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The Fundamental Concepts of Excellence.

Abstract: The Fundamental Concepts of Excellence provide us with the frameworks for achieving a Total Quality Management. They are based on the principles of TQM. The current move within economic and political integration in Europe should eliminate the remaining pockets of economic and social backwardness and boost the continent's political and economic strength using these concepts. Quality, which is a cultural issue first and a technical issue second, is no exception as far as diversity is concerned. There is no such thing as European quality. There is a need for an National Quality Award to support the national scope of Total Quality Management.

Key words: Fundamental Concepts of Excellence, Total Quality Management, Quality Award, Business Excellence.


In the past 10 or 20 years a few companies have radically transformed their business performance. Many of the concepts and methods they have used are now collectively called total quality or total quality management. Many other terms have also been used. These include business transformation, performance excellence, business excellence, and six sigma. The successes of these companies have dramatically changed how they and others see both quality and business management today. They are rethinking how they are organized, how they manage themselves, and even what businesses they should be in. Achieving quality became the key question to be answered in the business today.

As the importance of achieving quality increased, the quest to learn how to achieve it has grown also. The emergence in the European Union of the European Quality Award (EQA), and its many offspring's at the national level, have promoted the development of quality by providing a comprehensive, homegrown organizational model for the achievement of quality, and by opening to view organizations that have applied this model successfully. It is difficult to overstate the importance of these models of excellence in the promotion of quality practice over the past two decades. They have provided managers at all levels with evidence that it can be done here and, more important, they have provided in unusual detail, roadmaps of how it was done. Various nations and regional bodies have established quality awards. The most widely known of these are the Deming Award in Japan, the Malcolm Baldrige National Quality Award (MBNQA) in the United States of America and the European Quality Award in the Europe. These awards incorporate concepts and principles of Total Quality Management (TQM) and they provide criteria for assessing business excellence throughout the entire organization. TQM is a philosophy of perpetual improvement and ISO 9000 is a Quality System Management Standard that sets in place a system to deploy policy and verifiable objectives. An ISO 9000 implementation is a basis for a Total Quality Management implementation.

This paper discusses the fundamental concepts of excellence and these concepts are the basis for the national quality awards. In addition, the paper is proposing the concepts of excellence that should be implemented in the non existing Croatian Quality Award.


As we stated before, there are several Quality Awards, such as the European Quality Award in Europe, the Deming Prize in Japan, the Malcolm Baldrige National Quality Award in the United States of America. The broad aims of these awards are to increase awareness of TQM because of its important contribution to superior competitiveness, encourage systematic self-assessment against established criteria and market awareness simultaneously, stimulate sharing and dissemination of information on successfully deployed quality strategies and on benefits derived from implementing these strategies, promote understanding of the requirements for the attainment of quality excellence and successful deployment of TQM and encourage firms to introduce a continuous improvement process. Each award model is based on a perceived model of TQM.

2.1. The European Model for TQM

The primary purpose of the EQA is to support, encourage, and recognize the development of effective TQM by European firms. The model of the EQA is divided into two parts, Enablers and Results (Introducing EFQM, 2007). The enablers are leadership, people management, policy & strategy, resources, and processes. These five aspects steer the business and facilitate the transformation of inputs to outputs. The results are people satisfaction, customer satisfaction, impact on society, and business results. The EQA model consists of nine primary elements, which are further divided into a number of secondary elements. The primary elements are listed in table 1.

2.2. The Deming Prize Model for TQM

The Deming Prize main purpose is to spread the quality gospel by recognizing performance improvements flowing from the successful implementation quality control based on statistical quality control (Juran, & Blanton, 1998). The Deming Prize proved an effective instrument for spreading TQM philosophy throughout the Japanese industries. There are ten primary elements in the Deming Application Prize, as well as a checklist that is used to evaluate the performance of senior executives. This checklist emphasizes the importance of top management's active participation in quality management activities and understanding of the main requirements of quality improvement programs. It is also provides senior executives with a list of what they need to do (Ritchie, 2000). The primary elements in the Deming Application Prize are listed in table 1.

2.3. The MBNQA Model for TQM

In 1987, the US Congress passed the Malcolm Baldrige National Quality Improvement Act, and thus established an annual quality award in the US. The aim of the award is to encourage American firms to improve quality, satisfy customers, and improve overall firms performance and capabilities. The model framework can be used to assess firms current quality management practices, benchmark performance against key competitors and worldclass standards, and improve relations with suppliers and customers. The Malcolm Baldrige National Quality Award model framework is listed in table 1.


The principal goal of TQM is to attain competitive quality. The criteria of the National Quality Awards is to provide a widely accepted definition of comprehensive quality management. The EFQM criteria support a model which includes success measured in terms of delighted customers, empowered employees, higher revenue, and lower operating costs, attainment of success through management processes which include quality planning, quality control, and quality improvement, organizational infrastructure on which these processes depend, including a documented quality system ISO 9000, customer-supplier collaboration in partnerships, involvement of everyone in the organization in the quality effort, measurement and information systems for key business variables, and education and training of all in the organization, when and as required and foundation of the quality effort which includes strategic planning and management to the plan. These elements of the EFQM model provide a framework for assessing an organization's ability to progress toward TQM.

The different Levels of Excellence are based on the EFQM Excellence Model. We are going to discuss further, what is the main objective of National Quality Award.

The National Quality Awards for Business Excellence must be the most rigorous and prestigious business awards in one nation, allowing organisations to assess how well you are doing and to benchmark your achievements against other organisations (Sclickman, 2003). Winning the National Quality Award recognises your organisation as being among the best in the nation. Not only are you recognised as a leader and champion, importantly, you will receive detailed written feedback from a team of assessors to help your organisation continuously improve its performance. Winning the National Quality Award should mean that the organization has gained the higher level of quality and business excellence and represent only one step to achieving overall TQM.

National Quality Award should be situated just below the EQA in the piramid shown in the figure 1. Recognised for Excellence is designed for organisations, or organisational units, with experience of Self-Assessment using the EFQM Excellence Model. It offers Applicants the benefits of a structured approach to identify organisational strengths and areas for improvement. Self-assessment is a comprehensive, systematic and regular review of an organisation's activities and results against a model of business excellence (EFQM, 1994.).


Committed to Excellence level is designed for organisations, at the beginning of their journey to Excellence.


In the past two decades we have moved quickly from believing that managing quality just means conformance to specifications and requirements. Quality also means meeting and even exceeding the needs and expectations of customers. Quality includes the right features, correct documentation, and error-free invoices. It also includes the proper functioning of critical business processes, on-time delivery, user friendly and accurate technical support and no failures. Quality involves reducing all the costs of poor quality.

Fundamental Concepts of Excellence are providing us with the frameworks for achieving that level of quality. They are based on TQM principles. There is no assurance that implementation of TQM will guide us to the business excellence, but there is quite large probability that we gained business excellence if we are the prize winner.

From that arise the basic idea of this paper. It is essential that country like Croatia establish the National Quality Award as a key element of improving the organizational competitiveness.


This paper is result of researches on scientific project supported by Ministry of Science, education and sport, Republic of Croatia, Modeling of advanced production structures at intelligent manufacture 069-0692976-1740.


Juran, J. & Blanton Godfrey, A. (1998). Juran's quality handbook, McGraw-Hill, ISBN 0-07-034003-X, New York Macleod, A. & Baxter, Lynne (2001). The Contribution of

Business Excellence Models in Restoring Failed Improvement Initiatives, European Management Journal, Vol. 19, No. 4 (2001) pp. 392- 403, S0263-2373(01)00042-1

Ritchie, L. & Dale, B.G. (2000). Self-assessment using the business excellence model: A study of practice and process, International Journal of Production Economics, Vol. 66, (2000) pp. 241-254, S0925-5273(99)00130-9

Introducing EFQM, Available from: Accessed: 30.08.2007.

Schlickman, J. (2003). ISO 9001:2000 Quality Management System Design, Artech House inc. ISBN 1-58053-526-7, Boston
Table 1. Fundamental Concepts of Excellence

European Deming Prize MBNQA

Leadership Policies Leadership
Policy and strategy Organization Strategic planning
People management Information Customer and market focus
Resources Standardization Information and analysis
Processes Human resources Human resource focus
Customer satisfaction Quality assurance Process management
People satisfaction Maintenance Business results
Impact on society Improvement --
Business results Effects --
-- Future plans --
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Author:Vukovic, Aleksandar; Ikonic, Milan; Pavletic, Dusko
Publication:Annals of DAAAM & Proceedings
Article Type:Report
Geographic Code:4E
Date:Jan 1, 2007
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