Business excellence is the use of quality management principles and tools in business management. It is the systematic improvement of business performance based on the principles of customer focus, stakeholder value, and process management.
Key practices in business excellence applied across functional areas in an enterprise include continuous and breakthrough improvement, preventative management and management by facts.
Business excellence, as described by the European Foundation for Quality Management (EFQM), refers to ”outstanding practices in managing the organisation and achieving results, all based on a set of eight fundamental concepts”, these being “results orientation, customer focus, leadership and constancy of purpose, management by processes and facts, people development and involvement, continuous learning, innovation and improvement; partnership development, and public responsibility”.
In general, business excellence models have been developed by national bodies as a basis for award programs. For most of these bodies, the awards themselves are secondary in importance to the widespread adoption of the concepts of business excellence, which ultimately leads to improved national economic performance. By far the majority of organizations that use these models do so for self-assessment, through which they may identify improvement opportunities, areas of strength, and ideas for future organisational development. Users of the EFQM Excellence Model, for instance, do so for the following purposes: self-assessment, strategy formulation, visioning, project management, supplier management, and mergers.
When used as a basis for an organization's improvement culture, the business excellence criteria within the models broadly channel and encourage the use of best practices into areas where their effect will be most beneficial to performance. When used simply for self-assessment, the criteria can clearly identify strong and weak areas of management practice so that tools such as benchmarking can be used to identify best-practice to enable the gaps to be closed. These critical links between business excellence models, best practice, and benchmarking are fundamental to the success of the models as tools of continuous improvement.
The most popular and influential model in the western world is the Malcolm Baldrige Award Model (also known as the Baldrige model, the Baldrige criteria, or the criteria for performance excellence), launched by the US government. More than 60 national and state/regional awards base their frameworks upon the Baldrige criteria.
There are a number of internet resources that assist organizations in the application of business excellence principles. A useful one is the Business Performance Improvement Resource, which researches best practices in all business processes and then classifies them through business excellence models such as the Baldrige and EFQM models. Therefore, if an organization is already familiar with business excellence and has identified its opportunities for improvement through a business excellence assessment, it can use such resources to identify the most appropriate practices with which to address such opportunities.
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