Impact of adopting a PDCA methodology on performance of companies – experience from companies in India

Abstract

Purpose The purpose of this study is to find out the reasons why companies achieve different results in following different business excellence (BE) models. This has been done using a case study method, selecting to illustrate the actions taken and the results achieved by two role model companies, one following the Malcolm Baldrige model (MBM) and the other following the European Foundation for Quality Management (EFQM) model. Design/methodology/approach The research design adopted is as follows: examine the literature of Total Quality Management (TQM) and BE, with specific reference to practices and happenings in Indian industry, to identify the key themes; analyse the research questions RQ1and RQ2 as mentioned above, using the learnings from the literature survey in a qualitative way. The analysis is done using chronological developments in TQM, BE and linking them with the happenings in Indian industry in a cause–effect way; develop a “source to sink” framework to track the various actions implemented by companies to drive BE in their quest to performance excellence, and to analyse the root causes for the success of the actions; illustrate the conclusions through two case studies, of two different companies from India, on the varied results achieved from following two different BE models, one, the MBM by Tata Steel, and, two, the EFQM by BHEL, both award-winning companies, for instilling “excellence” in performance; and develop a model to correlate the observations from the companies using two constructs, identifying latent variables and actions that have been taken to address the outcomes of the variables. Findings The findings show that the actions taken by the companies are different, under the two models. The reasons for these different actions have been described, and the impact of these on the latent variables and outcomes have been tracked. There are six reasons why the results are different. Research limitations/implications The study has highlighted the efforts by two role model companies. These are “comparisons of the best in the business” in their respective industries. However, one needs more studies to verify and establish whether the six reasons described are the ones which are most impactful. More companies need to be studied, and, based on the outcomes, one can establish the “best choice of the BE model” for Indian companies. Practical implications The results of the study show that using different BE models can affect the results. A non-optimal choice may lead to longer time and lower results. Social implications Excellent companies are sustainable, which means that they eliminate waste, operate in an environmentally friendly manner and address social issues. Speedily achieving excellence can lead to faster use of sustainable operations. Originality/value The work is original in the following ways: data collection through assessment teams; experience through personal engagement; identifying six reasons and two constructs which could lead to different results.