Firm Theory Kim Valbum RUC MEA

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Firm TheoryKim Valbum RUC MEA

• Business Excellence

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Business Excellence the concept

• Business Excellence is when the company through
  conscious efforts achieves sustainable
  outstanding results on
• Employee satisfaction
• Customer satisfaction
• Effect on society
• Business results
• Business Excellence is a condition and a target
  to work for a moving target that moves in
  time with the level, set by the very best
  companies
• Business Escellence builds on the best and
  fundamental attitudes and thoughts of TQM

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The European Danish model for Business
Excellence

• HRM Employee
• satisfaction
• Leader- Politics Processes Customer
  Business
• ship strategy satisfaction results
• Resour- Effect on
• ces society
• Effort Results

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Vision Mission Idea Strategies of the
Company etc. Competence-distribution - Employee
development - Quality process managementPlan
process - Management development - Living rules -
Customeroriented cultureUse of Technology -
Management on Economy - Balanced Scorecard
HRM Employee
satisfaction Leader- Politics Processes
Customer Business ship strategy
satisfaction results Resour-
Effect on ces society
Effort Results
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EFQM Fundamental Concepts(European organization
For Quality Management)

• Customer focus
• Partnership with suppliers
• Employee development -involvement
• Processes factum
• Continuously improvement and innovation
• Leadership agreeing purpose
• Responsible to the public
• Result focus

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The Danish Quality Award Pyramide of quality

• Continuous improvements
• Everybody participate
• Focus on facts
• Focus on customer
• Focus on employee
• Management involvement

SAS 5 key notions in TQM Contiunous
improvements Customer focus Process
orientation Supporting leadership Co-workin
g workers
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Self-evaluation is crucial!

• Top-managers or key managers assess whether
  mission, vision, values and strategis of the
  company are implemented when challenged by the
  elements of the model

Our organisation
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• Effort results
• 9 criterias 5 effort- 4 result-criterias
• 32 undercriterias 24 effort- 8
  result-criterias
• Examples on every undercriteria

Effort Results
How are policies ?
Examples on concrete techniques
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Phase 1 of analysis establish a estimation basis

• Establish of basis for facts and validation
  through proofs What do we do and how do we prove
  it?
• Assesment of our strengths in this field What
  make us strong in the the light of our strategic
  basis and what can we build on in the future?
• Identification of fields of improvement and
  development Where can we improve in the light of
  out strategic basis and the concrete challenges
  in our industry?
• Phase 1 provide a qualitative picture of the
  organisation on every part criteria.

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Phase 2 challenge and validation of basis of
assessment

• At phase 2 you test and challenge the qualitative
  picture taken at phase 1.
• Use the criteria for scoring like you do when you
  give a mark at an exam. Express the level of
  quality by a figure on a recognised scale.
• Second phase of analysis are carried out at part-
  and under-criterias and are summed up at each
  criteria.

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Effort Criterias

• Leadership The behaviour of alle managers in
  their effort towards Business Excellence. It is
  being estimated how top- and middle-managers are
  using the implemetation of quality management as
  a fundamental issue in order to achieve ongoing
  improvements.
• Policy Strategy Assessment of how the
  policies, goals and strategies of the company are
  being decided and carried out and how the company
  estimates that the achieved results are effecting
  the policy and strategy decisions
• HRM How is the company carrying through human
  ressource management and administration, and how
  is the company utilizing the potentials at every
  employeed to achieve ongoing improvements
• Resources Steering and control, usage and
  maintainance of alle resources in the company and
  how the resources of the company are being
  effectively used to support policy and strategy
• Processes Assessment of management of the
  activities that create value in the company.
  Evaluation on how the processes are being
  identified, estimated and if necessary are
  changed to secure ongoing improvements.

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Result Criterias

• 6. Customer satisfaction Assessment on how the
  customers of the company regard the company, its
  products and/or services and how the company
  collects, estimates and use the results of
  customer satisfaction and the development in
  results over the years.
• 7. Employee satisfaction Assessment of the
  employees notion of the company and to what
  extent the company has success in satisfying the
  need and expectations of the employees and which
  development there has been in the results over
  the years.
• 8. Effect on Society Assessment on how the
  company generally are being percepted at a local,
  national and international level and how the
  company keep life quality and environment and
  preserve global resouces combined with
  measurement by the company itself. This also
  include relations to authorities and stakeholders
  influencing or regulating the industry.
• 9. Business results Assessment of what the
  company has achieved in relation to the targets
  and how the company during the years fulfill
  finansial and non-finansial targets and how the
  company satisfies the expactations at everyone
  with financial or political interest in the
  company.

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Basis for analysis of Phase 2

• Effort criterias Result criterias
• How good are How good are
• the methods? our results?
• How widespread To what extent
• are the methods? do we measure
• the right things?

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Score cards Effort
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Score cards Results
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Point structure
HRM Employee 90
satisfact.90 Leader- Politics
Processes Customer Business ship strateg
y 140 satisfaction results 100
80 200 150 Resour- Effect
on ces 90 society 60
Effort 500 Points Results 500
Points
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Self-evaluation-How to get going

• Step 1. Target and frames?
• Step 2. Qualification to individual preparation
• Step 3. The individual self-evaluation
• Step 4. Debate on consensus self-evaluation
  among the managers
• Step 5. Decision on improvement projects
• Step 6. Implementation of improvement projects
• Step 7. Integration of self-evaluation in the
  planning-circle of the company

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Business Excellence a moving target

• 3-5 years strategy-
• plan cyklus
• 1-year business-
• plan cyklus

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Targets

• Results-targets e.g.- Customer loyalty and
  satisfaction
• - Target for turnover, costs, customerpayoff
• - target for employee satisfaction absenteism
• - target for reduction of energyconsumption and
  recycling
• Effort-targets e.g. Implementation of new
  procedure
• - trimming the systems of quality management
• - reestimation of basic values
• - cut down by 50 of time in product developm.
• - education of managers to coach-functions

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Ongoing self-evaluations

• September Collect relevant informationand
  involving stakeholders
• October Determine target of budgets for all
  fields of result
• November Hearing and discussions of the business
  plan in foras
• December Communication and break down on
  business plan to operational action plans and
  targets and personal criterias
• March Quarterly follow up on progress of project
  (results efforts)
• June Quaterly follow up on progress of project
  (results efforts)
• September Quaterly follow up on progress of
  project (results efforts) in relation to
  business plan and start up on new plan cyklus
• December Quarterly follow up on progress of
  project (results efforts) in relation to
  business plan

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5 phases of implementation

• Phase 1 Stragy plan for organisation
  development
• Phase 2 Preparation
• Phase 3 Mobilisation and structure
• Phase 4 Rooting and integration
• Phase 5 Further development

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The classic well-driven company 300 450 points

• Leadership Godd and committed leadership, but
  not full synergi between top-management and
  managers
• Policy Strategy Company has a well-structured
  plan-process, but not perfect in follow-up and
  budget is run only by top-managers
• HRM Company has a fine and well-functioning
  policy on staff that leads to high motivation and
  loyalty
• Resources Steering of resources are effective
  and provide good results in relation to
  productivity/payoff
• Processes Relevant certification (ISO 9000/14000
  eg)
• 6-9. Result criterias Established measurepoints
  and notification systems, but still lacks
  important fields (customer satisfaction eg)

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The excellent company of world class 700-800
points

• Leadership Complete synergy between leaders and
  alle layers
• Policy Strategy Integrated plan process with a
  balanced focus on different fields and all
  stakeholders involved
• HRM On the basis of its strong culture, the
  company have placed competences and learning in
  every part of the organisation
• Ressources Company is a role model in use of
  technology and develop of knowledge and with
  effective warning systems
• Processes All managers have identified the key
  processes of the company and evaluate regularly
  if revision is needed
• 6-9. Result criterias The company has
  established measure points on every result
  criteria and result targets are determined in
  every relevant field. Not only customersatisfactio
  n is focused, but also customer loyalty. Every
  measurement is being communicated

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Business Excellence

• It works but it takes a lot of time,
  discussions and will!