Monitoring the connection between the application of EFQM model principles and the results of organisations

QUALITY INNOVATION PROSPERITY 28/1 – 2024 ISSN 1338-984X (online) 107 Monitoring the Connection Between the Application of EFQM Model Principles and the Results of Organisations DOI: 10.12776/qip.v28i1.1939 Petr Bris, Tomas Urbanek Received: 2023-11-07 Accepted: 2023-12-07 Published: 2024-03-31 ABSTRACT Purpose: The present paper evaluated the connections between the degree of fulfilment of the EFQM model's requirements and the organisation's size, key results, social responsibility, employee satisfaction and customer satisfaction. Methodology/Approach: The dataset was acquired via an internet-based survey hosted on Google Forms. The survey targeted managerial personnel within manufacturing entities situated within the geographical boundaries of the Czech Republic. Findings: Research on the relationship between the degree of fulfilment of the EFQM model requirements and the organisation's size, critical organisational results, social responsibility, employee satisfaction, customer satisfaction and overall organisational results demonstrated a moderately significant to strong correlation for all monitored indicators. Research limitation/implication: The data is collected only in one specific country, but the production organisations in which the research was carried out are mainly foreign-owned. Originality/Value of paper: The current research results offer practical and theoretical implications. Theoretically, the research expands the literature on the EFQM model and its connection with current trends, which are the higher innovative activity of organisations and correlation with Industry 4. Practically, the research results will benefit managers, directors, and leaders of companies by allowing them to maintain an optimal level of quality management and estimate future requirements for complex enterprise integration. Category: Research paper Keywords: EFQM Model; quality management; standard; improvement Research Areas: Quality Management, Strategic Quality Management QUALITY INNOVATION PROSPERITY 28/1 – 2024 ISSN 1338-984X (online) 108 1 INTRODUCTION Companies need to use strategic management models to maintain power over their competitors in the current competitive environment. Maintaining high performance and ensuring long-term profitability and sustainability is still one of the significant challenges facing managers of organisations. (Efimova and Briš, 2021) Managerial models of business excellence define core strategic competencies that enable businesses to secure sustainable competitive advantage through selfassessment. It is imperative that the models also need to be improved over time, as do standards such as the ISO 9000 series. The EFQM model can be a tool or, better said, a guide to achieving excellence in an organisation. The organisation objectively determines its position on the excellence scale to identify its strengths and weaknesses. The EFQM Model is applied in various forms in more than 50,000 organisations worldwide. (Bocoya-Maline et al.,2023). However, in the Czech Republic, it remains far in the background and, in most cases, completely unnoticed (Nenadál et al., 2018). This paper focuses on the management systems of organisations operating in the Czech Republic. In the questionnaire survey, managers of organisations comment on all the requirements of the EFQM model. All organisations must be managed. Top management is gradually creating its framework for the management system, which applies primarily to more giant corporations. However, it is also advantageous to use support tools that can help lead organisations to successful results. This applies to all sectors regardless of size or structure. The EFQM model is one such tool that helps manage organisations in the form of so-called self-assessment. The gradual application of this tool makes it possible to assess the degree of perfection of the managed system or to discover its strengths and weaknesses or shortcomings in the sense of the declared visions, missions and strategic goals. Thanks to the EFQM model, communication in the organisation can be improved and better specified because the model brings an original vocabulary and way of thinking. Thanks to the EFQM model, planning existing or future activities can be optimised, and duplications and other forms of waste can be avoided. Although numerous management tools and methodologies are commonly used, the EFQM model offers a comprehensive view of the organisation and can help clarify the interrelationships and synergistic potential between these different methods. All organisations strive to be successful. Some end up in failure, others achieve short-term success. Only a select few realise lasting prosperity and gain the respect and admiration they deserve. 1.1 The principle of organisational excellence Excellence in an organisation is defined as the way an organisation is managed to achieve exceptional results in all aspects of the company. These extraordinary QUALITY INNOVATION PROSPERITY 28/1 – 2024 ISSN 1338-984X (online) 109 results can be achieved through the use of knowledge and skills from the practices of the most successful and high-performing organisations in the world, the socalled best practices (Sanders, 2017). There is also debate in the professional community as to whether the EFQM model should be adapted for specific industries. 1.2 The impact of excellence on the performance of organisations Since its introduction, the EFQM model has been recognised as a global structure that supports organisations of any nature, sector or dimension in managing change and improving organisational performance (Fonseca, 2022). Regardless of the business sector, size or organisational structure, a company needs to have a proper management framework in place. The EFQM model can be a voluntary framework (Yousaf and Briš, 2019). This framework provides a holistic view of the company. It enables them (Yousaf and Briš, 2019) To assess where they are in their journey to excellence, helping them identify and understand their strengths and weaknesses relative to their identified vision, strategy and mission. The framework mentioned above will ensure the following: • Creating consistent terminology and ways of thinking facilitates communication within the organisation and the communication of ideas. • Preparation of the primary structure for the management system. • Bringing together existing and planned proposals while eliminating duplication and identifying gaps. Organisations that we label as excellent cannot only achieve but also sustain an excellent level of performance that meets or exceeds the expectations of all their stakeholders (Yousaf and Briš, 2019). 1.3 Examples of models of excellence The most common Business Excellence models include: • EFQM Model of the European Foundation for Quality Management – Used throughout Europe • Canadian Model of Business Excellence – Canada • Singapore Quality Award Model – Singapore • Japanese Quality Award Model – Japan • Australian Business Excellence Framework (ABEF) – Australia • Baldrige (MBNQA) – Used in more than 25 countries, including the USA and New Zealand QUALITY INNOVATION PROSPERITY 28/1 – 2024 ISSN 1338-984X (online) 110 1.4 Model EFQM The model enables three key objectives to be achieved (Mirhosseini, 2012). In addition to identifying strengths, it also highlights areas for improvement. Last but not least, the model highlights projects and programs with the help of which the organisation can start the journey to excellence. Exemplars of excellence models necessitate periodic scrutiny to ensure alignment with evolving environmental factors, market dynamics, and technological advancements, as underscored by Gunasekaran (2019). Building upon this, Dodangeh (2011) asserted that, despite the widespread utilisation of the EFQM framework in Europe and worldwide, it is imperative to adapt earlier iterations of the model to accommodate recent shifts in business paradigms and market landscapes. Consequently, the EFQM model has undergone systematic revisions to sustain its pertinence and utility. Through a collaborative endeavour encompassing EFQM constituents, previous award recipients, partners, scholars, trainers, and consultants, the version of 2013 culminated in formulating the EFQM 2020 model (Fonseca, 2022). Furthermore, the model's 2021 iteration integrated the United Nations Sustainable Development Goals (SDGs) and incorporated facets of business ethics. The re-evaluation of the EFQM model was guided by the imperative to concurrently manage change and operations while fostering more collaborative leadership and innovative ideation, reinforced by disruptive thinking. This recalibration aims to empower organisations to adapt to future exigencies. The EFQM 2020 model is anticipated to bolster organisational agility in responding to opportunities and threats, ultimately optimising performance. The EFQM 2020 model was founded on the articulation of three fundamental inquiries, denoted as follows: Firstly, "Why" encompasses an exploration of the organisation's raison d'être and its underlying purpose, delving into the rationale behind its chosen strategies, thus elucidating the overall direction. Secondly, "How" delves into the tactical execution of its purpose and strategy, delineating how the organisation intends to realise its objectives, thereby underscoring the realm of implementation. Finally, the question "What" delves into an assessment of the actual accomplishments realised to date, in tandem with a vision of what the organisation aspires to achieve in the future, emphasising the realm of results. Figure 1 shows the three critical parts of the new framework: Results, Execution and Direction. QUALITY INNOVATION PROSPERITY 28/1 – 2024 ISSN 1338-984X (online) 111 Figure 1 – The structure of the new EFQM model. Source: Adapted according to EFQM (Ghafoor, 2023; EFQM, 2020) 1.5 Existing research on the use of the EFQM model There is a debate in the professional community about whether the EFQM model should be adapted to specific industries. The EFQM model incorporates generic management terminology that has been successfully applied in organisations of different sizes and types in many countries (Doeleman, 2014). However, although thousands of European organisations have used the model to assess their organisational performance, Davies (2008) and Wongrassamee (2003) have criticised the model, arguing that having the same score in the current EFQM model for all industries is inaccurate. This was echoed by Dubey (2016), who criticised the model and suggested the adoption of new frameworks for specific types of organisations. Liu (2021), in his paper, states that the results of research on restaurant experts show that the criteria for this type of organisation are not all in line with the criteria of the current EFQM model. There will likely be a need to give different sectors different EFQM assessment models in the future. The restaurant industry is given as an example in this study. As such, the new EFQM model developed in this study can be used as a self-assessment tool to assess restaurant performance accurately whenever and wherever. In the Czech Republic, research has been conducted on the awareness of the EFQM model and its QUALITY INNOVATION PROSPERITY 28/1 – 2024 ISSN 1338-984X (online) 112 applications and benefits. The research was conducted in about 80 organisations (Nenadál, 2018). The responses of about 16% of organisations actively working with excellence models showed that the most significant barrier to its successful implementation is the lack of knowledge of the subject. According to most respondent organisations, one of the most significant benefits of excellence models is increased employee engagement and satisfaction. In addition, it also has a positive impact on customer satisfaction. It can also be said that the EFQM model in place positively impacts the economic performance of most of the organisations surveyed (Yousaf, 2022). The next part of the survey was devoted to organisations that are aware of the excellence model but, for some reason, have not implemented it in their practice. According to the survey, 64.16 % of organisations are aware of the excellence models issue. The remaining 35.84 % of organisations operating in the Czech Republic have no idea about the existence of EFQM models. The vast majority of organisations with awareness of excellence models answered that they have no intention of introducing this concept into their practice. The generally shared view was that it is not required by anyone, not even by the management, so organisations have no need to implement any of the excellence models. Time and lack of human resources are the most significant barriers to implementing excellence models. Organisations also lack management confidence that an excellence model will lead to overall performance improvement (Sternad, 2019). An interesting observation from the survey was that 10.67 % of organisations are concerned about the financial challenges associated with implementing an excellence model. This concern is countered by the fact that in no case did the organisations that already had an excellence model in place identify financial complexity as a significant complication during the implementation of the model. The last part of the survey focused on organisations without awareness of the existence of excellence models. According to almost half of the organisations surveyed, the biggest reason for the lack of awareness of excellence models is the lack of resources and publicity on the subject. Cartmell (2011) and Rostami (2022) noted a positive relationship between the use of the model in the education sector and improved financial performance such that the model balanced stakeholder expectations and improved processes. Following a similar principle, Hıdıroglu (2019) used EFQM to evaluate non-financial aspects of a company. The analyses revealed potential points of prosperity and operational weaknesses needed to make the company more efficient and effective. The use of this model confirmed that the company's performance is excellent, the company is well managed, and its performance is improving. The research showed that the company scored 593 out of 1,000 points, which is higher than the average. 1.6 EFQM and Innovations Innovation has become a critical driver of success and competitiveness in today's dynamic business environment (Ferreira, 2019). Organisations constantly try to QUALITY INNOVATION PROSPERITY 28/1 – 2024 ISSN 1338-984X (online) 113 introduce new and improved products, services, processes and strategies to keep ahead of the competition (Distanont, 2020). Amid this drive for innovation, examining how these organisational innovations impact the functioning of established frameworks of excellence, such as the EFQM model (Kafetzopoulos, 2019), is essential. The EFQM model supports aligning innovation initiatives with organisational strategies and goals. By incorporating innovation into the strategic planning process, organisations can ensure that innovation efforts are directed towards areas that support the organisation's long-term goals (Gambi, 2020). Strategic alignment ensures that innovation contributes to the overall success and sustainability of the organisation. The EFQM model recognises the importance of stakeholder engagement, including employees, customers, suppliers and society (Para-González, 2022). Organisations can gain valuable insights, feedback and ideas by involving stakeholders in innovation. The EFQM model encourages organisations to create channels for collaboration, co-creation and open communication to foster an ecosystem that supports innovation across all stakeholder groups (Lehtinen, 2019). An organisation that effectively manages innovation within the EFQM model can achieve synergies between quantity and quality (Černe, 2023). A continuous improvement and innovation culture drives the generation of more ideas and creates more opportunities to identify high-quality innovations (Rajapathirana, 2018). Feedback, collaboration and learning within the organisation can refine and improve the quality of innovative ideas, leading to the implementation of compelling and valuable innovations (Chiarini, 2020). In conclusion, the EFQM model influences product and process innovation by providing a structured framework, promoting a customer-centric approach, empowering employees, encouraging collaboration and knowledge sharing, emphasising measurement and evaluation, fostering a culture of continuous improvement, and ensuring strategic alignment. By adopting the principles of the EFQM model, organisations can effectively drive innovation and remain competitive in today's dynamic business environment (Chen, 2021). 1.7 EFQM and Industry 4.0 In the rapidly evolving environment of Industry 4.0, organisations face unprecedented challenges and opportunities brought about by digital transformation (Jayashree, 2021). To prosper in this era of disruptive technologies, organisations must adopt innovative approaches to ensure sustained excellence (Fonseca, 2021). The EFQM (European Foundation for Quality Management) model, a well-established framework for organisational excellence, has recognised the importance of Industry 4.0 and is evolving to align with its principles. (EFQM, 2020). The EFQM model serves as a guide for organisations striving for excellence. Based on a holistic approach, it includes seven criteria grouped into three categories: direction, implementation and results. QUALITY INNOVATION PROSPERITY 28/1 – 2024 ISSN 1338-984X (online) 114 Integration with Industry 4.0 is about embracing digital transformation, characterised by the convergence of technologies, including the Internet of Things (IoT), artificial intelligence (AI), robotics and data analytics. In the era of Industry 4.0, data has become a strategic asset. The EFQM model recognises the importance of digital transformation in increasing an organisation's performance and competitiveness. Furthermore, the EFQM model is consistent with decision-making based on the obtained data. Thanks to integrating Industry 4.0 principles, organisations can use technology to optimise processes, improve decision-making and support innovation (Para-González, 2022). By using the power of advanced analytics and big data, organisations can gain actionable insights, identify opportunities for improvement and increase operational efficiency. Integrating data-driven decision-making with the EFQM model enables organisations to make informed decisions and promote continuous improvement (Grufman, 2020). Industry 4.0 requires a change in leadership styles that relies on agile and adaptive leadership that can navigate complex and rapidly changing environments (Murthy, 2022). The EFQM model emphasises the role of leadership in driving organisational excellence and provides a framework for agile leadership practices (Nenadál, 2020). By connecting with Industry 4.0, leaders can orient themselves to the complexity of digital transformation, encourage experimentation, and foster a culture of innovation (Fajsi, 2022). This integration enables organisations to respond to market dynamics and promote sustainable growth (Asif, 2020). An unprecedented ability to understand and respond to customer needs is also one of the principles of Industry 4.0. The EFQM model recognises the importance of customer satisfaction and encourages organisations to be customer-centric (Geraedts, 2001). By using digital technologies, organisations can personalise products, services and experiences, increasing customer satisfaction and loyalty. Integrating Industry 4.0 principles with the EFQM model enables organisations to drive business success (Martusewicz, 2021). Industry 4.0 benefits from collaboration and partnerships because organisations recognise the value of collective intelligence and shared resources. The EFQM model emphasises the importance of partnerships and resources in achieving organisational excellence (Vuksanović, 2020). By integrating Industry 4.0 principles, organisations can promote strategic collaboration, engage in open innovation, and co-create value. This integration allows organisations to access new opportunities, share risks and strengthen their competitive advantage in the digital ecosystem (García-Fernández, 2022). 2 HYPOTHESES THAT EMERGED FROM THE PREVIOUS LITERATURE REVIEW Based on the previous literature review, the following six hypotheses were established: QUALITY INNOVATION PROSPERITY 28/1 – 2024 ISSN 1338-984X (online) 115 H1: Organisations with more than 250 employees fulfil the requirements of the EFQM model more than organisations with fewer employees. H2: Key performance results increase with the degree of fulfilment of the assumptions of the EFQM model. H3: Employee satisfaction increases with the degree of fulfilment of the assumptions of the EFQM model. H4: Customer satisfaction increases with the degree of fulfilment of the assumptions of the EFQM model. H5: Social results increase with the degree of fulfilment of the assumptions of the EFQM model. H6: Overall results increase with the degree of fulfilment of the assumptions of the EFQM model 3 METHODOLOGY The presented study aimed to evaluate the connections between the degree of fulfilment of the requirements of the EFQM model and the critical results of the organisation, social responsibility, employee satisfaction and customer satisfaction. The dataset was acquired via an internet-based survey hosted on Google Forms between November 2022 and March 2023. The survey targeted managerial personnel within manufacturing entities situated within the geographical boundaries of the Czech Republic. A total of 103 responses were obtained, of which 15 were discarded due to failure to meet criteria such as system errors, incomplete data, and irrelevant responses. Thus, 88 participants were included in the resulting research sample. These were 9.09% of micro companies, 20.45% of small companies, 18.18% of medium-sized companies and 52.27% of large companies. A quantitative approach was used in data processing. Current studies and articles write about different ways to manage organisations and solve various problems. However, not enough has been explored about how effective the EFQM model is for managing organisations. The main question we wanted to answer is how much the ideas from the EFQM model affect manufacturing organisations of different sizes or how well they contribute to outcomes in defined areas. We looked at existing research and compared different management methods to find answers. Then, we surveyed 88 organisations in the Czech Republic to collect information. 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Total Quality Management & Business Excellence, [e-journal] 33(13-14), pp.1472-1488. https://doi.org/10.1080/14783363.2021.1972800. Wongrassamee, S., Simmons, J.E.L. and Gardiner, P.D., 2003. Performance measurement tools: the Balanced Scorecard and the EFQM Excellence Model. Measuring Business Excellence, [e-journal] 7(1), pp.14-29. https://doi.org/10.1108/13683040310466690. ABOUT AUTHORS Petr BrisORCID 0000-0001-7027-1648 (P.B.) – Assoc. Prof., Department of Industrial Engineering and Information Systems, Faculty of Management and Economics, Tomas Bata University in Zlín, Zlín, Czech Republic, e-mail: [email protected]. Tomas UrbanekORCID 0000-0002-6307-2824 (T.U.) – Senior Lecturer, Department of Statistics and Quantitative Methods, Faculty of Management and Economics, Tomas Bata University in Zlín, Zlín, Czech Republic, e-mail: turban[email protected]. AUTHOR CONTRIBUTIONS Conceptualisation, P.B.; Methodology, P.B.; Investigation, P.B.; Data curation, T.U.; Original draft preparation, P.B.; Review and editing, P.B.; Supervision, P.B. and T.U.; Project administration, P.B. CONFLICTS OF INTEREST The authors declare no conflict of interest. The funders had no role in the design of the study; in the collection, analyses, or interpretation of data; in the writing of the manuscript, or in the decision to publish the results. © 2024 by the authors. Submitted for possible open-access publication under the terms and conditions of the Creative Commons Attribution (CC-BY) license (http://creativecommons.org/licenses/by/4.0/).