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Strategic Quality Management, Malcolm Baldrige

and European Quality Awards and ISO 9000

Certification: Core Concepts
and Comparative Analysis
Manufacturing Engineering
City Polytechnic of Hong Kong

Termbray Industries

Abstract advocated an impressive managerial process for top management

consisting of quality planning, quality control and quality
The i mportant contributions of quality gurus like Deming, i mprovement [Juran (1989)]. This process is called the Juran
loran, Crosby, Feigenbaum, IshikaNva and Garvin which lead to
Trilo<,y and can be used effectively in managing quality. It begins
the CVOlution,Jry development of Strategic Quality Management with quality planning (design for quality) to determine the
(SQNI) a re described in this paper. In addition, the core concepts
i ntended customers and their needs. The planners should then
of SQM :ire identified and are compared with Malcolm Baldrige proceed to develop product as well as process designs responding
and European Quality Awards. and ISO 9000 Certification
to these needs. Like Deming, Juran emphasized the significance
of quality improvement. However, in attracting top management
attention, he introduced the concept called the costs of poor
Introduction quality- (COPQ) and advocated that quality improvement should
Reduction of variation, continuous improvement of products be aimed at reducing continuously the COPQ that would result
and services to meet customers needs, costs of quality or costs from product deficiencies while at the same time developing
of poor quality. breakthrough projects, zero defects, cross product features that meet customer needs. He has recommended
functional management systematic approach to quality, and the third component. namely quality - control, as a means to
strategic focus to quality with respect to customer satisfaction, accomplish this goal. The costs of poor quality (COPQ) are those
competitiveness, profitability, quality planning, and organization- costs n - hich would disappear if all products and processes were
wide commitment are the major concepts that are introduced by perfect-no deficiencies [Juran (1989)]. It is the purpose of quality
the quality gurus like Deming, Juran, Crosby, Feigenbaum, i mprovement to reduce COI'Q to zero and hence eliminate the
Ishikawa and Garvin. The advancement of these concepts over chronic waste clue to product deficiencies. According to Juran,
a period of time covering the later part of the 20th Century chronic waste must provide the basis for opportunities to improve
paved the way for the evolutionary development of quality quality; consequently. quality improvement efforts should begin
management, namely, from inspection, to statistical quality with identifying a vital few" its areas to improve quality as
control, to quality assurance, to total quality control and finally breakthrough projects aiming at addressing chronic waste
t o total or strategic quality management. problems.

Successful implementation of strategic quality management Like Deming and Juran, Ct`osby stated that effective quality
is not an easy task. As Deming stated "Everyone doing his best management to he practical and achievable, must start at the top
is not the answer. It is necessary that people know what to do. [ Crosby (1979)]. After noting the misconceptions and attitudes
Drastic changes are required. The responsibility for changes held by managers about quality, he defined quality as
rests on management" [Deming (1982)]. Thus, Deming put the "conformance to requirements", in the sense that any product or
responsibility for continuous improvement of products and service that has consistently produced its design specifications
services to meet customer needs and to stay ahead of competition is of high quality. To change the attitudes and perceptions, he
squarely on management. In fact, the major emphasis of Deming's embarked it as a cultural revolution, emphasizing defect
philosophy on quality management is that top management prevention over detection, recognition of quality as a genuine
must orient themselves to constantly innovate and commit first among equals. doing things right the first time, and
resources to support innovation and continuous improvement organization-wide involvement to develop quality improvement
[ Deming (1986)]. Building quality into products and services, strategies [Crosby (1979)]. In order to implement quality plans,
breaking down department and worker-supervisor barriers, he sought the support of management participation and attitude,
developing long-term partnerships with suppliers, restoring pride professional quality management, original programs, and
of workmanship, ceasing dependence on mass inspection, and recognition. Crosby stated that zero defects should be the
removing numerical quotas and targets and concentrating instead management standard. He further advocated the costs of quality
on improving processes are the leadership issues that and quality management maturity grid as a means to improve
management must pursue in developing strategies for managing quality. The quality management maturity grid is a self-assessment
quality. He has further stated that the management must look for tool to examine where the operation in question stands from a
the variation due to "common causes" and find ways in reducing quality stand point. Regarding the costs of quality, Crosby said
it as a basis for continuous improvement [Deming (1986)]. that if quality is improved, total costs would eventually fall,
which lead to his most famous claim that "quality is free" [Crosby
With the definition of quality as "fitness for use" via product (1979)7.
features that are possessed by a product or service which are
i ntended to meet customer needs, and product deficiencies that Feigenbaum, in introducing "total quality control" (TQC) for
result in product or service dissatisfaction by customers, Juran the first time in the 50s, defined it as an "effective system for

40 1994-95 Annual Issue of IIE (HK)

Strategic Quality Management, Malcolm Baldrige and European Quality Awards
and ISO 9000 Certification: Core Concepts and Comparative Analysis

i ntegrating the quality deployment, quality maintenance, and 1, (1992)1. Both these definitions are very broad and appear to
quality improvement efforts of the various groups in an only stress the importance of management process in achieving
organization so as to enal)le marketing, engineering, pr)duction organization's goals. They do not describe the basic elements
and service at the most economical levels which all<nv for full lien% tlu-y fit together to achieve (Iuality inaprovernent goals
customer satisfaction [Fcigenhautn (1991 )]. He argued for the and objectives. In this regard Juran's definition also falls short
managerial ;rid technical implementation OF customer -oriented C% (21) though It(: included the acconmplislament of quality goals.
quality (Voice of Customer). changes in the basic attitudes of I n addition, the 13, ~[ u.ed tl)c turn total quality management
people required for a positive approach, infrastructure of a ( TQ_\I) instead Of Stratellic quality nrtnagement. As lone as they
modern I)LISint.ti.ti organization. systems apprcrtch to quality recognize the strategic importance of quality and quality planning,
systems and the focus of business strategic planning to foster both terms an he used interchangeably. In this sense, w e recognize
business -r(nvila and strategic quality leadership. Thus, according tile significance of strategic value of quality as Garvin did in
to him, TQC requires effective ways to integrate the efforts of i mplementing the quality improvement strategies, and use in this
l arge numbers of people. with large numbers of machines, and paper the terms total and'strategic interchangeably. Also, we
hu(Ie quantities of information [Fcigenheum (1991)1. shall make an attempt to define SQyt embracing all the important
views of the quality ;;uru; that are mentioned above which are
Ishikawa, has further intensified the concept of I'QC in si,mificant and different.
advancing the Japanese approach to total quality control and
advocated ill(: corupany-wide quality control :CWQC) Thins we define the strategic quality management as a
emphasizing that every one in every division in tile _, onlpam comprehensive and strategic framework linking
muststucly, practice. and participate in quality control f[.shikawa profitability, business objectives, and competitiveness to
(1985)1. Personal responsibility of senior management, customer quality improvement efforts with the aim of harnessing
focus, prevention over inspection, employee in%olverient, and the human, material and information resources
total organizational participation are central toJapanese company- organization-wide in continuously improving products
%vide quality control Wail (1992)). The goal of such CWQC or services that will allow the delivery of customer
Should he continuous improvement with focus on producing satisfaction. This definition, as mentioned earlier, describes the
products what custonmers really want. He strongly promoted the basic elements ~\ - hich are required and emphasizes the need for
use of duality circles at all IC%ek and cause-and-effect dia~-raills, the management process in accomplishing the quality
and cross functional teamwork in addressing quality• improvement i mprovement goals and objectives. In the following section, we
efforts. Ishikawa believed mainly in the use of simple methods shall identify certain core concepts of SQNI that ;are useful in
to work together on solving problems and renmcn-im, harriers to formulating and implementing quality improvement strategies.
i mprovement, cooperation, training and education. Thus, he
advocated the use of seven tools of quality, narrmely, check The Core Concepts of Strategic
sheets, histograms. Pareto diagrams, cause-and-effect diagrams,
control charts, binomial probability plots, graphs, and scatter Quality Management
diagrams. As in the case of the definition of SQM, the core concepts are
identified from the significant contributing factors that are
Garvin, while focusing on the strategic potential of quality, promoted by the qualitvgurus in one form or another in managing
wanted to recognize the eight dimensions of quality, namely, quality. As such the% should he fundamental in developing the
performance, features, reliability, conformance, durability. strategic as well as operational strategies to improve continuously
serviceability, aesthetics, and perceived quality as the basis for the quality of products or services. We identify them as customer
developing strategic options [Garvin (1988)]. Companies must focus, leadership, continuous improvement, strategic
decide which subset of these dimensions differentiate their quality planning, design quality, speed and prevention,
products or services from the competitors. Then he introduced people participation and partnership, and fact-based
the framework or strategic quality management emphasizing management.
that quality must be defined from the customer's point of view.
He further elaborated it by stating that quality should be linked Customer Focus
with profitability on both the market and cost sides. It shOUICI be As all the quality gurus stated, duality must be defined by the
linked with the strategic planning process requiring org.mnization- customer. The quality process is continuous loop that begins,

wide commitment. Also, quality should be viewed as a company ends, and begins again with the customer. Thus the focus on
weapon [Garvin (1990)]. quality must be from a process-driven discipline to a customer-
driven discipline. All product or service attributes that contribute
Definition of Strategic Quality Management value to the customer and lead to customer satisfaction need to
As mentioned earlier, these important views can be used to be addressed.
define strategic quality management. Even thou,, ,h Garvin
i ntroduced the term and elaborated it in terms of five elements, Juran and Crosby- have underscored this concept by defining
he did not define it in a compact form. Juran, on the oilier hand, quality as "fitness for use" and "conformance to requirements,"
defined SQM as a systematic approach for setting and meeting respectively. Ishikawa, on the other hand, advanced the concept
quality goals throughout the company [Juran (1989)x. The BSl of CWQC with the goal of producing products or services that
Standards defined it as a management philosophy and company customers want. Similarly, Garvin highlighted customer focus
practices that aim to harness the human and material resources from a strategic view point. Thus customer focus must be the
of an organization in the most effective way to achieve the overall goal of all quality objectives and strategies in implementing
objectives of the organization [Total Quality Manageinent, Part strategic quality- management.

1994-95 Annual Issue of IIE (HK) 41

Strategic Quality Management, Malcolm Baldrige and European Quality Awards
and ISO 9000 Certification: Core Concepts and Comparative Analysis

Leadership (1991)]. Achievin~o excellence in quality and market leadership

All senior managers must create clear and visible quality requires a strong future orientation and a willingness to make
values and high expectations and build them into the way the l ong term commitments to customers, employees, stockholders,
organization operates. This requires their personal commitment suppliers, aril the corrtrnunity. "[he quality goals as well as the
and involvement in substantial proportions. They mart take part strate~-ic and operational plans need to reflect these commitments.
as role models in the creation of strategies, systems, an(1 metlxx[s They shcnild he cleveloped in concrete terms and highly focused.
for achieving excellence in qu:dity. Also, as Crosby said, the Also, they need to address training, employee development,
senior managers Should position their companies in such a way supplier development, technology evolution, and other relevant
that inspection, testing, checking, .and analysis are not necessary factors that bear upon quality [Profiles (1992)]. They need to
[ Axland (199})1. In addition, they should encourage leadership embody the short term and long term needs. In addition, the
at all levels of management. particularly, in maintaining close goals Should be integrated into the overall corporate business
relationships among the many divisions in an organization, strategies. As ]uran stated. "as long as TQiNI isn't an essential part
communicating quality goals and objectives vertically cloven the of the business plan, we can forget obtain results," thus
organization, eclucating ernpl0VCCS about making quality their underscoring the importance of this aspect (personal
first priority, and spreading the concept of continuous communication of \ -an Nuland). Communicating the goals and
i mprovement on an organization-wide basis [Dale & Tiddj. objectives to all employees in the organization is extremely
useful in motivating them to rally round and making quality their
top priority.
It goes without saying that all quality gurus have not only
emphasized on this core concept but demanded that senior
managers must demonstrate the leadership role they play in Garvin Was arnon~y the first to recognize the importance of
creating and communicating quality values and expectations the strategic planning process in formulating quality improvement
and establishing the quality culture in their organizations in strategies. He particularly emphasized that quality planning
achieving the quality excellence. As Juran pointed, stunning must be integrated into the overall corporate strategic planning
results cannot be achieved without the active and personal process of the organization [Garvin (1990)). Juran, on the other
l eadership of senior managers [Juran (1991)1. hand. has built quality planning into the Juran Trilogy as one of
the three managerial processes in cleveloping the products,
systems and processes required to meet customer needs. He has
Continuous Improvement
further stressed the need for developing stretch goals, the goals
Continuous improvement is the cornerstone of SQ:N/I and which cannot he met by using the pedestrian pace of the ordinary
requires well-designee( and well-executed management of all l earning curve: ;oinething extraordinary is needed in
systems and processes. Do it right today, and better tomorrow accomplishing excellence in quality (Juran (1991)].
should be the guiding principle. Enhancing value to the customer
through new and improved products and .services; getting Design Quality, Speed and Prevention
consistently uniform products and services by benchrraarking;
reducing variation, COI'Q, and waste; reducing the number of Design quality. and error and defect prevention should be
defects (six-sigma quality or better); improving responsiveness the major aim of quality systems. In order to accomplish this, we
and cycle time performance; and improving productivity and need to build quality into products and services and into the
effectiveness in the use of all resources should be the objectives processes that produce them. Innovative applications of
for continuous improvement of all operations and of all Work technology, «- ell-designed and well-integrated systems and
unit activities of the organization. This means promoting processes, and planning of new products or services based on
organizations to be "learning organizations", taking initiatives to concurrent or simultaneous engineering are some of the creative
t ry something and taking correcting actions spontaneously, if concepts and tools that need to be encouraged. A major design
something goes wrong. issue is the design-to-introduction cycle time (speed). To meet
the demands of more rapidly changing markets, organizations
According to Deming and Juran, the baseline for continuous need to focus increasingly on this issue to achieve shorter
product and service introduction time using cross functional
i mprovement is the control of processes and the reduction of
variation and waste. Juran has identified the sporadic vs. chronic management.
wastes related to the systems and processes which a-e used to
produce products, and found that 85% of the problems are due As Crosby emphasized, "do it right the first time" and "defect
to chronic waste and only 15% are due to sporadic wa;;te [Neave prevention over detection" and hence "zero defects" must be the
(1990)]. He then focused on chronic waste and the corresponcling standard in establishing systems and processes related to all
COPQ as the potential opportunities for continuous improvement. quality activities [Crosby (1979)]. Also, the concept of Big Q
Deming later on revised these numbers to 94% for common i nvolving all products and services, all processes including
causes and 6°io for special causes (Doming prefers to call special manufacturing as Well as support systems, all internal and external
vs. common causes of what Juran called them as sporadic vs. customers, and all costs of poor quality in reducing errors,
chronic wastes) [Neave 1990)]. Both of them urged unequivocally defects, and cycle time, as well as in improving response time,
that only the management must be responsible for implementing market share, productivity and profits must be adopted [Juran
necessary actions in constantly improving the quality due to (1989)]. Well-planned supplier quality management must be
common causes. i ntegrated into company quality plans. Two of Deming's
principles, namely. ceasing dependence on inspection and
i mproving constantly and forever the system of production and
Strategic Quality Planning
service to improve quality must be invoked in support of this
As Garvin said, strategic quality plans are the glue holding core concept [Doming (1986)].
together an organization's quality improvement efforts [Garvin

42 1994-95 Annual Issue of IIE (HK)

Strategic Quality Management, Malcolm Baldrige and European Quality Awards
and ISO 9000 Certification : Core Concepts and Comparative Analysis

People Participation and Partnership processes, and operations the company uses to evaluate
The word people in this core concept refers to the employees performance and to track progress on customer satisfaction,
tvhoare lured hytht company underLinionizedornon-unionized employee satisfaction, and the company's operational results.
agreements a:; well as the yendor:s who supply material and Fine-tuned information .,y°.stems that support these activities as
components. As lshikawa pointed out, all employees cuist work yell as sun ey-feedback-action (SFA) systems should he in place.
toxl"ether to achieve quality and productivity objectives set that The strategies to im - est in information technolo ,.;y and tools for
the productoi service meets ctistomersarisfLiction. This requires diagnosin- and solyin(, quality improvement problems need to
a fully comruitted, \~•ell-trainecl and involved work force in :ill he seriously considered.
quality activities. Necessary actions to formulate and implement
people (employee) strategies for creating a quality culture and The use of statistical techniques and the evaluation of quality
clr~uiging the organizations structure to do the 'right things right strategies needs objective data. Also, it requires a clear
the first time and every time' are to he seriously considered. understanding of such measures as customer satisfaction,
I nnovative strategies related to multi-functional employee (NIFI.) en , ployee satisfaction, response time, or cycle time, etc., to
programs, .self-managed teams (SNITS) of workers programs, establish measurcintntstandards. Without this it is very difficult
participatioe management programs WMPs) and QC ci_-cles must to obsen -e reliable data and evaluate quality strategies. In addition
be encouraged to improve employee skills and knowledge, to observing data to evaluate tilt quality plans, one needs to
performance and flexibility to solve quality related problems. ob.sen e the data over a certain time period to develop trends,
Reward and recognition systems. quality of work-life environment projections, and benchmarks in order to evaluate whether or not
consisting of safety, health, well-being and morale. education the pre-established desired levels are achieved. Also, one needs
and training to reinforce full participation Shout( 11 part of the to examine the company's quality and operational results in
system. Trtining should be reinforced through on-the-job :y)plications relation to its competitors. Such an analysis is an effective tool
of learning, involvement and empowerment [Profiles (1902)1. i n examining the company's position relative to its competitors.
In ;iddition. systematic cross-checking and regular reviews need
Similarstrategiesshould hedeveloped to conununic.ltequality to be conducted in ensuring thar the information provided
requirements to suppliers and unions in building pa_-tnership.s supports effective management of the company's quality plans.
with them to elevate their quality performance. The building of
such partnerships should address long-term objectives for mutual Thus these sty en core concepts are pivotal in accomplishing
i nvestments and to evaluate progress and methods to the basic aims of strata,=ic quality ntanagement,namely, satisfying
accommodate to changing conditions. To effect positive changes, the customer. continuously improving the processes and systems
i t is not only necessary to let vendors understand the- need for i n increasing the quality of products and services and staying
quality systems and processes to supply quality material and/or ahead of competition. We can think of these core concepts as the
components, but also equip them with the necessary knowledge, spokes of a wheel ,\- hich is climbing the quality hill, the basic
skills and tools. goal of which is to improve value forever to customer and
compete strongly in the market place. This scenario is shown in
This core concept is perhaps the most difficult, butsignificant Fig. 1. " - here LDR represents the leadership core concept; SQP,
one to address. According to Juran, there is an inherent conflict strategic quality planning; DQSI', design quality, speed and
between the functional organization and multifunctional prevention; PP&P. people participation and partnership; FBM,
processes [Juran (1991)] . We need multifunctional processes to fact-based management: CI, continuous improvement: and CF,
get things done in accomplishing quality objectives. Therefore, the customer focus core concept, respectively.
we need to find ways to integrate traditional (vertical) hierarchies,
which exist in corporations, with multifunctional (horizontal) As mentioned earlier, the seven core concepts are clearly
processes to reduce conflicts and make workers more productive. based on the preachings of the quality gurus. In addition, Van
This is the reason why Deming underscored the importance of De Wiele and Dale et al, in an extensive survey conducted
breaking clown the barriers between departments, driving out mainly in the UK and the Netherlands, found that satisfying
the fear among workers to work effectively, and removing barriers external customers, reducing costs, partnership between
that rob hourly workers as well as engineers and managers of their an organization and its customers, each person satisfying
pride of workmanship, and establishing instead the multifunctional their internal customers (employees), employee
processes to improve quality of products and services involvement and development, team work, improving
process capability, each person dedicated to continuous
Equally important is the recognition of the fact that suppliers process improvement, quality of working life, and
or vendors play a significant role in providing quality material partnership between organization and the suppliers were
and/or components. We should develop long term ,win-win) the 10 most important aspects of TQM out of the 15 they asked
relationships between corporations and their suppliers. Also, as participants to rank on a five-point scale from 1 (not important
Deming suggested, select a few suppliers who can work together as at all) to 5 (very important) [Van De Wiele and Dale et al (1993)].
partners in producing the products or services that customers want. The other 5 aspects included in the survey are participative
management, process management, each person has a
Fact-Based Management designated responsibility for improvement, horizontal
integration, and policy deployment. The lowest mean rank
Accomplishing the quality and performance goals of the
of 3.28 for policy deployment and the highest mean rank of 4.84
organization requires that process management solidly he based for satisfying external customers among all these 15 clearly
upon reliable information, data, and analysis. Oper.itions and indicate that they all are important factors of TQM. Table 1
decisions need to be based upon factual information about describes the comparison between the seven core concepts and
performance indicators, projections, and trend analyses. These these 15 aspects.
i ndicators should reflect the characteristics of products, services,

1994-95 Annual Issue of HE (HK) 43

as shown in Table 5 (page 20) clearly indicates that they are
embodied in the criteria of both awards and are extremely useful
CORE VALUES in implementing quality improvement strategies to achieve
CUSTOMER excellence in quality and possibly to win the awards . Also, the
INDICATORS Malcolm Baldrige National Quality Award winners have clearly
OPERATIONAL demonstrated their creativity in developing innovative strategies,
INDICATORS systems and processes embracing these seven core concepts in
FINANCIAL improving the quality of their products or services as well as their
INDICATORS company's operational performance . In fact, the study, which
was published by the General Accounting Office (GAO) of' the
United States Federal Government, based on the 20 MBNQ
Award winners and semifinalist companies indicated this strong
relationship [Garvin (1991)) .

The Juan's lessons for developing strategies for world-class

quality, namely, implementation of stretch goals and
benchmarking, adoption of the Big-Q concept, development of
Figure 1 : The Wheel of Seven Core Concepts necessary infrastructure, implementation of multifunctional
processes, demonstrated leadership, incorporation of quality
plans into corporate business plans all depend on these seven
core concepts [uran (1991)] . Therefore, any company planning
to develop and implement quality improvement efforts must
clearly understand these seven core concepts and use them as
an integrating model in developing relevant strategies . It is
interesting to note that the 12-step implementation program of
TQM suggested by Oakland can be linked in terms of these
seven core concepts [Oakland (1991)] .

.....u~mia9 d!y- uu!J __

Core Values of Strategic Quality Management
a~yt aw~roM,7o ,t1)tena

-.. iuauranoiilut7 I
Associated with the seven core concepts are the core values
~a;»oad snonur~uo;7~
~1 ~w+ts~?~t ua~ad 4o":I'
which will be measured by carefully developing and
- ,~ a13q aea to implementing the necessary quality improvement strategies .
ssaao~ e~ur,ao~dwf ~ (D
These core values as shown in .Fig .1 basically include customer
satisfaction and the company operational performance results,
such as cycle time, on-time delivery, defective parts per million,
reliability, employee satisfaction, absenteeism, market share ;
~awalxn tatiuaWf,taru .
auu~srleS uosra,~ 4a?1
sales per employee, and return on assets etc ., as they relate to
s7i Pus uoi7~aj, duality improvement plans .
I us_uxrmt?13dt4 sd,_{

1 ".0.3 sup.
Implementation Framework of SQM
Isura~xg 8p,{~stle, Fig . 2 describes the implernentation process of SQM . The
or management (leadership (LDI1)) of the organization must
start with quality initiatives with sound strategic duality planning
(SQP) . Design quality, speed and prevention (DQSP), people
gdaouoD aioD participation and partnership (PP&I') and fact-based management
(FBM), together as a system must address well-defined and well-
designed processes, and planning of new products or services
Table 1: Core Concepts Vs Van De Wiele, Dala & et al Survey
with zero defects as the standard, employee and supplier
'o1vement and participation training and education, rewards
The leadership and fact-based management core concepts
and recognition as well as quality of work life environment,
appear to be left out in terms of the comparison. This is not
evaluation of performance and tracking progress based on
because they are not important but Van De wiele and Dale et al
reliable informantion, data and analysis, benchmarking and
did not include them as two of the fifteen factors . We are
competitive analysis with major focus on continuous
confident that they would have come out as important factors as
over (CI) in order to satisty the customer focus (CF) and
others as shown in Table 1 had they been included among them . faction . The successful implemention of the framework
In fact, both the Malcolm Baldrige National Quality (IBNQ) and
sed on ~e seven core concepts must generate impressive
the European Quality Awards have included leadership and fact-
core values such as customer satisfaction and company
based management as two of the seven (in the case of the MBNQ
operational and financial performance results including cycle
Award) and nine (in the case of the European Quality Award)
time, absenteeism, and markest share, etc . In other words, the
criteria, respectively [Malcolm Baldrige (1994), Total Quality
ework described in Fig . 2 must be the results-oriented
Management, The European Model (1993)] . The comparative
analysis between these two awards with the seven core concepts

44 1994-95 Annual Issue of HE (HK)

As mentioned ) ! ; prestigious c ;r quality excellence in satisfying c customer requirements
Malcolm 3 I3t Baldrige c National Quality (MB; AwardUSA corporate performance improvement. Management of process
and the t European1 Quality Sean Q Quality Award EQA in W Europe tlity, humanresource development and management, stmt
tahlished recently with a view towards planning
increasing the quality planning and information and analysis provide a syste
tla quality awareness competitiveness t to their respective to develop well-defined and well-clesigned processes for meeting
c , ((1994), - -oat 1 Qa Quality Management
countries [~ Malcolm It Baldrige , " <x customer satisfaction and corporate performance requirements
(19)3)). We shall now describe the major , -, ,gory, on the other
The Europeancan Model c
1 e quality and operational results category
characteristics of these awards and compare them along with the provides the fact-based framework for measuring the
ISO 9000 Certification process in the following sections . measures of progress) and ch challenging e actions
the improved customer value and company performarnce .
basic aim (goal) of the quality process as shown earli
CoRE VALUES i 1 should be the delivery of ever-improving value to CU customers
which is reflected in the customer focus and satisfaction category



customer satisfaction
customer Satisfaction
relative to Competitors
market Share

Figure 2: Implementation Framework of SQM

-Product & Service quality

internal Quality & Prodoctivity
., quality and -Supplier Quality
In this section we shall explain the main features of the Results

Malcolm Baldrige National Quality and the European Quality

rds and compare them .

The Malcolm Baldrige National Quality Award

The Malcolm Baldrige National Quality Award promotes
three important characteristics, namely, awareness of quality to
increase competitiveness, understanding the requirements for Figure 3: Dynamic Relationships Among Seven Categories
excellence in duality, and sharing the information and benefits
strategies The MBNQ Award places certain importance in irnplernentin
derived from successful quality strategies that are employed by
the companies [Malcolm Baldrige (1)94)] . Seven categories of and maintaining the quality improvement strategies in torn` n`
each category gas explained below [Ii!I<tlcc~lrxu I3alclg
(1994) 9 .
criteria are included in evaluating the company's overall strategic

and operational strategies employed in implementing quality

improvement efforts . These are Leadership, Information and 1 .0 Leadership
Analysis, Strategic Quality Planning, Human Resource I'his category emphasizes the role of the senior managers
Development and Management, Management of Process personal leadership and involvement in creating and sustaining
Quality, Quality and Operational Results, and Customer a customer focus and clear visible quality values . It also
Focus and Satisfaction . emphasizes on how the quality values and expectations are
integrated into the company's management system and reflected
As shown in the dynamic relationships among these criteria in the manner in which the company addresses its public
in Fig. 3, the primary focus of the award is on the customer focus responsibilities and corporate citizenship .
and quality and operational results. As Jennett stated, the award
is not given for a specific product or service, nor is it an. 2.0 Information and Analysis
endorsement of a company's product or service [Jennett (1991)).
The information and analysis category examines the sco
It is given to those companies that have a world-class system for
validity, analysis, management, and use of data and infortnat
managing its people and processes . Each system must ensure
to drive quality excellence and improve competitive performance .
continuous improvement in its product or service and provide
a way of satisfying and responding to its customers . The seven It also examines the need for the adequacy of the corn
data, information, and analysis system to support improvement
categories are divided into several examination items. The
of its customer focus, products, services, and internal operations .
examination items are further subdivided into several areas (89
in total), each assigned with certain points with a overall total of The analysis must include revealing information such as trends,
projections, cause-and-effect relationships as well as the
1000 points [Malcolm Baldrige (1994)].
company's quality performance with competitor's or with "best
practice" benchmarks .
As shown in Fig. 3 the senior executive leadership provides
the driving force (driver) to create the values, expectations,
goals, and the systems in order to guide and sustain the pursuit

1994-95 Annual Issue of LIE (HK) 45

Strategic quality planning emphasizes the company's
roach to planning process and how all key quality
requirements are translated and integrated into overall corporate 1 .0 Leadership 95 9.5%
business plans. Also examined are the company's short-term and 2 .0 Information and alysis 75 7.5%
long-terrn plans and howquality and performance requirements 3.0 Strategic Quality Planning 60 6%
are deployed to all related work units.
4.0 Hurnan Resource Development
and. Management 150 15%
4,011uman Resou.rce Development and Management
5 .0 Management of Process Quality 140 1.4%
The INIBNQ Award places a significant importance in
examining the key elements of how the company develops and 6.0 Quality and Operational Results 180 18%
realizes the full potential of its work force including the 7.0 Customer Focus and Satisfaction 300 30%
management to pursue the company's quality and performance
objectives . In addition, the company's efforts to build. and maintain Total Point Values 1,000 1 .00
an environment conducive to full participation and involvement,
and personal and Table 2: Relative Percentages of Seven Categories
organizational growth that would lead to
quality excellence are observed,
Most companies use Malcolm Baldrige Award criteria as a
5.O Management of-Process Quality quality blueprint to improve their quality to the point that they
`['his category examines systernatically all processes and are as competitive as possible in the market place without
systems the company uses to pursue higher quality and company competing for the award. Furthermore, as Reimann stated the
performance objectives . It also examines the key elements of award can he adapted 0) the needs of any organization [Reimann
process management, including design, management of process (1989)]. The MBNQ Award, as Garvin said, not only codifies the
quality for all work units and suppliers, systematic quality principles ofqualitymanagement in clear andaccessible language,
but also provides companies with a corripreliensive framework
improvement, and quality assessment .
for assessing their progress toward the new paradigm of
management and Such commonly acknowledged goals as
6.0 Quality and Operational Results
customer satisfaction and increased employee involvement
This is another category in which the NIBNQ Award wants [Garvin (199 .1)] . Knotts, Parrish and Evans in their study involving
corporations play a stronger role in critically examining their Fortune 500 industrial and service fit-ins found that this is true .
duality levels and improvement trends in qualky, and their In particular, the respondents indicated that the MBNQ Award
operational performance as well as supplier qualy. The criteria were very useful as an internal assessment tool and if
companies should also examine and compare their results with folkwed, they will provide quantifiable results [Knotts, Parrish
the quality and performance levels of the competitors . They not and Evans (1993)]-
only need to examine the current levels, they must evaluate the
results over a certain period of time to observe trends, projections, The European Quality Award
and benchmarks, and these results relative to those of competitors .
The European Foundation for Quality Management (EFQM)
established the European Quality Award (EQA.) for the first time
7.0 Customer Focus grad Satisftiction
in 1992, mainly to accelerate the acceptance of quality as a
The customer focus and satisfaction category is perhaps the strategy for global competitive advantage, to stimulate and assess
most important one of all the MBNQ Award criteria and examines the development of quality improvement activities, and to
the company's relationships whir customers and knowledge recognize the companies in Western Europe that demonstrate
of customer requirements and of keyquality factorsthat determine excellence in the management of quality as their fundamental
market competitiveness . It also examines the company's methods process for continuous improvement [Total QualityManagement,
to determine customer satisfaction, current trends and levels of The European Model (1993)1. The EQA is also supported by the
satisfaction, and these results relative to competitors . European Committee of the European Organization for Quality.
This award consists of nine criteria for evaluation, namely,
The relative importance of these seven categories in terms of Leadership, Policy and Strategy, People (Employee)
category point values and the associated percentages are shown Management, Resources, Processes, Customer Satisfaction,
in Table 2 . As you can find, oxistonwr Anus and satisfaction People (Employee) Satisfaction, Impact on Society, and
carries the most weight . Together with this, the quality and Business Results. The dynamic relationships among these nine
operational results, human resource development and criteria are described in fig, 4. As you can see from the figure,
management, and the management of process quality carries the European Quality Award criteria describe the processes and
almost 80 percent with the balance distributed among the the people including the leadership, people management, policy
leadership, information and analysis, and strategic quality and strategy, resources, and processes categories as the enablers
planning categories . It should be noted that the examination that will accomplish the results which include customer
items and theirrelative importance in terms of point values have satisfaction, people (employee) satisfaction, impact on society
been changed over the yeas based on the feedback from and business results.
applicants, Board of Examiners and other quality experts . The
overall focus of the seven categories, however, is not changed.

46 1994-95 Annual issue of HE (HK)

Strategic Quality Management, Malcolm Baldrige and European Quality Awards
and ISO 9000 Certification: Core Concepts and Comparative Analysis

6.0 Gttstorner Satisf~rctior2


This criterion examines the key indicators used in

understanding and measuring the customer satisfaction with
respect t >r,u ~ nrz-urcn
~ s products and services, Also examined1c
RESOURCES , [ IMPACT ON SOCIETY ,i i n this criterion are the organization's methods to determine
custcrrrrer a:ursftactionl. current trends, henchrnarkin,,, and levels
ENABLERS RESULTS of satisfaction, and these results relative to those of competitors.

Figure 4: Dynamic Relationships Among Nine Criteria 7.0 People (Entplol ,CC) Satisfactiurt
The people satisfaction criterion investigates howemployees
As in the case of the NIBNQ Aw arcl,,,ve shall now ex -)lain the percei\ e of the Organization and how• the organization understand
i mportance of these criteria [Total Quality Nlanagenl,~nt, Tile and develop key indicators to measure employee satisfaction.
European Model (1993)]. Also observed are the methods to determine the employee
satisfaction, current trends and levels of satisfaction, and these
1.0 Leadership results relative tO those of competitor-.~.
This criterion examines htnv senior executive managers
should inspire and drive TQ\I in the organization. They should 8.0 Impact on Society
demonstrate their personal commitment and involvement in This criterion examines the views of the organization's
creating a consistent qualitti° culnrre, understanding customer al)proaclr to quality oflife, the environmentand to the preservation
satisfaction, encouraging innovation and creativity, allocating of global resources. It also examines the perceptions of the local
resources and establishing reward and recognition systems and wider community with respect to education and training,
throughout the organization to promote TQNL hazards and health risks and reduction of waste. In addition,
current trends. and levels of satisfaction and these results relative
2.0 Policy and Strategy to those of competitors are examined.
The policy and strategy criterion investigates ]to" - t he
organization's policies and strategies reflect the concept of TQNI 9.0 Business Results
and how• the principles of total quality are used in the \Chat the organization has achieved and is achieving in
determination, deployment, review, and improvement of policies relation to its planned business performance are investigated in
and strategies. Also examined are how the organization's vision, the business results criterion. Also examined are the financial
values, mission, and strategic direction and the ways n which results such as profit. cash flows, sales, etc., as well as the non-
the organization achieves them. financial results such as waste reduction, cycle times etc. and the
methods used to determine the current levels and trends, and
3.0 People (Employee) Management these results relative to competitors.
This criterion examines how the organization develops and
realizes the full potential of the employees in the pursuit of As in the case of the NIBNQ Award, the European Foundation
continuously improving the quality and performance objectives. for Quality:1ianagementhas assigned a certain numberof points
Also examined are the needs of education and training :and their for each of these nine criteria as shown in Table 3. Like the
effectiveness, empowerment, top-clown and bottom-up MBNQ Award, the European Quality Award gives the maximum
conununication and continuous improvement of people weight to customer satisfaction. This is followed by business
management processes. results, processes, leadership, people management, people
satisfaction, resources, policy and strategy and impact on society,
in order of importance.
4.0 Resources
The resources criterion examines how the organization's
financial, information, material, and technological resources are Criteria Point Values Percentage
effectively deployed to support the policies and strategies of
TQM. The scope, validity, integrity, adequacy, accessibility, and
1.0 Leadership 100 10%
security of the data to support the improvement of the company's
customer focus, products, services, and internal operations are 2.0 People Management 90 9%
also observed. 3.0 Policy and Strategy 80 8D/o
4.0 Resources 90 9%
5.0 Processes 140 14%
5.0 Processes
This criterion investigates how the processes and systems are 9%
6.0 People Satisfaction 90
i dentified, reviewed, and if necessary revised to ensure continuous
i mprovement of the products and services produced by the 7.0 Customer Satisfaction 200 20%
organization. Also examined are the critical elements of process 8.0 Impact on Society 60 6%
management including design, management of process quality 9.0 Business Results 150 15%
for all work units and suppliers, establishing and monitoring
standards and performance measurements for quality assessment
Total Point Values 1000 1.00
and improvement.

Table 3: Relative Percentage of Nine Criteria

1994-95 Annual Issue of HE (HK) 47

Strategic Quality Management, Malcolm Baldrige and European Quality Awards
and ISO 9000 Certification: Core Concepts and Comparative Analysis

Comparison Between Malcolm Baldrige and to determine whether or not the competitiveness of a company
European Quality Awards i s III,- rc!ased curly due t o quality iInProven rentstrategies employed
based on quality management.
Before we compare the y113NQ and European Quality Awards,
we shall explain some of the criticisms that were lodged against
NI13NQ award. This will enable us to Understand more LIN)LIt tile It i s also a misunderstanding to criticize that the MIiNQ
MI3NQ Award and to compare it with the FQA with a hotter Award fails to predict a company's financial success.The
perspective. The MI3NQ A%- ard was mainly criticized on three ccntnhanies tl),u % ,' On the award might not have performed well
major deficiencies [Garvin (1991), Sims et al (1992 )]; namely, that Financially hUCaLISU of other reasons such as design problems (at
ttiiotorola ), depressed demand (.it Cadillac), or other related
prohleins (for example at Federal Express). As Garv-in stated
1. tlieaw,irclrequiresenormousexpendituresontlieupplic,ttion
%-i nning (the NIBNQ Award) is neither a necessary nor a sufficient
and preparation for site visits giving rise to the notion that
condition for financial success" [Garvin (1991)]. Companies can
M13NQ ANvard "can he hour=ht."
he financially - successful if they implement a one-of-a-kind
2. the award does not reflect outstanding or even exceptionally production process or ,t production Facility located abroad for
good product or service duality. reaping manufacturing benefits over costs, even though they fall
short on MI3NQ A% -ard criteria. Thus winning the award is not
3, the award fails to predict a company'scompctitil,eness and
a necessary condition for financial success. On the other hand,
financial success.
it is not t sufficient condition for financial success either, since
Even though these deficiencies appear to he plausible, the the a% and criteria do not include such important aspects of
criticisms, as Garvin said, reflect deep misunderstandings [Garvin management as innovative R & D, sound financial planning or
(1991)]. First, some MI3NQ Award winners (as Xerox) who spent cream-c marketing.
l arge sums of money did not do to "bring home a priz1- - but have
i nvested in their long term commitments for developing a new The award % innrrs are as vulnerable as other companies to
Set of quality goals and implementing appropriate quality° economic recessions and shifts in technology and market
i mprovement strategies. Furthermore, no company can buy a conditions. Ho% -ever, they are far better positioned relative to
system or a process and install it to achieve quality excellence others to recover fully- when the economy gets better. Thus the
i n its products or sewices. and to win the award. According= to !MBNQ Award can he ,t strong predictor of long term survival and
Peterson, former Chairman of the Board and CEO, Ford Motor a leading= indicator of future profitability [Garvin (1991)]. In fact,
Company, "buying off-the-shelf solutions or force fitting the according to the GAO study, the N11INQ Award winners and
company to the criteria ire forms of self-deception and semifinalists performed well on several important operational
mismanagement" [Sims et al (1992)]. In addition, the study and financial measures such as market share, return on assets,
conducted by the GAO has further indicated that there was no productivity, customer satisfaction, and employee relations
"cookbook" approach to implementing quality- management [ Gar,, in (1991 )l. These are the kinds of indicators that suggest
system [Garvin (1991)]. The 20 companies that participated in the future profitability. In addition, the study conducted by Knotts,
GAO study have employed different practices and techniques. I'arri;h, and Evans also concluded that the MBNQ Award criteria
trneasure performance that improves competitive position [Knotts,
Second, the NIBNQ A-,vard is not designed to re%"trd product Parrish. and 1- vans (1993)]. The results of this study have further
or service quality excellence only. In fact judging from the seven i ndicated that the a% arcl has altered the U.S. conscience regarding
MBNQ Award criteria, the product or service excellence area the benefits and processes necessary to achieve quality. Thus the
corresponds to only 250 points out of a total of 1000 points. The benefits far out% eigh the criticisms made against the MBNQ
remaining 750 points are assigned to other important aspects Award.
such as management of systems, processes, and planning. It is
possible, as Garvin argued, that the companies which won the We shall no% - compare the MBNQ and the European Quality
award (for example, the Cadillac Division of General Motors) Awards. As seen from Tables 2 and 4 both awards are based on
may have performed extremely well in these areas ,is opposed point system. They are almost similar in the sense that both
to the product excellence area. awards give maximum weight to customer satisfaction, 30% or
300 points in the MBNQ and 20% or 200 points in the European
In fact, as Garvin did, one way to compare the MBNQ Award Quality Awards, respectively. The quality and operational results
is to compare it with two possible extreme situaticns. At one i n the MBNQ Award and the business results in the EQA have
extreme, is to design an award to reward only product or service the next highest %- eight. It should be noted that the business
excellence (traditional quality control). At the other extreme, is results criterion includes financial measures such as profits, cash
to design an award to reward overall corporate management flows. working capital, liquidity, and shareholder returns. The
excellence and not for quality management alone. According to MBNQ Award, on the other hand, does not include them in the
Garvin, the MBNQ Award is neither too narrow (as in the case quality and operational results criterion as the award criteria do
of product or service excellence) nor it is too broad (as in the case not cover the organization's financial performance. As one of the
of corporate management excellence) [Garvin (1991)]. It is j udges of the award pointed, financial performance does not
positioned firmly in between these two extremes. Here, we fully belong in the MBNQ Award. If it is included, then it might
agree with Garvin. The major purpose of the MBNQ Award is to overshadow the quality and operational results that are observed
promote awareness of quality to increase competitiveness. Any as a result of the quality improvement strategies that were
set of criteria to evaluate companies for the award should be employed.
related only to quality management and not to overall corporate
management that encompass marketing, R & D, finance etc., in The European Quality Award considers human resource
addition to quality management. Otherwise, it would be difficult development and management strategies in two separate criteria

48 1994-95 Annual Issue of IIE (HK)

and p'op ."2 as p preservation of global resources in a more detailed Fashion
total of 180 (=90+)0) points or IRA, whereas they are than the MBNQ Award.
s one criterion in the MBNQ Award with 150 points
or 15% Thus the human resource developmentand management 51 The MBNQ Award and EQA are neither product or service
-ion receives the third largest weight in both the awards . excellence awards, nor are they corporate managernent
once awards . Both are positioned between these two
Processes criterion in We EQA (with 14%)and the management
die MBNQ Award extremes .
process quality criterion in (with 14%)
e fourth highest weight Leadership, resources (in the 6) . Because of the inclusion of financial performance
EQA) or information and analysis (in Me MBNQ Awmd), and ia, the EQA is more broad-based than the MBNQ Award
policy and strategy (in the EQA) or strategic quality planning (in mentioned
e MBNQ Award) criteria me rated as the fifth, sixth and As earlier, the seven core concepts are clearly
seventh ranked criteria with respect to their point values . It embedded in the MBNQ and European QualityAward criteria as
which Shown in Table 5, where the clashed lines indicate the inclusion inclusion
should he noted however, that the order in these criteria of more aspects in
are ranked A Me -me as described above even though the point Quality Award the resources,
values (or the corresponding percentages) are not exactly the business results criteria
same .

In addition to the above analysis, we should note Malcolm Baldrige Award European Quatity Award

Malcolm Baldrige Award does not specifically consider the

impact on society criterion included in the European Quality L0 Leadership

Award. Even though the MBNQ Award includes some of the 2.0 Information and Anal ysis
reated aspects such as business ethics, public health and safety, 3 .0 People (Emptoyee3
environmental protection, and waste management in the 3 .0 Strategic Qualit y Plannin g
leadership criterion, the EQA by including the impact on society
as one of the nine criteria, covers more aspects, for example, 4 .0 Human Resource Development
preservation of global resources, organization's involvement in and Mana g ement
6A Customer Satisfaction
community in terms of charity, education and training, and S ,U Management of Process Quality
ports and leisure, etc., in a more detailed fashion. 71 People Mraployee)
61 Quality and Operational Results SAWN,

Similarly, the resources criterion in the European Quality

Award covers financial, information, and material resources as 7 .0 Customer Focus

well as alternative and emerging technologies . The MBNQ satisfaction

Award, on the other hand, covers only the management of
quality and performance data and analysis, and the related
issues in the information and analysis criterion. The material Table 4: Comparison Between MBNQ and
reSoUrces and the alternative and emerging technologies are European Quality Awards
ded in the management of process quality criterion of the
NQ Award. As mentioned earlier, the MBNQ Award (Jose not
consider financial resources as formally as they are considered Malcolm Baldrige Core Concepts Euro lpean Quality
EQA this is me of the major differences between the two National Qalit
u y Award Award

awards . Also, consideration of human resource development Leadership Customer Focus Leadership
and management into two categories aA n the EQA may make
it icy and Strategy
easier to understand the award criteria better that would help
preparing the written reports for application . Table 4 describes People (Employee)

the cross-relationships among the criteria of both awards where

the clashed lines indicate the inclusion of more aspects in
resources, impact on society, and business results criteria of the Stmegi
European Quality Award as discussed above . The solid lines Quality
indicate the identical nature among the criteria of both awards . Planning Cwtomer
Design fatality,
<,j ,, Peo ple (Fmploy ee)
Basedon these observations, we can conclude the following. Speed, and
Preven t

Quality Awards Impact on

11 Both the MBNQ and European me results- Quality and / ~~ People
Participation Society
.d awards . Results and Partnership

2), Both awards give maximum weight to customer satisfaction

results. Thus, customer focus and satisfaction is the overall
goal of both the awards,
3) . TileMBNQ Award criteria do not includefinancial performance
whereas it is included in the EQA criteria . Table 5: Comparison of Core Concepts, MBNQ and
European Quality Awards
4) . The European Quality Award, by including the impact on
society as one of the nine criteria, covers more aspects such

1994-95 Annual Issue of HE (HK) 49

Strategic Quality Management, Malcolm Baldrige and European Quality Awards
and ISO 9000 Certification: Core Concepts and Comparative Analysis

The ISO 9000 Standards requirements- We can identify certain core concepts and core
value., in the frarne\tork that are fundamental in implementing
The ISO 9000 quality assurance stanclards, consisting of ISO the duality assurance system for successful certification. As in the
9000, 9001, 9002, 9003 and ISO 900-1, were issued in 1987 by the case of the strategic quality management, the core concepts of
i nternational Organization for Standardization (ISO). These the ISO 9001 framework consist of Conformance,
standards are hased on the concept that certain minimum Documentation, Design Quality and Prevention, and
characteristics of quality management system could he usefully Inspection and Testing. We shall now explain the significance
standardized, giving mutual benefit to suppliers and -_ust<nners of these core concepts.
alike [ISO 9000 - Handbook (1992)]. The major purpose of fllese
standards is to provide an effective quality system reflecting the Core Concepts of ISO 9001
company practices of producing goods and services that conform
to specified requirements in order to enhance and facil tote trade. Co; tfbrmctaace
Conformance is the cornerstone of the ISO 9001 standard.
ISO 9000 describes the guidelines for use of a particular N1anagement must establish and maintain at all tithes an effective
standard whereas ISO 900-1 describes the guidelines for documented quality - system to provide confidence in customers
establishing an internal quality management system •within the i n producing goods and services which satisfy the specified
[)road and general context of Total Quality Management. The requirements. Any product that does not conform to these
other three standards, ISO 9001, 9002 and ISO 9003, are the specified requirements must be prevented from inadvertent use.
generic standards containing minimum requirements for Therefore, necessary - documented procedures should be
establishing and maintaining a documented quality system to established for identification, documentation, evaluation,
i nstill confidence in customers that the intended products or segregation and disposition of such nonconforming products.
services meet customer requirements. In other words, these Nonconformance,, must be based on objective evidence only.
three are the contractual standards between suppliers and Procedures should also include notification of nonconforming
customers. Of the three. ISO 9001 is the most comprehensive products to the concerned personnel. If gaps are found between
standard including all activities in all stages, namely design. the actual and the planned activities, relevant procedures or
development, production, installation, and servicing. Similarly, work instructions must he improved. Also, if a new procedure
if a company is engaged in production and installation only, then is needed to satisfy the requirements of the applicable standard,
it can use [SO 9002 to establish and maintain a CIO:Umented but does not exist. It must he defined and documented.
quality system, whereas it can use ISO 9003 if it is engstged only
i n final inspection arc[ test. e.g.. traders. I n addition. corrective actions are required in investigating
the root causes of nonconformimg products by analyzing the
From the beginning of its publication, the adaptat.on of ISO processes and systems, work instructions, service and customer
9000 standards was phenomenal. Originally they were adopted reports. and finding solutions to prevent reoccurrence. Employees
by the European Community - ( EC) requiring that ,my one doing and management must thoroughly understand the systems and
business with EC should have the ISO 9000 certification. This processes involved so that corrective actions can be implemented
followed by the European Free Trade Association (EFTA) member effectively to prevent the occurrence of potential future defects
countries and latter by several other countries including LISA, or errors.
Japan and China under exactly similar or equivalent names.
The registration (or certification) process consists of an audit Document \%hat you do and do what you document should
of the implementation of company's documented quality system he the major aim of documentation [Popular View (1993)]. The
after it has been verified and seen to conform to the requirements documentation should consist of preparing a quality manual that
of the applicable ISO 9000 standard. The audit is con-lucted by adequately covers all relevant aspects of the quality system,
an independent third party organization such as tae British procedures for describing general instructions and job
Standards Institute or Lloyd's Registered Quality Assurance, organization, and detailed work instructions covering all technical
usually selected by the company that applies for certification. requirements and other relevant data. It should be noted however,
Depending upon the number and the nature of the that these procedures and work instructions are not wish lists
nonconformance,, found during the audit, the company is either based on what would he liked, but rather what is necessary and
recommended or rejected for certification. what must be done as well as what must not be done. We need
to check how the written procedures and work instructions stack
Since it is the most comprehensive standard of the three, we up against the requirements of the applicable ISO 9000 standard.
shall consider ISO 9001 and compare it with the NIBNQ and As Lamprecht said. - document what you say you do and not
European Quality Awards. ISO 9001 consists of 20 elements. what you think you do or, worse yet, what you used to do.
Interested readers can refer to 1987 British Standard Quality Outdated procedures are a sure way of being issued a
System to learn the importance of each one of these 20 elements nonconformance notice" [Lamprecht (1991)].
i n demonstrating the conformance of product or service to
specified requirements [British Standard Quality Systems (1987), As mentioned earlier, management must provide confidence
ANSI/IPC-QS-95 (1992)]. i n customers that an effective quality system is in place indicating
that they can supply products and services that conform to
Based on these 20 elements and their importance, the ISO specified requirements. The only way to accomplish this aim is
9001 standard provides a systematic and comprehensive to develop, implement -and maintain a well-planned and well-
framework for establishing and maintaining a documented quality i ntegrated documented quality system. Such a system must
system that increases the level of confidence in meeting, customer i nclude the organization's quality policies and objectives,

50 1 994-95 Annual Issue of HE ( HK)

Strategic Quality Management, Malcolm Baldrige and European Quality Awards
and ISO 9000 Certification: Core Concepts and Comparative Analysis

management responsibility and authority, procedures ttnd work maintaining calibration procedures, ensuring suitable
i nstructions related to all departments, and all functions. The environmental conditions for calibrations, inspections, tests, and
personnel who use the procedures must be made aware of the measurenurnts. mid for maintenance of inspection, measuring
li mitations in applying than. Also, they must know what to do and tctitequipmcnt should hescriously investigated in developing
i fa situation warrant; that a (lesign change is neccled. In addition, proper proc(!dures.
I nanagenicnt nrttst establish and maintain documented procedures
fo r appropriate dOCUn1Cnt reyic%y and approval, distribution. I nspection and test records mist I)e maintained and must
prtn•ision Of a master list oran equivalent document, and approval readily he ;tccessihte for all required personnel. The necessary
of all chan~"cs and modifications. Obsolete document- must he i nformation .systems requirements in collecting and storing
promptly rent( wed from all points of issue or use. i nspection. test and measurement data must be identified. Data
and information issues such as security, availability and
Desig;t Qttalitl' curd Prevention accessibility must also be addressed. All procedures related to
these actiyitieti Moist he clearly defined and documented.
One of the major goals of the ISO 9001 standard is to provide
a product or service that customers want. The clesign quality and
prevention core concept mist ensure this goal. Do the job "right Core Values of ISO 9001
the first time" rather than redo until ri, , Iit" and huil(lin'Icustomer There is one and only one core value for ISO 9001, namely,
requirements into the design moist he the priority. All quality conformance to specified requirements. Management must
i mprovement efforts that are related to eliminating waste provide :t documented quality system that increases the level of
processes and components that do not acld value to ill,- product confidence in producing goods or services that customers want.
or service should be formulated and implemented. Developing The company operational results as in the case of MBNQ and
innovative systems and processes and analyzing root cause European Quality Awards are not considered when
conditions and corrective action plans, work operations, and recommenclin; ISO 9001 registration.
criteria for -,vorktnanship must he seriously considered. Necessary
design and development planning, documenting work The w ay that the ;shove four core concepts are important and
i nstructions, assigning required resources and qualified personnel, form the basis for developing and maintaining an effective
coordinating the clesign, technical, and support interfaces among quality system can he explained as follows. Of the twenty
different ( , roups or departments should also be seriously rCCIuiretnents. which are directly involved with respect to their
considered. si-nificance in developing the quality system, conformance is
central to ten requirements, clocumentation to seventeen, design
I n addition, assessing information systems and their duality and prevention to six, and inspection and testing for
management and evaluating technology and technical support three requirements, respectively. Thus, the thorough
needs such as CAD/CAbi, CIyI. SPC, JIT, and testing and rneasttring understanding of these four core concepts not only by the senior
for effective design and production must be seriously investigated management responsible for implementing the system, and all
to build quality and to prevent errors or defects in manufacturing others w ho develop the corresponding procedures and detailed
products or services. Supplier quality management based on work instructions is extremely useful in applying them in
acceptance inspection. product review and evaluation, and planning. establishing and maintaining a documented quality
constructive feedback must also he considered [ Kloc( (1990)]. system. In addition. the experiences of successful ISO 9001 or
ISO 9002 registration at Du Pont, UCB Chemical Sector, Dow
A system for regular reviews and verifying that the design Corning. Union Carbide, and other companies clearly indicate
output is meeting the design input requirements, and evaluation that these four core concepts are extremely important in
and approval as well as the new issue of design changes must developing and implementing an effective quality system [Popular
be clearly defined. As mentioned by Soslow, management must View (1993), Dzus (1991), Van Nuland (1990), Schnoll (1993),
provide adequate resources and trained personnel to carry out Gasko (1992). Klock (1990)].
verification activities related to product designs, processes and
i nstallations [Soslow (1992)]. The design verification process I n addition to these core concepts, the importance of
should be conducted by someone independent of personnel l eadership, customer focus and fact-based management must be
directly responsible for the work. recognized in establishing and maintaining a documented quality
system. These are not as strongly advocated in ISO 9001 as they
Inspection and Testing are in satisfying the MBNQ and European Quality Awards criteria.
For example, senior management must make a commitment to
Inspection and testing is another crucial core concept for
define quality policies and objectives, specify delegation of
establishing and maintaining an effective ISO 9001 quality
authority and responsibility and allocate sufficient resources in
assurance system. Management must ensure that incoming
i mplementing a quality system. It is recommended that
product is not. used or processed until it has been inspected or management should conduct reviews periodically to ensure its
otherwise verified as conforming to specified requirements. continuing suitability and effectiveness of the quality system
Procedures for inspecting and testing which may be specified in against changing technology and market conditions, regulatory
the quality plan, use of process monitoring and control releasing requirements and customer expectations. However, they are not
products only after inspection and testing, final inspection and
testing before final dispatch, and identifying nonconforming as much personally involved, dedicated and expected to
demonstrate leadership in formulating and implementing quality
products must be clearly defined and documented. Also,
improvement strategies as they do in the case of the MBNQ and
identifying the necessary measurements made and the accuracy European Quality Awards. The same is true in committing to the
required, and selecting appropriate inspection, measuring and goal of customer focus and satisfaction. All managers have to do
test equipment must be established. In addition, establishing and is to establish and maintain a documented quality system that

1994-95 Annual Issue of ME (HK) 51

Strategic Quality Management, Malcolm Baldrige and European Quality Awards
and ISO 9000 Certification: Core Concepts and Comparative Analysis
would instill confidence in producing goods and services that i mproving value to customers and improvement of the
customers want. Thus the documented quality system is a contract company's overall operational performance. The EQA also
between the company and the customer. There is no need to focuses on company's financial performance. ISO 9001, on
examine critically the company's relationships with customers the other hand. focuses only on conformance to specified
and its knowledge of customer requirements and of key quality requirements in establishing and maintaining the company's
factors that determine market competitiveness. documented quality system.
I SO 9001 give considerable importance to the role of inspection
Quality records of management reviews, internal quality and testin~u. As explained earlier, it is one of the core concepts
audits, inspection and tests, calibration, training, and t hat is fundamental in developing and implementing a
nonconformances reflect the data at the time of their Occurrence documented quality system. The MBNQ Award and EQA, on
to demonstrate the achievement of quality and :o provide t he other hand. emphasize that inspection and testing be
evidence that activities are carried out as planned. It is not replaced hypre\ention in demonstrating excellence in quality
required to observe them over a period of time to conduct of products or services.
analysis for trends, projections or benchmarking. Also, there is
no need to compare the results with those of competitors. This 6. As mentioned above, people participation and partnership,
i s smother difference between ISO 9001 requirements and the and strategic quality planning are not considered at all in ISO
MBNQ and European Quality Awards criteria. 9u01 requirements whereas they play a most important role
i n formulating and implementing quality improvement
Comparison of ISO 9001 with the MBNQ and strategies to satisfy the Iv1BNQ and European Quality Awards
European Quality Awards criteria.
As mentioned earlier, the ISO 9001, 9002 and 9003 standards Continuous improvement, as Juran pointed out, is not one of
are generic contractual quality assurance standards representing the requirements of ISO 9001 standard whereas it plays a
the minimum requirements for an effective quality system to central role in planning and implementing quality
ensure that the product or service consistently meets customer i mprovement efforts to satisfy the MBNQ and European
requirements. They are written for all suppliers regardless of Quality Awards criteria. As stated by Hyman Katz, Corporate
their industry base, company size, or what division of a company ` - ice President. Pall Corporation, continuous improvement
is being registered. Consequently, they are not set high and hevond the minimum requirements of ISO 9001 is necessary
therefore can be thought of as the lowest common denominator i n order toachievetotal quality[ISO9000-Handbook(1992A
of an effective quality system meant for all industry and service
8. Similarly. customer focus, leadership, and fact-based
groups - one that does not contain vital technological and
management are importantforISO 9001 only up toestablishing
competitive elements [Kalinosky (1990), Sayle (1988)]. As Juran
and maintaining a documented quality system to ensure
pointed out, these standards do not mention or make provision
confidence in customers that the intended products orservices
for continuous improvement [Burr (1990)]. Also, they do not
conform with specified requirements. There is no need to
require any evidence of a satisfactory track record of performance
examine critically the company's relationships with customers
- e.g., in product quality or delivery [Burr (1990)]. Similarly,
and its knon ledge of customer requirements as the MBNQ
human resource development and management, and strategic
Av, ard and EQA criteria emphasize in customer focus.
quality planning are not covered at all in ISO 9001 requirements
Similarly. all senior management has to do is to make a
i n planning and implementing the quality system.
commitment in establishing and maintaining a documented
quality system in observing ISO 9001 requirements. It is not
Based on these observations, we can compare the MBNQ required to observe the data over a period of time to conduct
and European Quality Awards with the ISO 9001 standard as
analysis for trends, projections or benchmarking. Also, there
follows. is no need to compare the results with those of competitors
in satisfying ISO 9001 requirements. On the other hand, all
1. The MBNQ Award and EQA are awards whereas the ISO 9001 these three core concepts, as explained earlier, play a vital
is a contractual quality assurance standard that can be role in implementing quality plans to satisfy the MBNQ
satisfied by registration. Award and EQA criteria. The relationship between ISO 9001
2. Both the MBNQ Award and EQA and the ISO 9001 standard and the seven core concepts is described in Fig. 5. As you will
are results-based awards /standards. see in the figure. the overlap between the seven core concepts
of SQhl and the four core concepts of ISO 9001 is the design
3. The major purposes of MBNQ and European Quality Awards quality and prevention as discussed in item 9 below.
are to promote quality awareness, to increase competitiveness,
to understand the requirements of excellence in duality, and 9. The only major overlap between the ISO 9001 standard and
to recognize companies for outstanding quality management the MBNQ and European Quality Award criteria is in design
and achievement. In addition, the MBNQ Award requires that quality, speed and prevention. However, it should be noted
award winning companies should share information on their that the requirements of ISO 9001 do not refer to the technical
successful strategies with other companies. Or.. the other specifications of the products, but instead to the systems that
hand, the major purpose of ISO 9001 is to implement an produce them. instilling confidence that the products or
effective quality system to provide confidence in customers services consistently have the quality that customers expect.
that the intended products and services consistently conform As Reimann and Hertz, and others have pointed out, they are
to specified requirements. designed to complement technical and service requirements
[Reimann and Hertz (1993), Heapy and Gruska (1993), ANSI/
4. Both the MBNQ and European Quality Awards emphasize I PC-QS-95 (1992)]. In addition, the ISO 9001 requirements do
two factors of competitiveness; namely, delivery of ever not require speed or cycle time to become competitive in

52 1994-95 Annual Issue of IIE (HK)

bringing prod products or services purposes of the 11' NQ Award -d < rid the ISO 9001 stars standard
the other hand, they y a dominant role: in sat different. The core concepts that are central in developin
Award and EQA crit implementing quality systems based can theMI3NQ Award c
as well as the requirements of the ISO 9001 standard are di different t
10 . In addition to inspection and testing, conformance and design quality, speed and prevention . The same is
documentation play a vital role in planning and implementing true for comparing the ISO 9001 standard with the European
an effective documented quality system that satisfies ISO Quality Award. As explained earlier, both MBNQ and European
9001 requirements . On the other hand, they are not Quality Awards address factors reflecting competitiveness;
emphasized in the MI3NQ and European Quality Awards
namely, customer focus, continuous improvement, competitive
criteria . comparisons and benchmarking, fact-based management, people
11 . "Total duality management is not required under ISO 9001 participation and partnership, strategic quality planning and its
registration [Soslow (1.992)] . integration with overall corporate business plans, and public
responsibility . Senior management must also be actively involved
12 . ISO 9001 requirements do not containvital technological and and demonstrate leadership in developing and impl
competitive elements Malinosky (1990)]. quality improvement strategies . These significant fa
focused and considered in the ISO 9001 requirements.
It should be underscored, however, in the words of I-Iym
Katz that the ISO 9000 requirements "certainly, belong in a Total
Quality Process. ISO 9000 provides a comprehensive approach
documenting quality processes and assessing their
erformance," [ISO 9000 - Handbook (1992)].ThusISO 9001 can
provide a foundation for SQM as decribed in Fig. 5 . Companies
can document processes and procedures for an effecive qual
system which can be taken as a platform for continuous
improving the quality of products or services that custom
want . Such an integration can provide an efficient implementation
of quality improvement strategies involving SQM in a gradual

From the experiences of MBNQ Award winners, we find

a lotof time and effort, and considerable initial costs are required
in formulating and implementing duality plans to satisfy the
award criteria . Even it is too early to find evidence, the amount
Figure 5: Overlap Between SOM and ISO 9001 of time, effort and cost would be the same in of
the EQA criteria . The ISO 9001 registration wever,
"Thus, the MBNQ and European Quality Awards criteria are involves much less time and effort, It also evolves much less
farther-reaching and broader than the ISO 9001 requirements . cost . Therefore, we recommend that compani+ can attemptfirst
Also, the ISO 9001 quality assurance standard falls short of SQM getting ISO 9001 registration and then try to develop and
in focusing and implementing quality improvement strategies in implement quality improvement strategies to satisfy the MBNQ
delivering ever improving value to customers and improvement and European Quality Award criteria . If companies are located
of company's overall operational performance. This does not in USA, they can follow ISO 9001 first, then the MBNQ Award
mean that ISO 9001 is not desirable; the fact they are being used path ; on the other hand, companies located in Western Europe
for registration all over the world should underscore its definite can follow ISO 9001 registration and the EQA path . Companies
value. We should also note that the emphasis of IS09001 in in other countries can obtain ISO 9001 registration first, and
addressing process control issues is much stronger than the attempt developing and implementing SQM es by
Award criteria . However, one should understand the basic following the seven core concepts . If they have cal awards
differences between the ISO 9001 and MBNQ and European based on these seven core concepts and hence TQ ut with
Quality Awards (and differences between the ISO 9001 and different names (like MBNQ and European Quality Awards),
SQM) as described above. Also, as Lofgren, President of the then they can follow ISO 9001 registration and their local award
Registrar Accreditation Board (RAB), explained that neither set path .
of criteria alone will assure total quality; but together, the MBNQ
and EQA criteria and ISO 9001 requirements, complement each
other [ISO 9000 - Handbook (1992)].
After observing the significant contributions of the quali
In pointing out the differences between the MBNQ Award gurus like Deming, Juran, Crosby, Feigenbaum, Ishikawa,
and ISO 9001 standard, Reimann and Hertz noted two Garvin, we have defined the strategic quality management as a
misconceptions ; namely, that they both cover the same comprehensive and strategic framework linking profitability,
requirements and both address improvement, relying on high business objectives, and competitivenessto quality improvement
quality results and hence, both are forms of recognition. efforts with the aim of harnessing the human, material and
Consequently, many believe that they are equivalent and choose information resources organization-wide in continuously
one or the other [Reimann and Hertz] . Forthe twelve differences improving products or services that will allow the delivery of
as stated above, these conclusions are not correct. The basic customer satisfaction. For the reasons explained earlier in the

1994-95 Annual Issue of LIE (HK) 53

Strategic Quality Management, Malcolm Baldrige and European Quality Awards
and ISO 9000 Certification: Core Concepts and Comparative Analysis
paper, the words "strategic" and "total" are used interchangeably. [ 81 Deming. W. Edxvards (1986), Out of the Crisis, Camhridge,
Also, seven core concepts, namely, customer focus, eadership, MA: Massachusetts of Technology.
continuous improvement. strategic quality planning, design
[91 Dzus, G. ( 1991), Planning a Successful ISO 9000 Assessment,
duality, speed and prevention, people participation and
Quality Pro(, ress, November 1991, pp. 43-46.
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on strategic or total quality management are introduced. These Revised. New York, NY: iMcGraw-hill.
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[131 Garvin, 1). A. (1991), How the Baldrige Award Really Works,
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' On Leave from the College of Business, Eastern Michigan

University , Ypsilanti, MI 48197

1994-95 Annual Issue of IIE (HK) 5 5