2000-13 Value Measurement and Value Creation Models in ... · The 1999 Criteria for Performance Excellence notes that the program’s ﬁrm-level goals are “delivery of ever-improving

2000-13Value Measurement and Value Creation Models in Europe and the

US: A Comparison of the EFQM Excellence Model and the Baldrige Award Criteria

Brigitte Oger* et David E. Platt**

*Maître de Conférences à l’IAE de Paris1, **Assistant Professor, University of Texas at Austin2

Résumé : Des différences importantes entre es modèles de création de valeur de l’EFQM(European Foundation for Quality Management) et du BQA (Baldrige Quality Award) aux EtatsUnis peuvent être identifiées. En particulier, les deux modèles, bien que partageant un butcommun d’identification et de mesure des caractéristiques de l’entreprise associées auxprocessus de création de valeur, décrivent et pondèrent différemment les éléments de ceprocessus. Le modèle EFQM accorde plus d’importance aux éléments tactiques en relation avecla diffusion et la mise en œuvre de la stratégie, le contrôle des résultats concernant les clients,les salariés et l’impact sociétal. Le modèle BQA insiste davantage sur le développement de lastratégie, le reporting et l’analyse des résultats financiers. A la lumière des environnementssocio-économiques de l’Europe et des Etats Unis, ces différences sont discutées ; il semble queles deux modèles soient bien adaptés à leur environnement et contribuent à leurs objectifsrespectifs de création de valeur.

Mots clés : EFQM, European Foundation for Quality Management, BQA, Baldrige QualityAward, Modèles de création de valeur.

Abstract : We have identified and characterized notable differences between the value-crea-tion models of the European Foundation for Quality Management (EFQM) and BaldrigeQuality Award (BQA). Specifically, we observe that the two models, despite sharing a commongoal of identifying and measuring the firm characteristics associated with the process of valuecreation, propose very different descriptions and weightings of the elements of that process. TheEFQM model places much more emphasis on tactical issues relating to the diffusion and imple-mentation of strategy and the monitoring of customer, employee and society results, while theBQA model emphasizes the development of strategy and the reporting and analysis of business(financial) results. We discuss these differences in light of the differing socioeconomic environ-ments of Europe and the United States and conclude that, given these differing environments,the two models are well suited to helping their respective constituencies achieve their commonobjective of value creation.

Key words : EFQM, European Foundation for Quality Management, BQA, Baldrige QualityAward, Value Creation Models.

1 Introduction

Value-creation models propose that business organizations can be viewed as complex bi-directional networks of resources, strategies, and outcomes, all linked by a series of measurablecausalities and interactions. Two such models3 that are well known and widely accepted are theEuropean Foundation for Quality Management Model for Business Excellence (the EFQM

1. Institut d’Administration des Entreprises de Paris, 162 rue Saint Charles, 75740 Paris, France, [email protected]

2. McCombs School of Business, University of Texas, CBA 4M.202, Austin, Texas 78749,USA, [email protected]

3. The use of the appellation “model” could be discussed, “framework” is perhaps better suited

IAE de Paris (Université Paris 1

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Excellence Model) and the Baldrige Quality Award’s Criteria for Performance ExcellenceFramework (the BQA Criteria Framework).

Both of these models grew out of the Total Quality Management (TQM) initiatives of the1980s. Both propose a similar measurement framework based upon leadership and strategy,resources and the processes that apply them, and observation of resource-level outcomesleading to overall firm performance and value. And both models are highly respected withintheir respective geopolitical domains: Europe for the EFQM Excellence Model, and the UnitedStates for the BQA Criteria Framework.

Yet we identify notable differences between these two models, and it is these differences thatare the subject of this study. Specifically, we observe that the two models, despite sharing acommon goal of identifying and measuring the firm characteristics associated with the processof value creation, propose very different descriptions and weightings of the elements of thatprocess. It is somewhat disconcerting that two models with such similar objectives andframeworks would differ in any great respect. We hypothesize that this seeming inconsistencyresults, at least in part, from environmental factors that distinguish the socioeconomic environ-ments of Europe and the United States. We propose that, given these differing environments,the two models are well suited to helping their respective constituencies achieve their commonobjective of value creation.1

2 Value-creation models

If one searches the business literature for a generally-accepted theory of the firm thatproposes a mechanism demonstrating how firms create value for their owners, one finds insteadanecdotal models that purport to explain, from the perspective of the CEO of a particularcompany, why that company has been so successful. These anecdotal models tend to come andgo, generally following the fate of the companies they describe.

One notable exception to this anecdotal approach can be found in the TQM discipline. There,models have been developed in an attempt to describe structurally the characteristics of a busi-ness that is operating effectively, or creating value. The TQM field has, in fact, spawned a smallindustry of organizations dedicated to the evaluation of firms and the conferring of prizes. Theoldest and most established of these evaluation/award programs build around value-creationmodels are the Malcolm Baldrige National Quality Award Program in the United States and theEuropean Foundation for Quality Management Excellence Model in Europe.

The success of such models remains an open question. The National Institute of Standardsand Technology of the U.S. Department of Commerce has tracked the performance of BaldrigeAward winners (or their parent companies, in the case of plant- or division-level awards) andclaims that Baldrige firms as a group have achieved stock returns that are 300-400% greater thanthe S&P 500 (NIST [12]). This is not a well-controlled study (no adjustment for risk, nomatching on firm characteristics), however other more rigorous studies (Hendricks and Singhal[7], Tai and Przasnyski [13]) have also concluded that Baldrige winners significantly outperformthe market as a whole, though by much less of a margin than reported by NIST. Only one studyhas considered the operating performance of Baldrige winners. Hendricks and Singhal [8] finda significantly greater increase in operating income and significantly greater sales growth for thewinning firms in comparison to matched firms.

2-1 EFQM Excellence ModelEFQM, the European Foundation for Quality Management, was founded in 1988 to promote

self-assessment as a key process for driving business improvement. Most European countries

1. A logical extension of this result is that value creation cannot be modeled independent of the antecedent condi-tions of the firm, and hence every value-creation model must be suboptimal for a particular firm (though perhaps collectively optimal for a group of similar firms). We leave this extension for future research.


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are members of EFQM,1 and several have their own government-sponsored quality organiza-tions and awards.

The EFQM Excellence Model is a diagnostic tool, with a set of criteria generally acceptedacross Europe, that can be used by organizations to evaluate their strengths, weaknesses, oppor-tunities, and threats and to monitor progress of strategic actions. For companies and more gene-rally organizations, it provides a framework for continuous improvement.

The framework shown above (as revised in 1999 [5]), addresses total stakeholder perfor-mance and consists of nine criteria, 32 sub-criteria, and their relationships. These criteria,summarized below, are outlined in the brochure “The EFQM Excellence Model Changes” [5]and are described in greater detail in the document “Assessing For Excellence - A PracticalGuide for Self-Assessment.”[6]

- Criterion 1 – Leadership: The ways in which leaders develop firm values, are personallyinvolved in the management system and motivate the organization’s people.

- Criterion 2 – Policy & Strategy: The systems for ensuring that the needs of stakeholdersare incorporated in strategy and that strategies are developed, deployed, and communi-cated.

- Criterion 3 – People: The systems whereby people resources are managed, competenciesdeveloped, people involved and recognized; seeks evidence of a dialogue between peopleand the organization.

- Criterion 4 – Partnerships & Resources: The systems for the management of partnerships,finances, equipment, technology, and knowledge.

- Criterion 5 – Processes: The methods used for managing and improving processes,producing products and services, and incorporating customer needs and expectations intoprocesses.

- Criterion 6 – Customer Results: The measures of customers’ perceptions of the organiza-tion and other indicators of firm performance with respect to external customers, inclu-ding image, loyalty, and the reputation of the firm’s products, services, and customerservice.

- Criterion 7 – People Results: The measures of employees’ perceptions of the organizationand other indicators of firm performance with respect to its people, including satisfaction,motivation, recognition, involvement, and achievement.

- Criterion 8 – Society Results: The measures of the organization’s performance in satis-fying the needs and the expectations of society (local, national, or international commu-nity), including public disclosure, environmental impact, community involvement, healthand safety, and management of such issues.

1. The MFQ, «Mouvement Français pour la Qualité», represents France in the EFQM.

Figure 1 : Graphical Representation of the EFQM Excellence Model


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- Criterion 9 – Key Performance Results: The measures of the organization’s ability to growin value and meet the expectations of investors and stakeholders, including financial andnon financial performance indicators related to present and future profitability, cash flow,and investor returns.

The RADAR Scoring Methodology: The EFQM Excellence Model refers to its scoringmethodology as RADAR (Results, Approach, Deployment, Assessment and Review). Thismethodology specifies that for each “enabler” criterion (and its sub-criteria) the latter fourelements of RADAR, comprising the procedures and policies developed in support of eachcriterion and how they are put into practice, should be evaluated. For the four “results” criteria,the outcomes (Results) are to be measured.

2-2 BQA Criteria Framework.The Malcolm Baldrige National Quality Award Program, established in 1987, is sponsored

by the U.S. government. It is jointly administered by the National Institute of Standards andTechnology of the Department of Commerce (a governmental organization) and the AmericanSociety for Quality (a non-governmental not-for-profit organization). The award was created topromote international competitiveness of U.S. firms by rewarding the organizations thatdemonstrate the best levels of and procedures for quality and productivity. In addition, it seeksto promote diffusion of best practices that are consistent with these levels of quality and produc-tivity (see, for example, Curkovic and Hanfield [2] or De Baylo [3]).

Like the EFQM Excellence Model, the BQA Criteria Framework is a tool intended to be usedby organizations to evaluate their performance and monitor the progress of strategy and processchanges. The 1999 Criteria for Performance Excellence notes that the program’s firm-levelgoals are “delivery of ever-improving value to customers, resulting in marketplace success” and“improvement of overall organizational performance and capabilities” ([14], p. 1).

The generic framework shown above is the representation of the BQA Criteria Frameworkthat was provided to potential applicants by the Baldrige organization in 1999. It consists ofseven criteria categories (the framework element “Customer and market focused strategy andaction plans” is not considered to be a criterion category, but rather it is the statement of orga-nization purpose and tactics that will guide development of the criteria and assessment ofresults), 19 sub-criteria (called “Items”), and their relationships. These criteria are outlined inthe brochure “Baldrige National Quality Program 1999: Criteria for Performance Excellence.”[14]. The following criteria descriptions are adapted from this brochure (pp. 10-24).

- Criterion 1 – Leadership: Examines how the organization’s senior leaders address valuesand performance expectations and focus on customers and other stakeholders. Includes

Figure 2 : Graphical Representation of the BQA Criteria Framework


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issues of empowerment, innovation, learning, direction, responsibility to the public, andsupport of key communities.

- Criterion 2 – Strategic Planning: Examines the organization’s strategy developmentprocess. Assesses development, deployment, and performance measurement of strategicobjectives, action plans, and human resource plans.

- Criterion 3 – Customer and Market Focus: Examines how the organization determinescustomer and market requirements and preferences, builds relationships, and determinessatisfaction.

- Criterion 4 – Information Analysis: Examines the organization’s performance measure-ment system and how the organization analyzes performance data and information.

- Criterion 5 – Human Resource Focus: Examines how the organization aligns employeeobjectives with firm strategy and creates and maintains a supportive work environment inwhich both employees and the organization can grow and succeed.

- Criterion 6 – Process Management: Examines customer-focused design, product andservice delivery, support, and supplier and partnering processes involving all work units.

- Criterion 7 – Business Results: Examines the organization’s performance and improve-ment in key business areas: customer satisfaction, product and service performance,financial and marketplace performance, human resource results, supplier and partnerresults, and operational performance. Also considers performance relative to competitors.

The Scoring System: The Baldrige Criteria Framework is applied, both through self-asses-sment and by the award examiners, based on three evaluation dimensions: Approach, Deploy-ment, and Results. These dimensions consider, respectively, the appropriateness andeffectiveness of methods used, the extent to which the approach has been applied, and theoutcomes achieved. Each evaluation dimension is intended to be applied to all frameworkcriteria.

3 Observations

The original frameworks, with their criteria, sub-criteria, and point weightings, are presentedin Exhibit 1. Both models assign scores on a 1000-point scale, with the point allocation reflec-ting a weighting among the elements of the framework. However, the models differ in thenumber of criteria (9 in EFQM, 7 in Baldrige) and the number and grouping of sub-criteria (32in EFQM, 19 in Baldrige), so in order to compare the frameworks we found it necessary toconvert from one model to another, using the detailed descriptions provided in the self-assess-ment documents ([6], [14]) to clarify and enhance comparability.

In Exhibit 2, we present a matrix mapping points in the sub-criteria from the Baldrigeframework to the EFQM framework. In the columns at the right side of the matrix , we presentthe points assigned to each of the EFQM sub-criteria by (1) the EFQM model and then (2) bythe translated Baldrige model.

3-1 Criteria weights are significantly different in the two modelsDespite the superficial similarity of the two models, we note that after mapping the points

from Baldrige to EFQM the weightings of model criteria differ markedly between them. Speci-fically, relative to the EFQM criteria with the EFQM weightings normalized as 100%, theBaldrige framework assigns corresponding weights of:

- 115% for Leadership- 243% for Policy and Strategy- 107% for People Management- 11% for Resources- 96% for Processes


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- 58% for Customer Satisfaction- 89% for People Satisfaction- 47% for Impact on Society- 151% for Business Results

These results, reproduced graphically in Exhibit 3, show a surprising degree of disagreementon the weighting of important framework criteria such as Policy and Strategy, Resources, andBusiness Results, and we discuss these differences below.

3-2 Tactical criteria dominate in EFQM, strategic criteria in BaldrigeIn attempting to understand these observed differences in criteria weightings, we hypothesize

that the differences may be related to a difference between the frameworks in their overallemphasis on categories of criteria. Our first hypothesis is that the two frameworks may differin their relative emphases on business processes (referred to by EFQM as Enablers) and theoutcomes of those processes (Results). Secondly, we hypothesize that the frameworks maydiffer in their relative emphases on effective planning and management versus effective execu-tion. Accordingly, we next group the criteria and investigate differences between these grou-pings.

Specifically, we group the four Results criteria together, and then divide the Enabler criteriainto two groups. These are categorized as Strategic Enablers if they are most closely related tosetting the goals and objectives of the firm, and as Tactical Enablers if they are concerned witheffective execution of strategy via deployment and management of resources to achieve thosegoals. Two criteria were classified as Strategic Enablers: Leadership, and Policy and Strategy.The three remaining Enablers were classified as Tactical Enablers: People Management,Resources, and Processes.

The weightings of these groups of criteria, as summarized from Exhibit 2 and presentedgraphically in Exhibit 4, and the weighting of the Baldrige criteria relative to the EFQM normof 100%, are as follows (tableau 1)

These grouped results suggest support for our second hypothesis but not our first. Specifi-cally, it appears that the Baldrige Framework emphasizes effective planning and managementthrough Strategic Enablers, while the EFQM Model emphasizes execution and deployment ofstrategy through Tactical Enablers. However the division between emphasis on results andemphasis on business processes (Enablers, in total) is similar between the two models.

Nevertheless, we note that within the Results measurements of the two models there aresignificant differences as well.

Tableau 1 : Comparison of Grouped Model Weightings

Baldrige EFQM Baldrige %

Strategic Enablers- Leadership

- Policy and Strategy309 180 172%

Tactical Enablers- People Management

- Resources- Processes

241 320 75%

Results- Customer Satisfaction

- People Satisfaction- Impact on Society- Business Results

450 500 90%


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3-3 Customer, employee, and societal results measures are more heavilyweighted in EFQM.

In 1999, EFQM changed the name of its customer-oriented criterion from Customer Satis-faction to the broader Customer Results, focusing on a wider range of performance indicators(“relevant targets relating to customer results are defined, understood by all employees, bench-marked across the organization and met” [5]). Consistent with the breadth of this definition, itrepresents 200 points in EFQM and only 115 in Baldrige (tableau 2).

The EFQM’s measure of employee well-being, People Results, also receives a somewhatheavier weight than does the Baldrige version. But the greatest difference between the modelsis in their allocation of points between perceptual measures and performance measures (tableau3).

The EFQM criterion capturing the effect of firm actions on society is called Society Results.This criterion, which also underwent a name change in 1999 from Impact on Society, is alsomore heavily weighted in the EFQM model than in the Baldrige model, though perhaps lessdramatically so than one might anticipate given the historical differences in the European andAmerican economic models. Still, societal results measures represent 6% (60 points) in EFQMand only 2.8% (28 points) in Baldrige. Note that the two models are quite balanced with respectto perceptual measures but EFQM places all of its extra weight on performance indicators(tableau 4).

3-4 Business results are more heavily weighted in BaldrigeWithin the category of results measures, the business results measure largely offsets the diffe-

rences in weighting observed in the previous section. Business results measures are defined inmuch the same manner in the two models: using the Baldrige terminology, they are “Financialand market results” and “Organizational effectiveness results.” Though more heavily weightedin Baldrige in all respects (overall as well as at the subcomponent level), this criterion is heavilyweighted in both models: 150 points in EFQM, 227 in Baldrige.

Tableau 2 : Customer results


Customer Results 115 200 58%

Perception measures 58 150 39%

Performance indicators 57 50 114%

Tableau 3 : People results

Baldrige EFQM Baldrige %People Results 80 100 80%

Perception measures 40 67.5 59%

Performance indicators 40 22.5 178%

Tableau 4 : Society results


Society results 28 60 47%

Perception measures 14 15 94%

Performance indicators 14 45 32%


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4 Possible explanations for differences observed

These differences are quite striking, and while they are at least in part consistent with ourhypotheses, some intuitive interpretation is desirable. To this end, we provide below someobservations regarding the ways in which these results are consistent with differences betweenthe US and European socioeconomic environments.

4-1 Financial markets demand business results measuresFinancial markets in the US are strong and well established. In this environment, companies

can more easily raise funds for investment, but these strong and effective markets have a vora-cious appetite for reported firm data, and especially the sort of reporting characterized above asBusiness Results reporting.

By contrast, public funding markets are relatively less developed in Europe, and many small-and medium-sized European firms fit customized financing from local banks to their needs. Insuch an environment, a company is perhaps less heavily punished, at least in the short run, forfalling short of profit objectives. Accordingly, the relatively greater emphasis on businessresults in the Baldrige model is understandable. As the European system of market financingdevelops, and evidence of such development can be found in the recent Bourse mergers, it islikely that the EFQM business valuation model will evolve to increase emphasis on businessresults measures.

4-2 European economic and environmental policies influence employeeand societal measures.

European economic policies, with their extensive legal limits on working and operatingconditions, are somewhat resistant to deregulation. This is particularly true in France, asevidenced by the recent adoption of a legislated 35-hour work week. That legislation, the Actof 19th January, is now in effect and the 35-hour limitation is keenly felt as a social constrainton French firms. Even as privatization has been generally developing, companies operating inEurope are quite accustomed to social regulation.

By contrast, the US, as a free-market economy, is more strongly characterized by the elimi-nation of legal barriers to trade and by a more flexible market. Consistent with these differences,it is not surprising that measurement of People and Society results figure much more stronglyin the EFQM model than in the Baldrige model.

Capturing measures of ecological impact and pollution risk through the EFQM model is alsoconsistent with the degree of environmental regulation in the Eurozone economies, especiallyin the north of Europe. Environmental and social reports are reliable and European companieshave to worry about the perception of their companies. The greater EFQM weighting on Societyresults is consistent with this European state of mind.

Nor is it surprising that the EFQM model emphasizes perceptual measures of employee well-being and performance measures of societal well-being. Through their extensive workplaceregulation, European governments have demonstrated an acute concern for employee well-being and for workers’ perceptions of their working environment. The social environment, on

Tableau 5 : Key performance results

Baldrige EFQM Baldrige %Key performance results 227 150 152%

Key performance outcomes 115 75 154%

Key performance indicators 112 75 150%


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the other hand can only provide its perceptions of its well-being through observable characte-ristics, and so extensive European social and environmental legislation (for example, consumer-protection legislation in Germany and sustainable-development legislation in France) has beenadopted to provide measurable performance outcomes on such issues.

4-3 A tactical orientation requires a more detailed assessment of results.In Europe, and in Germany and France in particular, there is a broad technical culture in

companies because many executives have backgrounds in engineering. Historically, perfor-mance and quality objectives have been generally well specified and often linked to certificationrequirements (though enthusiastic American adoption of the European ISO9000 standardssuggests that American companies may be moving in that direction as well). The EFQMmodel’s relatively greater emphasis on tactical enablers is consistent with this orientation.

Such a tactical orientation, as opposed to the Baldrige’s emphasis on strategic issues andenablers, may open European companies to a risk of “measuring the wrong things well.” TheEFQM model counters this risk by giving much greater emphasis to measures of customerresults, especially perceptual measures. In this way, the EFQM model reflects the realities ofthe European business environment while also specifying that companies wishing to createvalue must compensate for the environment’s shortcomings. Similarly, the Baldrige modelgives only modest weight to tactical enablers but ensures that American companies are not“measuring the right things poorly” by heavily weighting the business results measures.

4-4 The traditional European business model emphasizes long-terminterpersonal and interfirm relationships

Another possible difference between the value-creation dynamics underlying the Baldrigeand EFQM models may be in their implicit definitions of performance and value to be achieved.Such definitions depend on interpretation and comparison across different organizational andnational cultures (see, for example, Dellana and Hauser [4]). An American definition of perfor-mance may be argued to give greater emphasis to market superiority, while a European defini-tion may lean toward tradition and long-term commitment. Regardless, the concept ofperformance and value as embodied in the two models needs to be more precisely defined (fora relevant discussion, see Bessire [1]), as does the concept of sustainable performance (Herriau[9]).

Another possibility is that the EFQM and Baldrige models are in fact embedded in a greaterand more universal model of business performance, representing only different but overlappingportions of such a model. As a step in the direction of defining a more general model, we brieflyconsider how the two models map onto the strategic model called the Balanced Scorecard.

5 Baldrige, EFQM and the Balanced Scorecard: Is a cross-culturalframework conceivable?

The Balanced Scorecard (BS) model of Kaplan and Norton [10] does not provide a structuralmodel of firm value but instead promotes strategy formulation and performance measurementthat is consistent with maximization of proxies for long-term value creation. It proposes thatfirms measure aspects of current performance in the categories of financial performance, abilityto learn as an organization, competence in core processes, and customer perception, and thatthese categories are integrated through strategy formulation. By mapping the elements of theEFQM and Baldrige models to the four categories of the Balanced Scorecard and its process ofstrategic measurement, we can observe whether or not they can be reconciled by the BS model.(For a comparison of American and European scorecards, see Mendoza and Zrihen [11]) orWegmann [15])


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Exhibit 5 below shows this mapping and the resulting point allocation among the elementsof the BS. Following the same format used earlier, we can summarize these results as follows(tableau 6):

We observe here a reduction in the divergence between the two models relative to thatpresented in section 3.1. However, large differences remain in the Financial Results andCustomer categories, again in the direction previously observed.

Therefore, to the extent that the two structural models are subsets of the larger strategicmodel, they still display different weightings of the measures employed and therefore still main-tain their unique characters, which we argue is driven by socioeconomic differences.

6 Conclusions and suggestions for future research

We have identified and characterized notable differences between the EFQM and Baldrigemodels. Specifically, we observe that the two models, despite sharing a common goal of iden-tifying and measuring the firm characteristics associated with the process of value creation,propose very different descriptions and weightings of the elements of that process. The EFQMmodel places much more emphasis on tactical issues relating to the diffusion and implementa-tion of strategy and the monitoring of customer, employee and society results, while theBaldrige model emphasizes the development of strategy and the reporting and analysis of busi-ness (financial) results. We discuss these differences in light of the differing socioeconomicenvironments of Europe and the United States and conclude that, given these differing environ-ments, the two models are well suited to helping their respective constituencies achieve theircommon objective of value creation.

It is conceivable that increasing market globalization may give an increased weight tocultural and geographical influences on social perceptions about human motivation, politicalconcerns, legitimacy and the appropriate use of law, power and freedom, further emphasizingthe differences between value-creation models. However, it seems even more likely that theprocess of global rationalization, and its attendant singleness of purpose that comes from acommon economic culture with profit-driven owners, will in time fade the differences betweenAmerican and European definitions of performance. For the present, however, we observe thatthese differences still exist and are captured in the dominant structural value-creation models,the EFQM and Baldrige frameworks.

There is a need for future research in this area to confirm empirically the need for, appropria-teness of, and economic consequences of the model differences that we claim are driven bysocioeconomic differences between Europe and US. We must test our implication that a Euro-pean firm will be more successful following the EFQM model than the Baldrige model, and viseversa for American firms. A related question would be to define the cultural and organizationaleffects of multi-national firms: is value still gained by using value-creation models that aretuned to the socioeconomic environments of the firms’ various operations, or will a value-crea-tion model based on, say, the firm’s headquarters economy suffice? Finally, and importantly, wemust ask if one model is truly more effective than another, or is this simply a Heisenberg effect?

Tableau 6 : Assigning EFQM and Baldrige Criteria to Balanced Scorecard Categories


Vision and Strategy 210 190 111%

Financial Results 230 168 137%

Process and Innovation 145 156 93%

Organizational Learning 215 196 110%

Customer 200 290 69%

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7 References

[1] Bessire, D. 1999. Définir la performance. Revue Comptabilité Contrôle Audit. Vol. 2.Tome 5 (Septembre): 127-150.

[2] Curkovic, S., and Hanfield R.. 1996. Use of ISO 9000 and Baldrige Award criteria insupplier quality evaluation. International Journal of Purchasing and Materials Manage-ment, (Spring): 2-11.

[3] DeBaylo, P. W. 1999. Ten reasons why the Baldrige model works. The Journal forQuality and Participation (Jan/Feb): 24-28.

[4] Dellana, S.A., and Hauser, R.D. 1999. Towards defining the quality culture. Enginee-ring Management Journal (Jun): 11-15.

[5] European Foundation for Quality Management. 1999. The EFQM Excellence ModelChanges. Available from http://www.efqm.org/imodel/changes1.htm.

[6] European Foundation for Quality Management. 1999. Assessing for Excellence: A Prac-tical Guide for Self-Assessment. EFQM: Brussels.

[7] Hendricks, K. B., and Singhal V. R.. 1996. Quality awards and the market value of thefirm: An empirical investigation. Management Science 42(3) (March): 415-436.

[8] Hendricks, K. B., and Singhal V. R.. 1997. Does implementing an effective TQMprogram actually improve operating performance? Empirical evidence from firms thathave won quality awards. Management Science 43(9) (September): 1258-1274.

[9] Herriau, C. 1999. Le concept de performance soutenable en comptabilité de gestion.Revue Finance Contrôle Stratégie. Vol. 2. N˚ 3 (Septembre): 147-177.

[10] Kaplan, R. S., and Norton D. P.. 1996. The Balanced Scorecard: Translating Strategyinto Action. Harvard Business School Press: Boston.

[11] Mendoza, C., and Zrihen R.. 1999. Le tableau de bord: en V.O. ou en version améri-caine? Comparaison entre le tableau de bord et le balanced scorecard. Revue Françaisede Comptabilité (March) 1999 : 60-66.

[12] National Institute of Standards and Technology. 2000. ‘Baldrige Index’ outperformsS&P 500 by almost five to one. U.S. Department of Commerce press release #G2000-26,found at http://www.nist.gov/public_affairs/releases/g00-26.html.

[13] Tai, L. S., and Przasnyski Z. H.. 1999. Baldrige winners beat the S&P 500. QualityProgress 32(4) (April): 45-49.

[14] Wegmann, G. 1999. Les tableaux de bord stratégiques: Analyse comparative d’unmodèle nord-américain et d’un modèle suédois . Papiers de recherche du GREGOR.99.11.

[15] Wilkes, N., and Dale, B.G. 1998. Attitudes to self-assessment and quality awards: Astudy in small and medium-sized companies. Total Quality Mgt (Dec.): 731-739.

Exhibit 1Quality Award Comparison Table -- Original Structure

EFQM (1999) Baldrige Award (1999)

Criteria Sub-criteriaScoring

Criteria Sub-criteriaScoring

Weight Points Weight Points

E1

Lea

ders

hip

E1.1 Mission, values developed; act as role models 2,5% 25

B1

Lea

ders

hip

B1.1 Organizational leadership 8,5% 85

E1.2 Personally involved with mgt. system 2,5% 25 B1.2 Citizenship 4,0% 40

E1.3 Involved with external orgs. (cust., suppl., etc.)

2,5% 25

E1.4 Motivate, support, and recognize people 2,5% 25

10,0% 100 12,5% 125

E2

Pol

icy

& S

trat

egy E2.1 Based on needs and expect. of stakeholders 1,6% 16

B2

Str

ateg

ic P

lann

ing B2.1 Strategy development 4,0% 40

E2.2 Based on perf. meas. and learning activities 1,6% 16 B2.2 Strategy deployment 4,5% 45

E2.3 Developed, reviewed and updated 1,6% 16

E2.4 Deployed through key process framework 1,6% 16

E2.5 Communicated and implemented 1,6% 16

8,0% 80 8,5% 85

E3

Peo

ple

E3.1 Resource planned, managed, and improved 1,8% 18

B3

Cus

tom

er a

nd M

kt F

ocus B3.1 Customer and market knowledge 4,0% 40

E3.2 Competencies identified and developed 1,8% 18 B3.2 Customer satisfaction and relationships 4,5% 45

E3.3 Involved and empowered 1,8% 18 8,5% 85

E3.4 Dialog with organization 1,8% 18

E3.5 Rewarded, recognized, and cared for 1,8% 18

9,0% 90

E4

Par

tner

ship

s &

Res

ourc

es E4.1 External partnerships managed 1,8% 18

B4

Inf

orm

atio

n an

d an

alys

is B4.1 Measurement of organizational performance 4,0% 40

E4.2 Finances managed 1,8% 18 B4.2 Analysis of organizational performance 4,5% 45

E4.3 Bldg., equip., and materials managed 1,8% 18

E4.4 Technology managed 1,8% 18

E4.5 Information and knowledge managed 1,8% 18

9,0% 90 8,5% 85

E5

Pro

cess

es

E5.1 Systematically designed and managed 2,8% 28

B5

Hum

an R

esou

rce

Focu

s B5.1 Work systems 3,5% 35

E5.2 Improved as needed to generate incr. value 2,8% 28 B5.2 Education, training, and development 2,5% 25

E5.3 Prod. design based on customer needs 2,8% 28 B5.3 Well-being and satisfaction 2,5% 25

E5.4 Prod. produced, delivered, and serviced 2,8% 28

E5.5 Cust. relationships managed and enhanced 2,8% 28

14,0% 140 8,5% 85

E6

Cus

tom

erR

esul

ts

E6.1 Perception measures 15,0% 150

B6

Pro

cess

Man

agem

ent

B6.1 Design and delivery processes 5,5% 55

E6.2 Performance indicators 5,0% 50 B6.2 Support processes 1,5% 15

20,0% 200 B6.3 Supplier and partnering processes 1,5% 15

E7

Peo

ple

Res

ults

E7.1 Perception measures 6,8% 67,5 8,5% 85

E7.2 Performance indicators 2,3% 22,5

B7

Bus

ines

s R

esul

ts

B7.1 Customer focused results 11,5% 115

9,0% 90 B7.2 Financial and market results 11,5% 115

E8

Soc

iety

Res

ults

E8.1 Perception measures 1,5% 15 B7.3 Human resource results 8,0% 80

E8.2 Performance indicators 4,5% 45 B7.4 Supplier and partner results 2,5% 25

6,0% 60 B7.5 Organizational effectiveness results 11,5% 115

E9

Key

Pe

rfor

man

ceR

esul

ts

E9.1 Key performance outcomes 7,5% 75 45,0% 450

E9.2 Key performance indicators 7,5% 75

15,0% 150

Total Points

100,0% 1000 Total Points 100,0% 1000

Exhibit 2Allocation of BQA Framework Weightings to EFQM Model Sub-Criteria

Bal

drig

e A

war

d C

rite

ria

Tota

ls

Lea

ders

hip

Stra

tegi

c Pl

anni

ngC

usto

mer

and

Mkt

. Foc

usIn

form

atio

n an

d A

naly

sis

Hum

an R

esou

rce

Focu

sPr

oces

s M

anag

emen

tB

usin

ess

Res

ults

EFQ

MB

aldr

ige

B1.

1B

1.2

B2.

1B

2.2

B3.

1B

3.2

B4.

1B

4.2

B5.

1B

5.2

B5.

3B

6.1

B6.

2B

6.3

B7.

1B

7.2

B7.

3B

7.4

B7.

5Pt

s%

Pts

%

8540

125

4045

8540

4585

4045

8535

2525

8555

1515

8511

511

580

2511

545

025

2,5%

60,

6%

Strategic Enablers

EFQM Criteria

Leadership

E1a

6

E1b

4025

2,5%

404,

0%

E1c

535

105

252,

5%55

5,5%

E1d

59

252,

5%14

1,4%

100

10,0

%11

511

,5%

Policy and Strategy

E2a

45

1410

161,

6%33

3,3%

E2b

513

2016

1,6%

383,

8%

E2c

1315

2045

161,

6%93

9,3%

E2d

1516

1,6%

151,

5%

E2e

1516

1,6%

151,

5%

808,

0%19

419

,4%

People Mnagement

E3a

1213

181,

8%25

2,5%

Tactical Enablers

E3b

1212

181,

8%24

2,4%

E3c

1118

1,8%

111,

1%

E3d

208

181,

8%28

2,8%

E3e

818

1,8%

80,

8%

909,

0%96

9,6%

Resources

E4a

518

1,8%

50,

5%

E4b

181,

8%0

0,0%

E4c

518

1,8%

50,

5%

E4d

181,

8%0

0,0%

E4e

181,

8%0

0,0%

909,

0%10

1,0%

Processes

E5a

118

282,

8%19

1,9%

E5b

1011

728

2,8%

282,

8%

E5c

108

1128

2,8%

292,

9%

E5d

1128

2,8%

111,

1%

E5e

1027

1128

2,8%

484,

8%

140

14,0

%13

513

,5%

Customer Satisfaction

E6a

5815

015

,0%

585,

8%

Results

E6b

5750

5,0%

575,

7%

200

20,0

%11

511

,5%

People Satisfaction

E7a

4067

,56,

8%40

4,0%

E7b

4022

,52,

3%40

4,0%

909,

0%80

8,0%

Impact onSociety

E8a

1415

1,5%

141,

4%

E8b

1445

4,5%

141,

4%

606,

0%28

2,8%

BusinessResults

E9a

115

757,

5%11

511

,5%

E9b

2587

757,

5%11

211

,2%

150

15,0

%22

722

,7%

1000

100,

0%

1000

100,

0%


Exhibit 3Graphical Comparison of Model Weightings


Exhibit 4Graphical Comparison of Grouped Model Weightings


Exhibit 5

Assigning EFQM and Baldrige Criteria to Balanced Scorecard Categories

EFQM

BSFinancial Results

Organizational Learning

Custom erProcess

and

Innovation

Vision and Strategy

E4.2E9.1E9.2

EFQM Total Points = 168

E 1.3E 4.1 (50%)

E 5.3 E5.5E 6.1 E6.2

E FQM To tal Points = 290

E1.1E1.2

E2.1 - E2.5E8.1 E8.2


E 3.1E 4.1 (50%)

E 4.3 E4.4E 4.5 (50%) E5.1E 5.2 E5.4E FQM To tal Points = 156

E1.4E4.5E3.2 - E3.5E7.1 E7.2


Baldr ige To tal Points = 230

B 7.2B 7.5

Baldrige Total Points = 145

B6.1 B6.2 B6.3

B5.1B7.4


B1.1 B1.2

B 2.1B 2.2

Baldrige To tal Points = 200

B 3.1 B3.2

B 7.1


B4.1 B4.2B5.2 B5.3

B 7.3

L

Secrétariat du G

2000-13Value Measurement and Value Creation Models in Europe and the US: A Comparison of the EFQM

Excellence Model and the Baldrige Award Criteria

Brigitte Oger* et David E. Platt**

* Maître de Conférences à l’IAE de Paris ** Assistant Professor, University of Texas at Austin

es papiers de recherche du GREGOR sont accessiblessur INTERNET à l’adresse suivante :http://www.univ-paris1.fr/GREGOR/

REGOR : Claudine DUCOURTIEUX ([email protected])


Documents

2000-13 Value Measurement and Value Creation Models in ... · The 1999 Criteria for Performance Excellence notes that the program’s ﬁrm-level goals are “delivery of ever-improving