The Level of Organizational Performance - Term Paper Example

European Foundation for Quality Management (EFQM) Introduction The improvement of the quality of services and products offered by firms internationally has been the main priority for many organizations around the world. In the context of the European Union, the design and the application of a model that could represent the level of the organizational performance (in terms of the quality of services and product offered to the public) has been proved to be the most appropriate solution for the effective measurement of firms’ performance within the international market. In accordance with the official site of European Foundation ‘the EFQM (European Foundation Quality Management) Excellence Model was introduced at the beginning of 1992 as the framework for assessing organisations for the European Quality Award; it is now the most widely used organisational framework in Europe and it has become the basis for the majority of national and regional Quality Awards’ (European Foundation for Quality Management, 2007). In fact, EFQM Excellence model has become quite known in organizations operating both in the public and the private sector. Its effectiveness regarding the measurement and the evaluation of organizational performance has been the main reason for the expansion of this model in many countries around the world; EFQM Excellence model has been proved to be equally effective in the private and the public sector. Current paper examines the particular aspects of EFQM Excellence model and the applicability of this model on modern organizations around the world. In order for the structure and the role of this model to be clearly understood, the application of the specific model in a particular case is examined. In this context, the application of European Foundation Excellence model in Dubai has be considered to be a characteristic example of the effectiveness of this model both on the private and the public sector internationally. Part A European Foundation for Quality Management (EFQM) Excellence model – literature review In order to understand the role and the development of European Foundation for Quality Management, it would be necessary to refer primarily to the general characteristics of this model the main aspects of its application (positive and negative – if any – aspects of the application of EFQM in firms operating within the international market). In this context, it is noticed by the European Foundation of Quality Management that ‘the Excellence model is a management model for excellence which can be applied to any organisation to evaluate qualitatively its performance; it enables private, public and voluntary sector organisations to compare their performance and provides a method for measuring improvements in performance over time’ (European Foundation for Quality Management, 2007). Other ‘interpretations’ of the particular model can be also observed within the international market. More specifically, it is noticed in an article published by NEF (2007) that the EFQM Excellence model can be characterized as ‘a self assessment framework for measuring the strengths and areas for improvement of an organisation across all of its activities; the term ‘excellence’ is used because the Model focuses on what an organisation does, or could do, to provide an excellent service or product to its customers, service users or stakeholders’ (NEF, 2007). Because of its ‘capabilities’ as described above, the specific model has been used by many organizations around the world (belonging either in the private or the public sector). Moreover, a thorough analysis of the particular characteristics of this model has taken place by organizations around the world trying to identify the strengths and the weaknesses of the model when applied in practice. In this context, it is noticed that ‘the European Excellence Model allows Strengths and Areas for Improvement to be identified through self-assessment; it is a non-prescriptive framework based on nine criteria; the assessment looks at an entire organisation; the nine criteria are divided into Results Criteria (what the organisation achieves) and Enabler Criteria (how results are achieved)’ (National Probation Service for England and Wales, 2007). It is not made clear however whether the above mentioned criteria (as they can be seen in figure 1 below) are differentiated (in terms of their interpretation) in firms internationally or they tend to present similar characteristics and content no matter of the area on which they are applied. On the other hand, it has been found that ‘the EFQM Excellence Model has been used extensively and beneficially in manufacturing, banking and finance, education, management and consultancy; companies apply the EFQM Excellence Model since the pursuit of business excellence through TQM is a decisive factor in allowing them to compete in today’s global market’ (Watson, 2002, 2). The sectors mentioned above are just indicative. In fact the particular model can be used effectively either in the services and the manufacturing industries presenting the standards for the effective organizational activities taking into account the conditions of the particular market but also the trends and the turbulences of the global market. Figure 1 – Excellence Model (source: European Foundation for Quality Management, 2007) In accordance with another description of the EFQM Excellence model the particular model is ‘a non-prescriptive framework based on 9 criteria; five of these are ‘enablers’ and four are ‘results’; the Enabler criteria cover what an organization does while the Results criteria cover what an organization achieves; results are caused by Enablers and Enablers are improved using feedback from Results’ (BPT Trends, 2007). The above description is quite analytical; however there is always the case of wrongful interpretation of the criteria used for the construction of the particular model. More specifically, when interpreting the above model it is quite possible to give wrong values to one or more of the criteria included (not accurate evaluation of a specific business). In this way, the assumptions made regarding a particular business will be inaccurate. The importance of the model for firms operating in many sectors has been extensively accepted in the literature. Moreover, many efforts have been made in order to identify the sectors in which the above model would be more applicable. In this context, it has been found that ‘the model is being used increasingly by healthcare organisations in the Netherlands, Italy, Germany, France, Austria, Spain, Portugal and Belgium, for example, as well as in the UK’s National Health Service (NHS) acute and community trusts, strategic health authorities, primary care trusts and the newly formed NHS workforce confederations’ (Perides, 1981). Apart from the healthcare sector, Excellence model has been applied successfully in many other industrial sectors. It depends each time on the needs of a specific organization, the level of development of the sector involved (in terms of its appropriateness for the implementation of Excellence model in firms operating within the specific industrial area). The main problem regarding the application of Excellence model on firms operating in modern commercial market has been the following one: how this model operates? In order to identify the main aspects of Excellence model regarding its application in real terms (i.e. in firms actually operating in a particular commercial market) a research was conducted in 2000 by two accredited Academic Institutes: the Georgia Institute of Technology and the College of William and Mary. Through the above research which focused on the performance of more than 600 firms it was revealed that ‘as a whole, they experienced significant improvement in the value of their common stock, operating income, sales, return on sales, employment, and asset growth; effective adoption of performance Excellence principles embedded in various quality award criteria do make good economic sense’ (EFQM, 2007). In other words, Excellence model has a significant impact on the organizational performance offering an effective and detailed analysis of all firm’s sectors. In this way, the improvement of firm’s performance is more feasible and more effective. It should be noticed that Excellence model has been used in many other sectors apart from the healthcare industry as already explained above. However, it seems that in the specific industry the above model is extremely effective. It is perhaps for this reason that Excellence model has been adopted by the Dutch Institute of Quality. The above Institute promotes two specific aspects of Excellence model: the ‘«Positioning and Improving» and «Self-Assessment» that have been developed and are used frequently’ (Nabitz et al., 2000, 191). Generally, it has been found that Excellence model is effective in most organizational activities. On the other hand, many efforts have been made in order to identify the strengths and the weaknesses of this model. The research that made by Bauer et al. (2002, 576) revealed that ‘the basic feature of the evaluation model is the relationship between the overall customer satisfaction value of a company and its process-specific customer satisfaction values; the results of an empirical research project show that this model is an interesting alternative to traditional primarily finance-oriented techniques for identifying potential process improvements’. Among the benefits of Excellence model should be considered to be its effectiveness in the long term, its appropriateness for various business activities and its ability to be adapted on the needs and the demands of each particular firm (taking into account also the characteristics of the market involved). Part B Description of the contemporary exercise implemented by Dubai Government based on the above mentioned model. The value of Excellence model has been recognized by many governments around the world. In fact, as already explained above Excellence model has been implemented and used by many organizations of the public sector, especially in the healthcare industry. Among the countries that have recognized the value of Excellence model is Dubai. The country is facing a long period of continuous growth (in most industrial sectors) and the application of the particular model has been considered as necessary in order to secure the performance of organizational activities primarily in the country’s public sector. In fact, in accordance with a relevant research ‘in the past 30 years, Dubai has rapidly transformed from a traditional fishing and pearling village, into a hyper-modern internationalized (and largely ‘westernized) city, with expatriates from over 120 countries forming over 80% of the current population; indeed, Dubai is increasingly being branded as “The Las Vegas of the Middle East”’ (University of Wollongong, Dubai, 2007). The development of the country’s industry has been a significant factor towards the effectiveness of European Foundation Quality Excellence Model. The application of this model in the country’s public sector will offer the necessary framework for the further improvement of the country’s performance in the industrial sectors involved. The implementation and the application of European Foundation Quality Excellence model in Dubai is monitored and controlled by a widely known European Academic Institute, the Bradford University. In accordance with a relevant study published by the above University the application of the specific model in Dubai has been completed through a particularly designed programme the ‘Dubai Government Excellence Programme (DGEP)’ which covers all activities of public sector in Dubai. In order for the control of the above programme to be more effective, a regular update of the performance of the country’s public sector (since the implementation of the relevant model) has been established. In fact, ‘every two years, each public sector service must submit a report on its quality initiatives and identify areas for improvement according to criteria outlined by the Government - which invites independent assessors to scrutinise the various departments; the reports go back to the Government and the Ruler of Dubai acknowledges best performance and gives prizes to those that excel’ (The European Centre for TQM, Bradford University School of Management, 2007). In this way, it is made sure that employees of public sector in Dubai are given all necessary initiatives in order to support the improvement of the organization in which they work. At a next level, the Academic Institute that has the role of ‘supervising’ the application and the effectiveness of Excellence model in Dubai, can intervene in order to help towards the improvement of specific organizational activities, like the following ones: ‘build the protocol system and procedure for departmental assessment; train the assessors; co-ordinate all the activities of the jury that validate the work of the assessors; and prepare recommendations for the Ruler of Dubai to make his final award presentations’ (The European Centre for TQM, Bradford University School of Management, 2007). The role of the above Academic Institute is rather supportive than controlling. More specifically, Bradford University can propose all appropriate solutions when a problem in the application of Excellence model is identified, also transformations is the model’s forms and rules can be also proposed at the level that the main principles of the model are not affected. Recently, the Dubai eGovernment has been given an award with a significant value regarding the corporate activity and the quality of services/ products offered to the public. More specifically, it was given the ISO 9001:2000 quality certification which is an award of significant importance regarding the country’s industrial performance. In accordance with a report published by the Dubai eGovernment (2007) ‘the globally recognised certification was awarded following independent testing and assessment of Dubai eGovernment’s quality management systems and processes, by IMS Certification, an independent international certification body’. It seems that the application of European Foundation Quality Excellence model in Dubai has achieved the targets set by the country’s government: improvement of regulatory standards and customer satisfaction within all organizational activities in Dubai. The prospects for the performance of the firms operating in the particular country (including the organizations operating in the public sector) seem to be extremely positive. Conclusion The development of corporate activities within the international market has imposed the introduction and application of theoretical models that could support the above activities worldwide. The implementation and the use of European Foundation Quality Excellence model by firms around the world have been proved to be particularly effective towards the improvement of organizational performance in the long term. In the case of Dubai, the use of Excellence model has helped the country to improve the quality of services offered in all industrial sectors. On the other hand, the possible weaknesses of Excellence model have been proved to be limited and related mostly with the lack of appropriate preparation and ineffective monitoring of the implementation/ operation of the model in real terms. Moreover, Excellence model has been found to be equally effective for the private and the public sector, a fact that should be considered to be extremely positive for the particular model. More specifically, in contrast with other theoretical models that have been applied in corporate activities worldwide, European Foundation Quality Excellence model seems to have as a major advantage its effectiveness. It is for this reason that the specific model has been chosen by many organizations around the world (especially those operating in the public sector) as a significant supportive tool for the improvement of their performance. References Bauer, A., Reiner, G. (2002) Integrated business excellence model for a trading company. Managerial Auditing Journal, 17(9): 576-580 Dubai eGovernment (2007), [Online], available at http://egov.dubai.ae/en.portal?DEG_news_corp,News_000156,1,&_nfpb=true&_pageLabel=view European Foundation for Quality Management, EFQM (2007), [Online], available at http://www.warwickdc.gov.uk/WDC/Council_x2c_+government+and+democracy/Councils/Council+performance/European+Foundation+for+Quality+Management.htm Nabitz, U., Klazinga, N., Walburg, J. (2000) The EFQM excellence model: European and Dutch experiences with the EFQM approach in health care. International Journal for Quality in Health Care, 12: 191-202 National Probation Service for England and Wales (2007), [Online], available at http://www.gwentprobation.gov.uk/about/about_eem.html NEF (2007) EFQM Excellence Model, [Online], available at http://www.proveandimprove.org/new/tools/efqm.php Perides, M. (1981) Aiming at Excellence in Healthcare – The European Foundation for Quality Management Excellence Model. 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