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Business Excellence

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Business Excellence

Executive Summary

This report evaluates a range of issues associated with implementing the EFQM as one of the business excellence models. The first part highlights the principles and methods associated with the implementation of business excellence, the similarities/differences between quality and excellence accreditation standards (ISO 9000/1/4 and the EFQM, and the benefits that an organization can derive from the integration of quality and excellence accreditation standards. The report further examines the challenges the leaders face in implementing the EFQM and the leadership approaches that organizational leaders can employ in implementing the model. Finally, recommendations on how to achieve business excellence by addressing the challenges identified are proposed.

 

 

Brief Introduction to EFQM

The EFQM Model is a detailed plan that enables an organization to integrate innovation and improvement in its culture (EFQM, 2019). It involves the use of current and insightful data along with current trends that characterize the industry in which the organization operates (EFQM, 2020).  The EFQM model is essential in supporting directors and managers in managing and strengthening the quality of its operation.  Through its application, managers gain insight into their organization’s position with respect to its quality process. The model thus aids in assessing the maturity of an organization (White & Harris, 2004).

Part 1: Business excellence; principles and methods

Contemporary organizations are progressively following business excellence models (BEMs) in pursuing different aspects of their daily operations. The BEMs are intended to enhance their success in achieving value, quality, and sustainability (Lasrado & Pereira, 2018). According to the European Foundation for Quality Management, business excellence emphasizes achieving results and integrating outstanding practices in the management of an organization (Business Process Improvement Resource, 2020). Thus, business excellence symbolizes the attainment of high quality at all the different levels of an organization’s operation.

As such, business excellence is an essential tool for organizations that intend to achieve future development (Zeljko, Boris & Ana, 2014). Achieving business excellence is dependent on how well firms employ the principles and methods of business excellence. This requires the organization to integrate two main criteria that include the enablers and the results. The results criteria emphasize the need for an organization to achieve the best results towards its different stakeholders. The enabler criteria are concerned about how an organization operates. The six core enablers include ‘leadership,’ ‘partnership and resources,’ ‘strategy,’ people, ‘process, products, and services.’ Conversely, the results relate to people, customers, business, and society (Lasrado & Pereira, 2018).

The enabler and results criteria outlined under the EFQM play a fundamental role in enhancing efforts by an organization in managing their quality systems. Thus, the EFQM is positively correlated to the quality programs. As a model of excellence, the EFQM is critical in promoting an organization’s success in entrenching a holistic approach in managing quality systems (Carlos et al., 2005).

Similarities/differences between quality and excellence accreditation standards 

Both the quality management programs and the EFQM have recognized the importance of customer focus. In respect to this, quality management programs have integrated different quality management standards, such as the ISO 9000-1 and ISO 9000-4. The two standards emphasize the importance of integrating quality assurance as one of the critical aspects of a firm’s quality management system. The rationale of entrenching quality assurance is underlined by the fact that the management of an organization and customers are not involved in a firm’s production. Thus, quality assurance is essential in creating knowledge in respect to what is to be supplied, how the products/service will be supplied, and that the product will be aligned with the customers’ requirement, and compliance with the specified requirements in the production process (Jacobs & Suckling, 2007).

In respect to this, the ISO 9000/1/4 standards are thus critical in promoting the creation of a sense of confidence amongst the target customers. The confidence emanates from the creation of the knowledge and commitment of an organization to ensure optimal adherence of a firm’s product/service to all the necessary quality requirements. The ISO 9000/1/4 quality standards and the EFQM excellence accreditation standard are thus correlated in that they entrench customer focus as one of the core principles in quality management (Jacobs & Suckling, 2007).

As such, the two EFQM excellence accreditation standards the ISO 9000/1/4 standards appreciate the significance of customer focus constitutes an integral aspect in a firm’s commitment to achieving total quality and hence organizational excellence.

Despite their similarities in respect to customer focus, the excellence accreditation standard is broad in that it has entrenched customer results as one of the critical concepts of the EFQM. Under the concept of customer results, a firm can continuously monitor, understand, and evaluate its opinions and ideas (Hoyle, 2001). As such, the excellence accreditation standard increases the likelihood of an organization achieving a high level of satisfaction. The excellence standard enables a firm to achieve a high level of customer focus.

Benefits of quality and excellence accreditation standards 

Successful integration of the quality and excellence accreditation standards is beneficial to improve the long-term sustainability of an organization. For example, the EFQM presents a blueprint that organizations can employ in entrenching a culture of performance and innovation. Moreover, the quality and excellence accreditation standards further play a critical role in the entrenchment of strong organizational leadership (Lasrado & Pereira, 2018). By pursuing the concept of quality assurance, a firm increases its probability of satisfying its target customers. This enhances the likelihood of achieving organizational purpose and vision (EFQM, 2020).

Part 2: Challenges faced by leaders in implementing the EFQM

Challenge One 

One of the challenges that leaders face while trying to implement the EFQM model is organizational structure. For example, a lack of effective vertical communication would hinder the effective and reliable flow of information up and down the hierarchical organizational structure. Ineffective organizational structures make it hard to implement the EFQM, by limiting feedback in a communication process, possibly due to fear of reprisal (INNO Partnering Forum (n.d.). The rigidity associated with a hierarchical organizational structure limits sharing between and across departments. Consequently, inadequate communication mechanisms lead to the formation of silos between organizational departments, subsequently resulting in sub-departmental optimization. Given this, the organization’s management team needs to consider promoting a flexible organizational structure.

Challenge Two 

The second challenge that leaders may face in trying to implement the EFQM model effectively is limited funds. The EFQM model is resource-intensive to implement, not to mention that the cost of operation is also high. Although the actual implementation process of the EFQM model does require a lot of resources, the technique cannot be said to be downright cheap. One of the vital resources that the leadership of an organization should focus on the building includes human capital. The implementation of business excellence is dependent on the skills and competencies of its workforce. For this reason, the management of an organization has to consider allocating a substantial amount of time and money in training its staff on the methodologies necessary for the implementation of the EFQM. Ultimately, most organizational leaders are left to scramble for the limited training resources to meet the requirements set forth by EFQM models (INNO Partnering Forum n.d.).

Challenge Three

The third challenge facing leaders while implementing the EFQM model are the barriers associated with the organizational profile, size, and sector: this is a challenge that spreads across all organizations. The organizational profile in this context refers to the hierarchical levels in an organization, while the size factors refer to either large, average, or small entities. Sectors relate to an organization being a privately owned and run firm, or public organization. Previous evidence indicating that EFQM models are easily implementable in smaller firms due to a more straightforward communication structure is a fallacy (EFQM Model, n.d.).

However, concerns emerge in the applicability when it comes to public firms. The unstable and bureaucratic nature of most public organizations makes it difficult for leaders to effectively eventuate various EFQM initiatives. This is attributed to austerity measures in various countries; publicly owned and managed entities are faced by severe cost constraints, thereby resulting in challenges of frequent policy changes. Accordingly, the management team in an organization should consider developing an effective organizational culture to overcome the challenges posed by organizational size, sector of operation, and profile. An organizational profile can be effective if the entire firm makes use of every department. Organizational leaders should ensure that the diverse levels of management work harmoniously to pursue the overall organizational goal (The EFQM, 2020).

Part 3: Leadership approaches and recommendations relevant to overcome that organisations face throughout their business excellence journey

            The leadership of an organization should be exercised within the context of different stakeholder groups.    Therefore, for contemporary organizations to achieve success, they must integrate effective leadership.  There are diverse leadership approaches that organizational leaders may consider, as examined herein.

  1. i) Sustainable leadership approach:this leadership approach emphasizes the importance of leaders looking beyond their organization’s short term and immediate gain. Under this approach, leaders should perceive their organization within the broader context. Leadership strategies should thus be aligned with the triple-bottom-line dimensions that include financial, social, and environmental perspectives. A sustainable leadership approach requires a leader to develop critical leadership behaviors aimed at fostering sustainable corporate development, such as corporate social responsibility, effective communication with diverse groups, effective communication, and measuring performance (Pozega, Boris & Ana, 2014).
  2. ii) Transformational leadership:under this approach, leaders emphasize on inspiring and encouraging their followers to be innovative and pursue change initiatives. The motive of transformational leadership is to shape and stimulate the organization’s future growth and success.

iii) Servant leadership: this leadership is founded on the principle of service. The servant leadership approach emphasizes the need to put the interest of others first, for example, the team members. The approach further requires one to acknowledge and support the perspective that their followers adopt in pursuing their personal and work-related goals (Spears, 2010).

Recommendations to achieve business excellence

To derive business excellence from the EFQM, organizational leaders should focus on addressing the obstacles that hinder the model’s implementation. Organizational leadership should consider the following proposals.

1) Reforming the organizational structure: the organizational leaders should focus on reforming their organizational structure as one of the critical components of an organization’s infrastructure. Leaders should consider Porter’s value chain and the McKinsey 7S model. These tools recognize organizational structure as one of the crucial components that influences how the different organizational departments interact. Organizational leaders should ensure optimal coordination and communication within and across departments. Thus, organizational leaders should consider entrenching a flexible organizational structure, for example, a flat organizational structure to promote two-way communication.

2) Integrating a resource-based approach; in line with Porter’s value chain, the organizational leaders should focus on entrenching a resource-based approach by ensuring optimal utilization of organizational resources and competencies. One of the critical resources that leaders should consider exploiting includes human resources. Thus, leaders should consider entrenching effective HR practices to build a strong HR-base, for example, by training the workforce.

3) Promoting an effective organizational culture; in respect to the challenge posed by organizational profile, size, and sector of operation, organizational leaders must entrench a strong organizational culture to promote organizational excellence. In doing so, leaders should consider leveraging the seven components of the McKinsey 7S model: shared value, styles, strategy, staff, skills, structure, and systems.

Summary and conclusion 

The report highlights the importance of organization leaders steering their organization towards business excellence. The rationale of pursuing business excellence is to enhance an organization’s success in achieving sustainable competitive advantage. Offering clients quality products and services is one of the fundamental elements in the pursuit of organizational excellence. In respect to this, organizations should consider entrenching effective business excellence models and adhering to quality standards. Nevertheless, organizational leaders need to be knowledgeable of the obstacles to entrenching business excellence. In respect to this, organizational leaders should consider adopting the outlined recommendations.

 

References

Business Process Improvement Resource. (2020). What is business excellence? Retrieved from

https://www.bpir.com/business-excellence-bpir.com.html

Carlos, B., Tena, E, Vicente, R., & Immaculada, B. (2005). To what extent do enablers explain

results in EFQM excellence model? An empirical study. The International Journal of Quality and Reliability Management, 22(4).

Hoyle, D. (2001). ISO 9000 quality system handbook. New York: Butterworth.

INNO Partnering Forum. (n.d.). EFQM Framework Innovation Agencies.

Jacobs, B., & Suckling, S. (2007). Assessing customer focus using the EFQM excellence model.

A local government case. The TQM Magazine, 19(4).

Lasrado, F., Perira, V. (2018). Achieving sustainable business excellence; the role of human

            capital. Cham: Palgrave Macmillan.

Pozega, Z., Boris, C., & Ana, U. (2014). Business excellence as a crucial component for

organisation competitiveness. UTMS Journal of Economics, 5(2), 179-188.

Spears, L. (2010). Character and servant leadership; ten characteristics of effective, caring

leaders. Journal of Virtues and Leadership, 1(1), 25-30.

The EFQM. (2020). The Concepts: fundamental concept of excellence. Retrieved from

https://www.efqm.org/index.php/efqm-model/the-concepts/

White, V., & Harris, J. (2004). Developing good practice in children’s services. London: J.

Kingsley Publishers.

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