One indicator of the growing recognition of management as a field of great importance has been the proliferation in the late twentieth century of prizes that various governments award their most outstanding organizations. Such official recognition of management practice, quality, and contribution to business reflects the belief at the highest levels that good management practice can be learned and nurtured through promoting awareness of best practices and innovative techniques.
The five most prestigious management awards are Japan's Deming Prizes, the United States' Malcolm Baldrige National Award, the European Quality Awards, the Canada Awards for Excellence, and the AKAO Prize.
The first widely esteemed management award, Japan's Deming Prize, was only established in 1950. For nearly three decades, the Deming Prize stood essentially alone as a major prize for business management practice.
With the enormous success of Japanese industry in the late twentieth century, interest in Japanese business practices grew, including Japan's recognition of business successes. By the 1980s, Japan's successes in competing worldwide were admired worldwide and Japanese business began to find emulators. Subsequently, the United States and Europe set up their own equivalents to the Deming Prize to honor their own businesses. The United States established the Malcolm Baldrige National Quality Award in 1989, and soon after the 12 nations of the European Community (now the European Union) jointly created the European Quality Awards in 1990, awarding the first recipient in 1992.
To date, only one company—Xerox—has won all three major quality awards. Xerox was one of the first non-Japanese companies to win the Deming Application Prize (in 1980). Xerox then won the Baldrige Award in 1989, and (in the first year the prize was given out) a European Quality Award in 1992.
The Japanese Union of Scientists and Engineers (JUSE) created the first major management award, the Deming Prize, to recognize "contributions to quality and dependability of product." The award is still generally held as the most prestigious of all management awards, and is generally recognized as the most highly esteemed business award offered in Japan. The JUSE instituted the award in 1950, and began awarding the prize annually in 1951.
Interestingly, this most significant of Japan's business awards honors an American, Dr. W. Edwards Deming. Many Japanese government and academic leaders credit Deming with revolutionizing Japanese postwar industry through his advocacy in Japan of quality control and managerial efficiency.
The JUSE's Deming Prize Committee administers two types of awards honoring Deming: the Deming Prize and the Deming Application Prize. The Deming Prize is given to a person or group of people who have advanced the practice and furthered awareness of TQC. The Deming Application Prize, in turn, goes only to companies based on successes attributable to implementing TQC.
Beginning in 1970, the JUSE began to offer the Japan Quality Control Medal. Only those who have formerly won a Deming Application Prize five years or more earlier are eligible for the Quality Control Medal. The medal is intended to upgrade the quality control of former prize recipients. To this end, the criteria for the Quality Control Medal remain the same as the Deming Application Prize and the Medal is awarded at the same time as the other Deming Prize awards. The current aim of the examination is to find out how well a company implements total quality control by assessing its quality-assurance policies and activities, and by measuring the company's results in the areas of productivity improvement, quality improvement, cost reduction, expanded sales, and increased profits.
Non-Japanese companies were allowed to apply for and receive the Deming Prize starting in 1984; the categories that remain unavailable to non-Japanese companies include the individual prize and the factory award.
The U.S. Congress created the Malcolm Baldrige National Quality Award in 1987 largely as a counterpart to Japan's Deming Prize. The specific goal of the Baldrige Award is to heighten U.S. awareness of TQM and to formally recognize successful quality management systems. The award is named for the U.S. Secretary of Commerce from 1981 to 1987. Baldrige was actually helping in drafting the creation of the award at the time of his death in a rodeo accident.
The U.S. Commerce Department's National Institute of Standards and Technology (NIST) administers the Baldrige Award. The NIST presents up to two awards each in three divisions: manufacturing, service, and small business. The NIST gave its first awards in 1988.
The Baldrige Award judges results companies have shown through management practices in seven specific areas. These are (1) leadership, (2) information and analysis, (3) strategic planning, (4) human resource focus, (5) process management, (6) business results and company performance, and (7) customer focus and satisfaction.
The Baldrige Award is open to any for-profit business in the United States. Like the Deming Prize, the award may be won by a foreign-owned company, but unlike the Deming Prize only those foreign-owned companies with more than 50 percent of their employees or physical assets located in the United States are eligible.
In addition to its more parochial focus, the Baldrige differs from the Deming Prize in three significant ways. First, the Baldrige Award emphasizes customer perceptions and the bottom line emphasizing clear-cut results through its seven specific areas. This makes the Baldrige more objective-oriented than the more systemic focus of the Deming Prize.
Second, while the NIST is an independent agency, the Baldrige relies on a wide array of professional groups to decide on its winners, while from its inception the Deming Prize has relied solely on the JUSE. The Baldrige is consequently able to draw on a wider range of expertise among its judges than the Deming Prize, but may be more open to charges of conflict of interest among the reviewers.
Finally, the Baldrige Award has a stated objective of sharing information while the Deming Prize does not. Consequently, the Baldrige is more likely to make known to other companies how the winners have achieved their success so that others may emulate them; the Deming Prize is more proprietary, allowing winners more readily to keep company secrets if they wish, thus widening the field of companies which may wish to participate but simultaneously limiting the benefit to other companies and to the dissemination of TQM principles in general.
By 1990, the European Community (now the European Union) felt that it had fallen behind Japan and the United States in the recognition of quality management. In that year, the European Foundation for Quality Management, with support from the European Organization for Quality and the European Commission, set about to create its own Deming or Baldrige equivalent, The European Quality Awards. The first winners were announced in October 1992.
The initial awards favored larger, for-profit companies, so by 1996 the European Commission began to give out additional awards for public sector organizations and for small- to mid-sized enterprises. The awards also have a category for operational units of companies, such as factories, research units, or assembly...