Despite the fact that award-winning companies have shown excellent
financial results, their financial performance has not always been the
best in their industry. The National Institute of Standards and
Technology (2004) evolved the Baldrige Index to keep a track of the
impact on the share prices of Baldrige Award winners in the USA. In a
study, a ten-year common stock comparison of the results was
calculated of 1994-2003 Baldrige Award recipients vis-a` -vis S&P 500
value as on 1 December 2004. The National Institute of Standards and
Technology (2004) reports that 17 publicly traded Baldrige Award
recipients as a group under-performed the S&P 500, and generated a
return of 18.15 per cent as compared to the return of 35.58 per cent
for S&P 500. NIST felt that Baldrige Index does not accurately reflect
the results, accomplishments, and diversity of the Baldrige Award
recipients and site-visited organizations (short-listed organisation for
the award) and thus discontinued it in 2004.
(Talwar 2011:31)
What is the point of TQM if it does not achieve financial success for companies?
Discuss, using course materials in your answer.
Further Guidance for Students:
You should start by reading the cited article:
Talwar, B. (2011) ‘Business excellence models and the path ahead …’, The TQM
Journal, Volume 23(1): 21—35.
dx.doi.org/10.1108/17542731111097461
There are several ways of approaching this assignment but all answers should
centre on the relationship between financial success and TQM. You may wish to
consider how different authors explain and explore this relationship, which might,
in turn, lead you to examine questions such as how financial success should be
measured, and what is the purpose of companies? You might also consider how
TQM can be externally assessed (and thus what was the status of the Baldridge
Award).
You may, of course, argue that TQM does indeed deliver financial success – but you
will need to gather evidence to support your argument. Make sure when you do so
that you look for substantiated claims rather than rhetorical arguments – this will
require you to look critically at how authors present their own evidence.
You should avoid quoting excessively from material published by consultants and
practitioners that is widely available on the Internet unless you critically evaluate
the claims that are made. You are likely to find much more relevant material in
academic journals.