:The Malcolm Baldridge National Quality Award Paula K. Reynolds

~
:The Malcolm Baldridge National Quality Award
Paula K. Reynolds:
University of Indianapolis
Paula K. Reynolds
is a part-time undergraduate student in Business Administration
: the University of Indianapolis, Indiana.
3345 McLaughlin
Indianapolis, IN 46227
(317) 865-3503
at
The Malcolm Baldridge National Quality Award
In today's global economy, quality goods and services provided by American
companies are no longer a choice--it is a matter of survival. In 1987, Congress enacted
legislation
to recognize
quality achievement
in individual companies,
in order to share
successful quality strategies and to promote quality awareness among the nation's
:businesses. The Malcolm Baldridge National Quality Award is much more than a
contest, it is a tool for recognizing excellence, and a means for companies to be aware
of quality as a competitive
device.
The Malcolm Baldridge National Quality Award is an annual award used to
recognize companies for business excellence and quality achievement.
"The Award
promotes awareness of quality as a vital competitive element; understanding of quality
:and excellence
requirements,
implementation"
(10, p.18)
and sharing of quality strategies
and benefits from their
HISTORY LEADING TO THE CREATION OF THE BALDRIIDGE AWARD
The U.S. economy dominated the post-World War II era, and the demand for
u.s. consumer products grew rapidly during the 19505 and 19605. For a while,
American products set the standards for quality, but businesses were preoccupied with
efficiency and price rather than effectiveness and value. An appetite for consumer
products led to a mind-set that emphasized productivity at the expense of quality
As the quality of goods made in America declined, consumers lost confidence in
American products and began spending their dollars on foreign goods.
By the 19805 U.S. manufacturing growth slowed dramatically while our trading
:panners, panicularly Japan and other Pacific Rim nations, made strong gains. Many
u.s. plants shut down and workers were laid off. The U.S. slipped into a deep
recession, and congressional offices were flooded with demands for trade protection,
Executives from U.S. Companies began touring foreign factories, especially in
:Japan, and found defect levels were much lower than those in the U.S This superior
:quality was being achieved on the production line rather than through extensive testing
and rework. In fact, most executives found that the Japanese plants had no final
:inspection or rework areas at all.
3
Various groups of industry and government leaders began looking at the
seriousness of America's declining dominance in the global marketplace.
Concerned
executives formed the National Advisory Council for Quality (NACQ) in 1982. Another
igroup formed the American Productivity Center, now the American Productivity and
:Quality Center (APQC), and sponsored productivity and quality conferences whose
outcome was a recommendation to establish a national quality award similar to Japan's
Deming Prize. As the push for the award matured, so did the general consensus that it
should focus on comprehensive quality management.
In January 1985 John Hudiburg, Chairman and CEO of Florida Power & Light
:approached Congressman Don Fuqua (D-Florida) to develop legislation for the award.
A bill was introduced
in 1986 but did not pass that year although
support for the
legislation grew.
The bill was reintroduced in 1987 and was passed by the House of
Representatives in June of that year. In July of that same year the Secretary of
Commerce, Malcolm Baldridge, was killed in a rodeo accident. Since Mr. Baldridge had
been a supporter of the award as a way to improve the U.S.'s competitive edge, the
':award was renamed
in his honor.
This action accelerated the bill's passage in the
Senate, and President Reagan signed it into law on August 20, 1987.
:4
.
WHO IS ELIGIBLE TO APPLY?
Any U.S. for-profit company may compete under one of the following three
classifications.
Manufacturing
companies
Services companies
Small businesses with fewer than 500 full-time employees
WHO PICKS THE WINNERS?
There are four groups that play key roles in determining the winners. The
National Institute of Standards and Technology (NIST), an agency of the Department of
:Commerce, is assisted by the American Society for Quality Control (ASQC) and is
:!esponsible for managing the review and decision process. There is a Board of
Overseers which evaluates the award's criteria and processes and suggests changes to
the Secretary of Commerce and the director of NIST. Finally, there is a Board of
Examiners that evaluates applications, prepares feedback, and makes
recommendations to the director of NIST.
THE AWARD PROCESS
Each applicant must submit documents describing their activities in seven key
performance areas. The size of the application is limited to 75 pages for manufacturing
:and service companies and to 50 pages for small businesses.
Once the application is
submitted it goes through a four-step process.
1
Each applicant is assigned to a team of examiners who read the
:application and submits his or her score to a senior examiner who
develops a consensus score. Each examiner will create a list of strengths,
:5
areas for improvement, and site visit issues. If a firm scores low, the
senior examiner will provide a feedback report that lists the areas of
:strengths and areas for improvements, and advise them that they have
been eliminated from further consideration
2.
The Board of Examiners reviews the applicants that made it past the first
step and determines which applicants warrant a site visit.
3.
A group of four to six people including examiners, a senior examiner, and
:a NIST observer will inspect facilities
that made it past step two.
The
purpose of the site visit is not to collect additional information but to clarify,
verify, and investigate. This inspection usually lasts three to five days and
:the group interviews
employees
and verifies information
submitted
on the
:application
4
A group of judges makes the final award decisions. Those who do not win
are provided feedback and are notified by NIST. The Secretary of
:Commerce telephones the winners.
QUALITY EXCELLENCE REQUIREMENTS
"The Baldridge Award has become the U.S. standard of excellence for total
quality management.
Baldridge winners deliver goods and services that are
competitive with the best in the world. They attain this status by successfully
applying TOM principles to every aspect of their business. The following
essentials for total quality are embodied in the Baldridge criteria:
6:
.
Customers define quality.
Senior corporate leadership must create clear quality values and build them
into company operations.
Excellent quality evolves from well-designed and well-executed systems and
processes.
Continuous improvement must be integrated into the management of all
systems and processes.
Companies must develop goals and strategic and operational plans to
achieve quality leadership.
Shortened response time for all operations and processes must be part of
quality improvement
efforts.
Operations and decisions of the company must be based on facts.
All Employees must be appropriately trained, developed, and involved in
quality improvement activities.
Design quality and error prevention must be key elements of quality systems.
Companies must communicate quality requirements to suppliers and work to
elevate their performance" (10, pp. 21-22).
AWARD CRITERIA FRAMEWORK
The excellence requirements described above are grouped into seven
examination categories that comprise the major components of the Baldridge
:application. They are broken down into examination categories, examination items, and
areas to address.
Each are briefly described below.
7
.
:Examination Categories
The major components of the total quality management system are contained in
the Award's seven examination categories that include:
"Leadership-Have
the senior leaders clearly defined the company's quality
values, goals, and ways to achieve the goals. Are senior executives
personally involved? Does this involvement include communicating quality
excellence to groups outside the company?
Information
and Analysis-Is
the information used to guide the company's
quality management system reliable, timely, and accessible?
Strategic
Planning-How
does the company plan to strengthen its
competitive position? How are these plans integrated into its overall business
planning?
Human Resource Focus-How
does the company develop the full potential
of its work force?
Process Management-How
are products and services designed?
product and service production and delivery processes managed?
How are
How does
the company assure that suppliers meet its performance requirements?
Business
Results-How
is the company performing in key business areas,
and what are its plans for improving
Customer Focus and Satisfaction-Is
quality defined by the customer?"(1).
The total value of these categories is 1,000 points. and each category carries a
different weight according to their importance in a total quality management system.
:8
:Examination Items
Under each of the seven examination categories there are at least two or more
examination items that deal with key quality components.
Applicants provide written
responses to these key items and describe their practices within each specific area.
Areas to Address
Areas to address describe the intent of the examination items.
They provide
specific information on the requirements in each examination item. There are between
two and six areas to address for each examination item.
DOES THE BALDRIDGE GET RESULTS?
Between February and April 1998, the Foundation for the Malcolm Baldridge;
National Quality Award commissioned a survey of 308 CEO's in the country. Two of the
questions asked if they felt the Baldridge criteria and award stimulated improvement in
quality and improvement in competitiveness in U.S. businesses.
:of the CEOs believe that the Baldridge
in stimulating
both improvements
"Significant majorities
criteria and award are extremely
in quality in U.S. companies
or very valuable
(79%) and improvements
in the competitiveness of U.S. Businesses (67%) (7); however, there are those who
:would disagree.
Critics claim that the benefits have been exaggerated and that the
Baldridge has done less for industry and U.S. businesses than its supporters would
:have us believe.
Philip Crosby, author and quality guru, is one who questions the Award's values.
:"I'm not a critic of the government giving an award. I'm a critic of being self-nominated
and offering a criteria which gives the impression that compliance with it will produce an
:organization that does things right" (6).
9
Many organizations believe that the application process itself is beneficial
experts. There are others, however, who feel that because the feedback isn't
prescriptive, the application process and related costs are not worth it because they
:,don't know what actions to take to improve.
Bruce W. Woolpert,
are viewing it through experienced eyes in their given industry.
President and CEO of
whether you are a
::'arge or a small company, you cannot get someone from AT&T, for example, to visit
your company and tell you what they see from their experienced eyes. But you can get
:this type of advice by applying for the Baldridge Award. You will benefit from these
other people's experiences"
(11, P 19.
There are no guarantees that the Baldridge award or any other quality awards
:will bring success, but Baldridge winners have shown improvement in all aspects of
theirs business.
CONCLUSION
Competing for the Malcolm Baldridge National Quality Award is not an easy task.
:It requires a large investment of time and money, and most that apply do not win on
their first application.
Furthermore, the Award and its criteria have proven to be both
interesting and controversial.
There are some that question the Award's real value, but
\its self-assessment process continues to earn respect among businesses in the U.S.
One thing is certain, since the award was established in 1987, the program has helped
:make quality a national priority.
II
REFERENCES
(1) American Society for Quality. Who was Malcolm Baldridge and Why Did they Name
:(2) Haavard, Robert, and the editors of Electronic Business.
Baldridge
Award.
Boston:
Butterworth-Heinemann,
The Road to the
1992.
{3) Hart, Chistopher W. L., Christopher E. Bogan. The Baldridge.
New York:
McGraw-Hili, Inc., 1992.
:(4) Hodgetts, Richard M. Blueprints for Continuous Improvement.
New York:
AMA Membership Publications Division, 1993.
Future. Quality Digest. November 1998. 17 Apr. 1999.
<http://www.qualitydigest.com/nov98/html/cover.htm/>
Off Page. November 1998. 17 Apr. 1999.
< http://www. qual ityd ige5t. com/nov98/htm
I/tq m. html>
(7) National Institute of Standards and Technology.
The Nation's CEOs Look to
the Future, Study No. 818407. July 1998. 17 Apr. 1999
<http:///wwwquality.nist.gov/ceo-rpt.htm>:
(8) Porter, Les, Steve Tanner. Assessing Business Excellence. Oxford:
Butterworth-Heinemann,
1998
(9) Reimann, Curt W. "The Purposes and Processes of the Baldridge Award", Lessons
Taught by Baldridge Winners, Report No. 1061-94-CH, 1994.
12:
\(10) Steeples, Marion Mills. The Corporate Guide to the Malcolm Baldridge
NationalQuality Award. Milwaukee: ASQC Quality Press, 1993.
(11) Woolper1, Bruce W. "Going Beyond Financial Measurements",
Lessons
Taught by Baldridge
Winners, Report No.1 061-94-CH,
13
1994,