Total Quality Management and the Malcolm Baldrige National Quality Award: Benefits and Directions for Banking Institutions

By Peschel, Daron; Ahmed, Irfan | Business Renaissance Quarterly, Winter 2008 | Go to article overview

Total Quality Management and the Malcolm Baldrige National Quality Award: Benefits and Directions for Banking Institutions


Peschel, Daron, Ahmed, Irfan, Business Renaissance Quarterly


Abstract

Among the philosophies and initiatives for a renaissance in quality across the business and public sectors, Total Quality Management (TQM) and the Malcolm Baldrige National Quality Award have been outstanding in terms of their design and appeal. The objective of this paper is to discuss the concepts of TQM and the Baldrige Award criteria, explicating their applicability and the value of combining the two for the benefit of banks and other financial institutions. We delineate the areas of potential benefit for an institution adopting TQM and seriously pursuing the Baldrige Award, or at least setting into motion a process of change as per the Baldrige guidelines. The benefits to such institutions include economic benefits, improved compliance with legal and ethical guidelines, and improved training and retention of employees and reputational benefits. To demonstrate the value of our thesis, we discuss the case of Los Alamos National Bank, the only bank to have won the Baldrige Award.

Introduction

Over the past thirty years, the role of quality as an all-encompassing organizational value and an important antecedent of organizational performance has been increasingly stressed. With the recognition of serious quality deficits in American organizational performance, especially in comparison with the Japanese, prognostications were made of dire consequences of the neglect of quality for American competitiveness. Thought leaders in industry, academe and government called for nothing short of a renaissance in quality in America. Consequently, the recognition of quality as a vital need led to the rise of quality management (Lee, Zuckweiler and Trim, 2006)

The early 1980s witnessed the emergence of a number of streams of research and writing intended to support, inspire and help direct this renaissance. Prominent among these streams of thought and practice was Total Quality Management (TQM). The idea of TQM has not only survived as a viable approach to improving quality in organizations, but has also spawned a substantial body of research and practice. One especially significant quality initiative that grew out of the TQM movement was the Malcolm Baldrige National Quality Award (MBNQA), instituted and sponsored by the United States Department of Commerce and presently administered by the National Institute for Standards and Technology. The objective of this paper is to identify the applicability and role of TQM in the banking and financial services industry, and to delineate the potential benefits of aspiring for the MBNQA. We begin with a discussion of TQM concepts and MBNQA Award criteria, followed by a discussion of the applicability and value of combining TQM efforts with the MBNQA criteria. To demonstrate the value of our thesis, we discuss the case of Los Alamos National Bank, the only bank to have won the Baldrige Award.

The TQM Approach

The philosophical roots of TQM are generally attributed to Edward De m ing' s 14 points and Carl Juran's 10 steps. Nomenclature and semantics may vary, but TQM can broadly be defined as "a philosophy, a set of tools, and a process whose output yields customer satisfaction and continuous improvement" (Hradesky, 1995). While the roots of TQM are in statistical quality control and conformance to specifications, the adoption of TQM can not only improve conformance but can also positively affect other dimensions of quality (Flynn, Schroeder and Sakakibara, 1995). TQM has been recognized as the preeminent route to quality improvement (Ishikawa, 1985), and it has been found to have a positive link with organizational performance (U.S. General Accounting Office, 1991).

An organization may initiate a TQM program for a variety of reasons, among which may be a desire for continuous improvement, superior use of resources, a desire for organizational change or a goal of improving operational efficiency and decision-making. Implementing the philosophy of TQM and utilizing its tools and process calls for a comprehensive commitment of effort, an understanding of customer requirements, a change in organizational culture, the use of statistical techniques, and wide-ranging coordination and integration among all these efforts. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Total Quality Management and the Malcolm Baldrige National Quality Award: Benefits and Directions for Banking Institutions
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.