Organizational Quality and Performance Excellence

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Many organizations face common challenges when it comes to achieving quality and high levels of performance. Organizations of all kinds— business, governmental, health care, and educational—create products or services to meet particular sets of consumer needs. To the extent that an organization achieves success and stability, the structures, systems, policies, work practices, and leadership styles that are associated with those accomplishments become accepted and standardized over time. In the short run, these patterns are often a prescription for continued success and vitality. However, in the longer term, these same patterns can lead to rigidity, insulation, lack of innovation, and gradual distancing from the needs of the marketplace and the expectations of consumers.

Over time, changes may also occur in the needs, expectations, or confidence of key consumers or sponsors. Competition, technology, economics, regulatory factors, and other marketplace conditions also evolve, sometimes in dramatic ways, and organizations or industries that are unable to anticipate, accommodate, or shape these changes are at risk as they become increasingly closed systems. Unless new ways of thinking and working and new structures and cultures to support these changes are developed, performance and quality may well deteriorate. The dynamics are quite similar whether one considers the rise and fall of an educational institution, a local video store, a community group, U.S. electronics manufacturers, or the Swiss watch industry.

Six Core Concepts

Originally called "TQM" (total quality management), "the quality/performance excellence approach" has achieved remarkable acceptance as a philosophy and method for addressing quality and performance challenges and dynamics and for identifying and reducing the gaps that confront many contemporary organizations.

Though the terminology varies somewhat from setting to setting, author to author, and program to program, there are six key values that transcend the various approaches to organizational quality and performance excellence: (1) service orientation, (2) leadership, (3) information use, (4) collaboration, (5) communication, and (6) continuous improvement.

Service Orientation

A service orientation directs attention to the needs, expectations, and satisfaction levels of the groups that are served by a private-or public-sector organization. Within the quality framework, these groups are variously referred to as "customers," "constituencies," "stakeholders," "consumers," "publics," "clients," "audiences," "beneficiaries," or "users." The focus on service to consumers is based on a recognition that it is ultimately their judgments of the quality of a product, service, or institution—translated into marketplace behaviors— that are necessary for the continuing viability of the product or service organization.

The quality/performance excellence perspective suggests that practically speaking—as well as theoretically speaking—the definition of quality and value is dictated by the behaviors of consumers in a competitive marketplace for goods and services. No matter how organizational "insiders" assess the value of a particular product or service, those judgments are made in a vacuum (which makes them limited and inevitably incomplete) if the insiders do not take account of the needs, perceptions, and expectations of the consumers for whom the products and/or services are intended.

The concept of service orientation also applies to services provided by support and operational units within an organization for other groups that are internal to the organization. Most basically, the concept of service orientation suggests that it is essential to (1) identify external constituencies for which the organization provides products or services, (2) determine and anticipate their needs and expectations, and (3) satisfy—ideally exceed— those needs and expectations.


A fundamental tenet of the quality approach is that leaders are most effective when they are personally involved in creating, communicating, explaining, reinforcing, and exemplifying the organization's mission, vision, values, and service orientation. These directions must be clear, visible, and well integrated into management systems. Leaders should serve as role models through their active involvement and leadership in public and professional activities.

Ideally, the involvement of senior leaders will include a visible commitment to the growth, development, and satisfaction of the employees, and it should encourage productivity, participation, collaboration, and creativity among all personnel. Through ongoing personal involvement in activities such as planning, communication, reviews of performance, and recognition of individual and unit achievements, senior leaders serve as role models, reinforcing the organization's mission, vision, values, and goals and encouraging improved leadership at all levels.

Information Use

The basic concept underlying the value of information use is that organizational well-being and an external focus are possible only with effective systems for information acquisition, analysis, and application. This includes identifying, studying, and comparing an organization's own activities to those of "benchmark" organizations—organizations that represent a standard of excellence and are therefore a focal point for performance comparison and improvement. Specific kinds of information to be collected and used would include the answers to the following questions:

  • How do key external consumer groups evaluate products and/or services?
  • What criteria do consumers use in assessing products/services?
  • What is the relative importance of these criteria?
  • Who are the key competitors?
  • How do products, services, management approaches, and operational performance compare to those of competitors?
  • How do employees evaluate the organization, its performance, management, quality of life, products/services, and processes?
  • How do suppliers and gatekeepers evaluate the organization and its products/services?

Depending on what information is needed in order to answer any given question, the data may need to be gathered from external sources (e.g., key constituent groups, other organizations, and suppliers), or it may need to be gathered from internal sources (e.g., from employees and through organizational self-study).


Organizations are considered to be complex systems with numerous internal and external constituencies that interact with and depend on one another. These interactions may take the form of exchanges of goods, services, capital, or information. The viability of organizations as systems and their ability to meet expectations of external constituencies depend largely on whether and how these internal interactions take place.

Traditionally, organizations have been structured based on basic functions that need to be carried out. Thus, a typical manufacturing company has divisions or departments of production, sales, operations, marketing, finance, research and development, and so on. Each division is organized hierarchically, with the staff in that area reporting to supervisors, who report to managers, who report to directors, who report to vice-presidents, who ultimately report to a president and/or a chief executive officer. This results in elaborate vertical structures and reporting relationships within each functional area of the organization.

Vertical structures, sometimes termed "silos," facilitate interaction within functional divisions. At the same time, they set up obstacles to interaction and coordination between units. Individuals and departments often become detached from the overall mission of the organization. Work process fragmentation, compartmentalization, and an "it's not my job" mentality tend to evolve. Thus, for example, the research and development division may design a product without the benefit of full collaboration with manufacturing, operations, and marketing, which can potentially lead to any of a number of unfortunate outcomes, such as a wonderful design for a product that the company cannot easily manufacture and for which there is no longer a viable market.

Simpler, better integrated, "flat" organizations, which facilitate cross-functional and cross-divisional collaboration, coordination, and teamwork, are considered to be a means for addressing consumer expectations, aligning individuals and functional units with the organization's mission, and improving the overall organizational quality.


Communication is the means through which information is gathered and disseminated to and from stakeholders or consumers, and it is the mechanism through which work process collaboration occurs. It is also the process through which relationships are formed and developed—relation-ships that are essential to the creation of a culture and spirit of teamwork that is necessary to support and maintain an external focus, collaboration, and a good overall organizational quality.

Continuous Improvement

Quality and high levels of performance do not occur naturally. Rather, they require a substantial commitment of time and resources to a process of continuous improvement and ongoing change— what many people writing in the quality area have called a "journey."

Continuous improvement implies a commitment by everyone within the organization to a recursive process, consisting of planning and testing improvements, evaluating outcomes, learning from failures, implementing and sustaining successes, planning and testing improvements, and so on.

Quality Strategies and Processes

What is the process by which the core quality and performance excellence values are implemented within an organization? Broadly speaking, the process has two phases: assessment and improvement.


Fundamentally, assessment is a strategy for evaluating the current level of performance of an organization in relationship to the expectations of its constituencies and the organization's mission and vision. It allows for the identification of service quality gaps, which become priorities for improvement.

One of the most widely used assessment tools is the Malcolm Baldrige National Quality Award. The Baldrige Award, signed into federal law on August 2, 1987, was initiated with the intent of improving quality and workmanship in the United States. The National Institute of Standards and Technology (NIST) directs the award program. Organizations that are interested in being considered for the award must complete a comprehensive self-study and application process. Awards are given in five categories: manufacturing, service, small business, education, and health care.

Quality Improvement

The process of quality improvement usually involves two steps: (1) identifying, planning, and implementing improvement and (2) integrating improvements. Basic to the improvement process are groups, or teams. A team simply is a group composed of individuals who represent various facets and levels of a unit or process earmarked for study and improvement. The team includes individuals who have a broad base of knowledge and experience with the processes that are being addressed.

The team members work together to develop an approach for ongoing monitoring, evaluation, and improvement. Team activities typically consist of the following:

  • attending meetings,
  • planning improvements,
  • understanding the process to be improved,
  • understanding the problem,
  • collecting information,
  • using tools and techniques to analyze and interpret the information, identifying solutions, and
  • implementing and managing changes.

Other improvement tools besides teams include strategic planning, advisory groups, work process design or redesign groups, quality and service skills training, partnerships with corporations that are experienced with quality programs, and external consultation.


The quality/performance excellence approach is an interdisciplinary approach to organizational behavior and leadership. The approach addresses significant and enduring issues, and it integrates theories, concepts, and methods from various disciplines and traditions of organizational thought.

See also:Culture and Communication; Group Communication; Knowledge Management; Management Information Systems; Organizational Communication; Organizational Culture.


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Cortada, James, and Woods, John. (1995). Encyclopedia of Quality Terms and Concepts. New York: McGraw-Hill.

Hammer, Michael, and Champy, James. (1993). Reengineering the Corporation. New York: HarperCollins.

Hiam, Alexander. (1993). Does Quality Work? A Review of Relevant Studies. New York: The Conference Board.

Lewis, Ralph G., and Smith, Douglas H. (1994). Total Quality in Higher Education. Delray Beach, FL: St. Lucie Press.

National Institute of Standards and Technology. (1987-2001). Malcolm Baldrige National Quality Award Criteria. Washington, DC: U.S. Department of Commerce.

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Brent D. Ruben

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Organizational Quality and Performance Excellence

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Organizational Quality and Performance Excellence