. The top level with the criteria and the second level
with the sub-criteria contain fixed elements that have to be considered when an organiz-
ation strives for excellence. The third level of the EFQM process is completely open and
its content should be defined by the company itself (Seghezzi, 2001). According to the
present scoring system, assessors give a score to each sub-criterion against specific guide-
lines detailed in the latest version of the Model. The score is a decision made by individual
366 B. Rusjan

assessors through comprehensive analysis of all the information that is provided to them.
The assessment represents a judgement of an organizations achievements across a range
of areas relating to each sub-criterion in the EFQM Excellence Model.
Criteria included into the EFQM Excellence Model are divided into two categories:
Enablers and Results. Enabler criteria are concerned with how organizations undertake
key activities, and how results are being achieved. Results criteria are concerned with
what the organization has achieved and is achieving.
The self-assessment in an EFQM Excellence model is based on RADAR logic. The
elements of RADAR are Results (used when assessing the Results criteria), and Approach,
Deployment, Assessment and Review (these are used when assessing Enabler criteria).
Assessors score each Result sub-criterion by consideration of the excellence and scope
of the results. With regard to the Enabler sub-criterion, scoring of the Approach takes
account of the soundness of the method or process described and the extent to which
the method or process described is integrated. Scoring of Deployment takes account of
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the extent to which the approach has been implemented across different areas and
layers of the organization and the extent to which the deployment of the approach is
systematic. In scoring the Assessment and Review, assessors will consider measurements
taken, learning activities that follow, and the improvements that have been identified,
prioritized, planned and implemented. Taking account of all the mentioned factors, the
assessors use the RADAR scoring matrix to give percentage scores to approach, deploy-
ment, assessment and review, deriving an overall percentage score to each of the Enabler
sub-criteria.
Regarding the assessment of results criteria, information provided by the organization
should include:

. Parameters used to measure results and, for each parameter, trends of data over, ideally,
three years or more.
. The rationale behind the parameters presented and how they cover the range of a com-
panys activities.
. Evidence of the relative importance of each of the parameters presented.

Regarding the assessment of enabler criteria, the following should be described


(www.efqm.org):

. The adopted Approach: the methods or processes used to address the sub-criterion, their
rationale and the way they interconnect with policy and strategy and other criteria in the
EFQM model.
. The extent to which the approach has been deployed vertically through all levels of the
organization and horizontally through all areas and activities.
. The steps in place to Assess and Review the approach and the deployment of the
approach.

There are a number of methods for self-assessment suggested by the EFQM model, such
as questionnaire, pro forma, matrix, workshop, and award simulation approaches. The pro
forma approach for example involves producing 32 forms, one for each sub-criterion of the
EFQM model. All forms are divided into sections in which the sub-criteria are described.
Usefulness of the EFQM Excellence Model 367

Sections for strengths and areas for improvement regarding each sub-criterion should
be filled in and verified in the evidence section. (Samuelsson & Nilsson, 2002).
The EFQM Excellence Model emphasizes that its full power is derived from an under-
standing of the relationships between the criteria. The model is based on the assumption of
connection between results achieved (presented in the results criteria) and actions to
improve performance (and presented in the enabler criteria). Comparisons of results
with internal targets, competitors or similar organizations and best in class organizations
are desirable and should be used to prioritize and drive improvement. Comparisons of Key
performance results (criterion 9) with internal targets and competitors for example could
lead to modifications of Policy and strategy (criterion 2). The model also assumes there
are relationships between Enablers criteria. For example, relationships can be expected
between Policy and strategy and all other enabler criteria and the results presented in
the results criteria.
There are various ways of identifying strengths and areas for improvement during
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assessments. Using pro forma, workshop, and award simulation approaches for self-
assessment by the EFQM model leads to identification of strengths and areas for improve-
ment. Another approach used in the EFQM model to identify strengths and areas for
improvement, without implementing the scoring procedure, is Pathfinder. Pathfinder is
used at the Results and Enablers criteria level or at the sub-criteria level. In the Pathfinder
procedure, answers to a predetermined set of questions have to be given for a specific
criteria or sub-criteria. The questions used in the Pathfinder procedure should be used
as a help and guidance on the path to achievement of business excellence. Li & Yang
(2003) propose two logical and systematic ways for identifying strengths and weaknesses:
the benchmarking method and the detailed analysis method. The benchmarking method
uses the chosen benchmarking grade as a gauge to identify strengths and areas for
improvement. By identifying all the basic attributes assessed higher than the benchmark
grade, the organizational strengths can be identified. In the same way, areas for improve-
ment can be identified by focusing on all the basic attributes assessed lower than the
benchmark grade. Even when an attribute is assessed above average grade, it is still
open to improvement. Therefore, to give a detailed assessment, the detailed analysis
method is an alternative method to identify strengths and areas for improvement. By
using the detailed analysis method, strengths are identified for all attributes unless the attri-
bute is assessed as grade 2 (out of five for example) or below. On the other hand, areas of
improvement are identified for all attributes unless the attribute is assessed as grade 5. By
going through this practice, organizations being assessed will have a detailed picture of
how their business processes are managed against the EFQM criteria.

Generalized Method of Analysis


This section develops a generalized theoretical approach to analysis against which the
EFQM model will then be compared. The objective of analysis is to support the
decision-making process; the effectiveness of a specific analysis can be evaluated based
on its usefulness for decision-making. As a result we must first define the relationship
between an analysis and a decision-making process as a basis for determining the role
of the analysis and subsequently for developing a generalized theoretical approach to
the analysis.
368 B. Rusjan

Decision-making is always related to a certain object, such as a business unit, business


function, department, etc. The purpose of decision-making pertaining to a specific object
is to meet a specific decision-making criterion to the greatest possible extent. Since the
purpose of decision making is the optimization of a specific decision-making criterion,
this decision-making criterion has to be predetermined to the process of decision-
making. In order to meet a specific decision-making criterion to the greatest extent
possible, we have to identify relevant goals for the object of decision-making through
which we can influence the result related to the chosen decision-making criterion. More-
over, to ensure efficient decision-making, we also have to identify relevant levers for the
object of decision-making, with which we can influence the results related to the relevant
goals. In order to make appropriate decisions, we have to know the relevant goals that lead
to the implementation of the specific decision-making criterion for the object of decision-
making, and the relevant levers that have an impact on the goals in question.
The goals and levers of the object of decision-making that are relevant for meeting a
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specific decision-making criterion to the greatest possible extent have to be studied in


the analysis. The objective of the analysis is to identify problems in performance,
because these show the levers with which certain decision-making criteria can then be
improved most effectively. Problems in performance constitute the primary reason for
decision-making.
Problem identification is, on one hand a result of analysis, while on the other it rep-
resents the starting point for decision-making about improvement measures. As a result
of the identification of problems, levers that will have to be changed in order to
improve the results of the relevant goals are defined. What follows is the identification
of alternatives to changing levers. However, the answer to the question of how the
levers are changed by improvement measures is not a part of the analysis process, but a
part of the decision-making process. Decisions are therefore choices between different
possible solutions and improvement measures regarding the relevant levers for the
object of decision-making, and simultaneously choices between possible results regarding
the relevant goals for the object of decision-making. The objective of decision-making is
to choose appropriate goals and paths (levers) in order to satisfy the purpose of decision-
making. A generalized process of decision-making, which follows the identification of
problems, would therefore consist of two phases:

(1) Identifying and developing possible alternative solutions for solving problems by
changing levers and, simultaneously, results related to the goals of the object of
decision-making.
(2) Selecting the best alternative solution that meets the decision-making criterion to the
greatest possible extent.

Analysis can be distinguished from decision-making, as the purpose of an analysis is to


guarantee effective decision-making about the specific object, while the purpose of
decision-making is to meet the decision-making criterion relevant to that object to the
greatest possible extent. A decision-making criterion stands outside the process of study-
ing the object and, as such, defines the economic purpose of an analysis; relevant goals and
levers of the object, on the other hand, define the organizational purpose of an analysis. We
can therefore distinguish between economic and organizational purposes of an analysis on
the basis of the purpose and objective of decision-making. The economic purpose of an
Usefulness of the EFQM Excellence Model 369

analysis is related to the purpose of decision-making; the organizational purpose of an


analysis is related to the objective of decision-making. The economic purpose of an analy-
sis relates the analysis to the decision-making criterion, and can be stated as guaranteeing
that the decision-making criterion is met to the greatest possible extent. The organizational
purpose of an analysis is to guarantee appropriate decision-making about the relevant
goals and levers of the object of decision-making in order to satisfy the economic
purpose of analysis. The objective of an analysis, meanwhile, is to acquire knowledge
of the object of decision-making, as this represents the basis of effective decision-
making that should guarantee meeting of decision-making criteria (Rusjan, 2000). The
objective of an analysis can therefore be defined as learning of those facts (levers)
about the object that have an impact on the object goals, and consequently getting to
know different possible alternatives to meeting the object decision-making criterion to
the greatest extent possible.
Systematic studying of the object of decision-making requires an appropriate method.
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Generally, the method of study is defined as a logical path leading to the knowledge
based on thinking procedures determined in advance. Such a path is analysis, which
includes two basic phases (Rusjan, 2001):

(1) Identification of problematic situations.


(2) Identification of problems.

In the first phase of analysis identification of problematic situations monitoring is


used to identify facts about levers that are then compared with bases chosen for compari-
son. Data are collected about those levers that have meaningful influence on the object
goals. The collected data enable us to describe the present state of different levers. Proble-
matic situations are then identified by comparing the present state of different levers with
different comparison bases. Levers expressed in quantitative or qualitative terms are com-
pared with theoretical models, recommendations, concepts and methods, with past experi-
ence, or with other companies. Deviations of levers from comparison bases lead to the
identification of problematic situations by evaluating the importance and influence of
identified deviations. Problematic situations are determined by the present state of differ-
ent levers, which influences the present results of the relevant goals. An analysis attempts
to identify the levers that have meaningful influence on the results of relevant goals, as
well as their impact, be it positive or negative. Deviations related to each lever can
have either a positive, neutral or negative influence on the results related to specific
goals. With the evaluation of the importance and influence of deviations, strengths and
weaknesses are identified. Strengths (weaknesses) are represented by those levers that con-
tribute positively (negatively) to the achievement of the relevant goals.
The second phase of analysis identification of problems is the diagnosis of the
present performance in which problems are identified on the basis of an explanation of
problematic situations. Decisions cannot be based on the problematic situations them-
selves, because the problem is not known yet. In order to identify the problem, the relation-
ship between the identified deviations for levers must be analysed. Certain deviations can
be isolated, but there is often a relationship between deviations that has to be studied.
Therefore, problematic situations have to be studied as an interconnected system. That
means we examine them, classify them according to their impact, and look for relations
between problematic situations, which all reveal the most important problematic
370 B. Rusjan

situations. We are interested in the cause-and-effect relationship between different proble-


matic situations.
In the process of problem identification, the findings for levers have to be synthesized,
which leads to the identification of the basic and the most important deviations. Moreover,
problems can be identified only after connecting the explained problematic situations with
the goals of the object of decision-making. This can be done by asking how it is possible to
improve the level of achievement of object goals with regards to the identified present state
of the object. The improvement of the level of achievement of the object goals is deter-
mined by a relevant decision-making criterion. Problem identification is therefore a
result of relating the impact levers to the goals of the object. In case there are more
goals that are relevant to the analysis, as decision-making criterion can be bettered by
improvements made in several goals, we have to consider the possible relationship
between the goals. A relationship can be either a complementary or a trade-off one. A
complementary relationship between two goals means that changing a specific lever
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will improve results in both goals. On the other hand, a trade-off relationship means
that changing a specific lever will improve results related to one goal, whilst worsening
results related to the other goal. Identification of problems therefore requires recognition
of the type of relationship between the levers, between the goals, as well as between the
levers and the goals.
Processes (methods) of decision-making and analysis are generalized; however, the
content of decision-making and analysis can be different as it is dependent on the type
of decision-making. There are many classifications of decision-making, such as: business
and business function decision-making; long and short-term decision-making; strategic,
tactical and operational decision-making; business and organizational decision-making;
etc. The different content of decisions means that there are differences in the purpose of
decision-making, and consequently its objective. This also means that economic and
organizational purposes of various analyses will be different. Different content of
decision-making therefore leads to different models of analysis, based on assumptions
of the relevant goals of the object and their impact levers. Operationalizing the content
of decision-making leads to operationalization of the economic and organizational
purpose of the analysis. Different decision-making criteria for the same object of
decision-making means that different goals (and levers) are taken into account, which
leads to different organizational purposes of analysis. Concrete studying of an object is
defined by the needs of the decision-making process, which is supposed to improve
results in the decision-making criterion.
The decision-making criterion for business analysis at the business unit level for
example is usually ROA. Goals that are relevant in such analysis are elements of
income, costs and assets employed. Relevant levers include quantities and prices of differ-
ent products sold, markets, number of employees, cost of energy, scrap, work-in-process
inventory, capacity related to specific machines and many others. The economic purpose
of such business analysis is to guarantee the maximization of ROA, while the organiz-
ational purpose is to guarantee appropriate decision-making about the above mentioned
goals and levers. The objective of such analysis is therefore to study the above-mentioned
levers and goals, and consequently get to know different possible alternatives to maximiz-
ing ROA.
If we compare such business analysis to the strategic analysis at the same business unit
level, we can see that, because of different decision-making criteria for the two analyses,
Usefulness of the EFQM Excellence Model 371

different goals (and levers) will be taken into account. This also means that economic and
organizational purposes of the two analyses will be different. The economic purpose of
strategic analysis at the business unit level is usually to guarantee the maximization of
a competitive advantage. Relevant goals in such analysis are, for example, product
quality, speed of introducing new products, speed of delivery, flexibility, etc. Relevant
levers are, for example, the number of design engineers in the R&D department, use of
SPC, system of production planning, level of capacity, type of machines, process
layout, and many more.

Definition of the Economic and Organizational Purpose for the


EFQM Excellence Model
By applying the generalized method of the analysis to the EFQM Excellence Model, we
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try to define:

. the object of analysis and decision-making,


. relevant decision-making criterion for that object, which defines the purpose of
decision-making concerning goals and levers,
. relevant goals of the object as the means to achieve the decision-making criteria,
. relevant levers as the means to achieve the object goals.

The object of analysis in the EFQM model is an organization. The analysis is usually
done at the strategic business unit level, because of the enabler criteria related to Policy
and Strategy, as Policy and Strategy is generally defined at that level.
The hierarchical structure of the EFQM model is represented in Figure 2. Companies
are assessed regarding their approaches, the depth of deployment in their approaches,
and performance results associated with operations, quality and customer satisfaction.
Assessors make a conscious effort to link approaches to results. Different companies
may use different approaches and the performance results that are assessed would
mostly be linked to the stated approaches. This will ensure that companies are measured
on the merit and effectiveness of their approaches and deployments (Lee & Quazi, 2001).
We see in Figure 2 that the economic purpose of the EFQM model is to help achieve
organizational excellence. Decisions, based on the results of the self-assessment with

Figure 2. Hierarchy structure of the EFQM excellence model


372 B. Rusjan

the EFQM model try to improve organizational excellence. Therefore, organizational


excellence as a decision-making criterion should be maximized through decisions.
Definition of the relevant goals and levers of the object is important as these determine
the organizational purpose of analysis. The organizational purpose of the EFQM model is
to guarantee appropriate decision-making about the areas to address (levers) and the
results related to sub-criteria in order to improve organizational excellence. Organiz-
ational excellence is improved through improvement of results in 32 sub-criteria of the
model. Goals that are determined as the result of the decision-making process based on
EFQM model are therefore related to improvements of scores related to specific sub-
criteria (criteria). When deciding about improvements in goals, relationships between
all goals have to be considered. We explained earlier that there are two types of relation-
ships among goals: the complementary and the trade-off relationship. For example, the
relationship between the sub-criteria related to the People management criterion, and
the sub-criteria related to the People results criterion, may represent an example of comp-
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lementary goals. The relationship between the Society results criterion and the Key
performance results criterion may represent an example of possible adversary goals. In
order to maximize organizational excellence, relationships between goals have to be
considered, which of course is not an easy task because of the many goals involved,
and because all relationships between the goals are not clear.
Levers (areas to address) that have an impact on object goals are determined with the
RADAR assessment approach, as explained before. Levers are specified for Results cri-
teria and Enablers criteria. If we want to improve goals related to Results criteria, we
have to improve both levels of achievement and the scope of the results. If we want to
improve goals related to Enablers criteria, we have to improve soundness of the Approach,
the extent of integration of the Approach, the extent to which the Approach was Deployed
and to which the deployment is systematic, and finally we have to improve measurement,
learning and improvements regarding Assessment and Review of the approach and its
deployment. Considering the possible improvement activities related to specific levers,
we have to take into account that a change in a specific lever may have an influence on
more than one goal. This means that changing a specific approach can have an impact
on performance related to more sub-criteria (criteria). For example, changing a specific
approach in the People management criterion can also have an impact on the People,
Customer and Key performance results. The facts about characteristics of areas to
address can be classified into strengths or weaknesses on the basis of their positive or nega-
tive influence on the sub-criteria performance. If there is a trade-off relationship between
two sub-criteria, a certain area to address might represent a strength regarding its impact
on one sub-criterion, and a weakness regarding its impact on another criterion.
The key in using the EFQM assessment model is to identify the relationship between the
levers, between the goals, as well as between the levers and the goals, which leads to dif-
ficulties in the use of the self-assessment results. These difficulties are explained in the
next section.

Methodological Issues Related to Analysis Based on the EFQM Excellence Model


Based on definitions of the object, the criterion for decision-making, and the object goals
and levers for the EFQM Excellence Model and their relationships, we will discuss some
methodological issues related to the use of the EFQM model. Some conceptual issues will
Usefulness of the EFQM Excellence Model 373

arise from this methodological question of applicability of the EFQM model. These are
discussed in the next section.
To assess the usefulness of the EFQM model for decision-making on improvement
activities, the implementation of both phases of analysis has to be studied. We will there-
fore look at the procedure of the EFQM model in order to analyse its appropriateness for
identification of problematic situations (phase 1) and, based on that, identification of
problems (phase 2).
Identification of problematic situations means identifying performance facts and com-
paring them with a basis chosen for comparison. In the EFQM model, scores for the sub-
criteria are assigned on the basis of the organizational achievements across a range of areas
relating to each sub-criterion. It is at the Areas to address (levers) level that evidence
about the RADAR elements is actually collected. At this level, comments are given to
explain how assessment results for specific sub-criterion are determined. At this level of
the EFQM process, monitoring is used to identify facts about levers. In each Area to
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address, strengths or areas for improvement (weaknesses) are identified based on compari-
son of the present situation, normally by comparing observed practices with the different
theoretically prescribed concepts and good practice used in other units or organizations.
This comparison leads to the identification of deviations, which can be assessed positively
or negatively given their particular impact on the sub-criteria results, and consequently
defined as either strengths or areas for improvement. This procedure is considered to
be in accordance with the identification of problematic situations in the generalized
method of analysis.
We explained that identification of problems requires an explanation of problematic
situations by determining the relationship between deviations (for example a relationship
between deviations for a lever of a specific enabler criterion and a lever for a specific result
criterion) and their importance for specific levers (how the deviation of a lever affects the
performance related to different goals). This means that a demonstrable connection
between the levers (areas to address) and the goals (sub-criteria and criteria) is needed.
Identification of problems determines the levers that will have to be improved in order
to achieve improvement in performance related to object goals. The final decision on
the improvement of specific goals and levers will be made based on the level of improve-
ment of organizational excellence. Therefore, as already emphasized, in order to maximize
organizational excellence, the relationship between the levers, between the goals, and
between the levers and the goals has to be considered. This is not an easy task in the
EFQM-based process, because often these relationships are either not known, or are
vague in definition. This is the primary reason why the second phase of analysis, the diag-
nosis, is difficult to implement. The desired result of the diagnosis is the identification of
the most important problematic situations. The diagnosis requires identification of the
relationship among levers and classification of levers according to their impact on different
goals. The second reason why the diagnosis is difficult is related to the fact that the diag-
nosis is very complex, when we are dealing with many goals and levers simultaneously. If
we take into account that there are 32 sub-criteria within the EFQM-based process that
should be considered as goals, and normally more than 100 areas to address that should
be considered as levers, it is clear that we are dealing with an extremely complex situation.
We explained previously that the EFQM model assumes the relationship between
the enabler and the results criteria, but these relationships are only presented and discus-
sed based on some examples. The EFQM model does not attempt to offer a more
374 B. Rusjan

comprehensive, structured and defined model of the relationship between the levers, the
goals, as well as the levers and the goals that are included in the model. The intention
not to be prescriptive is probably only one of the reasons for that, as the model does
not even try to clarify the relationships between the sub criteria (goals), which contain
fixed, predetermined elements. Even if it is more understandable that there is a neglect
of attempts to define the relationship related to areas to address (levers), as these are
open and defined by the company, it is our opinion that the more important reason for
the absence of a comprehensive definition of the relationship probably lies in the complex-
ity of the model.
We therefore conclude that the EFQM Excellence Model is appropriately structured to
perform the first phase of the analysis, i.e. a description of the present situation and identi-
fication of strengths and weaknesses. However, we also conclude that the model does not
offer any specific guidelines about the second phase, i.e. problem identification. However,
the diagnosis phase of the analysis (neglected by the EFQM model) is crucial for appro-
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priate decision-making. As previously mentioned, identification of problems is a result of


analysis on one hand; while on the other it represents the starting point for decision-
making on improvement activities. As problems can often not be appropriately identified,
self-assessment is concluded with the identification of a number of problematic situations
that form the basis of decision-making regarding improvement activities. This is not in
accordance with the generalized method of analysis, as it requires identification of pro-
blems as the basis of decision-making. Because problems are not identified in the self-
assessment procedure based on the EFQM model, certain difficulties arise when results
of self-assessment are used as the basis of decision-making on improvement activities.
This difficulty is related to the problem of prioritization among areas for improvement
and consequently prioritization among improvement activities. Difficulties with the diag-
nosis in the EFQM assessment model represent the cause of the problems in the use of its
results for improvement. Based on comparison of the EFQM self-assessment procedure
with the generalized method of analysis, we identified a problem in the EFQM model pro-
cedure that theoretically explains a probable cause of problems in the application of the
EFQM model.
Similar problems in the use of the EFQM model were identified by different researchers.
Lee & Quazi (2001) claim that conducting self-assessment by going through the criteria
requirements in national quality award guidelines is a daunting and time-consuming
task. Unless the organization is fundamentally strong in the implementation of its
quality processes, it will be hard for organizations to proficiently interpret the criteria
requirements. Li & Yang (2003) warn that although the current scoring system of the
EFQM model has been widely accepted by both academics and practitioners as a sound
approach for self-assessment, certain writers are in agreement that organizations have
encountered problems applying the model because the scoring criteria are too generally
defined. Crawfords opinion on the Baldrige award, which can also be applied to the
EFQM model, is that Baldrige is like a thermometer, it tells you what your fever is, but
it doesnt tell you how to get well (Simms et al., 1992).
Similar problems have been noticed with the Balanced Scorecard based approach,
which has also commonly been adopted as a strategic management system. The Balanced
Scorecard (BSC), like most business excellence models, is not a prescriptive approach, as
it tries to be a general and all-encompassing model. However, the relationships between
the different performance areas in the organization are not clear. The BSC claims to
Usefulness of the EFQM Excellence Model 375

identify the cause-and-effect relationship between the measures of an organization,


although the relationship between the performance areas is more likely to be one of inter-
dependence (Kanji & Moura, 2002).
Black & Crumley (1997) emphasize the problem of prioritizing among improvement
activities, which is related to our notion of problem identification. They state that if an
organization starts to assess itself using the model, it will inevitably generate a broad
range of improvement issues. Faced with a list of hundreds of improvement possibilities,
the main issue with an improvement action plan is to define priorities against a balance of
business strategy, current activities, resource constraints and understanding of the model
(Black & Crumley, 1997).
Authors of the EFQM model also try to solve the difficulty of problem identification in
the self-assessment process. They suggest that prioritization of areas to improve should be
based on different criteria: vision and mission of the organization, present priorities and
strategic plans, key processes in the organization, critical factors of success, key areas
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resulting from self-assessment, SWOT analysis, possibility of implementation and pos-


sible impact (EFQM Excellence Model, 2003). They suggest that self-assessment results
should be integrated in business planning of the organization. The attempts to resolve the
difficulty of problem identification in the EFQM model self-assessment, however, lead us
to the second major issue related to the EFQM model, i.e. the conceptual one.

Conceptual Issues related to the EFQM Excellence Model


We have explained that the neglect of the diagnosis phase in the analysis causes difficulties
in the use of assessment results. These difficulties are reflected in the problem of prioritiz-
ing among a number of different possible areas for improvement, which are the result of
identification of problematic situations. Since the diagnosis that would identify the most
important problematic situations is not implemented in the EFQM procedure, self-assess-
ment usually results in a number of possible areas for improvement. In our opinion, the
prioritization of possible improvement activities should be in accordance with the
purpose of the EFQM model. This means implementing activities that would lead to a
maximum increase in the excellence score given the applied effort. However many
researchers that have noticed the problem of prioritization among areas for improvement,
do not agree that improvement activities should be selected on the basis of maximizing the
excellence score.
Samuelsson & Nilsson (2002), for example, warn that if companies score the assess-
ment, the focus can shift to collecting scores rather than improving performance. They
argue that the main purpose of self-assessment is to identify areas for improvement by ana-
lysing the current situation, thereby making improvement in the long term possible. Self-
assessment only offers a map of the current situation developing an action plan is the
next step. Samuelsson & Nilsson emphasize that when developing an action plan, it is
necessary to prioritize strictly, since only a few actions can be driven effectively. A
method for prioritizing must be clear and simple, and yet thorough. They also claim
that prioritization must take several aspects into account. As an example, they mention
the contribution to business measures (slow/fast) and strategic alignment (weak/strong)
used by Nokia (Samuelsson & Nilsson, 2002).
Sandbrook (2001) also noticed that companies using the EFQM model for improvement
had problems, because without being clear on the overall purpose, the work done on
376 B. Rusjan

enablers was largely academic. Although the model is about both (enablers and results),
the emphasis needs to be more about results, about defining the purpose and deciding how
to measure it correctly. Organizations have plunged into enablers, assuming that their
purpose is understood; only to discover later that they need to know why they are
doing what they do (Sandbrook, 2001). We can see that Sandbrook argues that the empha-
sis in using the EFQM model has to be in defining the purpose of the organization, because
this represents the basis of prioritizing among improvement activities. Yet other research-
ers emphasize that the EFQM model does not formulate strategy, nor does it properly
evaluate strategy, it rather evaluates the process of forming strategy. It ensures there is
a rigorous strategic planning process but does not assist in giving strategic direction
(McAdam & ONeil, 1999).
We have already mentioned authors of the EFQM model and Black & Crumley (1997)
who also propose different criteria for prioritization among areas to improve. We see that
researchers who deal with the problem of prioritizing among the areas for improvement
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propose different criteria as the selection basis. However, our opinion is different.
Taking definitions about object, decision-making criterion, as well as goals and levers
into account, the economic purpose of self-assessment based on the EFQM model can
be defined as to guarantee the maximization of the organizational excellence criteria.
The organizational purpose of self-assessment is to guarantee appropriate decision-
making on enablers and results sub-criteria (criteria), and on improving relevant areas
to address. If the purpose of the EFQM model is to maximize organizational excellence,
this criterion should also be used as a basis of choosing appropriate improvement activities
in decision-making. Simply stated, the criterion for choosing improvement activities based
on the EFQM model cannot be anything else than maximizing the excellence score. There-
fore we can conclude that different criteria for prioritization proposed by researchers are
contradictory to the purpose of the EFQM model. The question then becomes: why do
researchers propose criteria for prioritization of improvements that are not in accordance
with the purpose of the EFQM model?
The position of the researchers, that other criteria, and not the excellence score, should
be used for prioritizing improvement activities implies two conceptual issues. The first one
is related to the question of whether the organizational excellence (determined by funda-
mental concepts, which include results orientation, customer focus, leadership and con-
stancy of purpose, processes and facts, involvement of people, continuous improvement
and innovation, mutually beneficial partnerships, and public responsibility) is appropri-
ately reflected in the sub-criteria used for the purpose of scoring the excellence. The ques-
tion is whether the 32 sub-criteria actually reflect the implementation of fundamental
excellence concepts. If not, then sub-criteria related goals are not appropriate to ensure
achievement of organizational excellence, and the measurement of excellence (with sub-
criteria) is not in accordance with its content (determined by the fundamental concepts).
The second conceptual issue is related to the assumption that the improvement activities
that aim to increase organizational excellence may not always be the most important
activities that the company needs to implement. Therefore other more important criteria
override the excellence criterion. Pifer claims that when quality or other benefits of the
TQM programme are not the most important priority for a company, such a TQM pro-
gramme should not be pursued blindly. In such cases TQM can be a false goal and its
pursuit distracting and even dangerous (Simms et al., 1992). The second conceptual
issue is one of the clarifications of the relationship between decisions made on the basis
Usefulness of the EFQM Excellence Model 377

of the EFQM model self-assessment results and other strategic, business, organizational,
etc, decisions. To our knowledge these relationships are not obvious and have not been
appropriately explained in the literature. Black & Crumley (1997), and authors of the
EFQM model (EFQM Excellence Model, 2003) for example claim that the improvement
planning process based on the EFQM self-assessment results should be built into corporate
planning, and improvement reviews or assessments should be built into business unit or
departmental reviews, but they do not explain how this could be achieved. Our view is
that this conceptual question about the relationship between self-assessment based on
the EFQM model and other traditional analyses that companies perform such as stra-
tegic, business and organizational analyses is still open.
So how is, for example decision-making based on results of the use of EFQM model
related to strategic decision-making? If we look at the relationship between the EFQM
model and strategic planning, we notice that quality which was usually one of the
important strategic competitive priorities is not the central point of the EFQM model
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anymore. As Seghezzi (2001) claims, the excellence model of the EFQM is no longer
bound only to quality issues, but offers an important tool for comprehensive management
system, which includes all areas of management. On the other side, Dale et al. (2000)
recognize that it is unclear where the drive came to change from quality and TQM to
excellence. The EFQM has progressively stripped out references to TQM and quality.
In the 1999 version of the model, the word quality does not appear in either the sub-cri-
teria or the areas to address, and the switch from Total Quality Management to Organiz-
ational Excellence is a fact. The Malcolm Baldrige, EFQM and Deming models extended
the concept of quality assessment to the entire organization. These models absorbed new
aims and new approaches, so they are now much richer than the traditional quality models
of the past. They go beyond the basic quality perspective, opening the assessment ver-
tically to the whole scale that leads to excellence, and horizontally to include different
stakeholders of an organization (Conti, 2002). The consequence of this is, of course, a
broader purpose of the EFQM model, which leads to the conceptual issues of concern
mentioned above.
If the purpose of strategic decision-making is the achievement of competitive advan-
tage, we have to analyse goals (and levers) that lead to the achievement of competitive
advantage as a decision-making criteria. If organizational excellence is the purpose of
the EFQM model, this would lead to different economic and organizational purposes of
the two analyses. The object of decision-making may be the same (i.e. business unit),
but the question is one of the relationship between the purpose and objective of strategic
decision-making and of decision-making based on the EFQM model assessment, and con-
sequently the relationship between the economic and organizational purposes of the stra-
tegic analysis and of the EFQM assessment. Vision, mission and strategic priorities are
often proposed as selection criteria by researchers for choosing the areas to address that
will be improved by future activities based on the results of EFQM model assessment.
However strategic improvement activities that aim to achieve appropriate mission,
vision and competitive advantage are usually the result of strategic planning and are
based on the SWOT analysis, which represents a traditional strategic analysis at the
business unit level. Therefore, one specific question is that of the relationship between
the SWOT analysis and the EFQM model self-assessment.
Generally speaking, since the same object can be analysed by taking different decision-
making criteria and therefore different goals into account, we have to acknowledge that
378 B. Rusjan

some levers can have an impact on different goals and different decision-making criteria.
This means that different analyses may be related and that making decisions based on an
analysis with a certain economic and organizational purpose requires consideration of
decision-making based on another analysis with a different economic and organizational
purpose. However, it is a specific decision-making criterion that defines the goals and
levers that should be studied in the analysis and decision-making criterion should also rep-
resent a selection criterion for improvement activities. It is understandable that in a case
where the same levers are important for different decision-making criteria, this should be
taken into account in decision-making on improvement activities. However, this does not
mean that the purpose of decision-making and analysis has changed, but only that relation-
ships have to be taken into account.

Conclusion
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Based on the generalized method of analysis, we defined the object, purpose, goals and
levers of self-assessment based on the EFQM Excellence Model. Based on these defi-
nitions we discussed some methodological issues related to the use of the EFQM
model. To assess the usefulness of the EFQM model for decision-making on improvement
activities, we studied the implementation of two phases of analysis within EFQM assess-
ment procedure. On the basis of the analysis of the procedure, we concluded that the
EFQM Excellence Model is appropriately structured to perform the first phase of the
analysis, i.e. identification of the problematic situation, which includes the description
of the present situation and identification of deviations of the present situation from bench-
marks. However, the model does not offer any specific guidelines on the second phase, i.e.
problem identification. It offers no structured approach to exploiting strengths, or classify-
ing and prioritizing areas of improvement.
We emphasized that difficulties arise when the results of self-assessment are used as the
basis for decision-making on improvement activities, because the diagnosis phase of the
analysis, which is neglected in the EFQM model, is crucial for choosing appropriate
decisions. This problem was also noticed by other researchers. Our conclusions are there-
fore confirmed with the work of other researchers. However, in our work we identified the
cause of the problems with the use of self-assessment results based on the EFQM model.
We identified two reasons why the second phase of analysis, the diagnosis, is difficult to
implement. The diagnosis requires identifying relationships between the levers, between
the goals, and between the levers and the goals, which is not an easy task, because these
relationships are often unknown or vague in definition. The second reason why the diag-
nosis is difficult is related to the fact that the diagnosis is very complex, because of the
many goals and levers involved in the analysis.
From these methodological questions of applicability of the EFQM model, some con-
ceptual issues arise. We explained that the neglect of the diagnosis phase in the analysis
brings difficulties in the use of assessment results. These difficulties are reflected in the
problem of prioritizing among a number of different possible areas for improvement. In
our opinion, the prioritization of possible improvement activities should be in accordance
with the purpose of the EFQM model. This means we should implement activities that lead
to a maximum increase in the excellence score with a given effort. However, many
researchers that have noticed this problem of prioritization among areas for improvement,
seem not to agree that improvement activities should be selected on the basis of
Usefulness of the EFQM Excellence Model 379

maximizing excellence score, instead proposing different criteria for prioritization among
improvement activities. We argued that different criteria for prioritization proposed by
researchers are contradictory to the purpose of the EFQM model, and that since the
purpose of the EFQM model is to maximize organizational excellence this criterion
should also be used as a basis of choosing appropriate improvement activities in
decision-making.
In our opinion, however, the position of researchers that it is other criteria and not the
excellence score that should be used for prioritizing improvement activities implies two
conceptual issues. The first conceptual issue is related to the question of whether the
organizational excellence is appropriately reflected in the sub-criteria used for the
purpose of scoring the excellence. The second conceptual issue is related to the assump-
tion that the improvement activities, which aim to increase excellence, may not always
be the most important activities that the company needs to implement. Therefore other
more important criteria override the excellence criterion. The second conceptual issue
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is, of course, one of the clarification of the relationship between decisions made on the
basis of the EFQM model self-assessment results and other strategic, business, organiz-
ational, etc, decisions. It seems that the EFQM model, through its development, tries to
become a comprehensive, general management model, but this orientation might lead to
the problem of overgeneralization, thereby necessitating clarification of the relationship
between such a model for decision-making and traditional models for management
decision-making.

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