02 TQM

Approaches to Total Quality
M any individuals have made substantial contributions to the theory and

practice of quality management. These include the well-known
“gurus”: W. Edwards Deming, Joseph M. Juran, and Philip B. Crosby, as well
as many other consultants, business executives, and academic researchers.
Their philosophical writings and lectures have helped shape management
thought as well as provide the foundation for practical management frame-
works designed around quality.
This chapter introduces you to several key philosophies and frame-
works that are being used to guide total quality initiatives. The objectives of
this chapter are
• to understand the fundamental paradigms that drive the TQ philosophy,
• to describe philosophies of Deming, Juran, and Crosby as a basis for TQ
approaches,
• to provide an overview of ISO 9000, the Malcolm Baldrige National Qual-
ity Award, and other international quality awards as frameworks for
total quality.
TOTAL QUALITY PARADIGMS

Adopting a TQ philosophy requires significant changes in organization design,
work processes, and culture. Organizations use a variety of approaches. Some
emphasize the use of quality tools, such as statistical process control or Six
Sigma (which we discuss in the next chapter), but have not made the neces-
sary fundamental changes in their processes and culture. It is easy to focus
on tools and techniques but very hard to understand and achieve the neces-
Chapter 2: Approaches to Total Quality 43
sary changes in human attitudes and behavior. Others have adopted a

behavioral focus in which the organization’s people are indoctrinated in a
customer-focused culture, or emphasize error prevention and design quality,
but fail to incorporate continuous improvement efforts. Still other compa-
nies focus on problem-solving and continuous improvement, but fail to
focus on what is truly important to the customer. Although these firms will
realize limited improvements, the full potential of total quality is lost due to
a lack of complete understanding by the entire organization.
Single approaches, such as statistical tools, behavioral change, or problem-
solving can have some short-term success, but do not seem to work well
over time. Total quality requires a comprehensive effort that encompasses all
of these approaches. A total change in thinking, not a new collection of tools,
is needed.
Total quality requires a set of guiding principles. Such principles have
been promoted by the three “quality gurus”—Deming, Juran, and Crosby.
Their insights on measuring, managing, and improving quality have had
profound impacts on countless managers and entire corporations around the
world. Deming has generated the most interest and controversy. A discus-
sion of his philosophy, which is actually more about management than qual-
ity, follows.
THE DEMING MANAGEMENT PHILOSOPHY1

Deming was trained as a statistician and worked for Western Electric during
its pioneering era of statistical quality control development in the 1920s and
1930s. During World War II he taught quality control courses as part of the
national defense effort. Although Deming taught many engineers in the United
States, he was not able to reach upper management. After the war, Deming
was invited to Japan to teach statistical quality control concepts. Top man-
agers there were eager to learn, and he addressed 21 top executives who col-
lectively represented 80 percent of the country’s capital. They embraced
Deming’s message and transformed their industries. By the mid-1970s, the
quality of Japanese products exceeded that of Western manufacturers, and
Japanese companies had made significant penetration into Western markets.
Deming’s contributions were recognized early by the Japanese. The Dem-
ing Application Prize was instituted in 1951 by the Union of Japanese Scien-
tists and Engineers in recognition and appreciation for his achievements in
statistical quality control. Deming also received the nation’s highest honor,
the Royal Order of the Sacred Treasure, from the emperor of Japan. The for-
mer chairman of NEC Electronics once said, “There is not a day I don’t think
about what Dr. Deming meant to us.”
Deming was virtually unknown in the United States until 1980 when NBC
aired a white paper entitled “If Japan Can . . . Why Can’t We?” This program
made Deming a household name among corporate executives, and compa-
nies such as Ford invited him to assist them in revolutionizing their quality
44 Part I: Introduction to Total Quality
approaches. Deming worked with passion until his death in December 1993
at the age of 93, knowing he had little time left to make a difference in his
home country. When asked how he would like to be remembered, Deming
replied, “I probably won’t even be remembered.” Then after a long pause, he
added, “Well, maybe . . . as someone who spent his life trying to keep Amer-
ica from committing suicide.”2
Unlike other management gurus and consultants, Deming never defined
or described quality precisely. In his last book, he stated, “A product or a
service possesses quality if it helps somebody and enjoys a good and sus-
tainable market.”3 Deming’s philosophy is based on improving products
and services by reducing uncertainty and variability in the design and man-
ufacturing processes. In Deming’s view, variation is the chief culprit of poor
quality. In mechanical assemblies, for example, variations from specifications
for part dimensions lead to inconsistent performance and premature wear
and failure. Likewise, inconsistencies in service frustrate customers and
damage a firm’s image. To achieve reduced variation, he advocates a never-
ending cycle of product design, manufacture, test, and sales, followed by
market surveys, then redesign, and so forth.
Deming stresses that higher quality leads to higher productivity, which
in turn leads to long-term competitive strength. The Deming “chain reac-
tion,” shown in Figure 2.1, summarizes this view. This theory states that
improvements in quality lead to lower costs because of less rework, fewer
mistakes, fewer delays and snags, and better use of time and materials.
Lower costs, in turn, lead to productivity improvements. With better quality
and lower prices, the firm can achieve a higher market share and thus stay
FIGURE 2.1 THE DEMING CHAIN REACTION
Improve quality
Costs decrease because of less

rework, fewer mistakes, fewer
delays and snags, and better use
of time and materials
Productivity improves
Capture the market with better

quality and lower price
Stay in business
Provide jobs and more jobs

in business, providing more and more jobs. Deming states emphatically that
top management has the overriding responsibility for quality improvement.
The Deming philosophy of quality and management is complex; indeed,
several books have been written in an effort to explain and interpret it.
Many of the principles are very basic yet difficult to put into practice. Dem-
ing has summarized his philosophy in what he calls “A System of Profound
Knowledge.”
Profound Knowledge
Profound knowledge consists of four parts: (1) appreciation for a system, (2)
some knowledge of the theory of variation, (3) theory of knowledge, and (4)
psychology.
Systems
A system is a set of functions or activities within an organization that work
together to achieve organizational goals. For example, a McDonald’s restaurant
can be viewed as a system. It consists of the order-taker/cashier subsystem,
grill and food preparation subsystem, drive-through subsystem, and so on.
The components of any system must work together for the system to be
effective. When parts of a system interact, the system as a whole cannot be
understood or managed solely in terms of its parts. To run any system, man-
agers must understand the interrelationships among all subsystems and the
people that work in them. One example is performance appraisal. The fol-
lowing are some of the factors within a system that affect the individual per-
formance of an employee:
• training received
• information and resources provided
• leadership of supervisors and managers
• disruptions on the job
• management policies and practices
However, most performance appraisals do not recognize these factors.

Management must have an aim, a purpose to which the system contin-
ually strives. Deming believes that the aim of any system is for everybody—
stockholders, employees, customers, community, the environment—to gain
over the long term. Stockholders can realize financial benefits, employees
can have opportunities for training and education, customers can receive
products and services that meet their needs and create satisfaction, the com-
munity can benefit from business leadership, and the environment can ben-
efit from socially responsible management.
Deming emphasizes that management’s job is to optimize the system. By
making decisions that are best for only a small part of the system (often
encouraged by competition), we suboptimize. Suboptimization results in a
loss to everybody in the system. For example, a common practice is to pur-
chase materials or services at the lowest bid. Inexpensive materials may be
of such inferior quality that they will cause excessive costs in adjustment and
repair during manufacture and assembly. Although the purchasing depart-
ment’s track record might look good, the overall system will suffer.
This theory applies to managing people also. Pitting individuals or depart-
ments against each other for resources is self-destructive. The individuals or
departments will perform to maximize their expected gain, not that of the
firm as a whole. Employees must cooperate with each other. Likewise, sales
quotas or arbitrary cost reduction goals do not motivate people to improve
the system and, ultimately, customer satisfaction; workers will perform only
to meet the quotas and goals.
Variation
The second part of Profound Knowledge is some understanding of statisti-
cal theory, particularly as it applies to variation. Just as no two snowflakes
are exactly alike, no two outputs from any production process are exactly
alike. A production process contains many sources of variation. Different lots
of material will vary in strength, thickness, or moisture content, for example.
Cutting tools will have inherent variation in strength and composition. Dur-
ing manufacturing, tools will experience wear, machine vibrations will cause
changes in settings, and electrical fluctuations will cause variations in power.
Operators may not position parts on fixtures consistently.
The complex interaction of all these variations in materials, tools,
machines, operators, and the environment cannot be understood. Variation
due to any individual source appears random; however, their combined
effect is stable and can usually be predicted statistically. Factors that are pres-
ent as a natural part of a process are called common causes of variation.
Common causes generally account for about 80 to 90 percent of the
observed variation in a production process. The remaining 10 to 20 percent
result from special causes of variation, often called assignable causes. Special
causes arise from external sources that are not inherent in the process. A bad
batch of material purchased from a supplier, a poorly trained operator, exces-
sive tool wear, or miscalibration of measuring instruments are examples of
special causes. Special causes result in unnatural variations that disrupt the
random pattern of common causes. Hence they are generally easy to detect
using statistical methods, and it is usually economical to remove them.
A system governed only by common causes is said to be stable. Under-
standing a stable system and the differences between special and common
causes of variation is essential for managing any system. Management can
make two fundamental mistakes in attempting to improve a process:
1. To treat as a special cause any fault, complaint, mistake, breakdown, acci-

dent, or shortage when it actually came from common causes.
2. To attribute to common causes any fault, complaint, mistake, breakdown,
accident, or shortage when it actually came from a special cause.
In the first case, tampering with a stable system will actually increase the vari-
ation in the system. In the second case, we can miss the opportunity to elim-
inate unwanted variation by assuming that it is not controllable. Changing a

system on the basis of a special cause can damage the system and add cost.
Variation should be minimized. The producer and consumer both benefit
from reduced variation. The producer benefits by having less need for inspec-
tion, less scrap and rework, and higher productivity. The consumer is assured
that all products have similar quality characteristics; this is especially impor-
tant when the consumer is another firm using large quantities of the product
in its own manufacturing or service operations.
Variation increases the cost of doing business. An example was published
in the Japanese newspaper Asahi comparing the cost and quality of Sony tel-
evisions at plants in Japan and San Diego.4 The color density of all the units
produced at the San Diego plant was within specifications, although the den-
sity of some of those shipped from the Japanese plant was not (Figure 2.2).
However, the average loss per unit at the San Diego plant was $0.89 greater
than that of the Japanese plant. This was because units out of specification at
the San Diego plant were adjusted within the plant, adding cost to the
process. Furthermore, a unit adjusted to just within specifications was more
likely to generate customer complaints than a unit that was closer to the
original target value, therefore incurring higher field service costs. Figure 2.2
shows that fewer U.S.-produced sets met the target value for color density.
The distribution of quality in the Japanese plant was more uniform around
the target value, and even though some units were out of specification, the
total cost was less.
The only way to reduce variation due to common causes is to change the
technology of the process—the machines, people, materials, methods, or
measurement system. The process is under the control of management, not
the production operators. Pressuring operators to perform at higher quality
levels may not be possible and may be counterproductive.
Variation due to special causes can be identified through the use of con-
trol charts, which are introduced in chapter 3. The responsibility for using
control charts to identify special causes of variation and to make the neces-
sary corrections should lie with the production operators and their immedi-
ate supervisors.
FIGURE 2.2 VARIATION IN U.S.-MADE VERSUS JAPANESE-MADE TELEVISION COMPONENTS
U.S. plant Japanese plant

(s2 = 8.33) (s2 = 2.78)
Target
Specification limits
Theory of Knowledge
The third part of Profound Knowledge is the theory of knowledge—a branch
of philosophy concerned with the nature and scope of knowledge, its pre-
suppositions and bases, and the general reliability of claims to knowledge.
Deming was influenced greatly by Clarence Irving Lewis, author of Mind
and the World.5 Lewis stated, “There is no knowledge without interpretation.
If interpretation, which represents an activity of the mind, is always subject
to the check of further experience, how is knowledge possible at all? . . . An
argument from past to future at best is probable only, and even this proba-
bility must rest upon principles which are themselves more than probable.”
Deming emphasizes that there is no knowledge without theory and that
experience alone does not establish a theory. To copy an example of success
without understanding it with the aid of theory may lead to disaster. Expe-
rience only describes; it cannot be tested or validated. Theory establishes a
cause-and-effect relationship that can be used for prediction. Theory leads
to questioning and can be tested and validated—it explains why. Many
companies have jumped on the latest fads advocated by popular business
consultants. Methods that have sustained success are grounded in theory.
Managers have a responsibility to learn and apply theory.
Psychology
Psychology helps us to understand people, interactions between people and
circumstances, interactions between leaders and employees, and any system of
management. People differ from one another. A leader must be aware of these
differences and use them to optimize everybody’s abilities and inclinations.
Many managers operate under the supposition that all people are alike
and treat them as interchangeable components of a process. However, peo-
ple learn in different ways and at different speeds and perform at different
levels. Leaders have an obligation to make changes in the system of manage-
ment that will bring improvement. People have an innate need for relation-
ships with other people and for self-esteem and respect. Circumstances pro-
vide some people with dignity and self-esteem and deny them to other
people. People inherit the right to enjoy work. Psychology helps us to nur-
ture and preserve people’s positive innate attributes.
Perspectives on Profound Knowledge

Little in Deming’s system of Profound Knowledge is original. The concept of
common and special causes of variation was developed by Walter Shewhart in
the 1920s; behavioral theories to which Deming subscribes were developed in
the 1960s; systems theory was refined by management scientists from the 1950s
through the 1970s; and scientists in all fields have long understood the rela-
tionships among prediction, observation, and theory. Deming’s contribution
was in tying together some basic concepts. He recognized the synergy among
these diverse subjects and developed them into a theory of management.
Peter Scholtes, a noted consultant, makes some salient observations about
the failure to understand the components of Profound Knowledge:6
1. When people don’t understand systems;

• they see events as individual incidents rather than the net result of
many interactions and interdependent forces;
• they see the symptoms but not the deep causes of problems;
• they don’t understand how an intervention in one part of [an organ-
ization] can cause havoc in another place or at another time;
• they blame individuals for problems even when those individuals
have little or no ability to control the events around them; and
• they don’t understand the ancient African saying, “It takes a whole
village to raise a child.”
2. When people don’t understand variation;
• they don’t see trends that are occurring;
• they see trends where there are none;
• they don’t know when expectations are realistic;
• they don’t understand past performance so they can’t predict future
performance;
• they don’t know the difference between prediction, forecasting, and
guesswork;
• they give others credit or blame when those people are simply either
lucky or unlucky. This usually occurs because people tend to attrib-
ute everything to human effort, heroics, frailty, error, or deliberate
sabotage, no matter what the systemic cause; and
• they are less likely to distinguish between fact and opinion.
3. When people don’t understand psychology;
• they don’t understand motivation or why people do what they do;
• they resort to carrots and sticks and other forms of induced motiva-
tion that have no positive effect and impair the relationship between
the motivator and the one being motivated;
• they don’t understand the process of change and the resistance to it;
• they revert to coercive and paternalistic approaches when dealing
with people; and
• they create cynicism, demoralization, demotivation, guilt, resentment,
burnout, craziness, and turnover.
4. When people don’t understand the theory of knowledge;
• they don’t know how to plan and accomplish learning and improve-
ment;
• they don’t understand the difference between improvement and
change; and
• problems will remain unsolved, despite their best efforts.
Deming’s 14 Points for Management

The 14 Points for Management, listed in Table 2.1, have been the subject of con-
siderable controversy and debate. They have their basis in Profound Knowl-
edge. Many companies have studied and applied them to their organizations.
TABLE 2.1 DEMING’S 14 POINTS FOR MANAGEMENT7
1. Create and publish to all employees a statement of the aims and purposes of
the company or other organization. The management must demonstrate
constantly their commitment to this statement.
2. Learn the new philosophy, top management and everybody.
3. Understand the purpose of inspection, for improvement of processes and
reduction of cost.
4. End the practice of awarding business on the basis of price tag alone.
5. Improve constantly and forever the system of production and service.
6. Institute training.
7. Teach and institute leadership.
8. Drive out fear. Create trust. Create a climate for innovation.
9. Optimize toward the aims and purposes of the company the efforts of teams,
groups, staff areas.
10. Eliminate exhortations for the workforce.
11. (a) Eliminate numerical quotas for production. Instead, learn and institute
methods for improvement.
(b) Eliminate MBO (Management by Objective). Instead, learn the capabilities
of processes and how to improve them.
12. Remove barriers that rob people of pride of workmanship.
13. Encourage education and self-improvement for everyone.
14. Take action to accomplish the transformation.
1. Management Commitment—Businesses should not exist simply for profit;

their true purpose should be to serve their customers and employees. To
do this, they must take a long-term view and invest in innovation, train-
ing, and research. Thus, an organization needs a clear mission and state-
ment of purpose.
2. Learn the New Philosophy—American management has been built on the
Taylor system, which has led to numbers-driven production, quotas, and
adversarial work relationships. Old methods of management create mis-
trust, fear, and anxiety with a focus on “satisficing” rather than on “opti-
mizing.” Eliminating defects is not good enough. Defect-free production
is taken for granted in Japan. Achieving competitive success in today’s
global economy requires a customer-driven approach based on mutual
cooperation between labor and management and a never-ending cycle of
improvement. Everyone, from the boardroom to the stockroom, must learn
the new philosophy.
3. Understand Inspection—Routine inspection acknowledges defects but
does not add value to the product. Instead, it encourages defects because
“someone else” catches and fixes the problems. This procedure increases
costs and decreases productivity. Workers must take responsibility for their
own work and be able to take appropriate action to assure good quality.
Managers need to understand how variation affects their processes and to

take steps to reduce the causes of variation. Inspection should be used as
an information-gathering tool for improvement, not as an end in itself.
4. End Price Tag Decisions—Purchasing decisions traditionally have been
driven by cost through competitive bidding, not by quality. Costs due to
inferior materials and components increase costs in later stages of pro-
duction and can far exceed the “savings” realized through competitive bid-
ding. The purchasing department is a supplier to the production depart-
ment and must understand its new role. Suppliers themselves are part of
the whole system.
Deming urges businesses to establish long-term relationships with
a few suppliers, leading to loyalty and enhanced opportunities for
improvement. A reduced supply base decreases variation and reduces
scrap, rework, and the need to adjust to this variation. Long-term relation-
ships between suppliers and customers allow the supplier to produce in
greater quantities and reduce unit costs, foster improved communica-
tion, and enhance opportunities for process improvements.
5. Improve Constantly—Western management has typically thought of
improvement in the context of large, expensive innovations such as robot-
ics and computer-integrated manufacturing. The success of Japanese man-
ufacturers, however, is due primarily to continuous, small, incremental
improvements in design and production. Improved design results from
understanding customer needs and from continual market surveys and
other sources of feedback. Improved production is achieved by reducing
the causes of variation in order to establish a stable, predictable production
process. Statistical methods provide one means for doing this. Improve-
ment should go beyond production, encompassing transportation, engi-
neering, maintenance, sales, service, and administration—all areas of the
organization.
6 Institute Training—Employees need the proper tools and knowledge to
do a good job, and it is management’s responsibility to provide these. In
addition to specific job skills, all employees should be trained in statisti-
cal tools for quality problem solving and continuous improvement. Train-
ing not only improves quality and productivity, but also enhances workers’
morale by showing them that the company is dedicated to helping them
and is investing in their future. Deming notes that in Japan, entry-level
managers spend 4 to 12 years on the factory floor and in other activities
to learn the problems of production. At Honda of America in Marysville,
Ohio, all employees start out on the production floor regardless of their
job classification.
7. Institute Leadership—The job of management is leadership and guidance,
not supervision and work direction. Supervisors should be coaches, not
policemen, and supervision should provide the link between manage-
ment and the workforce. Leadership can help to eliminate fear and encour-
age teamwork.
8. Drive Out Fear—Fear in work manifests in many ways: fear of reprisal,

fear of failure, fear of the unknown, fear of change. Many workers fear
punishment or reprisals for not meeting quotas and for problems of the
system that are beyond their control. Managers compete against each
other to protect their own jobs or to receive higher performance ratings.
Fear encourages short-term, selfish thinking, not long-term improve-
ment for the benefit of all.
9. Optimize Team Efforts—Barriers between individuals and departments
lead to poor quality, because “customers” do not receive what they need
from their “suppliers.” This is often the result of internal competition for
raises or performance ratings. Teamwork helps to break down barriers
between internal customers and suppliers. The focus should be on meet-
ing customer needs and improving processes. Teamwork is an impor-
tant means of achieving a company’s goals.
10. Eliminate Exhortations—Motivation can be better achieved through
trust and leadership than slogans. Slogans calling for improved qual-
ity usually assume that poor quality results from a lack of motivation.
Workers cannot improve solely through motivational methods when
the system in which they work constrains their performance. On the
contrary, they will become frustrated and their performance will
decrease further.
11. Eliminate Quotas and MBO—Numerical quotas reflect short-term per-
spectives and do not encourage long-term improvement, particularly if
rewards or performance appraisals are tied to meeting quotas. Workers
may shortcut quality to reach the goal. If the quota is met, they have no
incentive to continue production or to improve quality. Arbitrary man-
agement goals without a method for achieving them have no meaning.
Further, variation in the system makes year-to-year or quarter-to-quarter
comparisons meaningless. The typical American MBO system focuses
on results, not processes, and encourages short-term behavior. Manage-
ment must understand the system and the variation within it and seek
to improve it in the long term.
12. Remove Barriers to Pride in Workmanship—The Taylor system has promul-
gated the view of workers as a “commodity.” Factory workers are given
monotonous tasks, provided with inferior machines, tools, or materials,
told to run defective items to meet sales pressures, and report to super-
visors who know nothing about the job.
Deming believed that one of the biggest barriers to pride in work-
manship is performance appraisal. Performance appraisals
• destroy teamwork by promoting competition among employees for
limited resources;
• foster mediocrity since objectives typically are driven by numbers
and what the boss wants;
• focus on short-term results and discourage risk taking; and
• are not focused on serving the customer.
Deming suggests that there are three categories of performance: the

majority who work within the system, those outside the system on the
superior side, and those outside the system on the inferior side. Statisti-
cal methods provide the means of making this classification. Superior
performers should be compensated specially; inferior performers need
extra training or a different job.
13. Institute Education—“Training” in number 6 refers to job skills; education
refers to self-development. Firms have a responsibility to develop the
value and self-worth of the individual. Investing in people is a powerful
motivation method.
14. Take Action—The TQM philosophy is a major cultural change and many
firms find it difficult. Top management must institute the process and
include everyone in it.
Deming’s principles continue to live in many organizations today (see

box).
Louisville Slugger Hits a Home Run with Deming8
Hillerich & Bradsby Co. (H&B) has been making the Louisville Slugger brand of
baseball bat for more than 115 years. In the mid-1980s, the company faced
significant challenges from market changes and competition. CEO Jack Hil-
lerich attended a four-day Deming seminar, which provided the basis for the
company’s current quality efforts. Returning from the seminar, Hillerich decided
to see what changes that Deming advocated were possible in an old company
with an old union and a history of labor-management problems. Hillerich per-
suaded union officials to attend another Deming seminar with five senior man-
agers. Following the seminar, a core group of union and management people
developed a strategy to change the company. They talked about building trust
and changing the system “to make it something you want to work in.”
Employees were interested, but skeptical. To demonstrate their commit-
ment, managers examined Deming’s 14 Points, and picked several they
believed they could make progress on through actions that would demon-
strate a serious intention to change. One of the first changes was the elimi-
nation of work quotas that were tied to hourly salaries and a schedule of
warnings and penalties for failures to meet quotas. Instead, a team-based
approach was initiated. While a few workers took advantage of the change,
overall productivity actually improved as rework decreased because workers
were taking pride in their work to produce things the right way first. H&B also
eliminated performance appraisals and commission-based pay in sales. The
company has also focused its efforts on training and education, resulting in
an openness for change and capacity for teamwork. Today, the Deming phi-
losophy is still the core of H&B’s guiding principles.
THE JURAN PHILOSOPHY

Joseph M. Juran joined Western Electric in the 1920s during its pioneering
days in the development of statistical methods for quality. He spent much of
his time as a corporate industrial engineer. In 1951 Juran wrote, edited, and
published the Quality Control Handbook, now in its fourth edition.
Juran taught quality principles to the Japanese in the 1950s just after
Deming and was a principal force in their quality reorganization. Like Dem-
ing, he concludes that we face a major crisis due to the loss of sales to foreign
competition and the huge costs of poor quality. To solve this crisis, new
thinking about quality that includes all levels of the managerial hierarchy is
required. Upper management in particular requires training and experience
in managing for quality.
Juran’s programs are designed to fit into a company’s current strategic
business planning with minimal risk of rejection. This is in contrast to Deming
who proposes sweeping cultural change. Juran contends that employees at dif-
ferent levels of an organization speak in different “languages.” (Deming
believes statistics should be the common language.) Top management speaks
in the language of dollars, workers speak in the language of things, and mid-
dle management must be able to speak both languages and translate between
dollars and things. Thus, to get top management’s attention, quality issues
must be cast in the language they understand—dollars. Juran advocates the
accounting and analysis of quality costs to focus attention on quality problems.
At the operational level, Juran’s focus is on increasing conformance to spec-
ifications through elimination of defects, supported extensively by statistical
tools for analysis. Thus, his philosophy fits well into existing management
systems.
Juran defines quality as “fitness for use.” (Deming advocates no specific
definition.) This is broken down into four categories: quality of design, qual-
ity of conformance, availability, and field service. Quality of design focuses
on market research, the product concept, and design specifications. Quality
of conformance includes technology, manpower, and management. Avail-
ability focuses on reliability, maintainability, and logistical support. Field
service quality comprises promptness, competence, and integrity.
Juran views the pursuit of quality on two levels: (1) the mission of the
firm as a whole is to achieve high product quality, and (2) the mission of each
individual department in the firm is to achieve high production quality. Like
Deming, Juran advocates a never-ending spiral of activities that includes
market research, product development, design, planning for manufacture,
purchasing, production process control, and inspection and testing, followed
by customer feedback. Because of the interdependence of these functions,
the need for competent company-wide quality management is great. Senior
management must play an active and enthusiastic leadership role in the
quality management process.
Juran’s prescriptions focus on three major aspects of quality called the
Quality Trilogy (a registered trademark of the Juran Institute): quality
planning—the process for preparing to meet quality goals, quality con-

trol—the process for meeting quality goals during operations, and quality
improvement—the process for breaking through to unprecedented levels of
performance.
Quality planning begins with identifying customers, both external and
internal, determining their needs, and developing product features that
respond to customer needs. Quality control involves determining what to con-
trol, establishing units of measurement so that data may be objectively evalu-
ated, establishing standards of performance, measuring actual performance,
interpreting the difference between actual performance and the standard, and
taking action on the difference.
Juran’s program for quality improvement involves demonstrating the
need for improvement, identifying specific projects for improvement,
organizing to guide the projects, diagnosing the causes, providing remedies
for the causes, proving that the remedies are effective under operating con-
ditions, and providing control to hold improvements.
Juran’s assessment of most companies is that quality control is far and
away the top priority among the trilogy and most companies feel they are
strong in this category. Quality planning and quality improvement, how-
ever, are not important priorities and are significantly weaker in most organ-
izations. He feels that more effort needs to be placed on quality planning and
even more on quality improvement.
Japanese efforts at quality improvement were supported by massive
training programs and top management leadership. Training in managerial
quality-oriented concepts as well as training in the tools for quality improve-
ment, cost reduction, data collection, and analysis is one of the most impor-
tant components of Juran’s philosophy. Juran maintains that the Japanese
experience leaves little doubt as to the significance of the return on quality
training in competitive advantage, reduced failure costs, higher productiv-
ity, smaller inventories, and better delivery performance.
THE CROSBY PHILOSOPHY

Philip B. Crosby, who passed away in 2001, was corporate vice president for
quality at International Telephone and Telegraph (ITT) for 14 years after
working his way up from line inspector. After leaving ITT, he established
Philip Crosby Associates in 1979 to develop and offer training programs. He
was also the author of several popular books. His first book, Quality is Free,
sold about one million copies, and is credited with bringing quality to the
attention of top American executives.
The essence of Crosby’s quality philosophy is embodied in what he calls
the Absolutes of Quality Management and the Basic Elements of Improve-
ment. Crosby’s Absolutes of Quality Management are as follows:
• Quality means conformance to requirements not elegance. Crosby dispells the

myth that quality is simply a feeling of “excellence.“ Requirements must
be clearly stated so that they cannot be misunderstood. Requirements are

communication devices and are ironclad. Once a task is done, one can
take measurements to determine conformance to requirements. The non-
conformance detected is the absence of quality. Quality problems become
nonconformance problems—that is, variation in output. Setting require-
ments is the responsibility of management.
• There is no such thing as a quality problem. Problems must be identified by
the individuals or departments that cause them. There are accounting
problems, manufacturing problems, design problems, front-desk prob-
lems, and so on. Quality originates in functional departments, not in the
quality department, and the burden of responsibility for such problems
lies with the functional departments. The quality department should
measure conformance, report results, and lead the drive to develop a
positive attitude toward quality improvement. This is similar to number
3 of Deming’s Points.
• There is no such thing as the economics of quality: it is always cheaper to do the
job right the first time. Crosby supports the premise that “economics of
quality” has no meaning. Quality is free. What costs money are all the
actions that involve not doing jobs right the first time. The Deming Chain
Reaction provides a similar message.
• The only performance measurement is the cost of quality. The cost of quality is
the expense of nonconformance. Crosby notes that most companies
spend 15 to 20 percent of their sales dollars on quality costs. A company
with a well-run quality management program can achieve a cost of qual-
ity that is less than 2.5 percent of sales, primarily in the prevention and
appraisal categories. Crosby’s program calls for measuring and publiciz-
ing the cost of poor quality. Quality cost data are useful in calling prob-
lems to management’s attention, selecting opportunities for corrective
action, and tracking quality improvement over time. Such data provide
visible proof of improvement and recognition of achievement. Juran also
supports this theme.
• The only performance standard is Zero Defects. Crosby feels that the Zero
Defects (ZD) concept is widely misunderstood and resisted. Zero Defects
is not a motivational program. It is as follows:
Zero Defects is a performance standard. It is the standard of

the craftsperson regardless of his or her assignment. . . . The
theme of ZD is do it right the first time. That means concentrating
on preventing defects rather than just finding and fixing them.
People are conditioned to believe that error is inevitable;
thus they not only accept error, they anticipate it. It does not
bother us to make a few errors in our work . . . To err is human.
We all have our own standards in business or academic life—
our own points at which errors begin to bother us. It is good to
get an A in school, but it may be OK to pass with a C.
We do not maintain these standards, however, when it comes

to our personal life. If we did, we should expect to be short-
changed every now and then when we cash our paycheck; we
should expect hospital nurses to drop a constant percentage of
newborn babies . . . We as individuals do not tolerate these things.
We have a dual standard: one for ourselves and one for our work.
Most human error is caused by lack of attention rather than
lack of knowledge. Lack of attention is created when we assume
that error is inevitable. If we consider this condition carefully
and pledge ourselves to make a constant conscious effort to do
our jobs right the first time, we will take a giant step toward
eliminating the waste of rework, scrap, and repair that increases
cost and reduces individual opportunity.9
Juran and Deming, on the other hand, would argue that it is pointless, if
not hypocritical, to exhort a line worker to produce perfection since the over-
whelming majority of imperfections are due to poorly designed manufac-
turing systems beyond the workers’ control.
Crosby’s Basic Elements of Improvement include determination, educa-
tion, and implementation. By determination, Crosby means that top manage-
ment must be serious about quality improvement. The Absolutes should be
understood by everyone; this can be accomplished only through education.
Finally, every member of the management team must understand the imple-
mentation process.
Unlike Juran and Deming, Crosby’s program is primarily behavioral. He
places more emphasis on management and organizational processes for
changing corporate culture and attitudes than on the use of statistical tech-
niques. Like Juran and unlike Deming, his approach fits well within existing
organizational structures.
FRAMEWORKS FOR QUALITY AND

PERFORMANCE EXCELLENCE
The philosophies of Deming, Juran, and Crosby provide fundamental princi-
ples on which total quality is based. Business firms tend to be highly individ-
ualized. As a result, it is difficult to apply one specific philosophy. Company
leaders must understand the differences and commonalities in the three
philosophies and tailor an approach that fits their unique culture. Some of the
most successful firms, such as Texas Instruments and Dana Corporation, have
done this. Aspects of implementation are addressed further in chapter 11.
None of these philosophies, however, provide a framework for how to
implement total quality within an organization or a means of assessing total
quality efforts relative to one’s peers or world-class companies. Award crite-
ria and certification procedures fill this important role. The two most promi-
nent frameworks for quality that have had world-wide influence are ISO
9000 and the Malcolm Baldrige National Quality Award Criteria.
ISO 9000:2000
As quality became a major focus of businesses throughout the world, vari-
ous organizations developed standards and guidelines. Terms such as qual-
ity management, quality control, quality system, and quality assurance acquired
different, and sometimes conflicting meanings from country to country,
within a country, and even within an industry.10 As the European Commu-
nity moved toward the European free trade agreement, which went into
effect at the end of 1992, quality management became a key strategic objec-
tive. To standardize quality requirements for European countries within the
common market and those wishing to do business with those countries, a
specialized agency for standardization, the International Organization for
Standardization, founded in 1946 and composed of representatives from the
national standards bodies of 91 nations, adopted a series of written quality
standards in 1987, which were revised in 1994, and again (significantly) in
2000. The most recent version is called the ISO 9000:2000 family of standards.
The standards have been adopted in the United States by the American
National Standards Institute (ANSI) with the endorsement and cooperation of
the American Society for Quality (ASQ). The standards are recognized by about
100 countries, including Japan. In some foreign markets, companies will not
buy from noncertified suppliers. Thus, meeting these standards is becoming a
requirement for international competitiveness. The standards are intended to
apply to all types of businesses, including electronics and chemicals, and to
services such as health care, banking, and transportation.
ISO 9000 defines quality system standards, based on the premise that cer-
tain generic characteristics of management practices can be standardized,
and that a well-designed, well-implemented, and carefully managed quality
system provides confidence that the outputs will meet customer expecta-
tions and requirements. The standards were created to meet five objectives:
1. Achieve, maintain, and seek to continuously improve product quality
(including services) in relationship to requirements.
2. Improve the quality of operations to continually meet customers’ and stake-
holders’ stated and implied needs.
3. Provide confidence to internal management and other employees that qual-
ity requirements are being fulfilled and that improvement is taking place.
4. Provide confidence to customers and other stakeholders that quality
requirements are being achieved in the delivered product.
5. Provide confidence that quality system requirements are fulfilled.
Structure of the ISO 9000 Standards

The ISO 9000:2000 standards consist of three documents:
• ISO 9000—Fundamentals and vocabulary
• ISO 9001—Requirements
• ISO 9004—Guidance for performance improvement
ISO 9000 provides definitions of key terms. ISO 9001 provides a set of mini-
mum requirements for a quality management system, and is intended to
demonstrate compliance with recognized quality principles to customers

and for third-party certification. ISO 9004 focuses on improving the quality
management system beyond these minimum requirements.
The original ISO 9000:1994 series standards consisted of 20 elements of
a quality system; the ISO 9000:2000 standards structure these into four major
sections: Management Responsibility; Resource Management; Product Real-
ization; and Measurement, Analysis, and Improvement. These four sections
describe the four phases of a fundamental concept (based on the Quality
Management Principles) for the new standards referred to as the Process
Model.
Factors Leading to ISO 9000:2000

The original standards and the 1994 revision met with considerable contro-
versy.11 The standards required only that the organization have a documented,
verifiable process in place to ensure that it consistently produces what it says
it will produce. A company could comply with the standards and still produce
a poor-quality product—as long as it does so consistently! Dissatisfaction with
ISO 9000 resulted in the European Union calling for de-emphasizing ISO 9000
registration, citing the fact that companies are more concerned with “passing
a test” than on focusing their energies on quality processes.
The deficiencies in the old ISO 9000 standards led to a joint effort 1994
by the big three automobile manufacturers—Ford, Chrysler, and General
Motors—as well as several truck manufacturers, to develop QS-9000, an
interpretation and extension of ISO 9000 for automotive suppliers. The goal
was to develop fundamental quality systems that provide for continuous
improvement, emphasizing defect prevention and the reduction of variation
and waste in the supply chain. QS-9000 is based on ISO 9000 and includes all
ISO requirements. However, QS-9000 went well beyond ISO 9000 standards
by including additional requirements such as continuous improvement,
manufacturing capability, and production part approval processes.
ISO 9000:2000 is a response to the widespread dissatisfaction that resulted
from the old standards. The new standards have a completely new structure,
based on eight principles—“comprehensive and fundamental rules or beliefs
for leading and operating an organization” that reflect the basic principles of
Total Quality that we introduced in chapter 1. These eight principles, shown
in Table 2.2, were voted on, and overwhelmingly approved, at a conference
in 1997 attended by 36 representatives of countries that have delegates in the
TC 176 technical committee, charged with the responsibility of revising the
ISO 9000 standards.12
With this underlying philosophy, the ISO 9000:2000 revision aligns much
closer to the spirit of TQ. For example,
• Organizations now need a process to determine customer needs and
expectations, translate them into internal requirements, and measure cus-
tomer satisfaction and dissatisfaction.
• Managers must communicate the importance of meeting customer and
regulatory requirements, integrate ISO 9000 into business plans, set
TABLE 2.2 ISO 9000:2000 QUALITY MANAGEMENT PRINCIPLES
Principle 1: Customer Focus

Organizations depend on their customers and therefore should understand current
and future customer needs, should meet customer requirements, and strive to
exceed customer expectations.
Principle 2: Leadership
Leaders establish unity of purpose and direction of the organization. They should
create and maintain the internal environment in which people can become fully
involved in achieving the organization’s objectives.
Principle 3: Involvement of People
People at all levels are the essence of an organization and their full involvement
enables their abilities to be used for the organization’s benefit.
Principle 4: Process Approach
A desired result is achieved more efficiently when activities and related resources
are managed as a process.
Principle 5: System Approach to Management
Identifying, understanding, and managing interrelated processes as a system
contributes to the organization’s effectiveness and efficiency in achieving its
objectives.
Principle 6: Continual Improvement
Continual improvement of the organization’s overall performance should be a
permanent objective of the organization.
Principle 7: Factual Approach to Decision Making
Effective decisions are based on the analysis of data and information.
Principle 8: Mutually Benefiicial Supplier Relationships
An organization and its suppliers are interdependent and a mutually beneficial
relationship enhances the ability of both to create value.
Source: The terms and definitions taken from the quality management principles of ISO 9000 are reproduced with the
permission of the International Organization for Standardization, ISO. They can be obtained from any ISO member and
from the Web site of the ISO Central Secretariat at the following address: www.iso.org. Copyright remains with ISO.
measurable objectives, and conduct management reviews. No longer can

top management delegate the program to people lower in the organization.
• Organizations now must view work as a process and manage a system of
interrelated processes. This is significantly different from the “document
what you do” requirements of earlier versions.
• Analysis now needs to be done to provide information about customer
satisfaction and dissatisfaction, products, and processes with the focus
on improvement.
• Training effectiveness must be evaluated and personnel made aware of
the importance of their activities in meeting quality objectives.
• In the previous standards, organizations were required to perform cor-
rective and preventive action, but now must have a planned process for
improvement.
Implementation and Registration

Implementing ISO 9000 is not an easy task.13 The ISO 9000 standards origi-
nally were intended to be advisory in nature and to be used for two-party
contractual situations (between a customer and supplier) and for internal
auditing. However, they quickly evolved into criteria for companies who
wished to “certify” their quality management or achieve “registration”
through a third-party auditor, usually a laboratory or some other accredita-
tion agency (called a registrar). This process began in the United Kingdom.
Rather than a supplier being audited for compliance to the standards by
each customer, the registrar certifies the company, and this certification is
accepted by all of the supplier’s customers.
The registration process includes document review by the registrar of the
quality system documents or quality manual; pre-assessment, which identi-
fies potential noncompliance in the quality system or in the documentation;
assessment by a team of two or three auditors of the quality system and its
documentation; and surveillance, or periodic re-audits to verify conformity
with the practices and systems registered. During the assessment, auditors
might ask such questions as (using management responsibility as an example):
Does a documented policy on quality exist? Have management objectives
for quality been defined? Have the policy and objectives been transmitted
and explained to all levels of the organization? Have job descriptions for
people who manage or perform work affecting quality been documented?
Are descriptions of functions that affect quality available? Has management
designated a person or group with the authority to prevent nonconformities
in products, identify and record quality problems, and recommend solu-
tions? What means are used to verify the solutions?14
Recertification is required every three years. Individual sites—not entire
companies—must achieve registration individually. All costs are borne by
the applicant, so the process can be quite expensive. A registration audit may
cost anywhere from $10,000 to over $40,000 while the internal cost for docu-
mentation and training may exceed $100,000. As of December 1, 2000, over
400,000 organizations around the world have received registration.
Perspectives on ISO 9000:2000
ISO 9000 provides a set of good basic practices for initiating a quality system,
and is an excellent starting point for companies with no formal quality assur-
ance program. In fact, it provides detailed guidance on process and product
control. Thus, for companies in the early stages of developing a quality pro-
gram, the standards enforce the discipline of control that is necessary before
they can seriously pursue continuous improvement. The requirements of
periodic audits reinforce the stated quality system until it becomes ingrained
in the company.
Many diverse organizations have realized significant benefits from ISO
9000 (see box). At DuPont, for example, ISO 9000 has been credited with
increasing on-time delivery from 70 to 90 percent, decreasing cycle time from
15 days to 1.5 days, increasing first-pass yields from 72 to 92 percent, and
Some Unusual ISO 9000 Approaches15
The Rosemount Measurement Division of the Fisher-Rosemount Group of

the Emerson Electric Company was named one of the “Best Plants in Amer-
ica” by Industry Week in 1993. Since achieving ISO certification that year,
every department is audited internally at least once each year for confor-
mance to the standards. Discrepancies found during an audit are fed back to
the area on a corrective action form. Every corrective action is verified within
about a month of a stated completion date. In most ISO 9000 systems, the
quality department tends not to hold specific people responsible for system
deficiencies. But if a Rosemount department head is tardy resolving a discrep-
ancy, his or her name is found blinking in red letters on the computer moni-
tor. In other words, the person is held responsible for the lateness of the solu-
tion, not the actual problem. All discrepancies are therefore resolved in a
timely manner
As the audit teams visit all areas in the organization, they get very good
at understanding which departments are best in class for certain process
control features. Although most auditors tend to be neutral, the Rosemount
system gives complete feedback of information. At post-audit meetings, the
positive discoveries are shared first, and the department may be judged best
in class in some process categories. In other categories, where some improve-
ment is needed, the auditors may suggest that the audited department visit
other departments that are best in class in those categories.
The auditors try to let the departments learn from one another rather than
reinvent the wheel. The external auditors told the quality group that Rose-
mount has made great improvements in the two years that the best-in-class
feedback method has been used.
reducing the number of test procedures by one-third. Sun Microsystems’

Milpitas plant was certified in 1992, and managers believe that it has helped
deliver improved quality and service to customers.16 In Canada, Toronto
Plastics, Ltd. reduced defects from 150,000 per million to 15,000 per million
after one year of ISO implementation.17 The first home builder to achieve
registration, Michigan-based Delcor Homes, reduced its rate for correctable
defects from 27.4 to 1.7 in two years and improved its building experience
approval rating from the mid 60s to the mid 90s on a 100-point scale.18 Thus,
using ISO 9000 as a basis for a quality system can improve productivity,
decrease costs, and increase customer satisfaction.
The Malcolm Baldrige National Quality Award

The Malcolm Baldrige National Quality Award (MBNQA) has been one of
the most powerful catalysts of total quality in the United States, and indeed,
throughout the world. More importantly, the Award’s Criteria for Performance
Excellence establishes a framework for integrating total quality principles

and practices in any organization. In this section we present an overview of
the Award, the Criteria, and the Award process.
Recognizing that U.S. productivity was declining, President Reagan
signed legislation mandating a national study/conference on productivity in
October 1982. The American Productivity and Quality Center (formerly the
American Productivity Center) sponsored seven computer networking con-
ferences in 1983 to prepare for an upcoming White House Conference on Pro-
ductivity. The final report on these conferences recommended that “a National
Quality Award, similar to the Deming Prize in Japan, be awarded annually to
those firms that successfully challenge and meet the award requirements.
These requirements and the accompanying examination process should be
very similar to the Deming Prize system to be effective.” The Baldrige Award
was signed into law (Public Law 100-107) on August 20, 1987. The award is
named after President Reagan’s Secretary of Commerce who was killed in an
accident shortly before the Senate acted on the legislation. Malcolm Baldrige
was highly regarded by world leaders, having played a major role in carry-
ing out the administration’s trade policy, resolving technology transfer dif-
ferences with China and India, and holding the first Cabinet-level talks with
the Soviet Union in seven years, which paved the way for increased access
for U.S. firms in the Soviet market.
The purposes of the award are to
• help stimulate American companies to improve quality and productivity

for the pride of recognition while obtaining a competitive edge through
increased profits;
• recognize the achievements of those companies that improve the quality
of their goods and services and provide an example to others;
• establish guidelines and criteria that can be used by business, industrial,
governmental, and other enterprises in evaluating their own quality
improvement efforts; and
• provide specific guidance for other American enterprises that wish to
learn how to manage for high quality by making available detailed infor-
mation on how winning enterprises were able to change their cultures
and achieve eminence.
The Baldrige Award recognizes U.S. companies that excel in quality

management practice and performance. The Baldrige Award does not exist
simply to recognize product excellence, nor does it exist for the purpose of
“winning.” Its principal focus is on promoting high-performance manage-
ment practices that lead to customer satisfaction and business results. Up to
three companies can receive an award in each of the categories of manufac-
turing, small business, service, nonprofit health care, and nonprofit educa-
tion. Table 2.3 shows the recipients through 2001. Health care and education
award categories were established in 1999; 2001 was the first year for educa-
tion winners and to date, no health care organization has merited the honor.
TABLE 2.3 MALCOLM BALDRIGE AWARD RECIPIENTS
Year Manufacturing Small Business Service
1988 Motorola, Inc. Globe Metallurgical, Inc.

Westinghouse Commercial
Nuclear Fuel Division
1989 Xerox Corp. Business
Products and Systems
Milliken & Co.
1990 Cadillac Motor Car Division Wallace Co., Inc. Federal Express (FedEx)
IBM Rochester
1991 Solectron Corp. Marlow Industries
Zytec Corp.
1992 AT&T Network Systems Granite Rock Co. AT&T Universal Card Services
Texas Intruments The Ritz-Carlton Hotel Co.
Defense Systems &
Electronics Group
1993 Eastman Chemical Co. Ames Rubber Corp.
1994 Wainwright Industries, Inc. AT&T Consumer
Communication Services
GTE Directories, Inc.
1995 Armstrong World Industries
Building Products
Operations
Corning Telecommunications
Product Division
1996 ADAC Laboratories Custom Research Inc. Dana Commercial Credit Corp.
Trident Precision
Manufacturing, Inc.
1997 3M Dental Products Division Merrill Lynch Credit Corp.
Solectron Corp. Xerox Business Services
1998 Boeing Airlift and Tanker Texas Nameplate Co.
Programs
Solar Turbines, Inc.
1999 STMicroelectronics, Sunny Fresh Foods BI
Inc.-Region Americas The Ritz-Carlton Hotel
Company, L.L.C.
2000 Dana Corporation-Spicer Los Alamos National Bank Operations Management
Driveshaft Division International, Inc.
KARLEE Company
2001 Clarke American Checks, Inc. Pal’s Sudden Service
Education Category Recipients: Chugach School District, Pearl River School District,
University of Wisconsin–Stout
The award has evolved into a comprehensive National Quality Program,

administered through the National Institute of Standards and Technology in
Gaithersburg, Maryland, of which the Baldrige Award is only one part. The
National Quality Program is a public-private partnership, funded primarily
through a private foundation. The program’s Web site at www.quality.nist.gov
provides current information about the award, the performance criteria,
award winners, and a variety of other information.
The Criteria for Performance Excellence

The award examination is based upon a rigorous set of criteria, called the
Criteria for Performance Excellence, designed to encourage companies to enhance
their competitiveness through an aligned approach to organizational per-
formance management that results in:
1. Delivery of ever-improving value to customers, contributing to market-
place success
2. Improvement of overall company performance and capabilities
3. Organizational and personal learning
The criteria consist of a hierarchical set of categories, items, and areas to address.
The seven categories are
1. Leadership: This category examines how an organization’s senior leaders
address values, direction, and performance expectations, as well as their
focus on customers and other stakeholders, empowerment, innovation,
and learning. Also examined is how an organization addresses its respon-
sibilities to the public and supports its key communities.
2. Strategic Planning: This category examines how an organization develops
strategic objectives and action plans. Also examined are how chosen strate-
gic objectives and action plans are deployed and how progress is measured.
3. Customer and Market Focus: This category examines how an organization
determines requirements, expectations, and preferences of customers and
markets. Also examined is how the organization builds relationships with
customers and determines the key factors that lead to customer acquisi-
tion, satisfaction, and retention and to business expansion.
4. Information and Analysis: This category examines an organization’s infor-
mation management and performance measurement systems and how
the organization analyzes performance data and ensures hardware and
software quality.
5. Human Resource Focus: This category examines how an organization moti-
vates and enables employees to develop and utilize their full potential in
alignment with the organization’s overall objectives and action plans.
Also examined are the organization’s efforts to build and maintain a
work environment and an employee support climate conducive to per-
formance excellence and to personal and organizational growth.
6. Process Management: This category examines the key aspects of an organi-
zation’s process management, including customer-focused design, product
and service delivery, key business, and support processes. This category
encompasses all key processes and all work units.
7. Business Results: This category examines an organization’s performance
and improvement in key business areas—customer satisfaction, product
and service performance, financial and marketplace performance, human
resource results, and operational performance. Also examined are per-
formance levels relative to those of competitors.
You should consult the actual criteria document (which is updated annu-
ally) for clarifying notes and explanations. Slightly different criteria are writ-
ten for business, health care, and education, and all may be downloaded
from the Baldrige Web site.
The seven categories form an integrated management system as illustrated
in Figure 2.3. The umbrella over the seven categories reflects the focus that
organizations must have on customers through their strategy and action
plans for all key decisions. Leadership, Strategic Planning, and Customer
and Market Focus represent the “leadership triad,” and suggest the impor-
tance of integrating these three functions. Human Resource Focus and Process
Management represent how the work in an organization is accomplished and
leads to Business Results. These functions are linked to the leadership triad.
FIGURE 2.3 MALCOLM BALDRIGE NATIONAL QUALITY AWARD CRITERIA FRAMEWORK
BALDRIGE AWARD CRITERIA FRAMEWORK

A Systems Perspective
Organizational Profile:
Environment, Relationships, and Challenges
2 5
Strategic Human
Planning Resource
Focus
1 7
Leadership Business
Results
3 6
Customer Process
and Market Management
Focus
4
Information and Analysis
Finally, Information and Analysis supports the entire framework by provid-

ing the foundation for performance assessment and management by fact.
Each category consists of several items (numbered 1.1, 1.2, 2.1, etc.) or
major requirements on which businesses should focus. Each item, in turn,
consists of a small number of areas to address (e.g., 6.1a, 6.1b) that seek spe-
cific information on approaches used to ensure and improve competitive per-
formance, the deployment of these approaches, or results obtained from such
deployment.
For example, the Leadership Category consists of the following items
and areas to address:
1.1 Organizational Leadership
a. Senior Leadership Direction
b. Organizational Performance Review
1.2 Public Responsibility and Citizenship
a. Responsibilities to the Public
b. Support of Key Communities
The Senior Leadership Direction area asks organizations to answer the fol-
lowing questions:
• How do senior leaders set and deploy organizational values, short- and
longer-term directions, and performance expectations, including a focus
on creating and balancing value for customers and other stakeholders?
Include how senior leaders communicate values, directions, and expec-
tations through your leadership system and to all employees.
• How do senior leaders create an environment for empowerment, inno-
vation, organizational agility, and organizational and employee learning?
Areas to address that request information on approach or deployment

begin with the word “how”; that is, they define a set of key actionable man-
agement practices. Thus, the criteria define both an integrated infrastructure
and a set of fundamental practices for a high-performance management sys-
tem. These practices represent the collective wisdom of the nation’s leading
business experts and reflect what a truly world-class high-performance
organization must do to succeed.
One thing the criteria do not do is prescribe specific quality tools, tech-
niques, technologies, systems, or starting points. Companies are encouraged
to develop and demonstrate creative, adaptive, and flexible approaches to
meeting basic requirements (see box). Many innovative approaches have
been developed by Baldrige winners and are now commonly used by many
other companies.
The Baldrige Award Evaluation Process
The Baldrige evaluation process is rigorous. In the first stage, each applica-
tion is thoroughly reviewed by up to 10 or more examiners chosen from
among leading quality professionals in business, academia, health care, and
government (all of whom are volunteers). Examiners evaluate the applicant’s
Baldrige Leadership Practices at The Ritz-Carlton Hotel Company,

L.L.C.19
When Horst Schulze (who retired in 2001) became president in 1988, he and his
leadership team personally took charge of managing for quality because they
realized that managing for quality could not be delegated. They personally estab-
lished the Gold Standards, which are the foundation of The Ritz-Carlton quality phi-
losophy. The Gold Standards, in their simplicity, represent an easy-to-understand
definition of service quality, and are aggressively communicated and internalized
at all levels of the organization. The constant and continuous reinforcement tech-
niques of the Gold Standards, led by senior leaders, include lectures at new
employee orientation, developmental training, daily lineup meetings, administra-
tion of both positive and negative reinforcement, mission statements displayed,
distribution of Credo cards, The Credo as first topic of internal meetings, and peer
pressure. As a result, employees have an exceptional understanding and devotion
to the company’s vision, values, quality goals, and methods.
Since 1984, all members of senior leadership have personally ensured that
each new hotel’s goods and services are characteristic of The Ritz-Carlton on
opening day. An important aspect of this quality practice takes place during the
concentrated and intense “seven-day countdown” when senior leaders work side
by side with new employees using a combination of hands-on behavior modeling
and reinforcement. During these formative sessions, which all new employees
must attend, the president and COO personally interacts with every new employee,
both individually and in a group setting. The president personally creates the
employee-guest interface image and facilitates each department’s first vision state-
ment. Throughout the entire process, the senior leaders monitor work areas for
“start-up,” instill Gold Standards, model the company’s relationship management,
insist upon 100 percent compliance to customers’ requirements, and recognize
outstanding achievement. Senior leaders set direction through seven specific
approaches:
10-Year Vision: To Be The Premier Worldwide Provider of Luxury Travel and Hos-
pitality Products and Services
5-Year Mission: Product and Profit Dominance
3-Year Objectives: The Vital Few Objectives
1-Year Tactics: Key Production and Business Processes
Strategy: Customer and Market Focus Strategy with Action Plans
Methods: TQM—Application of Quality Sciences; Malcolm Baldrige National
Quality Award Criteria; The GreenBook, 2d edition (the company’s handbook of
quality processes and tools)
Foundation: Values and Philosophy—The Gold Standards, Credo, Motto, Three
Steps of Service, Basics, Employee Promise
Leadership effectiveness is evaluated on key questions of a semiannual employee
satisfaction survey and through audits on public responsibility. Gaps in leadership
effectiveness are addressed with development and training plans and extensive
use of developmental job assignments.
response to each examination item, listing major “strengths” and “opportu-

nities for improvement” relative to the criteria. Strengths demonstrate an effec-
tive and positive response to the criteria. Opportunities for improvement do
not prescribe specific practices or examiners’ opinions on what the company
should be doing, but rather deficiencies in responding to the criteria. To help
examiners understand the context of the organization, applicants are required
to provide an Organizational Profile, which is basically a snapshot of the organ-
ization that describes the organizational environment; key relationships with
customers, suppliers, and other partners; types of employees and technolo-
gies used; the competitive environment; key strategic challenges it faces; and
its system for performance improvement. The Organizational Profile helps
the organization focus on key performance requirements and results, and helps
examiners to understand the organization and what it considers important.
Based on the comments, a percentage score from 0 to 100 in increments
of 10 is given to each item. Each examination item is evaluated on approach/
deployment or results.
Approach refers to the methods the company uses to achieve the require-
ments addressed in each category. The factors used to evaluate approaches
include:
• the appropriateness of the methods to the requirements;

• the effectiveness of methods, namely, the degree to which the approach is
systematic, integrated, and consistently applied; the degree to which the
approach embodies effective evaluation/improvement cycles; and the
degree to which the approach is based upon reliable information and data;
• alignment with organizational needs; and
• evidence of innovation.
Deployment refers to the extent to which the approaches are applied to all
requirements of the item. The factors used to evaluate deployment include:
• use of the approach in addressing item requirements relevant to the organ-

ization, and
• use of the approach by all appropriate work units.
Results refers to the outcomes and effects in achieving the purposes
given in the item. The factors used to evaluate results include:
• current performance levels,

• performance relative to appropriate comparisons and/or benchmarks,
• rate, breadth, and importance of performance improvements, and
• linkage of results measures to important customer, market, process,
and action plan performance requirements identified in the approach/
deployment items and the organizational profile.
Table 2.4 summarizes the scoring guidelines.
Scores for each examination item are computed by multiplying the
examiner’s score by the maximum point value that can be earned (see Table
2.5). The scores are reviewed by a panel of nine judges without knowledge
of the specific companies. The higher-scoring applications enter a consensus
TABLE 2.4 BALDRIGE AWARD SCORING GUIDELINES
Score Approach/Deployment
0% • no systematic approach evident; anecdotal information

10% to 20% • beginning of a systematic approach to the basic purposes of
the item
• major gaps exist in deployment that would inhibit progress in
achieving the basic purposes of the item
• early stages of a transition from reacting to problems to a
general improvement orientation
30% to 40% • a sound, systematic approach, responsive to the basic
purposes of the item
• approach is deployed, although some areas or work units are in
early stages of deployment
• beginning of a systematic approach to evaluation and
improvement of basic item processes
50% to 60% • a sound, systematic approach, reponsive to the overall
purposes of the item
• approach is well deployed, although deployment may vary in
some areas or work units
• a fact-based, systematic evalution and improvement process in
place for basic item processes
• approach is aligned wiith basic organizational needs identified in
the other criteria categories
70% to 80% • a sound, systematic approach, responsive to the multiple
requirements of the item
• approach is well deployed, with no significant gaps
• a fact-based, systematic evaluation and improvement process
and organizational learning/sharing are key management tools;
clear evidence of refinement and improved integration as a
result of organizational-level analysis and sharing
• approach is well intergrated with organizational needs identified
in the other criteria categories
90% to 100% • a sound, systematic approach, fully responsive to all the
requirements of the item
• approach is fully deployed without significant weaknesses or
gaps in any areas or work units
• a vey strong, fact-based, systematic evaluation and
improvement process and extensive organizational
learning/sharing are key management tools; strong refinement
and integration, backed by excellent organizational-level analysis
and sharing
• approach is fully integrated with organizational needs identified
in the other criteria categories
TABLE 2.4 BALDRIGE AWARD SCORING GUIDELINES CONTINUED
Score Results
0% • no results or poor results in areas reported

10% to 20% • some improvements and/or early good performance levels in a
few areas
• results not reported for many to most areas of importance to
the organization’s key business requirements
30% to 40% • improvements and/or good performance levels in many areas of
importance to the organization’s key business requirements
• early stages of developing trends and obtaining comparative
information
• results reported for many to most areas of importance to the
organization’s key business requirements
50% to 60% • improvement trends and/or good performance levels reported
for most areas of importance to the organization’s key business
requirements
• no pattern of adverse trends and no poor performance levels in
areas of importance to the organization’s key business
requirements
• some trends and/or current performance levels—evaluated
against revelant comparisons and/or benchmarks—show areas
of strengh and/or good to very good relative performance levels
• business results address most key customer, market, and
process requirements
70% to 80% • current performance is good to excellent in areas of importance
to the organization’s key business requirements
• most improvement trends and/or current performance levels
are sustained
• many to most trends and/or current peformances levels—
evaluated against relevant comparisons and/or benchmarks—
show areas of leadership and very good relative performance
levels
• business results address most key customer, market, process,
and action plan requirements
90% to 100% • current performance is excellent in most areas of importance to
the organization’s key business requirements
• excellent impovement trends and/or sustained excellent
performance levels in most areas
• evidence of industry and benchmark leadership demonstrated
in many areas
• business results fully address key customer, market, process,
and action plan requirements
TABLE 2.5 BALDRIGE AWARD ITEM POINT VALUES
2002 Categories/Items Point Values
1 Leadership 120
1.1 Organizational Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
1.2 Public Responsibility and Citizenship . . . . . . . . . . . . . . . . . . . . . . . . . 40
2 Strategic Planning 85
2.1 Strategy Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.2 Strategy Deployment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3 Customer and Market Focus 85

3.1 Customer and Market Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.2 Customer Satisfaction and Relationships . . . . . . . . . . . . . . . . . . . . . . 45
4 Information and Analysis 90

4.1 Measurement and Analysis of Organizational Performance . . . . . . . . 50
4.2 Information Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5 Human Resources Focus 85

5.1 Work Systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.2 Employee Education, Training, and Development . . . . . . . . . . . . . . . . 25
5.3 Employee Well-Being and Satisfaction . . . . . . . . . . . . . . . . . . . . . . . . 25
6 Process Management 85
6.1 Product and Service Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
6.2 Business Processes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.3 Support Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7 Business Results 450

7.1 Customer-Focused Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
7.2 Financial and Market Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
7.3 Human Resouce Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
7.4 Organizational Effectiveness Results . . . . . . . . . . . . . . . . . . . . . . . . 120
Total Points . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000
stage in which a selected group of examiners discuss variations in individual

scores and arrive at consensus scores for each item. The panel of judges then
reviews the scores and selects the highest-scoring applicants for site visits.
At this point, six or seven examiners visit the company for up to a week to
verify information contained in the written application and resolve issues
that are unclear. The judges use the site visit reports to recommend award
recipients. All information is kept strictly confidential, and examiners are
bound by conflict-of-interest rules and a code of conduct.
All applicants receive a feedback report that critically evaluates the com-
pany’s strengths and areas for improvement relative to the award criteria. The
feedback report, frequently 30 or more pages in length, contains the evaluation
team’s response to the written application. It includes a distribution of numer-
ical scores of all applicants and a scoring summary of the individual applicant.
This feedback is one of the most valuable aspects of applying for the award.
As the criteria have evolved to reflect the changing business environ-
ment, the word quality has been replaced by performance as a conscious
attempt to recognize that the principles of total quality are the foundation for
a company’s entire management system, not just the quality system. As Curt
Reimann, former director and architect of the Baldrige Award Program,
noted, “The things you do to win a Baldrige Award are exactly the things
you’d do to win in the marketplace. Our strategy is to have the Baldrige
Award criteria be a useful daily tool that simulates real competition.”
Using the Baldrige Criteria

The Baldrige Award criteria form a model for business excellence in any
organization—manufacturing or service, large or small (see box). Many small
businesses (defined as those with 500 or fewer employees) believe that the
Baldrige criteria are too difficult to apply to their organizations because they
cannot afford to implement the same types of practices as large companies.
However, an organization’s practices need not be formal or complex. For
example, the ability to obtain customer and market knowledge through
independent third-party surveys, extensive interviews, and focus groups,
which are common practices among large companies, may be limited by the
resources of a small business. What is important, however, is whether the com-
pany is using appropriate mechanisms to gather information and use it to
improve customer focus and satisfaction. Similarly, large corporations fre-
quently have sophisticated computer/information systems for data man-
agement, while small businesses may perform data and information man-
agement with a combination of manual methods and personal computers.
Also, systems for employee involvement and process management may rely
heavily on informal verbal communication and less on formal written docu-
mentation. Thus, the size or nature of a business does not affect the appropri-
ateness of the criteria, but rather the context in which the criteria are applied.
Many organizations are using the award criteria to evaluate their own
quality programs, set up and implement quality initiatives, communicate
better with suppliers and partners, and for education and training, even if
they have no intention to apply for the award. For example, although the
legal profession in general has not adopted quality management practices,
the Trial Division of Nationwide Insurance, which operates 56 law offices in
20 states, uses the Baldrige model as a key component of its business plan.
Senior leaders introduced it to the company’s managing trial attorneys and
encouraged individual offices to apply for local or state Baldrige-based
awards. The incorporation of education and health care as categories in the
award program in 1999 was a reflection of the growing interest in these sectors.
Baldrige Pays Off for Texas Instruments20
Texas Instruments (TI) Defense Systems & Electronics Group (acquired by Raytheon
Corporation in 1997) faced a critical issue that many businesses struggle with: Is
the payoff of greater competitive advantage worth the effort of achieving total qual-
ity, specifically competing for the Baldrige Award? Their answer is a definite yes.
TI understands firsthand that the real benefit of applying for the Baldrige Award lies
in adopting its quality criteria. The application itself is the single most powerful cat-
alyst for the kinds of organizational and cultural changes that companies must
make to compete.
TI’s commitment to quality and productivity improvement dates back to the
1950s. But, like most corporations, most of its efforts were aimed at improving
manufacturing and product quality. In the early 1980s, a total quality initiative was
formalized across the entire corporation. Some business units made tremendous
progress; the semiconductor operation in Japan won the Deming Prize in 1985.
When the Baldrige Award criteria appeared, TI used them to provide focus and
coherence to the activities across the corporation. Using the criteria, they were
able to tackle a part of total quality that previously had been unreachable: imple-
menting quality efforts in staff, support, and nonmanufacturing areas. In 1989, TI
asked every business unit to prepare a mock award application as a way of meas-
uring its progress. This task represented a radical change for some operations
because, until that time, most staff functions were not required to measure their
processes or their results.
The Defense Systems & Electronics Group’s self-assessment revealed that
they were a long way from applying for and winning the Baldrige Award. But the
group aggressively adopted the criteria as a blueprint for improving its business.
Many executives did not believe that the criteria could be applied to defense con-
tractors. Similarly, many executives today question whether small businesses can
realistically meet the Baldrige Award criteria. TI discovered that all companies have
one thing in common: customers. Focusing on customers to make the company
more competitive gives meaning to the award.
The Baldrige Award application process changed almost everything within the
Defense Systems & Electronics Group. Before applying, the group had no way of sys-
tematically measuring how well it understood its customers’ concerns, captured cus-
tomers’ feedback, or made improvements in interacting with customers. Mountains
of data were being collected, but most of the data measured internal criteria, not cus-
tomer satisfaction. The structured, hierarchical management environment made it dif-
ficult to adopt ideas from outside sources.
The Baldrige Award process provided a way to make the customer the center-
piece of daily activities. It led to much better communication with customers and
employees and accelerated progress toward less hierarchical, more functional work
teams. It changed the management process from an individual activity to a team
effort, leading to better decisions. Finally, it introduced two radical new ideas: bench-
marking and stretch goals. Changing the culture was not easy and did not happen
quickly. It took teamwork, consensus building, and buy in. At TI, it took about five
years of dedicated pulling in the same direction to begin seeing measurable results.
Many school districts are using the criteria. One large Chicago-area hospital
applied for the Baldrige-based Lincoln Award for Excellence and prepared
for its accreditation visit by JCAHO at the same time, recognizing the syn-
ergy and overlap of Baldrige principles and JCAHO standards.
Most states have developed award programs similar to the Baldrige
Award. State award programs generally are designed to promote an aware-
ness of productivity and quality, foster an information exchange, encourage
firms to adopt quality and productivity improvement strategies, recognize
firms that have instituted successful strategies, provide role models for other
businesses in the state, encourage new industry to locate in the state, and
establish a quality-of-life culture that will benefit all residents of the state.21
Each state is unique, however, and thus the specific objectives will vary. For
instance, the primary objectives of Minnesota’s quality award are to encour-
age all Minnesota organizations to examine their current state of quality and to
become more involved in the movement toward continuous quality improve-
ment, as well as to recognize outstanding quality achievements in the state.
Missouri, on the other hand, has as its objectives to educate all Missourians
in quality improvement, to foster the pursuit of quality in all aspects of Mis-
souri life, and to recognize quality leadership. Information about state award
programs can be found at the NIST Web site cited earlier in this section.
The Baldrige Criteria and the Deming Philosophy

It is no secret that W. Edwards Deming was not an advocate of the Baldrige
Award.22 (Joseph Juran, however, was highly influential in its development.)
The competitive nature of the award is fundamentally at odds with Dem-
ing’s teachings. However, many of Deming’s principles are reflected directly
or in spirit within the criteria. In fact, Zytec implemented its total quality
system around Deming’s 14 Points and received a Baldrige Award. Specific
portions of the Baldrige criteria that support each of Deming’s 14 Points are
summarized next.
1. Statement of Purpose. Strategy development requires a mission and vision.
Commitment to aims and purposes by senior leaders is specifically
addressed in the Leadership category and in enhancing customer satis-
faction and relationships.
2. Learn the New Philosophy. Communication of values, expectations, customer
focus, and learning is a key area of the Organizational Leadership item.
3. Understand Inspection. The Process Management category addresses the
development of appropriate measurement plans. In the Support Process
item, the Criteria seek evidence of how a company aims to minimize the
costs associated with inspection.
4. End Price Tag Decisions. This is implicitly addressed throughout the Process
Management category and in the Criteria’s emphasis on overall per-
formance and linkages among processes and results.
5. Improve Constantly. Continuous improvement and learning is a core value
of Baldrige. The criteria specifically ask how the company evaluates and
improves its processes.
6. Institute Training. Item 5.2, Employee Education, Training, and Develop-

ment, recognizes the importance of training and employee development
in meeting performance objectives.
7. Teach and Institute Leadership. Category 1 is devoted exclusively to lead-
ership, and it is recognized as the principal driver of the management
system in Figure 2.3.
8. Drive Out Fear and Innovate. The Human Resource Focus, Customer and
Market Focus, and Strategic Planning categories focus on work design,
empowerment, and implementation issues that support this point.
9. Optimize the Efforts of Teams and Staff. The Criteria have a significant focus
on teamwork and customer knowledge in product/process design and
process management, as well as in the Human Resource Focus category.
10. Eliminate Exhortations. While not directly addressed, the focus on work
and job design as the driver of high performance makes this a moot point.
11. Eliminate Quotas and MBO; Institute Improvement; and Understand Processes.
The Organizational Leadership and Strategy Deployment items, as well
as the Information and Analysis and Process Management categories
deal with fact-based management and understanding processes.
12. Remove Barriers. The Leadership and Human Resource Focus categories, as
well as the Customer Satisfaction and Relationships item support this goal.
13. Encourage Education. This is addressed directly in the Employee Educa-
tion, Training, and Development and Employee Well-Being and Satis-
faction items.
14. Take Action. This role of leadership is addressed directly in the Leader-
ship category.
The consistencies among Deming’s 14 Points and the Baldrige criteria attest
to the universal nature of quality management principles.
INTERNATIONAL QUALITY AWARD PROGRAMS

A focus on total quality has permeated organizations throughout the world.
Numerous countries and regions of the world have established awards and
award criteria. Many other award programs are similar in nature to the
Baldrige criteria.
The Deming Prize

The Deming Application Prize was instituted in 1951 by the Union of Japan-
ese Scientists and Engineers (JUSE) in recognition and appreciation of W.
Edwards Deming’s achievements in statistical quality control and his friend-
ship with the Japanese people. The Deming Prize has several categories,
including prizes for individuals, factories, and small companies, and the
Deming application prize, which is an annual award presented to a com-
pany or a division of a company that has achieved distinctive performance
improvements through the application of Companywide Quality Control

(CWQC). As defined by JUSE, CWQC is
a system of activities to assure that quality products and services
required by customers are economically designed, produced and sup-
plied while respecting the principle of customer-orientation and the
overall public well-being. These quality assurance activities involve
market research, research and development, design, purchasing, pro-
duction, inspection and sales, as well as all other related activities
inside and outside the company. Through everyone in the company
understanding both statistical concepts and methods, through their
application to all the aspects of quality assurance and through
repeating the cycle of rational planning, implementation, evaluation
and action, CWQC aims to accomplish business objectives.23
The judging criteria consist of a checklist of 10 major categories: policies,

the organization and its operations, education and dissemination, informa-
tion gathering, communication and its utilization, analysis, standardization,
control/management, quality assurance, effects, and future plans. Each major
category is divided into subcategories, or “checking points.” For example, the
policy category includes policies pursued for management, quality, and
quality control; methods for establishing policies; appropriateness and con-
sistency of policies; utilization of statistical methods; communication and
dissemination of policies; checks of policies and the status of their achieve-
ment; and the relationship between policies and long- and short-term plans.
Each category is weighted equally.
Hundreds of companies apply for the award each year. After an initial
application accepted as eligible for the process, the company must submit a
detailed description of its quality practices. Based on review of the written
descriptions, only a few companies believed to be successful in CWQC are
selected for a site visit. The site visit consists of a company presentation, in-
depth questioning by examiners, and an executive session with top man-
agers. Examiners visit plants and are free to ask any worker any question.
For example, at Florida Power and Light (see box), examiners asked ques-
tions of specific individuals such as “What are your main accountabilities?”
“What are the important priority issues for the corporation?” “What indica-
tors do you have for your performance? For your target?” “How are you
doing today compared to your target?” They request examples of inadequate
performance. Documentation must be made available immediately. The prepa-
ration is extensive and sometimes frustrating.
The Deming Prize is awarded to all companies that meet the prescribed
standard. However, the small number of awards given each year is an indi-
cation of the difficulty of achieving the standard. The objectives are to ensure
that a company has so thoroughly deployed a quality process that it will con-
tinue to improve long after a prize is awarded. The application process has
no “losers.” For companies that do not qualify, the examination process is
automatically extended up to two times over three years.
Electric Quality24
Florida Power and Light (FPL) is one of the largest electric utilities in the United
States. During the 1970s the company was forced to increase utility rates repeat-
edly because of increasing costs, slower sales growth, and stricter federal and state
regulations. The company had become bureaucratic and inflexible. In 1981 Marshall
McDonald, then chairman of the board, realized that the company had been con-
cerned with keeping defects under control rather than improving quality. Due to his
concern for quality, McDonald introduced quality improvement teams at FPL. Man-
agement knew this was a step in the right direction, but such teams alone would
not bring about the change needed for the company to survive. McDonald tried to
convince other executives that a total quality improvement process was needed,
but all the experts that FPL talked to were in manufacturing, while FPL was prima-
rily a service company. In 1983, while in Japan, McDonald met a president of Kan-
sai Electric Power Company, a Deming Prize winner, who told him about their total
quality efforts. Company officials began to visit Kansai regularly, and with their help,
FPL began its quality improvement program (QIP) in 1983.
Its quality efforts included empowering each department to develop improve-
ment plans, standardizing work routines, removing waste from them, promoting the
concept of internal customers, and enabling better practice to be replicated from one
location to another. FPL revamped a centralized suggestion system it had been using
for many years. Only about 600 suggestions had been submitted annually and it usu-
ally took six months for evaluation. A new decentralized system was proposed with
simplified procedures to improve the response time. Employees participated in the
implementation of their own suggestions. In 1988, 9,000 suggestions were submit-
ted; in 1989 this number increased to 25,000. As a result of these efforts, the aver-
age length of service interruptions dropped from about 75 minutes in 1983 to about
47 minutes in 1989; the number of complaints per 1,000 customers fell to one-third
of the 1983 level; safety has improved; and the price of electricity has stabilized. In
1989, FPL became the first non-Japanese company to win the Deming Prize.
Five years after winning the Deming Prize, FPL still had an unwavering commit-
ment to quality initiatives, which was noted by Dr. Noriaki Kano of the Union of Japan-
ese Scientists and Engineers, after observing presentations from 11 FPL business
units. Dr. Kano, who had served as a counselor to FPL since 1986, was “pleasantly
surprised” that FPL had simultaneously reduced costs and improved quality. Kano
noted that recent improvements were based on skills developed through QIP prac-
tices. For example, one team improved service reliability by reducing transformer fail-
ures due to lightning. Before, an average of 23 transformers out of 761 on their worst-
performing feeder failed each year. This number was reduced to zero failures, even
though lightning strikes had increased 250 percent. Newly installed transformers
incorporate the team’s recommended changes, and existing transformers are modi-
fied as needed. The team leader stated that they found creative ways to use quality
improvement tools and techniques to their best advantage without getting caught up
in excessive paperwork or attending compulsory meetings. “Like most employees,
we’re so familiar with the quality processes that it’s almost second nature.”
European Quality Award

In October 1991, the European Foundation for Quality Management (EFQM)
in partnership with the European Commission and the European Organiza-
tion for Quality announced the creation of the European Quality Award. The
award was designed to increase awareness throughout the European Com-
munity, and businesses in particular, of the growing importance of quality to
their competitiveness in the increasingly global market and to their standards
of life. The European Quality Award consists of two parts: the European Qual-
ity Prize, given to companies that demonstrate excellence in quality man-
agement practice by meeting the award criteria, and the European Quality
Award, awarded to the most successful applicant. In 1992, four prizes and
one award were granted for the first time.
The award process is similar to the Deming Prize and Baldrige Award.
The assessment is based on customer satisfaction, business results, processes,
leadership, people satisfaction, resources, people management, policy and
strategy, and impact on society. Like Baldrige, results—including customer
satisfaction, people (employee) satisfaction, and impact on society—consti-
tute a high percentage of the total score. These are driven by “enablers”—the
means by which an organization approaches its business responsibilities.
The categories are roughly equivalent to those in Baldrige. However, the
results criteria of people satisfaction, customer satisfaction, impact on soci-
ety, and business results are somewhat different.25 The impact on society
results category focuses on the perceptions of the company by the commu-
nity at large and the company’s approach to the quality of life, the environ-
ment, and the preservation of global resources. The European Quality Award
criteria places greater emphasis on this category than is placed on the public
responsibility item in the Baldrige Award criteria.
Canadian Awards for Business Excellence

Canada’s National Quality Institute (NQI) recognizes Canada’s foremost
achievers of excellence through the prestigious Canada Awards for Excel-
lence. NQI is a nonprofit organization designed to stimulate and support
quality-driven innovation within all Canadian enterprises and institutions,
including business, government, education, and health care. The Canadian
Awards for Business Excellence quality criteria are similar in structure to the
Baldrige Award criteria, with some key differences. The major categories and
items within each category are:
1. Leadership: strategic direction, leadership involvement, and outcomes.

2. Customer focus: voice of the customer, management of customer relation-
ships, measurement, and outcomes.
3. Planning for improvement: development and content of improvement plan,
assessment, and outcomes.
4. People focus: human resource planning, participatory environment, con-
tinuous learning environment, employee satisfaction, and outcomes.
5. Process optimization: process definition, process control, process improve-

ment, and outcomes.
6. Supplier focus: partnering and outcomes.
These categories seek similar information as the Baldrige Award criteria.
For example, the people focus category examines the development of human
resource planning and implementation and operation of a strategy for achiev-
ing excellence through people. It also examines the organization’s efforts to
foster and support an environment that encourages and enables people to
reach their full potential.
Australian Business Excellence Awards

The Australian Quality Awards (now called Business Excellence Awards) were
developed independently from the Baldrige Awards in 1988. The awards are
administered by the Australian Quality Awards Foundation, a subsidiary of
the Australian Quality Council. Four levels of awards are given.
1. The Business Improvement Level: encouragement recognition for “Progress
Toward Business Excellence” or “Foundation in Business Excellence”;
2. The Award Level: representing Australian best practices; recognition as a
winner or finalist;
3. The Award Gold Level: open only to former award winners; represents a
revalidation and ongoing improvement;
4. The Australian Business Excellence Prize: open only to former award win-
ners; represents international best practices evident throughout the
organization.
The assessment criteria address leadership, strategy and planning, infor-
mation and knowledge, people, customer focus, processes, products and
services, and business results within the framework shown in Figure 2.3. In
this model, leadership and customer focus are the drivers of the manage-
ment system and enablers of performance. Strategy, policy and planning,
information and analysis, and people are the key internal components of the
management system. Quality of process, product, and service is focused on
how work is done to achieve the required results and obtain improvement.
Business results are the outcome of the management system—a results cate-
gory. As with Baldrige, the framework emphasizes the holistic and intercon-
nected nature of the management process. The criteria are benchmarked
with the Baldrige criteria and the European Business Excellence Model. One
of the distinctive aspects of Australia’s program is solid union support.
REVIEW AND DISCUSSION QUESTIONS
1. Summarize the Deming management philosophy. Why has it been con-

troversial?
2. Explain the 14 Points in the context of the four categories of Profound
Knowledge.
3. How might Deming’s concepts of variation be applied to the classroom?

4. Why doesn’t the Deming Chain Reaction terminate with “Increased Prof-
its”? Would this contradict the basis of Deming’s philosophy?
5. Provide an example of a system with which you are familiar and define
its purpose. Examine the interactions within the system and whether the
system is managed for optimization.
6. Describe a process with which you are familiar. List some factors that
contribute to common cause variation. Cite some examples of special
causes of variation in this process.
7. How does the theory of knowledge apply to education? What might this
mean for improving the quality of education?
8. Explain the implications of not understanding the components of Pro-
found Knowledge as suggested by Peter Scholtes.
9. Extract three or four key themes in Deming’s 14 Points. How might the
14 Points be grouped in a logical fashion?
10. What implications might the 14 Points have for college education? What
specific proposals might you suggest as a means of implementing the 14
Points at your school?
11. Discuss the interrelationships among Deming’s 14 Points. How do they
support each other? Why must they be viewed as a whole rather than
separately?
12. The following themes form the basis for Deming’s philosophy. Classify
the 14 Points into these categories and discuss the commonalties within
each category.
a. Organizational purpose and mission
b. Quantitative goals
c. Revolution of management philosophy
d. Elimination of seat-of-the-pants decisions
e. Cooperation building
f. Improvement of manager-worker relations
13. Summarize Juran’s philosophy. How is it similar to and different from
Deming’s?
14. What is Juran’s Quality Trilogy? Is it any different from management
approaches in other functional areas of business, such as finance?
15. What implications might Juran’s Quality Trilogy have for colleges and
universities? Would most faculty and administrators agree that the
emphasis has been on quality control rather than planning and
improvement?
16. How could you apply Juran’s Quality Trilogy to improve your personal
approach to study and learning?
17. Summarize the Crosby philosophy. How does it differ from Deming and
Juran?
18. Which quality philosophy—Deming, Juran, or Crosby—do you person-
ally feel more comfortable with? Why?
19. Explain the benefits of and controversy surrounding ISO 9000. Can ISO
9000 lead an organization to world-class quality?
20. Summarize the framework of the Baldrige Award. What are its key
philosophical underpinnings?
21. Describe the key issues addressed in each of the seven categories of the
Criteria for Performance Excellence.
22. Prepare a list of specific actions that a high-scoring company in the
Baldrige Award process might take in each of the seven categories. How
difficult do you think it is for a company to score well in all the categories?
23. Create a matrix diagram in which each row is a category of the Baldrige
Award criteria and four columns correspond to a level of organizational
maturity with respect to quality:
• traditional management practices;
• growing awareness of the importance of quality;
• development of a solid quality management system;
• outstanding, world-class management practice.
In each cell of the matrix, list two to five characteristics that you would
expect to see for a company in each of the four situations above for that
criteria category. How might this matrix be used as a self-assessment
tool to provide directions for improvement?
24. Map the elements of ISO 9000:2000 against the Baldrige criteria. How are
they similar? How are they different?
CASES
The Reservation Clerk

Mary Matthews works for an airline as a reservation clerk. Her duties include
answering the telephone, making reservations, and providing information
to customers. Her supervisor told her to be courteous and not to rush callers.
However, the supervisor also told her that she must answer 25 calls per hour
so that the department’s account manager can prepare an adequate budget.
Mary comes home each day frustrated because the computer is slow in deliv-
ering information that she needs, and sometimes reports no information.
Without information from the computer, she is forced to use printed direc-
tories and guides.
Discussion Questions
1. What is Mary’s job? What might Deming say about this situation?
2. Drawing upon Deming’s principles, outline a plan to improve this
situation.
The Rise and Fall of WonderTech26

In the mid-1960s a new electronics company, WonderTech, was founded
with a unique high-tech product—a new type of computer. Because of its
engineering expertise, WonderTech had a virtual lock on its market. The
demand for its products was enormous, and the investors were plentiful.
Sales in the first three years were so good that backlogs of orders began to
pile up midway through the second year. Even with steadily increasing man-
ufacturing capacity (more factories, more shifts, more advanced technology),
the demand grew so fast that delivery times began to slip. Originally Won-
derTech promised to deliver machines within eight weeks. It intended to
return to that standard, but management told investors, “Our computers are
so good that some customers are willing to wait 14 weeks for them. We know
it’s a problem, and we’re working to fix it, but nonetheless they’re still glad
to get the machines, and they love ‘em when they get ‘em.”
The top managers knew that they had to add production capacity. After
six months of study, they decided to borrow the money to build a new fac-
tory. To make sure the growth continued, they pumped much of the incom-
ing revenue directly back into sales and marketing. The company sold its
products only through a direct sales force, so they had to hire and train more
salespeople. During the company’s third year, the sales force doubled.
Despite these efforts, sales started to slump at the end of the third year.
At this point, the new factory came on-line. Top management began to panic.
The marketing VP was under fire to turn sales around. He held high-powered
sales meetings with a single message: “Sell! Sell! Sell!” He fired the low per-
formers and increased sales incentives, added special discounts, and ran
new advertising promotions.
Sales rose again, as did order backlogs. After delivery times began to rise
again—first to 10 weeks, then to 12, and eventually to 16—the debate over
adding capacity started anew. This time management was more cautious.
Eventually the approval of a new facility was granted, but no sooner had the
papers been signed than a new sales crisis began. The same situation recurred
over the next several years. High sales growth occurred in spurts, followed
by periods of low or no growth. The company prospered modestly, but never
came close to fulfilling its original potential. Gradually, top managers began
to fear competition and frantically introduced ill-conceived improvements in
the product. They continued to push hard on marketing, but sales never
returned to their original rate of growth. Eventually the company collapsed.
Discussion Questions
1. What factors led to the demise of WonderTech?
2. Could these factors have been overcome through a better understanding
of a system as advocated in Deming’s Profound Knowledge?
Modern Steel Technology, Inc.27

Modern Steel Technology, Inc. (MST) is a supplier of custom-designed, hard-
ened steel components and replacement parts to heavy industry worldwide.
Steel mills and mining companies account for 75 percent of sales, while alu-
minum, paper, chemical, and cement industries account for the remaining 25
percent. The main product groups are gears, couplings, wheels, and rolls.
MST operates three plants—two in Pennsylvania and one in Canada—and

employs 374 people.
The MST mission is to “serve our customers by producing and deliver-
ing products of superior quality and value; maintain a commitment to con-
tinuous improvement, and provide long-term value to our shareholders.”
Each year the president and his staff meet off-site to develop and refine a
plan for the next year, discuss goals, strategies, and objectives, and make
capacity, personnel, and quality decisions. This plan is then passed down to
middle management for review and suggestions. Middle management takes
the yearly plan and determines monthly goals for sales, production, inven-
tory, backlog, expenses, and revenues. All employees have access to these
plans. Every three months, managers review their department’s progress
against the plan and present the results to the president. If the plan is not
being met, suggestions for improvement are discussed.
MST is conscious of its community responsibilities at its Pennsylvania
headquarters. The CEO is a board member of the United Way, the Fine Arts
Council, and other local community efforts. Annually, MST employees are
encouraged to contribute to these causes. MST complies with all EPA and
OSHA regulations, and offers flu shots and other health-related seminars to
its employees.
MST understands its customer requirements. In a highly competitive
industry, failure to meet a customer need usually results in a lost customer. For
example, European Community customers required ISO 9000 certification,
which MST was able to obtain in June of 1995. Customer satisfaction is deter-
mined by on-time delivery and quality results. Each year, the roll product
managers visit all customers and conduct a survey on product performance.
Often, a latent customer need is determined, and MST seeks ways to fulfill
this need.
MST uses a mainframe computer-based information system to track
quotes, orders, inventory, schedules, and purchasing activities. Networked
PCs within the company allow different departments to access the same
information. Departments have access only to those databases they use. For
example, the Quality Department monitors on-time delivery, cycle time, and
cost. Several improvements have been made. For example, roll heat treat
recipes were kept in duplicate books by both the Metallurgy and Heat Treat
departments, resulting in errors if only one book was updated. These are now
maintained in a common database, accessible to both departments.
MST compares its performance to competitors by examining product per-
formance of rolls at steel mills. In addition, the company uses annual surveys
of the gear industry published by a manufacturing association to compare its
gears against others based on performance and production cost. The com-
pany also uses cost-of-quality indicators to measure performance. An exter-
nal measure is defined as the cost to repair or replace a product after it fails,
and an internal measure is the cost of rework and scrap. Each internal inci-
dent is traced back and charged to the budget of the responsible department.
These are analyzed in total to determine possible corrective actions.
Employee excellence is recognized through the use of annual employee

appraisals. The employee and his or her immediate supervisor sit down and
discuss the appraisal and the employee’s score. Merit raises are based on the
appraisal. The discussion also identifies any weaknesses the employee may
have, and additional training may be suggested to strengthen the weak areas.
Promotions generally occur when vacancies are established. Consequently,
turnover of salaried employees is relatively high. MST has an employee
stock ownership plan. In 1997, the last of the company stock was distributed,
and new employees contribute to a base retirement plan and are unable to
participate in company ownership.
Customer requirements are transmitted through blueprints. Blueprints are
generated by the Engineering Department and contain product dimensions,
specified hardness requirements, and other information necessary to manu-
facture the product.
Quality control measurement techniques are defined and vary by prod-
uct. Key product characteristics, such as gear tooth thickness, are measured
against tolerances. Inspection personnel are trained and certified in applica-
ble testing techniques. If a dimension is out of tolerance, the inspector must
call a technician who will decide whether immediate corrective action should
be taken. A department manager makes the decision to take preventive action
to stop an undesirable condition from recurring.
MST maintains an informal partnership with a supplier of forgings. MST
meets periodically to convey its requirements.
Currently, on-time delivery is above 90 percent for all product groups
except gears, which is at a 60 percent level. Delivery dates for gears are dif-
ficult to determine because the product mix is constantly changing, cycle
times vary, and machines used for production are common to several prod-
ucts, creating a challenge for capacity planners.
Assignment
Using the Baldrige criteria, identify any key strengths relating to MST’s
approach and deployment of its practices, and any major weaknesses or
gaps. How well does the company address the three core principles of total
quality?
ENDNOTES
1. W. Edwards Deming, Out of the Crisis, Cambridge, Mass.: MIT Center for Advanced Engi-
neering Study, 1986.
2. John Hillkirk, “World-Famous Quality Expert Dead at 93,” USA Today, December 21, 1993.
3. W. Edwards Deming, The New Economics for Industry, Government, Education, Cambridge,
Mass.: MIT Center for Advanced Engineering Study, 1993.
4. April 17, 1979; cited in L.P. Sullivan, “Reducing Variability: A New Approach to Quality,”
Quality Progress, Vol. 17, No. 7, July 1984, pp. 15–21.
5. Mineola, N.Y.: Dover, 1929.
6. Peter R. Scholtes, “Communities as Systems,” Quality Progress, July 1997, pp. 49–53.
7. Reprinted from Out of the Crisis by W. Edwards Deming by permission of MIT and W.
Edwards Deming. Published by MIT, Center for Advanced Engineering Study, Cambridge, MA
02139. Copyright © 1986 by W. Edwards Deming.
8. Adapted from March Laree Jacques, “Big League Quality,” Quality Progress, August 2001, pp.
27–34.
9. Philip B. Crosby, Quality Is Free, New York: McGraw-Hill, 1979, pp. 200–201.
10. Michael J. Timbers, “ISO 9000 and Europe’s Attempts to Mandate Quality,” Journal of Euro-
pean Business, March/April 1992, pp. 14–25.
11. Amy Zuckerman, “ISO/QS-9000 Registration Issues Heating Up Worldwide,” The Quality
Observer, June 1997, pp. 21–23.
12. Amy Zuckerman and Rosalind McClymont, “Tracking the Ongoing ISO 9000 Revisions,”
Business Standards, Vol. 2, No. 2, March/April 2000, pp. 13–15. Jack West, with Charles A. Cian-
frani, and Joseph J. Tsiakals, “A Breeze or a Breakthough? Conforming to ISO 9000:2000,” Qual-
ity Progress, March 2000, pp. 41–44. See also by West et al., “Quality Management Principles:
Foundation of ISO 9000:2000 Family, Part 5,” Quality Progress, February 2000, pp. 113–116, and
“Quality Management Principles: Foundation of ISO 9000:2000 Family, Part 6,” Quality Progress,
March 2000, pp. 79–81.
13. Implementation guidelines are suggested by the case study by Steven E. Webster, “ISO 9000
Certification, A Success Story at Nu Visions Manufacturing,” IIE Solutions, April 1997, pp. 18–21.
14. AT&T Corporate Quality Office, Using ISO 9000 to Improve Business Processes, July 1994.
15. Hank Rogers, “Benchmarking Your Plant against TQM Best-Practices Plants, Part 2,” Qual-
ity Progress, April 1998, pp. 60–64.
16. ISO 9000 Update, Fortune, September 30, 1996, p. 134[J].
17. Astrid L. H. Eckstein, and Jaydeep Balakrishnan, “The ISO 9000 Series: Quality Management
Systems for the Global Economy,” Production and Inventory Management Journal, Vol. 34, No. 4,
Fourth Quarter 1993, pp. 66–71.
18. “Home Builder Constructs Quality with ISO 9000,” Quality Digest, February 2000, p. 13.
19. Adapted from The Ritz-Carlton Hotel Co., 1992 and 1999 Malcolm Baldrige National Qual-
ity Award application summaries. © 1992 The Ritz-Carlton Hotel Company. All rights reserved.
Reprinted with the permission of The Ritz-Carlton Hotel Company, L.L.C.
20. Adapted from Jerry R. Junkins, “Insights of a Baldrige Award Winner,” Quality Progress, Vol.
27, No. 3, March 1994, pp. 57–58.
21. Paul M. Bobrowski and John H. Bantham, “State Quality Initiatives: Mini-Baldrige to
Baldrige Plus,” National Productivity Review, Vol. 13, No. 3, Summer 1994, pp. 423–438.
22. Letter from W. Edwards Deming, Harvard Business Review, January-February 1992, p. 134.
23. JUSE, The Deming Prize Guide for Oversea Companies, TOKYO, 1992, p. 5.
24. Brad Stratton, “A Beacon for the World,” Quality Progress, May 1990, pp. 60–65; Al Henderson
and Target Staff, “For Florida Power and Light After the Deming Prize: The “Music Builds . . . and
Builds . . . and Builds,” Target, Summer 1990, pp. 10–21.
25. B. Nakkai, and J. Neves, “The Deming, Baldrige, and European Quality Awards,” Quality
Progress, April 1994, pp. 24–29.
26. Adapted from Peter Senge, The Fifth Discipline, New York: Doubleday, 1990.
27. Developed from a term paper by Ms. Debra Bergerhouse. Her contribution is gratefully
acknowledged.

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Approaches to Total Quality

M any individuals have made substantial contributions to the theory and

TOTAL QUALITY PARADIGMS

sary changes in human attitudes and behavior. Others have adopted a

THE DEMING MANAGEMENT PHILOSOPHY1

FIGURE 2.1 THE DEMING CHAIN REACTION

Costs decrease because of less

Capture the market with better

Provide jobs and more jobs

However, most performance appraisals do not recognize these factors.

1. To treat as a special cause any fault, complaint, mistake, breakdown, acci-

inate unwanted variation by assuming that it is not controllable. Changing a

FIGURE 2.2 VARIATION IN U.S.-MADE VERSUS JAPANESE-MADE TELEVISION COMPONENTS

U.S. plant Japanese plant

Perspectives on Profound Knowledge

1. When people don’t understand systems;

Deming’s 14 Points for Management

TABLE 2.1 DEMING’S 14 POINTS FOR MANAGEMENT7

1. Management Commitment—Businesses should not exist simply for profit;

Managers need to understand how variation affects their processes and to

8. Drive Out Fear—Fear in work manifests in many ways: fear of reprisal,

Deming suggests that there are three categories of performance: the

Deming’s principles continue to live in many organizations today (see

Louisville Slugger Hits a Home Run with Deming8

THE JURAN PHILOSOPHY

planning—the process for preparing to meet quality goals, quality con-

THE CROSBY PHILOSOPHY

• Quality means conformance to requirements not elegance. Crosby dispells the

be clearly stated so that they cannot be misunderstood. Requirements are

Zero Defects is a performance standard. It is the standard of

We do not maintain these standards, however, when it comes

FRAMEWORKS FOR QUALITY AND

Structure of the ISO 9000 Standards

demonstrate compliance with recognized quality principles to customers

Factors Leading to ISO 9000:2000

TABLE 2.2 ISO 9000:2000 QUALITY MANAGEMENT PRINCIPLES

Principle 1: Customer Focus

measurable objectives, and conduct management reviews. No longer can

Implementation and Registration

Some Unusual ISO 9000 Approaches15

The Rosemount Measurement Division of the Fisher-Rosemount Group of

reducing the number of test procedures by one-third. Sun Microsystems’

The Malcolm Baldrige National Quality Award

Excellence establishes a framework for integrating total quality principles

• help stimulate American companies to improve quality and productivity

The Baldrige Award recognizes U.S. companies that excel in quality

TABLE 2.3 MALCOLM BALDRIGE AWARD RECIPIENTS

Year Manufacturing Small Business Service

1988 Motorola, Inc. Globe Metallurgical, Inc.

The award has evolved into a comprehensive National Quality Program,

The Criteria for Performance Excellence

FIGURE 2.3 MALCOLM BALDRIGE NATIONAL QUALITY AWARD CRITERIA FRAMEWORK

BALDRIGE AWARD CRITERIA FRAMEWORK

Finally, Information and Analysis supports the entire framework by provid-

Areas to address that request information on approach or deployment

Baldrige Leadership Practices at The Ritz-Carlton Hotel Company,

response to each examination item, listing major “strengths” and “opportu-

• the appropriateness of the methods to the requirements;

• use of the approach in addressing item requirements relevant to the organ-