Academic journal article SAM Advanced Management Journal

Quality Implementation in Small Business: Perspectives from the Baldrige Award Winners

Academic journal article SAM Advanced Management Journal

Quality Implementation in Small Business: Perspectives from the Baldrige Award Winners

Article excerpt

Introduction

Over the last two decades, American business has lost worldwide market share in a number of major industries including automobiles, computers, electronics, and textiles. In an effort to improve the overall competitiveness of U.S. industries, Congress created the Malcolm Baldrige Quality Award (MBQA) in 1987. Total quality has now become an expectation in contemporary business. However, the debate continues as to the real effectiveness of TQM (Total Quality Management) programs. Shin, et al (1998) argued that TQM programs fail due to an inefficient system for executing the quality principles. While there are recent studies examining TQM (Ernst & Young, 1993; Black & Porter, 1996; and Shiw, Kalinouski, & El-Enein, 1998), it becomes apparent that there is agreement on the building principles of total quality, but the actual implementation is the challenge.

Each year up to two MBQAs can be given to applicants in each of three categories: manufacturing, service, and small businesses. It is the small business category that provides the foundation for this article. Small business encompasses all sections of the economy - manufacturing, service, retail, and warehousing. It should be noted that the Small Business Administration reports that definitions of small business may vary from firms with fewer than 100 employees to those with fewer than 500. A more detailed employment breakdown also used is as follows: less than 20 employees, very small; 20-29, small; 100-499, medium sized; and more than 500, large. These size breaks are consistent with standard business employment, asset and receipt-size classes established on May 18, 1982, by the Office of Management and Budget for use by all federal agencies when publishing business data (Hodgetts & Kuratko, 1998).

Andreichuk (1992) examined the objective measure of quality in U.S. firms. He stated, "It's a common misconception that big firms with extensive human and financial resources can do a better job of educating and motivating their workers to make quality improvements. The truth is that smaller companies can be even more successful at soliciting employee support and involvement because there are fewer management layers to permeate and fewer people to convince of the benefits" (p.29). With this in mind, this article seeks to uncover the traditional as well innovative methods of quality improvement available to small businesses. Research was conducted from 1996 through the latter part of 1997 among the MBQA winners of recent years using on-site visits, telephone interviews, and secondary data, in order to gain insights into the techniques and processes of quality management for small firms.

Background on the Baldrige Award

The core values and concepts of quality are grouped into seven categories that constitute the heart of the Baldrige application. The framework connecting these categories is presented in Figure 1. As the figure shows, the framework has four basic elements; the driver, otherwise known as senior executive leadership, which creates the goals, systems, and values that guide the organization's pursuit of quality and performance objectives; the system, which consists of processes for meeting quality and performance requirements; the goal, which is the delivery of ever-greater value to customers; and the measures of progress, which are quantifiable results that lead to improvement customer value and company performance.

The Baldrige examiners and judges evaluate companies' performance in the seven categories using a checklist of 28 items. In recent years, the number of points allocated to each of the categories has changed; less emphasis is now given to leadership, while more goes to quality and operations results. Here is a 10-year comparison of how the 1,000 points have been awarded. Research reveals that the key to winning is to provide a detailed, well-written application of what quality improvements have been achieved as well as convincing documentation for those achievements. …

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