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Integrating resource-based view and stakeholder theory in developing the Malaysian excellence model: a conceptual framework.


Abstract

This article describes a conceptual framework For the concept in aesthetics and art criticism, see .

A conceptual framework is used in research to outline possible courses of action or to present a preferred approach to a system analysis project.
 for the development of the Malaysian version of total performance model through integrating resource based view and stakeholder theory As originally detailed by R. Edward Freeman (1984), stakeholder theory identifies and models the groups which are stakeholders of a corporation, and both describes and recommends methods by which management can give due regard to the interests of those groups. . The six dimensions put forward, namely, leadership, organisational culture, strategy/objectives, change management/innovation, specialised Adj. 1. specialised - developed or designed for a special activity or function; "a specialized tool"
specialized

specific - (sometimes followed by `to') applying to or characterized by or distinguishing something particular or special or unique; "rules with
 knowhow, and best practices could capture most variances in the enabler section of most performance models. The stakeholder stakeholder n. a person having in his/her possession (holding) money or property in which he/she has no interest, right or title, awaiting the outcome of a dispute between two or more claimants to the money or property.  focus adopted from the stakeholder theory could well explain the performance indicators. This study will contribute to the performance research base by pulling those factors together into a single theoretical framework.

**********

Several recent articles in the Singapore Management Review pertaining per·tain  
intr.v. per·tained, per·tain·ing, per·tains
1. To have reference; relate: evidence that pertains to the accident.

2.
 to the characteristics of successful organisations and performance (Cunningham and Gerrald, 2000; Koh et al, 2000; Arawati and Mokhtar, 2000) motivate us to offer our views on the characteristics of excellence companies. This is also consistent with the growing interest in excellence models such as Malcolm Baldridge National Quality Award models, European Quality Models, and many others (Nooreha et al, 2001).

Most of the performance assessment models such as MBNQA MBNQA Malcolm Baldrige National Quality Award  and EQA EQA European Quality Award (European Foundation for Quality Management)
EQA External Quality Assessment
EqA Equivalent Average (baseball statistic)
EQA Environmental Quality Act
 are based on fundamentals of quality management. Yet other models are built around different management fields. Such diverse models include operation-related world class manufacturing models, finance-related blue chip characteristics model, and strategic marketing-related competitive fitness model. In general, these excellence models could be divided into two parts: the enabling factors and the performance criteria section. It seems that different models proposed different factors that deem to affect the performance of the firms. One commonality com·mon·al·i·ty  
n. pl. com·mon·al·i·ties
1.
a. The possession, along with another or others, of a certain attribute or set of attributes: a political movement's commonality of purpose.
 associated with those models is that they combine a set of enablers that come within the organisational internal resources and a set of performance indicators that bring together financial standing and the satisfaction of important stakeholders Stakeholders

All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government.
. The enabler-result perspective is deemed a logical approach when presenting strategic performance framework such as in this paper.

In order to operationalise our conceptual idea, it has been noticed that there is a great opportunity to bring the two distinct areas as a foundation of a new excellence model. As could be observed, most enablers found in excellence models are related to some forms of resources or capability consistent with resource-based view The resource-based view (RBV) is an economic tool used to determine the strategic resources available to a firm. The fundamental principle of the RBV is that the basis for a competitive advantage of a firm lies primarily in the application of the bundle of valuable resources at the  of a firm (Barney, 1996; Hall, 1991; Prahalad and Hamel Ham´el   

v. t. 1. Same as Hamble.
, 1990; Amit and Shoemaker, 1993; Edmondson and Moingeon, 1998). As for the second part of our analysis on the performance indicator, we will attempt to discuss it from the perspective of the stakeholder theory (Freeman, 1983; Schmitt, 2000; Hill and Jones, 1992; Anderson, 1989 and Rowley, 1987).

Even well-accepted management phenomena today are full with critique. For example, quality has become a qualifying criterion to compete, not the winning criterion. As Thorne and Smith (2000) argue:
   Total quality management (TQM), business process reengineering (BPR)
   and other schemes to improve productivity may not be a source of
   competitive advantage in the future, but a minimum entry standard to
   compete in the global market. These currently fashionable tools and
   techniques will not provide the essential elements for the survival
   of any business beyond the year 2005.


Another major critique of TQM (Total Quality Management) An organizational undertaking to improve the quality of manufacturing and service. It focuses on obtaining continuous feedback for making improvements and refining existing processes over the long term. See ISO 9000.  is that it lacks theoretical foundation (Dean and Bowen, 1994; Hill, 1995; Kerfoot and Knights, 1995. Roberts and Corcoran Nantes, 1995). These authors offer their own base to connect TQM with a management theory. Dean and Bowen (1994), for example, relate TQM with the human resource management theory. In contrast, Spencer (1994) associated TQM with an organic management model. Our proposed framework will not only strengthen the earlier works on TQM by connecting it to the resource-based strategy, but also pulling other variables in most performance related models into a single comprehensive framework.

The basis of our total performance model framework is depicted de·pict  
tr.v. de·pict·ed, de·pict·ing, de·picts
1. To represent in a picture or sculpture.

2. To represent in words; describe. See Synonyms at represent.
 in Figure 1. The framework shows the integration of enablers identified in performance-based model, organisational capabilities dimension of resource based view and stakeholder focus from stakeholder theory. Area 1 is the common area between performance-based models and resource based view. Enablers, such as leadership and best practices, identified in TQM and other performance-based models are similar to organisational capabilities in resource-based view.

[FIGURE 1 OMITTED]

Area 2 is the commonality between performance-based models and stakeholders theory. Many performance section of the TQM model include satisfaction of particular stakeholders. For example, European Quality Award The European Quality Award is now referred to as the EFQM Excellence Award.

This distinction is awarded annually by the European Foundation for Quality Management to the organisation that is the best proponent in Europe of Total Quality Management.
 model includes the society satisfaction and customer satisfaction in its performance section.

Area 3 shares the similarities between resource-based view and stakeholder theory. Employees and suppliers are tangible resource of the firm while their experience, skill and competencies are considered organisational capabilities of the firms. Area 4 is the basis of our total performance model. It is the common areas among the three branches of knowledge. We argue that these three areas together will constitute a strong foundation of any future performance-based model.

Resource-based View of a Firm

Throughout the 1980s, most studies on performance and competitiveness have been dominated by Michael Porter's market-based theory. In resource-based theory, most studies confirm that those companies who possess resources that are rare, unique, imitability beat their competitors in various performance indicators. Resources are the basis of firms' capability. Tangible resources are those that could be seen and quantified. Four basic categories are: financial capital, physical capital, human capital, and organisational capital (Barney, 1996). Financial resources are the firms' borrowing capacity and the ability to generate internal funds internal funds

Funds that are raised within a firm. For example, income after taxes and noncash expenses, such as depreciation, provide a firm with funds to use in the acquisition of investments.
. Physical resources are the sophistication so·phis·ti·cate  
v. so·phis·ti·cat·ed, so·phis·ti·cat·ing, so·phis·ti·cates

v.tr.
1. To cause to become less natural, especially to make less naive and more worldly.

2.
 and location of a plant and equipment and also the firms' accessibility to the raw material. Human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees.  are the firms' ability to attain and retain the managers and workers through training and development.

The organisational resources are related to the firms' organisational structure of planning and reporting, controlling and coordinating the system. Intangible resources are more powerful than the tangible ones. In fact, most competitive advantages nowadays, come from better utilisation of the intangible resources. Some examples of intangible resources are technological resources referring to availability of technology such as patents, trade marks TRADE MARKS. Signs, writings or tickets put upon manufactured goods, to distinguish them from others.
     2. It seems at one time to have been thought that no man acquired a right in a particular mark or stamp. 2 Atk. 484.
, copyrights; technical employees, and research facilities. Reputation among the customers could also become a great source of intangible resource of a company.

Capabilities are the capacity to use those resources effectively and efficiently to achieve the desired end. They are achieved through a set of complex relationship between intangible and tangible resources over a period of time. Through continuous repetition and practice, the knowledge will be accumulated ac·cu·mu·late  
v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates

v.tr.
To gather or pile up; amass. See Synonyms at gather.

v.intr.
To mount up; increase.
 throughout the firm and finally will become capabilities. Since knowledge has been widely acknowledged as the main ingredient in the creation of capabilities, top companies such as Microsoft Corporation (company) Microsoft Corporation - The biggest supplier of operating systems and other software for IBM PC compatibles. Software products include MS-DOS, Microsoft Windows, Windows NT, Microsoft Access, LAN Manager, MS Client, SQL Server, Open Data Base Connectivity (ODBC), MS Mail,  has emphasised that its best assets are the intellectual strength of its employees. Coyne (1986) generalises the sources of capability differentials into four types: functional differential, positional differential, cultural differential, and regulatory differential. Sustainable competitive advantage could be exhaustively ex·haus·tive  
adj.
1. Treating all parts or aspects without omission; thorough: an exhaustive study.

2. Tending to exhaust.
 derived from any one or more of these capability differentials. Functional capability is competence-based which resulted from the knowledge, skill, and experience of firms' stakeholders. It is the ability of the firm to do specific things. Positional capability is asset-based ability as a consequence of favourable past actions and decisions. For example, firms may establish good reputation among the consumers after a certain period of time. Cultural capability, which is competence-based, is the positive values and perceptions of the individuals and groups, which constitute an organisation. Lastly, regulatory capability pertains to the possession of legal rights that are defendable in law such as intellectual property right, contracts, and trade secrets. Using the Coyne (1986) framework, Hall (1991) terms the functional and cultural capability as the 'doing' capability while positional and regulatory capability as 'having' capability. The 'doing' capability is represented by skills and competencies. The 'having' capability represents assets categorised Adj. 1. categorised - arranged into categories
categorized

classified - arranged into classes
 by regulatory capability such as patents and trade marks, and positional capability such as reputation.

Core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
  1. It provides customer benefits
  2. It is hard for competitors to imitate
  3. It can be leveraged widely to many products and markets.
 are the essence of capability to provide value to the stakeholders. In other words Adv. 1. in other words - otherwise stated; "in other words, we are broke"
put differently
, core competencies are becoming more specific and focused and not all resources and capabilities will eventually become core competencies. Therefore, a company must try to emphasise on the capabilities that they have in a few chosen areas. Research has found that companies should identify three or four core competencies so that their strategic action could be structured (Fatsis, 1993).

A company is considered as having good resource management if it is able to gather resources and capabilities that are rare, valuable, non-substitutable, and inimitable in·im·i·ta·ble  
adj.
Defying imitation; matchless.



[Middle English, from Latin inimit
. These characteristics of capabilities are also often referred to as strategic capabilities. Some of these examples are: joint venture, strategic alliances in retaining those resources, effective human resource management, and compensation scheme to develop the resources.

TQM-related Models

According to according to
prep.
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3.
 the business excellence proponents, the original concept of business excellence started with an indicative model that uses self-assessment approach to evaluate certain excellent criteria within a company and those companies that attain high score will be awarded for their achievements.

Indicative model means that the model provides the guidelines guidelines,
n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks.
 on 'what' to do to achieve quality awards and business excellence. The 'how to do' part is dependent on the creativity of the companies. Among the indicative models are Deming Quality Awards, European Quality Awards, Malcolm Baldridge National Quality Awards (MBNQA), and Australian Quality Awards, and Malaysian Prime Minister's Quality Award.

The word "business excellence" is used by both the European Foundation
  • European Foundation (think tank)
  • European Foundation Project
  • European Foundation (legal form)
 for Quality Management (EFQM EFQM European Foundation for Quality Management ) and the European Organisation for quality (EOQ (Economic Order Quantity) The most economical quantity of a product that should be purchased at one time. The EOQ is based on all associated costs for ordering and maintaining the product. ) to denote de·note  
tr.v. de·not·ed, de·not·ing, de·notes
1. To mark; indicate: a frown that denoted increasing impatience.

2.
 achievement in quality management. The organisations introduced the European Quality Award (EQA) and European Quality Prizes (EQP EQP Equipment
EQP Environment(al) Quality Program
EQP End Quantity Pricing
EQP Elder's Quorum President
EQP Education Quality Partner
EQP Equipment Object
EQP Equalizer Presets
) to selected organisations which have shown "excellence in the management of quality as their fundamental process for continuous improvement" (EQA, 1994). Firms which are considered as "the most accomplished exponent exponent, in mathematics, a number, letter, or algebraic expression written above and to the right of another number, letter, or expression called the base. In the expressions x2 and xn, the number 2 and the letter n  of TQM in Europe" are given the EQA (EQA, 1994). In Table 1, we summarised the enablers/performance indicators found in most recognised TQM related models and earlier studies.

Blue Chip Characteristics

A blue chip company is expected to perform better than others. Thus, studying such companies may improve the validity of our excellence model. Koh et al (2000) gave considerable details on the literature on blue chip companies. According to Pennett-Rea and Ferrot (1990), the blue chip is initially associated with the gambling business, representing the highest value gambling chip. Stalford (1987) is of the opinion that blue chip stocks Blue chip stocks

Common stock of well-known companies with a history of growth and dividend payments.
 belong to very sound, well-established, large companies such as Prudential, LA Gears and ICI (language) ICI - An extensible, interpretated language by Tim Long with syntax similar to C. ICI adds high-level garbage-collected associative data structures, exception handling, sets, regular expressions, and dynamic arrays. . A quantitative definition offered by Belsky (1993) refers to blue chip companies as those with estimated revenue at least US$300 million, solid balance sheet with debt of no more than 40 per cent of total capital, having profit growth of at least 15 per cent and projected share price of 20 per cent. In addition, those companies must have high sales turnover, high profit growth, and low debt equity ratio. A variety of related definitions are offered by other authors (see Schilit and Schilit, 1992; Weiss and Lowe, 1988; Holden Holden, town (1990 pop. 14,628), Worcester co., central Mass., a residential suburb of Worcester; settled 1723, set off and inc. 1741. Manufactures include electrical and metal products, plastics, and machinery. , 1988; Bailey, 1994). We will adopt the characteristics suggested by Koh et al (2000) because the nature of Malaysian business is very much similar to Singapore's, the location of the study. The blue chip companies are those with good reputation and quality of management, high stability of share price during recession, high regard of company in business circles, high profit growth, and large market share. Analysing the characteristics, they are combination of managerial characteristics with financial and marketing indicators.

World Class Manufacturing

A survey by Industry Week of 307 corporate-level executives who responded to the Third Annual Industry Week Census of Manufacturers in association with PriceWaterhouseCoopers found that the most critical manufacturing variables in sequence are quality management programmes, formal continuous improvement programmes, planning and scheduling strategies, new product development, lean manufacturing Lean manufacturing is the production of goods using less of everything compared to mass production: less human effort, less manufacturing space, less investment in tools, and less engineering time to develop a new product.  strategies, cross functional workforce, supply chain optimisation Noun 1. optimisation - the act of rendering optimal; "the simultaneous optimization of growth and profitability"; "in an optimization problem we seek values of the variables that lead to an optimal value of the function that is to be optimized"; "to promote the , agile manufacturing Agile manufacturing is a term applied to an organization that has created the processes, tools, and training to enable it to respond quickly to customer needs and market changes while still controlling costs and quality.  strategies, new information strategies, multi facility optimisation, new process equipment and technology, self-directed or empowered work teams, global purchasing, global brand management, and activity-based costing In a business organization, Activity-based costing (ABC) is a method of allocating costs to products and services. It is generally used as a tool for planning and control. This is a necessary tool for doing value chain analysis. . 1W Census also procures information about manufacturing practices and the performance from more than 1,700 plant-level managers across the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire,  (cited in Drickhamer, 2000)

Flynn et al (1994) include top management support, strategic management, human resource management, technology management, quality management, and just-in-time methods in their world class manufacturing model. These factors are derived from earlier works of Hayes and Wheelwright wheel·wright  
n.
One that builds and repairs wheels.


wheelwright
Noun

a person whose job is to make and mend wheels

Noun 1.
 (Flynn et al, 1999).

Schonberger (1986) emphasises the fundamental changes that must take place to be a world class manufacturing companies. Full elements of production are affected including management of quality, job classification, labour relations labour relations (US), labor relations nplrelations fpl dans l'entreprise

labour relations labour nplBeziehungen pl
, training, staff support, sourcing, supplier and customer relations, product design, plant organisation, scheduling, inventory management, transport handling, equipment selection, equipment maintenance, the role of computer automation, and many others.

Larrache's Competitive Fitness Model

The model is designed to assess companies' ability to compete in the global market. The final output of "degree of fitness" is a benchmark score that can be compared across companies and industries. The approach to measure the competitive position of companies relied on in-depth surveys of companies in the USA and Europe. The project, which was led by Professor Jean Claude Larrache of INSEAD INSEAD Institut Européen d'Administration des Affaires (European Institute for Business Administration; now know simply as INSEAD)
INSEAD I Never Stop Eating And Drinking
, France, has started since 1998. In the 2000 report, the capabilities of 290 companies were studied. Sixty per cent of the companies are from Europe while the rest from the USA. Seventy per cent of the companies enjoyed reported annual revenues of more than US$5 billion. In addition, 30 per cent of them enjoyed growth of more than 10 per cent. Factors that are included are: mission and vision, customer orientation Customer orientation (CO) is the set of beliefs in sales that says that customer needs and satisfaction are the priority of an organization. It focuses on dynamic interactions between the organization and customers as well as competitors in the market and its internal stakeholders. , corporate culture, organisation and system, planning and intelligence, human resource, technical resources, innovation, marketing operation, market strategy, international strategy, and performance. An index called OMEC OMEC One Mannheim Error Correcting (code)
OMEC Orbital Mission Explorers Circle
OMEC Oklahoma Mothers and Educators Collaborative
 is then established and plots visually to the web-like maps. The closer the point of the score to the centre of the map, the more competitive fitness the company possesses.

Dimensions in Our Framework

Tena et al (2001) attempt to relate TQM and the resource-based view of a firm. They select four concepts in TQM, namely, customer focus, continuous improvement, employee fulfillments, and total system, which are said to integrate organisational activities so that distinct competencies could be developed. We believe that their study comes at the right time. Nevertheless, the four concepts selected by the researchers are too restricted for a total quality view.

We select six dimensions of organisational capability, namely, leadership, strategy and objectives, organisational culture, best practices, change management and innovation, and specialised knowhow, which could be well connected in most performance based models and could be easily associated with the resource-based view literature. Since capability is intangible, all of our dimensions are in the category of intangibles mostly representing competence and skills (Hall, 1991).

Leadership

The leadership factor included in most models such as MBNQA, EQA, Kanji's Model, Larrache's Competitive Fitness Model, Flynn's World Class Manufacturing Model, and Koh et al Blue Chip Characteristics Model could be associated with the capability factors in resource based view of a firm. For example, Mahoney and Pandian (1992), proposed that the services and rent attained from certain resources could be the yield from the dominant logic of the top management team. It is also true that the development of top management dominant logic is to a certain extent shaped by the resource that they deal with. Furthermore, managing human intellectual has become a strategic issue that requires managerial capability. Grant (1991) viewed organisational style, values, traditions, and leadership as different forms of intangible resource that encourage cooperation and commitment of the organisational members. Since knowledge is one of the important organisational resources, leadership plays important part to facilitate the acquisition of knowledge. Top companies such as Coca-cola, GE, and General Motors have established the position of Chief Knowledge Officer to acquire the development and use of knowledge. Human resource in the form of experience, judgment and intelligence of managers and employees is the form of tangible resource to the firm (Barney, 1996; Grant, 1991).

Strategy and Objectives

Objectives are to provide direction; aid in evaluation; create synergies; show priorities; focus coordination and provide a basis for effective planning, organising, motivating and controlling activities (David, 1999). Therefore, objectives are fundamental for organisational accomplishment. Connecting to them, strategy is the mechanism to achieve long-term objectives. Leadership must set clear, measurable and achievable objectives so that they will set the fight direction for the firm. Once the specific objectives have been set and agreed, resources and capability could be employed to attain those objectives (David, 1995).

Capabilities will be developed systematically through repetition and quest of a particular strategy (Grant, 1991). Grant also argued that strategy should be pushed slightly higher than the current limit of the capability to ensure the perfection of those capabilities. Itami (1986) coined the term dynamic resource fit that refers to the interrelationship in·ter·re·late  
tr. & intr.v. in·ter·re·lat·ed, in·ter·re·lat·ing, in·ter·re·lates
To place in or come into mutual relationship.



in
 between the present and future strategy based on effective use of resources. Most performance related models included the trait trait (trat)
1. any genetically determined characteristic; also, the condition prevailing in the heterozygous state of a recessive disorder, as the sickle cell trait.

2. a distinctive behavior pattern.
 of strategy in different wordings. For example, EQA models use the term strategy and policy. Larrache (2000) implicitly mention intelligence and planning and international strategy. The MBNQA model includes this dimension in the form of strategic quality planning.

Organisational Culture

The sign of importance of organisational culture has been well explained in many TQM studies. Detert et al (2000) established a comprehensive framework relating organisational culture and improvement efforts. Quality culture is the results of organisational culture with specific emphasis on quality. Many attempts to validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct.

For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data
 the real quality culture use the original framework in organisational culture. For example, the Dellana et al (1999) study using the competing value framework showed that sound quality culture is associated with group and adhocracy Noun 1. adhocracy - an organization with little or no structure; "the choice between bureaucracy and adhocracy represents a common dilemma"; "the need for informational flexibility can lead to adhocracy"
organization, organisation - a group of people who work together
 categories. In this study, the researchers used the MBNQA criteria to capture the quality management position of companies.

Using Coyne (1986) framework, Hall (1991) explained that organisational culture could be fitted into his frameworks of intangible resources. It includes the habits, attitudes, beliefs, and values that bind the individuals and groups together. Such cultures that promote high quality standards, enhance the ability to react to change and encourage the ability to learn, would lead to competitive advantage for that organisation. Hall's (1993) survey on top managers found that organisational culture is the top four most significant intangible resources. In relation to excellence models, we have traced the element of corporate culture in Larache's competitive fitness model and quality culture (Kanji (human language, character) kanji - /kahn'jee/ (From the Japanese "kan" - the Chinese Han dynasty, and "ji" - glyph or letter of the alphabet. Not capitalised. Plural "kanji") The Japanese word for a Han character used in Japanese.  and Yui, 1997).

Change Management and Innovation

Organisational learning and innovation are considered "intangible" resources because they are very difficult to imitate im·i·tate  
tr.v. im·i·tat·ed, im·i·tat·ing, im·i·tates
1. To use or follow as a model.

2.
a.
 (Edmondson and Moingeon, 1998). Such resources constitute a kind of "capital" for an organisation, which is a source of competitive advantage. Therefore, companies are trying to use organisational learning and innovation in order not only to solve existing problems but also to improve their status continuously in the face of changing conditions. Many studies show that the degree of innovations correlates with firm performances. Nevertheless, not all innovation will end up with a success story (Cooper, 1983). One important determinant determinant, a polynomial expression that is inherent in the entries of a square matrix. The size n of the square matrix, as determined from the number of entries in any row or column, is called the order of the determinant.  of an innovation's success is consumers' beliefs about the viability of the innovation.

Best Practices

Cortada (1997) defined best practices as "collections of activities within an organisation that are done very, very well and ultimately are recognised as such by others" Best practices can also be viewed as "me too" strategies and organisations should try to come up with new practices that they can offer first to have a temporary advantage over their competitors, building up revenue and profit streams. In the final analysis, a best practice is what gives your company the capability to out-perform your competitors, grow market and profits and provide compelling value to customers, employees, and shareholders. In sum, best practices are ultimately those that give an organisation the "capability to outperform Outperform

An analyst recommendation meaning a stock is expected to do slightly better than the market return.

Notes:
Exact definitions vary by brokerage, but in general this rating is better than neutral and worse than buy or strong buy.
 its competitors" as well as to produce best "value to customers, employees, and shareholders" (Cortada, 1997).

Specialised Knowhow

Over a period of time, a firm will develop special knowhow in certain areas. It could be in finance and marketing. Global companies are said to possess certain expertise in functional areas. For example, Honda is known to possess "core competence Core competence

Primary area of expertise. Narrowly defined fields or tasks at which a company or business excels. Primary areas of specialty.
" in developing engines. Its competitor, Toyota, has very strong capability in new product development and production system. The relationship between distinctive competencies in functional areas and firms' financial performance are well grounded in several research (for example, Hitt and Ireland, 1986 and 1985; Hitt, Ireland and Palia, 1982; Hitt, Ireland and Stadler, 1982; Snow and Hrebiniak, 1980) A recent article on the relatedness of TQM and resource-base view argues that over a period of time, TQM will enhance specific knowledge that leads to certain competencies (Winter, 1994; Powell, 1995; Sovalainen, 2000). Rose and Ito (1996) proposed that through TQM related activities, an organisation might create knowledge of distinctive competencies.

Stakeholder Theory and Stakeholder Focus

Stakeholder focus refers to the extent of effort by a firm to satisfy its most important stakeholders. In TQM literature, among the related dimensions are customer focus, employee focus, and society/community focus. Most excellence models include the role of stakeholders and the impacts they have on performances. Stakeholders play a decisive role in stimulating business growth. For example, the EFQM Quality Award for Excellence measures scores in the forms of customer satisfaction (20 per cent), people satisfaction (18 per cent), society impact (6 per cent) and only 15 per cent to the business results. That means, 44 per cent of the scores are influenced by the impacts on stakeholders as compared to only 15 per cent on the business results.

Schmidt (1999) gives the importance of each category of stakeholder. The employee is responsible for productivity and customer satisfaction. The source of sales revenue and earning stability comes from customer support. Investors provide capital to fuel the growth of the companies. Suppliers are companies with technology and supply chain management. Communities must be satisfied with the favourable rules and regulations to support their well-being.

Earlier work on this subject had been proposed by Freeman (1983). He identified the origin of the word "stakeholders" from Stanford Research Institute Stanford Research Institute - Former name of SRI International. , which refers to" those groups without whose support the organisation would cease to exist".

From there, other researchers expand the subject into other dimensions Other Dimensions is a collection of stories by author Clark Ashton Smith. It was released in 1970 and was the author's sixth collection of stories published by Arkham House. It was released in an edition of 3,144 copies. . For instance, using agency theory, Hill and Jones (1992) explored the impact of stakeholders on the firms' performance. From the perspective of corporate social responsibility, Wood (199 l) studied how stakeholders influence the decision-making process. Anderson (1989) extended the argument on how stakeholders impact corporate social performances.

Donalson and Preston (1995) concluded that the stakeholder theory is justifiable jus·ti·fi·a·ble  
adj.
Having sufficient grounds for justification; possible to justify: justifiable resentment.



jus
 itself based on four aspects: descriptive accuracy, instrumental power, normative nor·ma·tive  
adj.
Of, relating to, or prescribing a norm or standard: normative grammar.



nor
 validity, and managerial implications. Descriptive accuracy explains whether the stakeholder approach is a viable business model to describe a corporation. Instrumental capability checks if the framework has been established while examining the relationship between stakeholder management and organisational performances. Managerial implication clarifies if the theory offers attitude, structure and practices and not only predict a cause-effect relationship.

D'sauza and Williams (2000) argued that stakeholder approach will minimise the focus on measure and emphasise relationship. This will solve the problem of cross-functional conflicts because the priorities are the satisfaction of the stakeholders. This will also minimise the problem of number manipulation, which occurs in different departments. Finally, the approach will offer more clear and direct objectives in the manufacturing functions.

Schmitt (1999) argued that stakeholder approach will be more accurate to measure performance because of the change that happens to the business environment in the new millennium. Organisations will be larger and more complex. They will rely on alliance and partnership to capture the global market. The employees will be younger and more literate. Customers will be more demanding because of the leverage of information through IT. The value of the corporation's stock will be based on the intangible asset Intangible Asset

An asset that is not physical in nature.

Notes:
Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets.
 such as image and knowhow, which will make traditional measures such as ROI (Return On Investment) The monetary benefits derived from having spent money on developing or revising a system. In the IT world, there are more ways to compute ROI than Carter has liver pills (and for those of you who never heard of that expression, it means a lot).  and ROA ROA

See: Return on assets


ROA

See: Right of accumulation


ROA

See return on assets (ROA).
 inappropriate.

Besides these promising facts, satisfying a single stakeholder may not produce sustainable organisational excellence.

Table 2 shows how most enablers in selected performance models could be easily be classified into one of our organisational capability dimensions. For example, our leadership dimension could be related to leadership variable in MBNQA and EQA models and top management support of world class manufacturing model (Flynn et al, 1994), mission and vision in competitive fitness model (Larrache, 2000), and quality of management of the Blue Characteristics Model (Koh et al, 2000). Resources dimension in EQA models is general and, in fact, our source of capability. Good organisation and system included in Larrache's model is one type of resources; namely, organisational resource discussed widely in the literature. Therefore, we are convinced that our framework captures most enablers in most performance models. We would like to propose our preliminary excellence model for empirical validation An empirical validation of a hypothesis is required for it to gain acceptance in the scientific community. Normally this validation is achieved by the scientific method of hypothesis commitment, experimental design, peer review, adversarial review, reproduction of results, . The whole manifest manifest 1) adj., adv. completely obvious or evident. 2) n. a written list of goods in a shipment.


MANIFEST, com. law. A written instrument containing a true account of the cargo of a ship or commercial vessel.
     2.
 variables, including latent Hidden; concealed; that which does not appear upon the face of an item.

For example, a latent defect in the title to a parcel of real property is one that is not discoverable by an inspection of the title made with ordinary care.
 endogenous endogenous /en·dog·e·nous/ (en-doj´e-nus) produced within or caused by factors within the organism.

en·dog·e·nous
adj.
1. Originating or produced within an organism, tissue, or cell.
 and exogenous Exogenous

Describes facts outside the control of the firm. Converse of endogenous.
 are depicted in Figure 2. Currently, the researchers are developing instruments to measure those manifest variables and intend to conduct a large-scale study for this purpose.

[FIGURE 2 OMITTED]

Conclusion

The emergence of various types of performance related models from different fields such as TQM, marketing and strategic management, finance, and organisational development motivate us to systematically categorise Verb 1. categorise - place into or assign to a category; "Children learn early on to categorize"
categorize

reason - think logically; "The children must learn to reason"
 them into a single framework. We have chosen the resource based view and stakeholder theory to explain enablers (success factor) and performance indicators section of most performance related models. We believe the six dimensions that we put forward, namely: leadership, organisational culture, strategy/objectives, change management/innovation, specialised knowhow, and best practices could capture most variances in the enablers section of most performance models and the stakeholder focus adopted from the stakeholder theory could well explain the knowledge in performance indicators in most models. This study will contribute to the knowledge in performance research by pulling those factors together into a single theoretical framework.
Table 1: Similarities of Different TQM-based Models

                            Malaysian Prime
                          Minister's Quality
                              Award (NPC)

Enablers             Top Mgmt Leadership
(Concepts +
characteristics      Human Res
+ practices)         Development/Mgmt

                     Organisation and System

                     Quality Data/Information

                     Satisfying Customer/
                     Handling complaints

                     Quality Assurance of
                     Support services/Vendor
                     Corporate Respon-
                     sibilities

Performances         Performances

                            Grandzol et al
                            1998 (critical
                            factors of TQM)

Enablers             Leadership
(Concepts +
characteristics      Employee Fulfillment
+ practices)

                     Process Management

                     Learning
                     Customer Satisfaction

                     Internal/External Co-
                     operation
                     Continuous Improve-
                     ment

Performances         Product/services
                     quality
                     Financial
                     Operational
                     Public responsibility
                     Customer satisfaction
                     Employee satisfaction

                             MBNQA (1995)

Enablers             Leadership
(Concepts +          Strategic Quality Planning
characteristics      Human Resource Utilisation
+ practices)

                     Process Management

                     Information Analysis

                     Customer satisfaction

Performances         Quality/Operational
                     Results

                                  EQA
                               (Business
                           Excellence Model)

Enablers             Leadership
(Concepts +          Policy and Strategy
characteristics      Personnel manage-
+ practices)         ment

                     Process Manage-
                     ment

                     Resources

                     Customer satis-
                     faction

Performances         Business results
                     Social impacts
                     Personal satisfaction

                             Kanji (1998)
                               (Business
                           Excellence Model)

Enablers             Leadership
(Concepts +
characteristics      People-based Mgmt
+ practices)         People make quality
                     Teamwork
                     All work is process
                     Internal customer
                     Mgmtbyfact
                     Measurement

                     Delight customer

                     Continuous Improvement
                     Prevention
                     Cycle

Performances         Business Excellence

Table 2: Classifying Enablers

Models (Enablers)                   Our Dimensions (Org Capability)

MBNQA
* leadership                        * leadership
* strategic planning                * strategy/objectives
* information analysis              * specialised knowhow/best practice
* human resource utilisation        * specialised knowhow/best practice
* process management                * specialised knowhow/best practice

EQA
* leadership                        * leadership
* policy and strategy               * strategy/objectives
* personnel management              * specialised knowhow/best practice
* process management                * specialised knowhow/best practice
* resources                         * resources **

World Class Manufacturing
* top management support            * leadership
* strategic management              * strategy/objectives
* human resource management         * specialised knowhow/best practice
* technology management             * specialised knowhow/best practice
* quality management                * specialised knowhow/best practice
* just-in-time                      * specialised knowhow/best practice

Competitive Fitness Model
* mission and vision                * leadership
* customer orientation              * takeholder focus
* corporate culture                 * rganisational culture
* organisation and system           * rganisational resources'
* planning and intelligence         * trategy/objectives
* human resource                    * pecialised knowhow
* technical resources               * pecialised knowhow+C35
* innovation                        * hange management/innovation
* marketing operation               * pecialised knowhow
* market strategy                   * trategy
* international strategy            * trategy

Blue Chip Characteristics
* good reputation                   * intangible resources (asset-
                                      based) **
* quality of management             * leadership
* high stability of share           * reputation/intangible (asset-
  price during recession              based) **
* high regard of company            * reputation/intangible (asset-
  in business circles                 based) **
* high profit growth and            * reputation/intangible (asset-
  large market share                  based) **

** mentioned elsewhere in RBV


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Fazli Idris

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Nooreha Hussain

AD-MACS Consulting Sdn Bhd SDN BHD Sendirian Berhad (Malay equivalent to incorporated)  
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