EFQM Model Economics

EFQM Model

A lot has been written on the EFQM Excellence Model generally and its application to the field of total quality management. This chapter is founded on the information search and review of literature that was conducted in February and March 2013. It largely investigates the EFQM model with respect to the adjustments it has undergone over the years.

Steered by the three research questions in this research, the literature review then explores the history of the EFQM Excellence Model, and the different adjustments the model has undergone as well. The chapter concludes with the current position the EFQM Excellence Model.

The EFQM Excellence Model

The EFQM- European Foundation for Quality Management was established in 1988 with the aim of assisting European firms to become competitive in the global market. The first choices of this establishment were to follow the example of the American MBNQA through forming the European quality prize (Conti, 2007). The mainstays of these prizes are extremely alike because all of them are founded on the philosophy of total quality management. On the other hand, there are a number of variations between nations. In accordance with Tan (2002), in developing nations these prizes provide little significance to factors like leadership and social responsibility. In Europe, the EFQM is more relevant to human resource management as well as social impact.

Successive forms of the EFQM Excellence Model have been created. The key reason for the adjustments is to be corresponding to the state of business. An evident illustration is the development of the MBNQA from a simple system of quality assurance to a system of quality management (Tan, 2002). The present type of the EFQM model dates from 2010. On the other hand, there is still not enough capability to evaluate this new type empirically. As a result of this, this paper will focus on the application of the EFQM model from 2003 -2012.

The EFQM model of 2003 varied in significant ways from the past one from the time it integrated a few concepts, like knowledge and information management, to draw up emphasis on process management and consumer orientation and to highlight the enhancement cycle (RADAR) and, in general, to make application easier in all sorts of businesses, private or public, multinationals or medium enterprises, or even in the non-profit organisations (EFQM 2003).

The EFQM Excellence Model supposes that, for a firm to be effective, whatever its industry, structure, size and so on, it ought to have a decent system of management. In light of this, the EFQM model is an instrument that may be applied to structure the system of management of a firm, through self-evaluation.

Self-assessment comprises a consistent assessment of activities and results of a firm with the excellence model (Calvo-Mora, Leal & Roldán, 2006) and it plays a part in identifying areas of improvement and strong points that as a result could facilitate to develop enhancement plans that ought to be incorporated in the strategic plans of an organisation (Jacobs & Suckling, 2007). In general, the scientific literature finds a positive correlation between company performance and self-assessment (Ahmed et al., 2003).

The EFQM Excellence Model is a flexible framework founded on nine principles. Out of the nine, five are Enablers whereas four are Results. The Enablers focus on what a firm, the Results focus on what a firm accomplishes. Enablers lead to Results (Mavroidis, Toliopoulou & Agoritsas, 2007). The EFQM model, realising there are a lot of strategies to attain maintainable excellence in all performance elements is founded on the principle that outstanding results with regard to customers, performance, and society are attained by means of resources, partnerships and processes. With reference to figure 1, the arrows highlight the dynamic attribute of the model. They indicate learning and innovation helping to better enablers that as a result cause advanced outcomes (Mohebi, 2002). This structure proposes the presence of correlations amid enablers and results and the actuality that being effective in a remote area is not satisfactory to attain excellence (Ehrlich, 2006).

EFQM Model Dissertation
EFQM Model Dissertation

Brief Summary of the Criteria Under the ‘Enablers’ group of the EFQM Model

Leadership- It is anticipated from the higher managers of leading firms that they would create systems of management in their firms and would struggle for their appropriate implementation and additional advancement (Collier & Bienstock, 2006). They would take the workers of the firm in assurance and would directly intermingle with their clients, suppliers and general public. These heads ought to be instrumental in making organisational transformations as and when requisite. They must come out as role models for the workers of their firm.

Policy and Strategy- Leading firms should have a long-standing strategic idea bearing in mind the anticipations of its different stakeholders (Ciavolino & Dahlgaard, 2009). These proposals must be evaluated constantly for appropriate implementation and upgraded obligatory. These plans must be founded on tracking the outer environment and monitoring the strong points of the organisation regularly.

People- It is desirable that firm manage their human resource obligations effectually by recognizing the capabilities of their employees and further advancing these to develop full advantage (Collier & Bienstock, 2006). There ought to be appropriate mediums of communication between senior managers and the staff members to identify their problems and prospects. The worker’s outstanding performance ought to be acknowledged and rewarded.

Partnerships and Resources- External allies, like suppliers, ought to be included in developing the coordination needs for more fulfillment of the buyers. The firm should assist these associates in their issues and form a synergy among them (Dahlgaard-Park, 2008). Outstanding firms ought to have well demarcated systems for dealing with their buildings, finances, materials and equipment. Old fashioned technology ought to be recognized in their operation and substituted with modern technology whenever the need arises. Appropriate application of information technology ought to be made and it must be guaranteed implied knowledge of the firm is transformed into systems of knowledge management.

Processes- Different processes must be well drawn and documented. The process ought to be analyzed for additional improvement constantly (Dahlgaard-Park, 2008). The firm must design and create its services and products on the basis of the anticipations of the clients. Long-standing relationships ought to be established with the consumers.

Brief Summary of the Criteria Under the ‘Enablers’ group of the EFQM Model

Customer’s results- How does the client view the firm? The firm is anticipated to develop processes to have knowledge of the consumer’s views of the firm (Go´mez-Go´mez, Martı´nez-Costa & Martı´nez-Lorente, 2011). People’s results- What are the views of the staff members of the firm regarding the firm? Therefore, systems must be developed to understand, monitor, forecast, and better the views of the staff members. Society’s results- What has the firm accomplished for the general public? What does the society notice regarding the firm? Therefore, systems have to be developed to understand, monitor, forecast, and better the views of the general public (Rooghani, M., & M. Homayonfar, (2005)). Key performance results- Key outcomes of performance are the results as intended by the firm. The results may be financial or non-financial. What the firm is accomplishing with regard to its intended performance is to be analysed and monitored.

According to Adebanjo (2001), the EFQM model integrates the principles of quality management mainly leaving the issues of quality management to individual companies. This implies that the aspect of quality assurance, related largely to the control of the production process, are presumed and organisations will possibly rely on other systems like six sigma, or ISO 9000 to concentrate in those features.

The Evolution of the EFQM Excellence Model

The EFQM Excellence Model is run by the European Foundation for Quality Management (EFQM) (Iñaki, Landín & Fa, 2006). This is a nonprofitmaking body integrated in Brussels (McCarthy & Greatbanks, 2006). Its associates are firms from industry and service in addition to institutions of higher education, research organizations and other institutions from academia. Its key purpose is to pass on the concept of Excellence across Europe (Vernero et al., 2007). In this context, the EFQM offers a range of services from information material and training on self-assessment to measuring support. They are all enhancing the fundamental business of supporting and running the European Quality Award.

The basic EFQM Excellence Model was initially established co-operatively by specialists and researchers and printed in 1991 (Klefsjo¨, Bergquist and Garvare, 2008). Ever since, it has been constantly revised and upgraded. A key amendment occured in 1999. It was acknowledged that collaboration with external allies or networking in addition to invention and learning had occurred in the interim as vital encounters to organizational performance. The objective was to integrate both features in the novel model. In addition, model management, applicability, and usability must be enhanced. As an initial step, the EFQM distributed a draft for a novel model in April 1998 (EFQM 1999). Conversely, its graphic arrangement revealed the preferred learning sequence. However, two new components were incorporated: “Partnerships”, as an enabler, defined the firm’s astrategy to cope or work together with external partners; “Partners” denoted the relevant measures of performance. In addition, the subcriteria lost their previous objective of offering comprehensive requirements to every component. As an alternative, they now termed as the factors approach, positioning, valuation, and assessment. These had initially been part of the “Blue Card”, that is, the scopes for assessment. The subcriteria of the old model were shifted to the parts to tackle. The latter alterations triggered significant criticism. Firms already using the model for self-valuation objectives would have had to re-educate all their employees.

As (Jelodar, 2006)a result, they strongly supported an evolutionary strategy to model improvement as an alternative . Additional issues were witnessed in the actuality that all model matters were shifted from the degree of subcriteria to the parts to tackle. The latter are not obligatory however, potrayed as an classic guidance for firms to comprehend the model. As a result, scientists and practitioners were frightened the good judgment concerning the subjects of the model could become disoriented (Javidi, 2006). On the other hand, the novel model draft provided some substantial developments largely referring to the dimensions of assessment. These later created the RADAR-Chart. Following an intense talk with its associates across Europe, the EFQM chose to pull out the draft of the new model and presented a second suggestion which was a lot more in agreement with the earlier version (EFQM, 1999). However, it considered the aforementioned factors of invention and learning in addition to external associations which are nowadays both placed more to the front. Conversely, the original level structure with subcriteria, elements, and sections to tackle was maintained. This made it easier for firms to adjust and carry on their internal processes of self-valuation.

The Changes Incorporated in Version 2010

According to the 3 dimensional trait of the EFQM Model, this section elucidates the adjustments in each of these scopes, being: The Fundamental Concepts; The set of eight concepts was retained per se, however, all have a transformed and more vibrant title whereas the content for each was developed and is nowadays presented in a more organized manner (Tarí, 2006); The Model itself with the 9 boxes or criteria; Moreover, here the 5 enabler and 4 result benchmarks boxes were retained per se, however, have now  an improved naming, more uniformity inside, less similarity and were upgraded in content. Similarly, the weighting is now easier and more stable (Jacobs & Suckling, 2007). The RADAR factors for Results and Enablers. Here an enormous transformation was made for the ‘scope’ elements employed to evaluate the performance of the outcomes or ‘footprint’ of an firm. The set of aspects for evaluating strategies in the enabler criteria were polished with traits like effectiveness, creativity and suitability being incorporated into the popular trio of ‘approach’, ‘deployment’ and ‘assessment and review’(Shertan, 2008).

Above and beyond these key adjustments, also the weighting of the benchmarks was revised and streamlined, while retaining the ‘equal’ value amid the capability of a firm using the 5 enabler benchmarks and the performance it conveys for all stakeholders in the 4 result benchmarks. Each retains 50-percent of the total (Davies, Douglas & Douglas, 2007).

Changes in the Fundamental Concepts

The key principle of what these 8 models signify is established in this form of the Model,

their function was strengthened as in former times the possible value of this aspect of the Model has frequently been undervalued (Homayonfar, 2008).  This is apparent from the process of design employed for this form of the Model – this method employed the Fundamental Concepts as the base and indite for the rest. It was now the first time that a entirely reliable and direct connection was created amid each of the eight notions and each of the 32 benchmark areas, whereas keeping these 2 outlooks on Excellence separately.

Although the amount of concepts stays at eight and the naming looks relatively identical, a comprehensive interpretation of the description for each concept demonstrates the content has been improved considerably and signifies extremely well the elements we can discover back in firms that are worthy our admiration (Delghavi, 2007).   What did not transform is that the fundamental concepts are a exceptional and influential way to ‘define’ the position of being outstanding in a broad way.  Furthermore, the 8 concepts stay numberless; they have no sequence order, weight or significance.  Which of these 8 are the most vital to follow relies on the present state and particular environment a firm exists in and what it aims to turn into in the future, its determination. What did transform however considerably is the manner these 8 concepts are nowadays  visually incorporated with the two other elements, the eight notions are now visibly placed as the electrons  circling around a core with RADAR and the 9 benchmarks (or if one prefer it more – Satellites circling around the Globe) (EFQM 2010).

 

Table 1 -Fundamental Concepts

2003 Version 2010 Version

Key shift in content

Results orientation Achieving Balanced Results Concentration is presently on developing the key set of outcomes requisite to observe development against the  mission, vision,  and strategy, allowing leaders to formulate effectual and appropriate decisions.
Customer Focus Adding Value

For Customers Concentration is presently on plainly defining and communicating the value proposition and vigorously  involving clients in the service and product  design processes. Leadership and constancy of purpose leading with vision, inspiration & Integrity. The concept is at present more  dynamic, concentrating on the capability of leaders to adjust, react and  gain the dedication of all stakeholders to guarantee the ongoing success of the firm. Management by processes and facts managing by Processes The concentration is at present on how the processes are intended to convey the strategy, with end to end running past the “classic”  limits of a company. People Development and Involvement Succeeding through People The Concentration is presently on forming a balance amid the tactical needs of the firm and the personal prospects and objectives of the people to achieve their obligation and involvements. Continuous Learning, Innovation and Improvement Nurturing Creativity & Innovation. The concept presently identifies the need to improve and relate with networks and involving all stakeholders as possible sources of originality and invention. Partnership Development Building Partnerships. The concept has been extended to include partnerships  beyond the supply chain and recognizes that these should be based on sustainable mutual benefits to succeed. Corporate Social Responsibility. Taking Responsibility for a Sustainable Future. The concept presently centers on  vigorously taking responsibility for the business’s behavior and activities and handling its effect on the broader community.

The Current Version of the EFQM Excellence Model

What transformed in the way the Model functions with results?

In this section, let us evaluate what has transformed in the Model to promote a better evaluation of the performance of a company. In this segment we define first the modifications in the 4 generic benchmarks of results a firm realizes, and then how the RADAR aspects were upgraded to allow better Feedback, Analysis, Learning and Action (Andersen, Lawrie & Shulver, 2003).

What transformed in the results benchmarks?

For the 3 stakeholders being the people, customers,  and the public a firm is working with

and for, the identifying and the ‘stereo’ norm of having on one hand insights and on the other

hand indicators of performance stay the same (Bencsik & Nagy, 2007). On the other hand, the guidance and the the definition of which actualities and figures to concentrate on were put into precisely the same structure and were enhanced. A clear change was formed from a list of illustrations of processes to a more generic depiction of the form of or the areas of performance to apply in signifying outstandingor excellent levels of performance (Civcisa, 2007).

For the Result benchmarks 6, 7 and 8 a sharper dissimilarity between the observation (a) and pointer (b) elements of performance is now developed. This strengthens that outstanding performance can simply be established or attained of both the  efficiency and effectiveness are attained (Acur and Englyst, 2006). Each of the b) principle areas deals with the effectiveness side, with performance pointers that display how much is achieved, whereas each a) side deals with the efficiency part or performed all this action certainly ‘created a difference’.

As an illustration for consumer outcomes on the b) side a firm could indicate how fit and how much negative and positive response was managed, and how quick, whereas on the a) side the effect of this response on the definite insights by Clients is perceptible (Rusjan, 2005). Without taking part in an academic paper here on this subject, it is currently evident in the criteria that efficiency data is placed in 6a, 7a and 8a, whereas effectiveness data is under 6b, 7b and 8b (Pouyan &. Karimanpoor, 2007). As a last observation on this subject let’s remark both a) and b) can have slugish or leading pointers, this version of the Model does not employ this element to assign a result in a) or b).  On the other hand, for the  Key Results benchmark (9) a noteworthy transformation was made in the definition and identification of the outcomes the shareholders or proprietors of a firm anticipate to be attained. It now basically refers to ‘attaining what is intended for in the approach’ (Gomez-Gomez, Martınez-Costa & Martınez-Lorente, 2011). Certainly, also for this ‘bottom line’ principle the description and direction for appropriate facts and figures was improved like it was for principle 6, 7 and 8.

Another could be less noticeable transformation at first sight is the overview now of the notion of giving priority to key outcomes. In the description for every of the results principles a particular part is committed to establish the relative significance or weight for every of the sets of data employed to present and comprehend one of the aspects of the performance, which connects into the necessity to make contrasts and determine goals for these ‘Key Results’. The virtual weighting of principles, these transformed and gets both Consumer and Key outcomes at the same significance (150 pts each), and Individuals and The public both at 100 pts. For principle 9, and currently also principle 8 there is a 50/50-percent share between the principle parts a) and b), whereas for the people and customer principles 6 and 6 the 75/25 share stays.

Changes affecting the way we look at specific RESULTS of an organisation

Here amongst the vital transformations of the 2010 version of the  EFQM Model was created by transforming the order and improving the aspects of RADAR relevant to each of the results principles.  For the study (such as during an evaluation for instance) of the performance a attains achieves in a particular field still  two key elements are employed, however, these  transformed in order. By placing the ‘relevance and usability’ of the outcomes first, and the popular performance elements of ‘targets, ‘trends’, ‘causes’ and ‘comparisons’ add, a balance between the examination of set of information itself and what may be perceived as patterns in this information has been recognized clearly and resolutely now (Go´mez-Go´mez, Martı´nez-Costa & Martı´nez-Lorente, 2011).

Foremost the analysis in agreement with the approach of the ‘scope & relevance’, ‘integrity’ and ‘segmentation’ of the information employed to comprehend and show the outcomes for a specific principle (6, 7, 8 or 9) is performed. Just when a vivid picture of what we employed to call ‘scope’ is decided upon, the level of performance may be evaluated.  Together then these 2 aspects help in measuring how strong the performance is or where noteworthy prospective to advance can be realized.The adjustments to the results segment of the RADAR imply that those measuring need to form a judgement, based on the data they are given, with regard to: The percentage of the outcomes being applicable, segmented and integer  for ‘Relevance and Usability’; and if the performance is  probable to be maintained into the future, founded on  evaluating the tendencies and targets, contrasts with other firms, the understanding of the “reason & effect” connections, modifications in the operating setting, etc.

What transformed in the way the Model functions with enablers?

In general, the structuring into 5 enabler principles was kept as an easy way to divide into generally approved groups of tactics a firm can transform when targeting to advance its size and future performance.  Whereas on the well-known 9 boxed picture all main words were kept (with the exclusion of ‘Policy’), the invitation from ‘Processes’ into  ‘Procedures, Services’ and conformityhighlights the worldwide personality of the EFOM Model (Go´mez-Go´mez, Martı´nez-Costa & Martı´nez-Lorente, 2011).  It is relevant for any form of industry, size or development.  In addition, it stops some explanations of the principles that ‘forget’ the center of any firm  that lies into the plan and provision of their collection of services, or products , the contribution for Customers employed to fulfil their task.

Another could be less apparent transformation at first sight is the extension of the Response arrow underneath the 9 boxes with  ‘Creativity’. In addition, the ‘Learning’ and ‘Innovation’ as the preferred outcome of comprehending how enablers incorporate with outcomes and vice versa, this highlights inventiveness as an factor element influencing accomplishment, it illustrates the dynamic attribute of the EFQM Model.

What changed in the enabler criteria?

In agreement, 24 benchmark araes are still employed to structure an organized and comprehensive outlook on the dimensions and value of all the methodologies a fim has. There are 24 areas a firm may transform in the light of a continued and improved future performance.  Such as in the 2003 version, every benchmark has 5 criterion areas, apart from criterion 2 on Strategy which has 4 areas. Moreover the alterations shortened below per benchmark part, numerous attention was offered in this revision to bring the amount of management points to a standard amid 5 and 6. This way every point defines now more evidently  a particular subject that may produce valuable topics for discussion. Furthermore, a rationality analysis on these management points to define just realistic and modern practices of management was performed, giving rise to a general decrease (from >160 to 132) and a more concentrated content (Go´mez-Go´mez, Martı´nez-Costa & Martı´nez-Lorente, 2011). Even though the old expression ‘may include’ is currently methodically substituted by ‘Actually, Excellent firms:’, these management points must NOT be regarded as a worksheet or a list of compulsory practices or tactics, they act as a generic list of practices from actual life circumstances in a way to describe a particular criterion-part.  Perhaps the most influential incorporation was attained by re-cycling a number of or all of the shot points from the Fundamental Concepts into every benchmark field (Gomez-Gomez, Martınez-Costa & Martınez-Lorente, 2011).

Changes affecting the way we look at a specific enabler of an organisation

Even though the modifications here are less noticeable at first sight matched to the ones for the results aspects of RADAR, they as well demand cautious attention when adjusting to the 2010 version. Although for instance the term ‘review’ is substituted by the name ‘refine’, as well what is being ‘Assessed & Refined’ is currently defined more evidently in the novel picture. In general, one may view each of the RADAR letters have this form of development; this is mirrored as well in the novel picture for RADAR that well demonstrates now the ‘whole circle’ of the 4 areas of the RADAR rationality (Gomez-Gomez, Martınez-Costa & Martınez-Lorente, 2011). The 3 aspects and how these are made up of the 7 qualities remains mainly similar as a structure and the technique to come to an agreement of either a recording level or to enable an intensive exchange of insights for one of the 24 enabler benchmarks. On the other hand, a number of trivial changes in wording may have a substantial adjustment in the examination of an enabler, such as the ‘timeliness’ (or speed) of positioning.In conclusion, the medium for scoring objective is now more constantly employing the standard of ‘evidence’ to arrive at an agreement for each of the aspects and/or the subsection of qualities.  As a good description in the appendix is not yet obtainable, this generates a need for more management for the applied meaning of ‘evidence’, this for instance during a actual external evaluation.

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