A Strong Partner for Sustainable Development

Module
in
MGT110

OPERATIONS MANAGEMENT TQM

COLLEGE OF BUSINESS AND MANAGEMENT

Bachelor of Science in Business Administration
-Business-

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 Module No. 4

BEYOND QUALITY

2nd Semester 2022-2023

Prepared by
SHARON-JULLY P. UNTALAN, RCHE, ENP, MBA
ELVIRA V. BAYAWA, MBA
CBM Faculty

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 Table of Contents
Instruction to the User...............................................................................................iv
Introduction................................................................................................................v
CHAPTER 4. BEYOND QUALITY.................................................................................6
Overview......................................................................................................................6
Learning Outcomes.....................................................................................................6
Pre-test........................................................................................................................6
Lesson 1. Baldridge Framework to Performance Excellence......................................7
A. Learning Outcomes.............................................................................................7
B. Time Allotment....................................................................................................7
C. Discussion............................................................................................................7
D. Activities/Exercises...........................................................................................12
E. Evaluation/Post-test..........................................................................................13
Lesson 2. Strategy and Performance Excellence......................................................14
A. Learning Outcomes............................................................................................14
B. Time Allotment..................................................................................................14
C. Discussion..........................................................................................................14
D. Activities/Exercises...........................................................................................23
E. Evaluation/Post-test..........................................................................................23
Lesson 3.Measurement & Knowledge Management for Performance Excellence. .24
A. Learning Outcomes...........................................................................................24
B. Time Allotment..................................................................................................24
C. Discussion..........................................................................................................24
D. Activities/Exercises...........................................................................................29
E. Evaluation/Post-test.........................................................................................29
Lesson 4. Leadership for Performance Excellence...................................................30
A. Learning Outcomes...........................................................................................30
B. Time Allotment..................................................................................................30
C. Discussion..........................................................................................................30
D. Activities/Exercises...........................................................................................36
E. Evaluation/Post-test..........................................................................................36
Lesson 5. Building and Sustaining Quality and Performance Excellence................37
A. Learning Outcomes...........................................................................................37
B. Time Allotment..................................................................................................37
C. Discussion..........................................................................................................37
D. Activities/Exercises...........................................................................................42
E. Evaluation/Post-test.........................................................................................42
References.................................................................................................................42

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Instruction to the User

This module will provide you with an educational experience while

independently accomplishing the task at your own time and pace. It also aims
to ensure that learning is unhampered by health and other challenges. It covers
the topic about the Overview of Financial Markets and Institutions.

Reminders in using this module:

1. Keep this material neat and intact.

2. Answer the pretest first to measure what you know and what to be
learned about the topic discussed in this module.
3. Accomplish the activities and exercises as aids and reinforcement
for better understanding of the lessons.
4. Answer the post-test to evaluate your learning.
5. Do not take pictures in any parts of this module nor post it to social
media platforms.
6. Value this module for your own learning by heartily and honestly
answering and doing the exercises and activities. Time and effort
were spent in the preparation in order that learning will still
continue amidst this Covid-19 pandemic.
7. Observe health protocols: wear mask, sanitize and maintain
physical distancing.

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Introduction

This module will serve as an alternative learning material to that of regular

classroom teaching and learning delivery. The instructor will facilitate and explain
the module to the students to achieve its expected learning outcomes, activities and
to ensure that they will learn amidst this pandemic.

This material discusses and aims to teach students what is beyond Quality. It is very
important that the students cooperate by using this module page by page and
completing all the given activities. At the end of the module, the learning outcome is
evaluated based on the different tasks given.

Through your cooperation in this kind of flexible learning delivery, understanding

what is beyond quality is possible. It is expected that after using this module you will
become well-oriented on the holistic approach to quality.

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 CHAPTER 4.
BEYOND QUALITY

Overview
To achieve sustainable change, quality improvement initiatives must become
the new way of working rather than something added on to routines. This chapter
presents the strategies and tools how to sustain quality, discussing in detail the
concepts of Baldridge Framework for Performance Excellence, Strategy and
Performance Excellence, Measurement and Knowledge Management for
Performance Excellence, Leadership for Performance Excellence and Building and
Sustaining Quality and Performance Excellence.

Learning Outcomes
At the end of the chapter, the you will be able to:

 explain the system of documentation, implementation and assessment

of quality;
 list the key steps in the control of quality; and
 explain the role of external and internal customers in setting quality
parameters.

Pre-test
Instructions: To test your prior knowledge, please answer the pre-test.

1. What is the Baldridge Award?

2. What is the European Quality Award?
3. Define Strategic Planning.
4. What is hoshin kanri?
5. What is Balanced Scorecard?
6. Differentiate Lagging measure and leading measure.
7. Define strategic leadership.
8. Define leadership system.
9. What is corporate culture?
10. Define best practices.
11.

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Lesson 1. Baldridge Framework to Performance Excellence
A. Learning Outcomes
At the end of the lesson, you can
1. define the criteria for performance excellence; and
2. discuss the international standards for quality and performance
excellence programs.

B. Time Allotment
2 sessions (3 hours)

C. Discussion

CRITERIA FOR PERFORMANCE EXCELLENCE

The Baldridge Award is based upon a rigorous set of criteria called Criteria for
Performance Excellence. It is designed to encourage companies to enhance their
competitiveness through an aligned approach to organizational performance
management that results in:
 Delivery of ever-improving value of customers, resulting in improved
marketplace success
 Improvement of overall company performance and capabilities
 Organizational and Personal Learning

Categories of the Criteria in Performance Excellence

1. Leadership- signifies critical importance of leadership to business success
 Senior Leadership
 Governance and Social Responsibilities
2. Strategic Planning- examines how an organization develops strategic
objectives & action plans
 Strategy Development
 Strategy Implementation
3. Customer Focus- examines how organization engages its customers for long
term marketplace success and builds a customer-focused culture.
 Voice of the Consumer
 Customer Engagement
4. Measurements, Analysis and Knowledge Management- this is
positioned as the foundation for all other categories in the systems framework
 Measurement, Analysis, and Improvement
 Management of Information, Knowledge and Information Technology

5. Workforce Focus- how an organization build an effective and supportive

workforce environment
 Workforce Environment
 Workforce Engagement

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 6. Operation Focus- examines how organization designs, manages, and
improves it work systems and work processes.
 Work Systems
 Work Processes
7. Results – provides “real-time” information (measures of progress) for
evaluation and improvement of processes and products in alignment with
overall organizational strategy.

Baldrige Criteria Framework: A Systems Perspective

Three Basic Elements of the Framework

1. Organizational Profile (the umbrella at the top of the figure) sets the
context for the way your organization operates. Your environment, key
working relationships, and strategic challenges and advantages serve as an
overarching guide for your organizational performance management system.

2. System operations (middle of the figure) consist of two linked triads,

formed by the six Baldrige process categories, that define your operations and
the results you achieve.

Leadership triad—emphasizes the importance of a leadership focus on

strategy and customers. Senior leaders set your organizational direction and
seek future opportunities for your organization.
1. Leadership,
2. Strategic Planning, and
3. Customer Focus

Results triad—focuses on your workforce and key processes that accomplish

the work of the organization, which yields your overall performance results.
1. Workforce Focus,
2. Operations Focus, and
3. Results
ALL actions point toward results.

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 The horizontal arrow in the center of the framework links the two triads—a
linkage critical to organizational success—and indicates the importance of
feedback in an effective performance management system.

3. System foundation (bottom of the figure) is composed of Measurement,

Analysis, and Knowledge Management, which are critical to a fact-based,
knowledge-driven system for improving performance and competitiveness.

Key Principles of Baldridge Criteria (Core Values and Concepts)

1. Visionary leadership
2. Customer-driven excellence
3. Organizational and personal learning
4. Valuing workforce members and partners
5. Agility
6. Focus on the future
7. Managing for innovation
8. Management by fact
9. Societal responsibility
10. Focus on the results
11. Systems perspective

Characteristics of Organizations that received the Baldridge Award

1. Achievement in Results
2. Entrepreneurism and Innovation
3. Agility
4. Governance and Leadership Metrics
5. Work Systema and Work Processes

Deming’s Principles Reflected on Baldridge Criteria

1. Statement of Purpose
2. Learn the New Philosophy
3. Understand Inspection
4. End Price Tag Decisions
5. Improve Constantly
6. Institute Learning
7. Teach and Institute Leadership
8. Drive-out Fear and Innovate
9. Optimize the Efforts of Team and Staff
10. Eliminate Exhortations
11. Eliminate Quotas and MBO
12. Remove Barriers
13. Encourage Education
14. Take Action

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 INTERNATIONAL QUALITY AND PERFORMANCE
EXCELLENCE PROGRAM

EUROPEAN QUALITY AWARD

In October 1991, the European Foundation for Quality Management (EFQM) in
partnership with the European Commission and the European Organization for
Quality announced the creation of the European Quality Award (now called the
European Excellence Award). The award was designed to increase awareness
throughout the European Community, and businesses in particular, of the growing
importance of quality to their competitiveness in the increasingly global market and
to their standards of life.

Fundamental Concepts of Excellence

1. Results Orientation: Excellence is achieving results that delight all the
organization’s stakeholders
2. Customer Focus: Excellence is creating sustainable customer value
3. Leadership and Consistency of Purpose: Excellence is visionary and
inspirational leadership, coupled with constancy of purpose.
4. Management by Processes and Facts: Excellence is managing the
organization through a set of independent and interrelated systems, processes
and facts.
5. People Development and Involvement: Excellence is maximizing the
contribution of employees through their development and involvement.
6. Continuous Learning, Innovation, and Improvement: Excellence is
challenging the status quo and effecting change by utilizing learning to create
innovation and improvement opportunities.
7. Partnership Development: Excellence is developing and maintaining
value-adding partnerships.
8. Corporate Social Responsibility: Excellence is exceeding the minimum
regulatory framework in which the organization operates and to strive to
understand and respond to the expectations of their stakeholders in the
society.

Canadian Awards for Business Excellence

Canada’s National Quality Institute (NQI) recognizes Canada’s achievers of
excellence through the prestigious Canada Awards for Excellence.

Major Categories of the Award

1. Leadership. Strategic direction, leadership involvement, and outcomes
2. Customer Focus. Voice of the customer, management of customer
relationships, measurement and outcomes
3. Planning for Improvement. Development and content of improvement
plan, assessment, and outcomes
4. People Focus. Human resource planning, participatory environment,
continuous learning environment, employee satisfaction, and outcomes.
5. Process Optimization. Process definition, process control, process
improvement, and outcomes
6. Supplier Focus. Partnering and Outcomes

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Australian Business Excellence Award
The Australian Quality Awards (now called the Australian Business Awards) were
developed independently from the MBNQA in 1988. The Australian Business
Excellence Prize is the preeminent award available for businesses in Australia. Only
two organizations have achieved this level of excellence since the Awards’ inception
in 1988.

Four Level of Awards

1. The Foundation in Business Excellence Level. Provides encouragement
recognition for progress toward business excellence.
2. The Bronze Award Level. Bronze Award recipients will demonstrate
Approach and Deployment that are well defined, planned, subject to review
and show evidence of improvement over time.
3. The Silver Award Level. Organizations at this level should be able to
demonstrate not only performance against the Framework at Bronze level, but
also a philosophy of management that reflects the principles that underpin it
and other Frameworks around the globe.
4. The Gold Award Level. Organizations at this level should meet Silver
recognition plus be able to demonstrate superior performance in at least 5 of
the categories in the framework and also have scored at least 50 percent in
each item.

Eight Principles of Business Excellence Award Framework

1. Leadership
2. Customers
3. Systems Thinking
4. People
5. Information
6. Knowledge
7. Corporate and Social Responsibility
8. Sustainable Results

The assessment criteria address leadership, strategy and planning, information and
knowledge, people, customer focus, process management, improvement and
innovation, and success and sustainability within the framework.

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Quality Awards in China

In 2001, the China Association for Quality (CAQ) introduced the National Quality
Award, which recently renamed the Performance Excellence Award. To facilitate the
emerging company of China, the Chinese government has issued new quality
standards that became effective on January 1, 2005, which are designed to encourage
China’s thriving business sector to strive for better quality.

The award criteria are based on components of the Malcolm Bridge National Quality
Award, and are geared toward China’s unique business environment-especially in
improving business credibility, brand building strategy and sustainable development.

Baldridge, Iso 9000, and Six Sigma

Baldrige focuses on performance excellence for the entire organization in an overall
management framework, identifying and tracking important organizational results.

ISO focuses on product and service conformity for guaranteeing equity in the
marketplace and concentrates on fixing quality system problems and product and
service nonconformities. Customer focus is a key requirement of ISO 9000:2000 and
its workforce focus revolve primarily around training and the work environment.

Six Sigma concentrates on measuring product quality and driving process

improvement and cost savings throughout the organization. Leadership is the
fundamental value of six sigma.

Six Sigma Key Processes

1. Project selection and definition
2. Financial review
3. Training
4. Leadership for project leaders
5. Project leader monitoring
6. Certification for six sigma specialists
7. Project tracking and reporting
8. Information management and dissemination

Many organizations have successfully blended ISO 9000, Six Sigma and Baldridge in
their practices. The ISO-based quality management system provides synergies with
its Baldridge-based performance excellence approaches. Six Sigma can provide the
impetus for change while Baldridge provides the key for sustainability.

D. Activities/Exercises

Group Activity. Group report.

Find one recipient of Baldridge Award and identify one role-model practice of the
organization. Explain why your group consider it as a role-model practice.

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E. Evaluation/Post-test

1. What is Australian Business Excellence Award?

2. Discuss the European Quality Award.
3. Differentiate Six Sigma, ISO 9000 and Baldridge.
4. Enumerate the eight (8) principles of business excellence award
framework.
5. Explain why does organizations blend ISO 9000, Six Sigma and
Baldridge.

Rubric for essays and discussions:

Features/Score 1 (0%) 3 (60%) 5 (100%)

Content/Ideas, No answer Identified the Presented
50% topic and provided important and
additional accurate
information information
Quality of No answer The information The idea
writing, presented was presented was
30% somewhat organized and
organized and highly informative
clear
Grammar and No answer Multiple spelling Virtually no
usage, 20% and grammatical spelling or
errors grammatical
errors

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Lesson 2. Strategy and Performance Excellence
A. Learning Outcomes
At the end of the lesson, you can
1. discuss the scope of Strategic Planning;
2. explain management and planning tools; and
3. enumerate the core competencies and strategic work system designs.

B. Time Allotment
2 sessions (3 hours)

C. Discussion

Strategy is the pattern of decisions that determines and reveals an organization’s

goals, policies, and plans to meet the needs of its stakeholders.

Strategic planning is the process of envisioning the organization’s future and

developing the necessary goals, objectives and action plans to achieve that future.

Some of the Key Practices for Strategic Focus on Performance Excellence

 Understand the organizations operating environment and its key relationships
with customers, suppliers, partners and stakeholders.

 Understand the competitive environment, the principal factors that determine

success, the organization’s core competencies, and strategic challenges

 Gather and analyze relevant data and information pertaining to such factors
as the organization’s strengths, weaknesses, opportunities, and threats,
emerging trends in technology, markets, customer preferences, competitions,
and the regulatory environment, long term organizational sustainability; and
the ability to execute strategic plans

 Develop and refine a systematic approach for conducting strategic planning

and setting strategic objectives, including identifying blind spots, leveraging
strengths, and addressing challenges over appropriate time horizons.

 Develop and align short-term action plans with long term strategic objectives,
ensure adequate resources and the ability to sustain outcomes, assess
financial and other risks associated with other plans, and communicate them
throughout the organization.

 Derive human resource plans required to accomplish long-term strategic

objectives and short-term action plans that address the potential impacts on
the workforce and potential changes to workforce capability and capacity
needs.

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 SCOPE OF STRATEGIC PLANNING
Developing and implementing a strategy requires a robust and effective strategic
planning and action plan deployment process. An effective strategic planning process
requires that executives and managers understand the short-term and longer-term
factors that affect the organization and its market place.

STRATEGY DEVELOPMENT PROCESSES

The goal of strategy development is envisioning the future for purposes of
decision making and resources allocation. The mission, vision and guiding principle
serve as the foundation for strategic planning.

The mission of a firm defines its reason for its existence; it answers the question
“Why are we in business?” A mission statement must include a definition of products
and services, types of markets, important customer needs, and distinctive
competencies or the expertise that sets the firm apart from others.

The vision describes where the organization is headed and what it intends to be; it is
a statement of the future that will not happen by itself. The vision articulates the
basic characteristics that shape the organization’s view of the future and its strategy.
A vision should be brief, focused, clear and inspirational to an organization’s
employees. It should be linked to customer’s needs and convey a general strategy for
achieving a mission.

Guiding principles are reinforced through conscious and subconscious behavior at

all levels of the organization to provide guidance to all employees.

Environmental Assessment of Key Factors include:

 the organization’s strengths, weaknesses, opportunities, and threats (SWOT)
 early indication of major shifts in technology, markets, customer preferences,
competition, or the regulatory environment
 long term organizational sustainability, including needed core competencies,
and projections of future performance and competitors’ or comparable
organizations; future performance
 the ability to execute the strategic plan

A SWOT analysis should address all factors that are key to an organization’s future
success. An organization cannot make good strategic decisions without a solid
understanding of its internal and external environments. Many strategic planning
processes begin with the organization’s leaders first exploring and agreeing upon (or
reaffirming) the mission, vision, and guiding principles of the organization, which
form the foundation for the strategic plan.

The Baldridge Organizational Profile

The Baldrige Criteria provides a list of key questions called the Organizational
Profile, which helps an organization summarize the elements of an environmental
assessment. mn

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The provides a frame of reference to help and organization better understand the
internal and Organizational Profile external factors that shape its operating
environment, and set the context for strategic planning.
Organization Situation
Strategic challenges refer to those pressures that exert a decisive influence on an
organization’s likelihood of future success. Strategic challenges frequently are driven
by an organization’s future competitive position relative to other providers of similar
products or services. They might include operational costs (e.g. materials, labor, or
geographical location); expanding or decreasing markets; mergers or acquisition
both by the organization and by its competitors.

Strategic Advantages are those marketplace benefits that exert a decisive

influence on an organization’s likelihood of future success.

Developing Strategies
Strategies are broad statements that set the direction for the organization to take in
nnnnnnrealizing its missio and vision.

Strategic objectives are what an organization must change or improve to remain

or become competitive.

Action plans are things that an organization must do to achieve its strategic
objectives.

Strategy Deployment
Strategy deployment involves developing specific action plans to achieve
strategic objectives, ensuring that adequate financial and other resources are
avaiable to accomplish the action plans, developing contingencies should
circumstances require a shift in plans and rapid execution of new plans, etc.

Reasons for Poor Deployment of Strategies

1.Lack of alignment across the Good deployment aligns resources and policies.
organization
2.Misallocation of resources Good strategic planning dedicates resources to
making improvements or changes in those areas
that are critical to an organization’s strategic
advantage
3.Insufficient operational Organizations need appropriate measurement
measures systems at their operational level to track
progress and know if action plans are really
accomplishing their objectives

Hoshin Kanri (Policy Deployment)

Japanese firms introduced a deployment process known as hoshin kanri or hoshin
planning. The Japanese translation of hoshin kanri is “pointing direction”.

In the United States, this process is often referred to as policy deployment, or

management by planning.

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Policy deployment is a quality-based approach to executing strategy by ensuring all
employees understand the business direction and are working to make vision a
reality. The traditional approach to deploying strategy has been top-down.

Top Management sets overall guidelines and strategies. Department and functional
units develop specific implementation plans.

Catchball is a negotiation process where leaders communicate midterm objectives

to middle managers and issues were discussed and debated until agreement is
reached. It is an up, down, sideways communication process as opposed to an
autocratic, top-down management style.

The figure provides a simplified

description of the policy deployment
process. With policy deployment, top
management is responsible for
developing and communicating a
vision, the building organization-wide
commitment to its achievement.

Linking Human Business Plans

and Strategy
Inclusions in the Strategic human resource plans
 Redesign of the work organization to increase empowerment and decision-
making or team-based participation;
 Initiatives for promoting greater labor/management cooperation, such as
union partnerships;
 Initiatives to foster knowledge sharing and organizational learning; and
 Partnerships with educational institution to help ensure the future supply of
well-prepared employees

Seven Management Planning Tools

Affinity Diagram A tool for organizing a large number of ideas,
opinions, and facts relating to a broad problem or
subject area
Interrelationship A tool for identifying and exploring causal
diagraph relationships among related concepts or ideas
Tree diagram A tool to map out the paths and tasks necessary to
complete a specific project or reach a specified goal
Matrix Diagram Spreadsheets that graphically display relationships
between ideas, activities, or other dimensions in
such a way as to provide logical connecting points
between each item
Matrix Data Analysis A tool to take data and arrange them to display
quantitative relationships among variables to make
them easily understood and analyzed

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Process Decision A method for mapping out every conceivable event
Program Chart and contingency that can occur when moving from
a problem statement to possible solutions
Arrow Diagrams A tool for sequencing and scheduling project tasks

Using the Seven Management and Planning Tools for Strategic Planning

1. Affinity Diagram: In developing a vision statement, for example, senior

management might conduct a brainstorming session to develop a list of ideas to
incorporate into the vision.

The list might include:

 Low product maintenance
 Satisfied Employees
 Courteous order entry
 Low price
 Personal employee growth
 Low production costs
 Innovative product features
 High return on investment
 Constant technology innovation
 High quality
 Motivated employees
 Unique products
 Small, lightweight designs
 Quick delivery
 Growth in shareholder value
 Teamwork
 Responsive technical support

2. Interrelationship Digraph: An interrelationship digraph identifies and

explores causal relationships among related concepts or ideas. It shows that every
idea can be logically linked with more than one other idea at a time, and allows
for “lateral thinking” rather than “linear thinking.” This technique is often used
after the affinity diagram had clarified issues and problems.

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3. Tree Diagrams: A tree diagram maps out the paths and tasks necessary to
complete a specific project or reach a specified goal. A tree diagram brings the issues
and problems revealed by the affinity diagram and the interrelationship digraph
down to the operational planning stage. A clear statement specifies problem or
process.

4. Matrix Diagrams: Matrix diagrams are “spreadsheets”

that graphically display relationships between ideas,
activities, or other dimensions in such a way as to provide
logical connecting points between each item. A matrix
diagram is one of the most versatile tools in quality planning.

5. Matrix Data Analysis: Matrix data

analysis takes data and arranges them to
display quantitative relationships among
variables to make them more easily
understood and analyzed. In its original
form used in Japan, matrix data analysis
is a rigorous, statistically based “factor
analysis” technique.

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6. Process Decision Program Charts: A process decision program chart
(PDPC) is a method for mapping out every conceivable event and contingency
that can occur when moving from a problem statement to possible solutions. A
PDPC takes each branch of a tree diagram, anticipates possible problems, and
provides countermeasures that will (1) prevent the deviation from occurring, or
(2) be in place if the deviation does occur.

7. Arrow Diagrams: For years, construction planners have used arrow diagrams
to sequence and schedule project tasks. Arrow diagramming has also been taught
extensively in quantitative methods, operations management, and other business
and engineering courses in the United States for a number of years.

ORGANIZATIONAL DESIGN FOR PERFORMANCE

EXCELLENCE

Several factors having to do with the context of the organization affect

how work is organized. They include the following:

1. Operational and organizational guidelines: Standard practices that

have developed over the firm’s history often dictate how an organization
organizes and operates.
2. Management style: The management team operates in a manner unique
to a given organization. For example, management style might be formal or
informal, or democratic or autocratic.

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 3. Customer influences: Customers, particularly governmental agencies,
may require formal specifications or administrative controls. Thus, the
organization needs to understand and respond to these requirements.
4. Size: Large organizations have the ability to maintain formal systems and
records, whereas smaller ones may not.
5. Diversity and complexity of product line: An organization suitable
for the manufacture of a small number of highly sophisticated products may
differ dramatically from an organization that produces a high volume of
standard goods.
6. Stability of the product line: Stable product lines generate economies
of scale that influence supervision, corrective action, and other quality-
related issues. Frequent changes in products necessitate more control and
commensurate changes to the quality system.
7. Financial stability: Quality managers need to recognize that their efforts
must fit within the overall budget of the firm.
8. Availability of personnel: The lack of certain skills may require other
personnel, such as supervisors, to assume duties they ordinarily would not
be assigned.

CORE COMPETENCIES AND STRATEGIC WORK SYSTEM

DESIGN

Work systems refer to how the work of an organization is accomplished. Work

systems coordinate the internal work processes and the external resources necessary
to develop, produce, and deliver products and services to customers and to succeed
in the market place.

Core competencies refer to an organization area of greatest expertise that provide

a sustainable competitive advantage in the marketplace or service environment.

Core Competency Meets Three Conditions (Gary Hamel and C.K. Prahalad)
1. It contributes significantly to customer benefits.
2. It provides access to many products and markets.
3. It is difficult for competitors to imitate.

Some contemporary theories suggest that business activities that do not comprise an
organization’s core competency should be outsourced.

Outsourcing refers to the practice of transferring the operations of a business

function to an outside supplier. Much outsourcing is done through offshoring in
which outsourced function is related to foreign shores.

Vertical integration, by which certain business functions are acquired and

consolidated within a firm, is the opposite of outsourcing.

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D. Activities/Exercises
Group Activity: List down your team strategies in coordinating and
completing the group activities for this subject, MGT 110 – TQM. Share your
experience, adjustments and best practices of the group.

E. Evaluation/Post-test

1. Define Strategic Planning.

2. What is hoshin kanri?
3. Differentiate Vison and Mission.
4. Enumerate the seven management and planning tools.
5. Enumerate the three reasons for poor deployment of strategies.

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Lesson 3. Measurement and Knowledge Management for Performance
Excellence
A. Learning Outcomes
At the end of the lesson, you can
1. identify the value and scope of performance measurement;
2. identify performance measures; and
3. discuss the link of measures to strategies.

B. Time Allotment
2 sessions (3 hours) identify

C. Discussion

VALUE AND SCOPE OF PERFORMANCE MEASUREMENT

Three Reasons: For Organizations to Need Good Measures

1. To lead the entire organization in a particular direction: that is, to drive strategies
and organizational change.
2. To manage the resources needed to travel in this direction by evaluating the
effectiveness of action plans.
3. To operate the processes that make an organization work and continuously
improve.

Balanced Scorecard
To achieve a high level of performance excellence requires a much broader set of
performance measures that are aligned to an organization’s strategy; this became
known as the balanced scorecard.

Purpose of the balanced scorecard: To translate strategy into measures that

uniquely communicate your vision to the organization.

Four perspectives of the balanced scorecard:

 Financial Perspective: Measures the ultimate results that the business
provides to its shareholders. They include profitability, revenue growth, return
on investment, economic value added (EVA), and shareholder value.
 Internal Perspective: Focuses attention on the performance of the key
internal processes that drive the business. They include such measures as
quality levels, productivity, cycle time and cost.
 Customer Perspective: Focuses on customer needs and satisfaction as well
as market share. This includes service levels, satisfaction ratings, and repeat
business.
 Innovation and Learning Perspective: Directs attention to the basis of
future success- the organization’s people and infrastructure.

A good balanced scorecard contains both leading and lagging measures and
indicators.
Lagging measures (outcomes) tell what has happened

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 Leading measures (performance drivers) predict what will happen

PERFORMANCE MEASUREMENT IN THE BALDRIDGE CRITERIA

Results of the Baldrige Criteria for Performance Excellence groups

performance measures into five sets
1. Product and Process Outcomes

Product Outcomes: Measures and indicators of product and service

performance that have a strong correlation with customer satisfaction and
decisions relative to future purchases and relationships are important for
organizations to track. They might include internal quality measurements,
field performance of products, defect levels, service errors, response times,
data collected from customers or third parties on ease of use or attributes, and
customer surveys on product and service performance.

Process Outcomes: Measures and indicators of process effectiveness and

efficiency might include work system performance that demonstrates
improved cost savings or higher productivity by using internal and/or external
resources; reduced emission levels, waste stream reductions, by product use,
and recycling.

2. Customer- Focused Outcomes: Relevant measures and indicators of an

organization’s performance as viewed by customers include direct measures of
customer satisfaction and dissatisfaction, customer retention, gains and losses
of customers and customer accounts, customer complaints, and warranty
claims.

Service quality and cycle times are key satisfaction measures for distributors,
while product quality is the principal satisfaction indicator for end users.

3. Workforce-Focused Outcomes: Workforce-focused outcomes show how

well the organization has created and maintained a productive, engaging, and
caring work environment.

4. Leadership and Governance Outcomes: With an increased focus on

issues of governance, ethics, and leadership accountability, it is important for
organizations to practice and demonstrate high standards of overall conduct.
Relevant performance measures can help organizations monitor these issues.

5. Financial and Market Outcomes: Financial measures are generally

tracked by senior leadership to gauge overall organizational performance and
are often used to determine incentive compensation for senior executives.
Measures of financial performance might include revenue, return on equity,
return on investment, operating profit, pretax profit margin, asset utilization,
earnings per share, and other liquidity measures.

25
 DESIGNING EFFECTIVE PERFORMANCE MEASUREMENT
SYSTEMS

Purposes of a performance measurement system

1. Providing a perspective of the past, present and future
2. Identifying trends and progress
3. Facilitating understanding of cause-and-effect relationships
4. Providing direction and support for continuous improvement
5. Allowing performance comparison to benchmarks

SELECTING PERFORMANCE MEASURES

Guidelines For Designing A Performance Measurement System

(Mark Graham Brown)
1. Fewer is better. Concentrate on measuring the vital key variables rather than
the trivial many.
2. Measures should be linked to the factors needed for success, namely, the key
business drivers.
3. Measures should include a mix of past, present, and future to ensure that the
organization is concerned with all three perspectives.
4. Measures should be based around the needs of customers, shareholders, and
other key stakeholders.
5. Measures should start at the top and flow down to all levels of employees in
the organization.
6. Measures should be changed or at least adjusted as the environment and
strategy changes.

LINKING BUSINESS TO STRATEGY

Effective performance measures that are aligned with business strategy should be
driven by internal and external factors that shape an organization’s operating
environment. These factors are reflected in the Baldrige Organizational Profile.

Key performance measures should be aligned with strategies and action plans.
Setting targets for each measure provides the basis for the strategy deployment.
System measures are driven by strategic objectives and action plans aligned with
departmental measures.

ALIGNING STRATEGIC AND PROCESS-LEVEL MEASUREMENTS

It is possible that all work processes could be meeting their requirements while the
organization is not achieving its longer-term goals. Thus, aligning strategic and
process-level measurements is vital to a high performing organization, and can be
viewed as an approach for strategy deployment.

26
Enterprise Resource Planning (ERP) systems are software packages that
integrate organizational information systems and provide an infrastructure for
managing information across the enterprise. They integrate key aspects of a
business-accounting, customer relationship management, supply chain
management, manufacturing, sales, and human resources-into a unified information
system, and provide timely analysis and reporting of sales, customer inventory,
manufacturing, human resource, and accounting data. The three most prominent
vendors for ERP software are SAP, Oracle and People-Soft.

Importance of Auditing the Measurement System

As the business environment changes, old measures can become obsolete or new
measures might be needed. An outdated measurement system wastes resources,
hinders strategic deployment, and often rewards the wrong behaviors. Thus, a
periodic audit of an organization’s measurement system is important.

Analyzing And Using Performance Data

Analysis refers to an examination of facts and data to provide a basis for effective
decisions.

Examples of possible analyses

1. Examining trends and changes in measures and indicators using charts and
graphs
2. Calculating a variety of statistical measures such as means, proportions, and
standard deviations
3. Applying sophisticated statistical tools such as correlation and regression
analysis to help understand relationships among different measures
4. Comparing results relative to other business units, competitors, or best-in-
class benchmarks

As discussed in the balanced scorecard topic, managers must also understand the
linkages between key measures of business performance. Example of such analyses
are:
1. How product and service quality improvement correlate with key customer
indicators such as customer satisfaction, customer retention, and market share
2. Financial benefits derived from improvements in employee safety,
absenteeism, and turnover
3. Benefits and cost associated with education and training
4. Relationships between product and service quality, operational performance
indicators

Interlinking is the term that describes the quantitative modeling of cause-and-

effect relationships between performance measures, such as the customer
satisfaction and product quality of employee performance.

Data mining is the process of searching large databases to find hidden patterns in
data, using analytical approaches and technologies.

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 THE ROLE OF COMPARATIVE DATA

Comparative data refers to industry averages, competitor performance, world-

class benchmarks, or performance measures of other organizations with similar
product offerings. The use of comparative data is important to all organizations.
Comparative data are needed because an organization needs to know where it stands
relative to competitors and to best practices; comparative information and
information obtained from benchmarking often provide the impetus for significant
improvement of change; and comparing performance information frequently leads to
a better understanding of processes and their performance.

Comparative data may be obtained in many ways and include third-party surveys
and benchmarking approaches.

Example.
1. Ritz-Carlton Hotel Company uses ratings and awards from travel industry
publication and sales force reports to assess competitive status.
2. Boeing A&T seeks information from three sources:
1. Best-in-Boeing: High performing processes identified through various
company-level councils
2. Best-in-Industry: Organizations identified through various benchmarking
centers, the International Benchmarking Clearinghouse, and their internal
Business Environmental Assessment group
3. World Class: Leading-edge organizations, winners of national awards, or
those cited by customers suppliers, and industry experts

PERFORMANCE REVIEW

Reasons why managers review performance results:

 To assess organizational success and performance relative to competitors
 To understand how well progress on strategic objectives and action plans is
being achieved
 To identify priorities for improvement and opportunities for innovation for
products, services and processes

Types of Performance Review

1. Short term decision review. Done on a daily or weekly basis
2. Long term decision review. Done periodically throughout the year.

Managing Information Resources

Simply collecting data is not enough. Organizations must ensure that both data and
information and the hardware and software systems that process them are reliable,
accurate, user-friendly, and secure, and that data and information are available to all
who need them in a timely fashion.

Confidentiality and security are critical in managing data, particularly with the
increasing use of electronic data transfer. Using firewalls to prevent external systems
attacks and passwords to ensure that only authorized users have access to sensitive

28
data such as customer records and financial information are vital in an information
management system.

Finally, data and information must be kept current. Antiquated measurements lead
to poor decisions. Leading organizations continually improve their performance
measurement systems, staying abreast of new techniques. They conduct ongoing
review and update their sources and uses of data, shorten the cycle time from data
gathering to access.

D. Activities/Exercises

Group Activity. Create a simple performance evaluation form (template) for a

sales staff.

E. Evaluation/Post-test

1. What is the Purpose of the balanced scorecard?

2. Differentiate Lagging measures and Leading measures
3. Enumerate three reasons why managers review performance results.

Rubric for essays and discussions:

Features/Score 1 (0%) 3 (60%) 5 (100%)
Content/Ideas, No answer Identified the Presented
50% topic and provided important and
additional accurate
information information
Quality of No answer The information The idea
writing, presented was presented was
30% somewhat organized and
organized and highly informative
clear
Grammar and No answer Multiple spelling Virtually no
usage, 20% and grammatical spelling or
errors grammatical
errors

29
Lesson 4. Leadership for Performance Excellence
A. Learning Outcomes
At the end of the lesson, you can
1. define leadership,
2. discuss the leadership competencies and practices; and
3. explain the societal responsibilities of leadership.

B. Time Allotment
1 session (1.5 hours)

C. Discussion

LEADERSHIP COMPETENCIES AND PRACTICES

Leadership is the ability to positively influence people and systems under one’s
authority so as to have meaningful impact ang achieve important results.

The Human Development and Leadership Division of the American Society for
Quality has summarized six competencies for leadership based on more than 50
authors’ thoughts on leadership. These are:

SIX COMPETENCIES FOR LEADERSHIP

Navigator Creates shared meaning and provides direction towards a
vision, mission, goal, or end-result. This competency may
entail risk taking and requires constant evaluation of the
operating environment to ensure progress in the appropriate
direction is achieved.
Communicator Effectively listens and articulates messages to provide shared
meaning. This competency involves the creation of an
environment that reduces barriers and fosters open, honest
and honorable communication.
Mentor Provides others with a role to guide their actions. This
competency requires the development of personal
relationships that help others develop trust, integrity, and
ethical decision-making.
Learner Continuously develops personal knowledge, skills, and
abilities through formal study, experience, reflection, and
recreation.
Builders Shapes processes and structures to allow for the
achievement of goals and outcomes. The competency also
entails assuming responsibility for ensuring necessary
resources are available and the evaluation of processes to
ensure effective resource use.
Motivator Influence others to take action in a desirable manner. This
competency also includes the evaluation of people’s actions
to ensure they are performing consistently with the mission,
goal, or end-result.

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Personal Leadership Characteristics

1. Accountability: Taking responsibility for the organization, community, or self

that the leader serves. This provides the means for measuring performance and
dealing with performance that is not good.
2. Courage: The mental or moral strength to venture, persevere, and withstand
danger, fear, or difficulty with a firmness of mind and will, allowing leaders to
navigate into the unknown.
3. Humility: What gives excellent leaders their ability to mentor, communicate, and
learn, and understand that they are servants of those that follow.
4. Integrity: The ability to discern what is right from wrong and commit to the right
path.
5. Creativity: The ability to see possibilities, horizons, and futures that don’t yet
exist, enabling the leader to help create a shared version.
6. Perseverance: Sticking to a task or purpose, no matter how hard or
troublesome. This is vital to overcoming obstacles and motivating subordinates.
7. Well-being: The ability to stay health in both work and play, demonstrating the
importance of being ready to implement leadership competencies when needed.

STRATEGIC LEADERSHIP

Strategic leadership can be defined as a “person’s ability to anticipate, envision,

maintain flexibility, think strategically, and work with others to initiate changes that
will create a viable future for the organization, and its competitive advantage to the
organization in this way.

Activities that strategic leaders perform generally include creating and

communicating a vision of the future, sustaining an effective organization culture,
making strategic decisions, developing key competencies and responsibilities,
managing multiple constituencies, selecting and developing the next generation of
leaders, and infusing ethical value systems into an organization’s culture.

Characteristics of Effective Strategic Leadership

1. Serving as both leaders and team members
2. Demonstrating the importance of integrity through actions rather than simply
articulating it
3. Leveraging the collective knowledge of everyone in the organization.
4. Designing work that reflects relationships rather than the organizational
hierarchy;
5. Anticipating environmental change rather than reacting to it
6. Viewing employees as organizational citizens rather than resources
7. Operating with a global mindset rather than a domestic mindset

Leadership system refers to how leadership is exercised, formally and informally,

throughout an organization. These elements include how key decisions are made,
communicated, and carried out at all levels.

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 LEADERSHIP THEORY AND PRACTICE

To understand how leadership is developed and practiced, it is important to

understand its theoretical foundations. The purpose of leadership theories is to
explain differences in leadership styles and contexts.

Classification of leadership theories

Leadership Theory Pioneer/Developer Type of Theory
1.Great Man model Ralph Stogdill Trait
2. Ohio State Studies EA Fleishman, EF Harris et al Leader behavior
3. Theory X-Theory Y model Douglas MacGregor
4.Managerial Grid model Robert Blake, Jane S. Mouton
5.Leadership Effectiveness Fred E. Fielder Contingency
model (situational)
6.Superisory contingency VH Vroom & PW Yetton
7. Decision model
8. Situational Hersey and Blanchard
9.Managerial Roles Henry Mintzberg Role approach
10.Leader-Member Exchange George Graen et al Emerging theories
11.Charismatic theory RJ House, JA Conger
12. Transformational theory James M. Burns, NM Tichy,
DO Ulrich, BM Bass
13.Substitutes for Leadership Jon P. Howell et al
14.Emotional Intelligence Daniel Goleman et al

CONTEMPORARY AND EMERGING LEADERSHIP THEORIES

1. Situational Leadership Theory

Situational leadership offers important insights into the interaction between
subordinate ability and leadership style and is taught in many executive management
seminars.

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According to situational leadership, leadership styles might vary from one person to
another, depending on the “readiness” of subordinates, which is characterized by
their skills and abilities to perform the work, and their confidence, commitment, and
motivation to do it.

The model defines four levels of follower maturity (readiness):

1. Unable and unwilling
2. Unable but willing
3. Able but unwilling
4. Able and willing

Leadership Styles to Address Levels of Follower Maturity

(Hersey-Blanchard Model)
1. Directing: focuses primarily on providing direction to employees. At this stage,
followers lack the ability and willingness to complete their tasks, and leaders must
clearly define their responsibilities and ensure they develop the foundational skills to
be successful. Typical this leadership methods include simple instructions, clear
explanations, and careful supervision.

2. Coaching: provides followers with both direction and personal support. In the
stage of development, followers are still unable to perform their tasks but are
motivated to succeed. Therefore, leaders should ensure that followers are developing
the necessary skills but still maintaining their self-confidence. Ultimately, this results
in followers that can take on personal responsibility for their tasks.

3. Supporting: focuses on supporting followers and less emphasis on providing

direction. the follower has already developed the necessary skills to complete their
tasks. Therefore, the leader should focus on providing feedback and support to
motivate the employee and encourage greater development.

4. Delegating: involves minimal direction and support, as the follower is already

capable of performing their tasks independently. The leader should provide support
when needed but also provide the follower with autonomy over their responsibilities.

33
 2. Transactional Leadership Theory
Assumes that certain leaders may develop the ability to inspire their subordinates to
exert extraordinary efforts to achieve organizational goals, through behaviors that
may include contingent rewards, and active and passive management by exception.

3. Transformational Leadership Theory

According to this theory, leaders adopt many of the behaviors discussed earlier in
this chapter: idealized influence, individualized consideration, inspirational
motivation, and intellectual stimulation. Leaders who take on a transformational
style have a long-term perspective, focus on customers, promote a shared vision and
values, work to stimulate their organizations intellectually, invest in training, take
some risks, and treat employees as individuals.

4. Substitutes For Leadership Theory

This takes the intriguing view that in many organizations, if characteristics of
subordinates (team members), the nature of the tasks they perform, and the
guidance and incentives provided by the organization are aligned, then formal
leadership tends to be unproductive or counterproductive.

5. Emotional Intelligence Theory

This theory emerged from the observation that too much reliance had been placed on
the rational side of leadership in research studies.

This theory is based on five “emotional intelligence” components:

(1) self-awareness
(2) self-regulation
(3) motivation
(4) empathy
(5) social skill

The theory argues that expectations for emotional intelligence are generally not
captured in performance evaluation systems, but that the self-management and
interpersonal skills represented by the five components are as essential for executive-
level leaders as “traditional” intelligence (measured by IQ tests) and technical
competence.

NEW PERSPECTIVES ON THE PRACTICE OF LEADERSHIP

The Center for Creative Leadership (CCL) has been studying the “changing nature of
leadership” (CNL). CNL studies have engaged survey, interactive classroom, archival,
and competitive benchmarking research.

Three Categories Challenges Facing Present and Future Management

1. Technical challenges were those that leaders and their organizations had faced
in the past and built competence in solving.
2. Adaptive challenges were those where current leadership skills had to be
extended and adapted to new environments.
3. Critical leadership skills were those required to meet discontinuous or crisis
conditions, never before faced by the leader of the organizations.

34
 LEADERSHIP, GOVERNANCE AND SOCIETAL
RESPONSIBILITIES

Corporate social responsibility (CSR) is the “responsibility of enterprises for

their impacts on society”. CSR implies that organizations must behave ethically and
be sensitive of social, cultural, economic, and environmental issues. This includes
compliance with legal and ethical standards, corporate governance, and protection of
public health, safety, and environmental protection.

The International Organization for Standardization has developed a voluntary social

responsibility standard ISO 26000:2010- Guidance on social responsibility. The
standard provides guidance on:

 Concepts, terms and definitions related to social responsibility

 The background, trends and characteristics of social responsibility
 Principles and practices relating to social responsibility
 The core subjects and issues of social responsibility
 Integrating, implementing and promoting socially responsible behavior
throughout the organization and, through its policies and practices, within its
sphere of influence,
 Identifying and engaging with stakeholders; and
 Communicating commitments, performance and other information related to
social responsibility

Organizational Governance

Senior management is responsible for creating an environment in which employees’

decisions and actions and stakeholder interactions conform to the organizations’
moral and professional principles. Senior leaders must build stakeholders’ and
employees’ trust in the governance of their organizations and ensure legal
compliance and ethical behavior.

Governance refers to the system of management and controls exercised in the

stewardship of an organization.

Corporate charters, bylaws, and policies document the rights and responsibilities of
owners/shareholders, board of directors, and the CEO, and describe how the
organization is managed to ensure accountability, transparency of operations, and
fair treatment of all stakeholders. Governance processes may include approving
strategic direction, monitoring and evaluating CEO performance, succession
planning, financial auditing, executive compensation, disclosure, and shareholder
reporting.

Societal Responsibilities

An important aspect of CSR is safety in product design and manufacturing. Planning

activities such as product design should anticipate adverse impacts from production,
distribution, transportation, use, and disposal of a company’s products to protect the

35
welfare of consumers and society. Another responsibility is the management and
security of sensitive information.
Practicing good citizenship refers to leadership and support-within the limits of an
organization’s resources-of publicly important purposes, including improving
education, community health, environmental excellence, resource conservation,
community service and professional practices.

Many businesses also partner with educational institutions for mutual benefits. In
turn, business needs are factored into curriculum and the graduates are better
prepared to enter employment.

D. Activities/Exercises

Group Activity. Design a simple CSR program for a coastal community.

E. Evaluation/Post-test

1. Define is leadership system.

2. What is corporate social responsibility (CSR)?
3. Enumerate the six (6) competencies for leadership.

36
Lesson 5. Building and Sustaining Quality and Performance Excellence

A. Learning Outcomes
At the end of the lesson, you can
1. define corporate culture,
2. identify barriers to change; and
3. explain the strategies for quality and performance excellence.

B. Time Allotment
1 session (1.5 hours)

C. Discussion

ORGANIZATIONAL CULTURE AND CHANGE

For quality and performance excellence to truly succeed in an organization, it must

define and drive the culture of the organization. Culture (specifically, corporate
culture), is an organization’s value system and its collection of guiding principles.
Culture is an important factor for sustainability and long-term successes of any
organization.

Culture is a powerful influence on behavior because it is shared widely and because it

operates without being talked about, and indeed, often without being thought of.
Therefore, organizations that believe in the principles of performance excellence are
more likely to implement the practices successfully.

Changing Organizational Culture

2 Organizational Changes
1. strategic changes resulting from a strategy development and
implementation (i.e., “strategic change”), and
2. organizational changes resulting from an operational assessment activity
(i.e., “process change”).

Strategic change stems from strategic

objectives, which are generally
externally focused and relate to
significant customer, market,
product/service, or technological
opportunities and challenges. An
organization must change these
aspects to remain or become
competitive. Strategic change is broad

37
in scope, driven by environmental forces, and tied closely to the organization’s ability
to achieve its goals.

Management must understand what needs to change. A culture of performance

excellence is very different from a traditional management culture. To drive change,
organizations must change behavior as well as policies and procedures.

Three Basic Stages of Organizational Change

1. first stage involves questioning the organization’s current state and
dislodging accepted patterns of behavior.
2. second stage is a state of flux, where new approaches are developed to
replace suspended old activities.
3. final period consists of institutionalizing the new behaviors and attitudes.

Summary of a culture of performance

1. A premium is placed on excellence in performance- obtaining desired
behaviors and results. That is, there is a clear focus on results that support the
organization’s mission, vision, and strategic objectives.
2. Organizations acknowledge that their success is contingent upon the
successful performance of their employees. People are the most important
driver of performance.
3. Strategic outcomes drive the work. There is clear alignment at the
organizational, process, and individual levels.
4. Management is strongly committed to creating conditions and consequences
that support and sustain strong performance. Finally, leadership is vital to
success.

Five Key Behaviors to Develop a Positive Quality Culture (by Juran)

1. It must create and maintain an awareness of quality by disseminating results
throughout the organization.
2. It must provide evidence of management leadership, such as serving on a
quality council, providing resources, or championing quality projects (Six
Sigma, for example).
3. It must encourage self-development and empowerment through the design of
jobs, use of empowered teams, and personal commitment to quality.
4. It must provide opportunities for employee participation to inspire action,
such as improvement teams, product design reviews, or Six Sigma Training.
5. It must provide recognition and rewards, including public acknowledgment
for good performance as well as tangible benefits.

BARRIERS TO CHANGE

Numerous barriers exist to successfully transform organizations to a sustained

culture of performance excellence. Understanding these barriers can help
significantly in managing change process.

Reasons for Quality Failure

1. lack of what Deming called “constancy of purpose” in his original
version of the 14 points. The people who implement quality initiatives often
have conflicting goals and priorities and simply do not follow through the
initiative.

38
 2. lack of holistic systems perspective-one of the Core Values and
Concepts of the Baldridge Criteria. Many approaches to “implementing
quality” are one-dimensional and are consequently prone to failure.

3. lack of alignment with the organizational system

Alignment refers to consistency of plans, processes, information, resource
decisions, actions, results, and analyses to support key organization-wide
goals. Integration refers to the harmonization of plans, processes,
information, resource decisions, actions, results, and analyses to support key
organization -wide goals.

4. lack of integration with the organizational system

Integration goes beyond alignment and is achieved when the individual
components of a performance management system operate as fully
interconnected unit.

Achieving performance excellence requires comprehensive effort and span across

three levels of quality – individual, process and organization. A well-aligned
organization has its processes focused on achieving a shared vision and strategy.

STRATEGIES FOR QUALITY AND PERFORMANCE

EXCELLENCE

Best Practices are simply those that are recognized by the business community
(and often verified through some type of research) to lead a successful performance.

Some Examples of Quality Engines

Organization Quality Engine Focus
Pal’s Sudden Service Process Focus Everything-from new product
introduction to hiring work systems-
viewed as process that affects customer
satisfaction.
Clarke American Strategic Involving all stakeholders in a “First in
Checks Planning service” strategy focused on running
and changing the business
Sharp Health Care Customer Focus The Sharp Experience aimed at
transforming the health care
experience
North Mississippi Measurement Award-winning management
Medical Center and Knowledge information system and electronic
Management medical records
PRO-TEC Coating Workforce Safety as a priority, leadership and
Co. Engagement communication throughout the
organization.
MESA Products Technology Manufacturing equipment and design
center unique to the industry

39
Principles for Effective Implementation of Six Sigma
1. Committed leadership from top management
2. Integration with existing initiatives, business strategy, and performance
measurement
3. Process thinking
4. Disciplined customer and market intelligence gathering
5. A bottom-line orientation
6. Leadership in the trenches
7. Training
8. Continuous reinforcement and rewards

THE JOURNEY TOWARDS PERFORMANCE EXCELLENCE

The Life Cycle of Quality Initiatives

Six Stages of Quality Life Cycle

1. Adoption: The implementation stage of a new quality initiative.
2. Regeneration: When a new quality initiative is used in conjunction with an
existing one to generate new energy and impact.
3. Energizing: When an existing quality initiative is refocused and given new
resources.
4. Maturation: When quality is strategically aligned and deployed across the
organization.
5. Limitation or stagnation: When quality has not been strategically driven or
aligned
6. Decline: When the initiative has had a limited impact, is failing, and is awaiting
termination.

Observation:
1. Awareness that separates initiatives create a cumulative impact leads to an
appreciation that selection of new quality initiatives must be based on where
an organization is in the quality life cycle.
2. Understanding that the quality-of-life cycle elements enable an organization
to apply energizing or regenerating actions proactively to successfully sustain
its quality journey.

Baldridge Roadmap to Performance Excellence

1. Status Quo
2. False starts
3. Traction
4. Integration
5. Sustaining

40
Organizational Learning
Learning organizations have become skilled in creating, acquiring, and transferring
knowledge and in modifying the behavior of their employees and other contributors
to their enterprises.

Managers are often hesitant to make needed organizational changes as the

organization grows, even when needed for change becomes obvious. This need to
change is embodied in a concept called the learning organization.

Welch's approach to business improvement has gone through three cycles.

(a) In the first cycle, he focused GE on the elimination of nonperforming business
units as determined by market performance.
(b) In the second cycle, the company simplified and eliminated nonvalue-added
activities.
(c) In 1995 Welch discovered Six Sigma and initiated the third phase of discovery
focused on the elimination of variation from already lean business operations to
promote gains in productivity and financial performance.

Self-Assessment

Self-assessment is the holistic evaluation of processes and performance. It helps

managers answer essential questions such as “How are we doing?”, “What are our
strengths?”, and “What areas require improvement?”

Self-assessment should identify both strength and opportunities for improvement,

creating a basis for evolving toward higher levels of performance. Thus, a major
objective of most-self assessment projects is the improvement of organizational
processes based on opportunities identified by the evaluation.

Self-assessment addresses the following:

1. Management involvement and leadership
2. Product and process design
3. Product control
4. Customer and supplier communications
5. Quality improvement
6. Employee participation
7. Education and training
8. Quality information

To leverage self-assessment findings, managers must do four things:

- Prepare to be humbled
- Talk through the findings
- Recognize institutional influences
- Grind out the follow-up

A VIEW TOWARDS THE FUTURE

What the future will hold is never predictable. We face a serious challenge in
sustaining the principles of quality amidst the continuing emergence of short-lived
management fads, changing leadership driven by pressures of the stock-market, e-
commerce, and a myriad of other factors.

41
D. Activities/Exercises

Group Activity.
Create a list of your individual and personal values. Identify how each value
positively or negatively affects your current group in this subject.

E. Evaluation/Post-test

1. Define corporate culture.

2. Define Self-assessment.
3. Differentiate Integration and Alignment.
4. Enumerate and discuss the life cycle of quality initiatives.
5. What does Self-Assessment address?

Rubric for essays and discussions:

Features/Score 1 (0%) 3 (60%) 5 (100%)

Content/Ideas, No answer Identified the Presented
50% topic and provided important and
additional accurate
information information
Quality of No answer The information The idea
writing, presented was presented was
30% somewhat organized and
organized and highly informative
clear
Grammar and No answer Multiple spelling Virtually no
usage, 20% and grammatical spelling or
errors grammatical
errors

References
Evans, James R., Lindsay, William M (2015). Total Quality Management, 9th
Edition
Ramasamy, Subburaj (2005). Total Quality Management, International Edition
Chopra, Sunil. Supply Chain Management: strategy, planning, and operation /
Sunil Chopra, Kellogg School of Management, Peter Meindl, Kepos Capital. 6th
Edition.

Disclaimer: This module is prepared for instructional purposes only. The teacher does not claim
ownership of this module but patterned the ideas from different authors.

42
Congratulations for completing this module!

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Data Privacy Notice
For this module, we collect name, program, year and section, contact number, email address, facebook and
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All personal information collected will be stored in a secure location and only authorized staff will have access
to them.

43
 Vision 2020
WPU: the leading knowledge center for sustainable
development of West Philippines and beyond.

Mission
WPU commits to develop quality human resource and green
technologies for a dynamic economy and sustainable
development through relevant instruction,
research and extension services.

Core Values (3CT)

Culture of Excellence
Commitment
Creativity
Teamwork

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