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Taking a critical perspective to the European Business Excellence Model using a balanced scorecard
approach: a case study in the service sector
Rodney McAdam Edel ONeill
Article information:
To cite this document:
Rodney McAdam Edel ONeill, (1999),"Taking a critical perspective to the European Business Excellence Model using a
balanced scorecard approach: a case study in the service sector", Managing Service Quality: An International Journal, Vol. 9
Iss 3 pp. 191 - 197
Permanent link to this document:
http://dx.doi.org/10.1108/09604529910267091
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Techniques
Taking a critical
perspective to the
European Business
Excellence Model using
a balanced scorecard
approach: a case study
in the service sector
Introduction
The European Business Excellence Model
(similar to the Baldrige Model) is now in
widespread use in many organisations.
Various approaches to applying the model,
emphasising its advantages in the area of total
quality management (TQM) are well documented in the literature. These advantages
include improved approaches, measurement
and benchmarking. However, there is a surprising lack of literature which adopts a critical perspective to the Business Excellence
Model (McAdam et al., 1998). Instead there
is an apparently endless stream of advocacy
based writings. In contrast to advocacy based
writings a critical perspective (Burgoyne and
Reynolds, 1998):
is concerned with questioning assumptions;
has a social rather than individual focus;
pays attention to the analysis of power
relations;
is concerned with emancipation.
Over the last three years this critical approach
has been applied within a large service based
electrical utility through a university/industry
partnership. The organisation wanted a learning approach to applying TQM, rather than
short term initiatives.
The aim of this paper is to critique one of
the main approaches used in the partnership,
namely the European Business Excellence
Model. The objectives are:
to define a TQM implementation framework from the literature;
to critique the EQA model against this
TQM framework;
to critique Balanced Scorecards against
this TQM framework;
to evaluate critically the university/industry
partnership case study and its use of the
EQA model and Balanced Scorecards
using the TQM framework.
TQM framework
Over the past ten years there has been a proliferation of TQM frameworks in the literature.
Jamal (1998) provides a useful synthesis of the
literature based on the work of Grant et al.
(1994); Hackman and Wageman (1995);
Krishnan et al. (1993); McDonell (1992);
Ross (1993); Olian and Rynes (1991);
Spencer (1994) and Deschamps and Nayak
(1995). His summarised approach also largely
191
192
194
Organisation Strategy
Strategic Objectives
Strategic Balanced
Scorecard
Devolved Balanced
Scorecards
EQA Model
Self Assessment
made employees more involved in more meaningful activities. The EQA model was initially
use to try and involve as many people from as
many organisational levels as possible. Selfassessment using the model started at the senior
management level and worked downwards.
While the process was found to be rigorous it
was also found to be bureaucratic and time
consuming. Even simplified approaches took
considerable time and resources. Also the
complexity of the model was difficult to explain
within short time scales. These problems were
further heightened by employees at lower levels
not seeing a clear link between the wide-ranging
self-assessment and their immediate jobs.
Furthermore, the link back to the overall
company strategy was obscure.
The BS was found to offer a much simpler
and more effective approach. The strategic
level BS could readily be devolved to scorecards
down to individual level. These personal and
team scorecards were reinforced by the organisations personal performance review (PPR)
system where appraisal was linked to achievement of the scorecard objectives and measures.
However, this approach did not give employees
a view of the wider business. The EQA model
was more successful in this respect. Quality
improvement teams were more readily formed
from the scorecard approach as the participants
could relate the improvements more to their
own specific jobs.The EQA model process
identified areas for improvement more suited to
wide ranging cross functional improvement
teams. Figure 3 shows the increased turnover
per employee due to increased involvement.
A benchmarking study against the average
rate of defaults per 100,000 customers for all
UK Regional Electricity Companies (NI
Telco) enabled further improvements to be
made including the comparison of favourable
benchmarks (e.g. General Standard Customer
defaults per 100,000 customers Figure 4).
Thus, both approaches can be used for involving employees in the TQM process. The BS
approach was found to be faster, more job
100
99.9
200
% success 99.8
in GS
99.7
Turnover
per
150
Employee
99.6
99.5
1995/96
1996/97
100
1997/98
1995/96
195
1996/97
1997/98
1997/98
Conclusions
A TQM framework has been defined which
was used to critique the application of the
European Business excellence model in a
TQM university/industry partnership
application. The Balanced Scorecard was also
applied in the partnership and helped to critique the EQA model by being compared and
contrasted.
Based on the case study the key comparisons against the TQM framework are
summarised in Table I. This shows that the
EQA model supports TQM mainly through
improving business efficiency, customer satisfaction and encouraging a coach/mentor style
of leadership. It also defines a rigorous process
management approach. The BS was found to
support TQM mainly through
linking TQM practice to the organisations
strategy, improving customer measures and
encouraging involvement at all levels.
The case study also showed that the organisation made significant TQM based improvements in all aspects of its business by applying
both the EQA model and the BS concurrently
(Figure 1). For example customer satisfaction
has improved across all measures, there has
been increased business growth and diversification and the organisation has won the
Charter mark award. The overall business
performance also increased significantly.
Figure 5 shows the increasing dividend per
share.
Thus, these approaches, although having
their respective strengths and limitations, can
make a significant approach to instilling TQM
within an organisation.
196
TQM elements
EQA model
Lack of proactive
strategic approach
limited to
business efficiency
Linked well to
proactive growth
strategy
Encouraged use
of both perceptive
and internal
customer data
Easier to adapt to
guaranteed and
overall customer
measures
Bureaucratic and
time consuming
in regard to this
element
Easier to involve
people at all levels
and to relate to a
specific job
BS
250
Little contribution
to this element
Dividends
per
200
Share
150
1995/96
1996/97
1997/98
References
197
26. Rodney McAdam. 2000. Three leafed clover?: TQM, organisational excellence and business improvement. The TQM
Magazine 12:5, 314-320. [Abstract] [Full Text] [PDF]
27. S.F. Lee, Andrew Sai On Ko. 2000. Building balanced scorecard with SWOT analysis, and implementing Sun Tzus The
Art of Business Management Strategies on QFD methodology. Managerial Auditing Journal 15:1/2, 68-76. [Abstract] [Full
Text] [PDF]