Assessing Quality Systems For Business Excellence

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Entering into today 21st century knowledge era defined by globalisation, rapid technology advancement, rising business complexity, faster flow of information and intense global competition (Baets, 2005), innovative practices have became today's key driver of growth (Ruggles and Little, 1997) and survival strategy (Drucker, 1999). Managing innovation substantially change the way management is worked and alters organisational structure in order to enhance organisational performance (Hamel and Breen, 2007). However, most companies are still operating under various basic management policies, techniques and practices such as hierarchies practices that were used to governed the manufacturing organisations in centuries ago (Brusman, n.d.; Heindl, 2008; Zuzga, n.d.; Hamel and Breen, 2007). Even though improvement like structure flattening is done, in fact, hierarchies practices still exist (Brusman, n.d.; Heindl, 2008; Zuzga, n.d.; Hamel and Breen, 2007). Thus, leading to the argument: "although business practices and their various contexts may change, basic management policies, techniques and practices will not."

To discuss the argument above, explanations below will address why organisations resist to change their basic management practices, what practices that organisations need to change, follow by recommendations on how to overcome resistance to change:


Innovation, by its nature requires change regardless of how radical the change or how different it may seem to the organisation (Coffman, n.d.). However, change is very difficult and organisations often insist to maintain the status quo even when the pressure to change is intense (Belasco and Stayer, 1994; Zaltman and Duncan, 1977). Below are some of resistance that fenced management to change their basic practices:

Organisation Complacency of Current Performance (Bao, 2009)

Satisfaction with current performance promotes duplication of existing management behaviour and mitigate organisation's motivation to change (Bao, 2009). In this reality, historical basic management success is seen as prove of desired result of what has been done, thus leading to management resistance (Gutman, 1988).

Lack of Employees' Trust (Smit et al., 2007)

According to Oreg (2006), trust in management involved employees' believe in management ability to guide effective change and their feelings that they could rely on management to do the best for the organisation and its members. The lack of trust will result in frustration, anger and anxiety to resist against change initiative.

Threatened self-interest (Smit et al., 2007)

When management think that change will cause them to lose something of value, they will resist to change (Smit et al., 2007). The lost of power over organisational resources, prestige and respect from the subordinates resist management from change (Smit et al., 2007).

However, without revamping management, organisations will find themselves stuck in an outdated practices and bureaucracies that restrict flexibility, innovation and demotivate employees (Brusman, n.d.). Therefore, management will need to change their way of managing when business practices and their various contexts change towards the need to innovate.


To manage innovation, organisations need to embrace Learning Organisation and Knowledge Management - a targeted expertise designed to affect innovation (Gupta and McDaniel, 2002) by altering their basic management practices. Below are some of the management policies, techniques and practices that need to be changed:

Communication Practices

Management innovation require a radical changes in basic management's communication practices. Traditionally, hierarchical organisations' communication pathways are mainly vertically and top-down from the decision makers (Hamel and Breen, 2007) for the purpose of standardising and affecting employees behaviours, appraise and monitor performance in order to correct undesirable deviations from standard (Ouchi, 1980; Daft, 2001). It inhibits horizontal knowledge transfer and ignores the potential of ordinary workers knowledge for innovation development (Price, 2007; Walczak, 2005; Klenke, 2006; Pearce and Conger, 2003). Therefore, today, organisations need to embrace learning organisations that have flat structure to allow cross-departmental, continuous company wide communication (Walczak, 2005). With the use of knowledge management system, ongoing feedback, information and ideas from horizontally and vertically within the organisation structure are brought together, thus bringing disparate groups into integrative, continuous learning cycle (Walczak, 2005; Miller, 2003; Petrides, 2004). It is through continuous learning and integrating of different knowledge, organisational innovation and creative imitation occur (Kim and Lee, 2006). According to a research, under a learning organisation and knowledge management system, 93.5% of respondents agree that new ideas are cultivated (Oliver, 2008). A very good innovative organisation example is Google. The company has invested a lot of capital in building a high-end social networked organisation to allow all employees to share ideas, to gather and to build constituencies. To team up all the independent knowledge teams, "Mics List" (an open, detailed organisation ideas and comments access system), "MOMA" (Google's intranet system that allow teams to communicate their progress, garner feedback and solicit help), "Snippers" (a site for internal sharing of accomplishments) and "TGIE" (a weekly performance evaluation meeting programme) are held (Hamel and Breen, 2007). Through this initiatives, it fosters employees' trust, internal transparency and sharing of individuals wisdoms to drive organisational innovation (Politis, 2003). Therefore, a flat structure with cross-departmental, continuous company wide communication practices are crucial important to keep fresh idea flowing across the organisations to achieve innovation.

Customer Value Creation Techniques

Management innovation also include the change in basic customer value creation techniques (Hamel and Breen, 2007). Traditionally, management focused on internal value creation activities whereby quality is totally internally defined (Lean Manufacturing Concepts, 2008; von Hippel, 1997). Products or services offered were assumed to be good quality if organisation has done best in production (Lean Manufacturing Concepts, 2008) and at a lowest cost (Neely, Gregory and Platts, 2005). However, internal value creation practices are not customer focus and do not align with criterion part 4a of EFQM Excellence model which stated that external partnerships is essential to maximise customers value through innovation (Red Thread, 2009). Therefore, today, organisations need to embrace learning organisations that have integrated value creation networks with their suppliers, distributors, customers and other partners across and out of their supply chains, distribution channels and information networks (Lesser, 2007). Using knowledge management tools such as electronic mail, groupware and internet , it allows firms to constantly exchange and learn essential information and knowledge with external partners (Bennett and Gabriel, 1999; Spekman and Kamauff, 1998). Through close relationships and synergy development of new knowledge, it increase organisational superior innovation capability and ultimately higher innovation performance and customer value (Prajogo, Power and Sohal, 2004). For instance, companies such as Nike and Apple come together from different industries, learn and gather their knowledge to co-create a new product called Nike+ (Buytendijk et al., 2008). Another example is Lego which has created an internet (knowledge management tool) based Lego Factory to engage many customers together to co-create new Mindstorms robots (Daft, Willmott and Murphy, 2010). As the company and customers come together and interact, it provides an opportunity for the company to learn and capture customers knowledge as well as to provide a higher value to the customers through the quality of personalised experiences and personalised innovation (Lawer, 2006). Therefore, managing innovation require a firm to learn and gather knowledge from the external partners in order to create higher customer value.

Participative Policy: Leadership

Managing innovation requires the change in basic management's participative policy (Smith, 2001). Traditionally, leaders are viewed as the high position people who set the guidance, make important decisions and motivate the subordinates as deriving from deeply individualistic and non-systemic worldview (Gupta, 2008). Traditional view of leadership disregard employees' personal visions, ability and power to master by restricting their participation in decision making (Gupta, 2008). It was being criticised for stifling flexibility, creativity and innovation (Speechley, 2005). Therefore, today, organisations need to embrace learning organisations with shared leadership style (Smith, 2001). The central idea of shared leadership is to empowered all members of an organisation to take responsibility and participation in organisational performance and decision making (Porter-O'Grady, Hawkins and Parker, 1997). By empowering employees, it promotes employees freedom to exercise their imagination, initiative and passion capabilities in their work (Hamel and Breen, 2007), creates a sense of community and develops shared visions that are essential for new knowledge and innovation cultivation (Terry, 1993; Madsen, 1996). In this open structure environment, people in appointed leadership do not play the role of controlling, new way of being accountable are essential to develop individual imaginative and learning capability (Jackson, 2000). For instance, in a shared leadership environment like Gore with "no boss and many leaders" concept, words like "boss" and "manager" are inhibited from conversation (Hamel and Breen, 2007). The role of an appointed leader does not serve to direct others, instead he/she influences others by demonstrating capacity to get things done (Hamel and Breen, 2007). Therefore, managing innovation require a leadership that is more than just having the authority of a top position people, the best leadership style is to share it among all members of an organisation to inspire personal mastery, mental models, share vision and team learning in order to drive organisation innovation to stay ahead of competition.

Standard for Risk Taking: Experimentation

Managing innovation requires organisations to change their risk taking standard in experimentation. Traditionally, organisations consider experimentation as a risky and costly practices that will affect their efficiency in resource allocation therefore it was best left to the few people at the top of the organisation (Snyder and Duarte, 2003; Thomke, 2003). However, with their limited capabilities, innovation was badly affected (Snyder and Duarte, 2003). Innovation requires people to adopt risks through experiments (Snyder and Duarte, 2003). Therefore, organisations today need to embrace learning organisation that encourage employees to learn through freedom to experiment new ideas for all employees (Ehin, 2004). For instance, 3M technical employees are encouraged to spend up to 15% of their working time to non-core initiatives (Martocchio, 2005). This policy had led to the development of diversified products such as Post-it notes and Scotch masking tape that allowed 3M to enter into new lines of business and industries (Martocchio, 2005). Through freedom to experiment, unpredictable new informations are generated which allow innovators to learn, gather and incorporate into new round of experiments with novel and potentially risky ideas (Thomke, 2003). The more information and knowledge that employees learned through experimentation, the greater ability a firm is able to improve their position in innovation (de Sousa, 2006). According to a research of 400 firms in different countries done by Yeung et al. (1999), it showed that the higher the learning ability of a firm, the higher the firm's competitiveness and innovativeness. Therefore, freedom to experiment new ideas for all employees is the engine of innovation that drive continuous improvement.

Clearly, basic management policies, techniques and practices mentioned above are insufficient to cope with the need to innovate. Therefore, organisations today need to embrace a new set of management policies, techniques and practices that are encompassed in Learning Organisation and Knowledge Management.


Organisational innovation resistance is a barrier to innovate (Bao, 2009). To overcome resistance, organisation need educate people about the change in order to helps employees to see the logic in change (Kotter and Schlesinger, 1979). Besides that, extensive and early participation of all employees influenced by innovation is crucial to reduce the power of resistance (West, 1997). Furthermore, management can fosters innovation champions (volunteers who are committed to innovation), giving them responsibilities to persuade people about the value of management change and to ensure all technical supports are available (West, 1997). Through careful implementation of these initiatives, organisation as a whole will be committed to change for a better future of the organisation.


In conclusion, innovation is the only competitive advantage a company really has that allow it to sustain growth in today's dynamic and fierce competitive arena (Heindl, 2008). Therefore, it is time for organisations to learn to adapt the challenges by reinventing their basic management policies, techniques and practices that restrict innovation. They must learn to share and joint company wide employees knowledge without a restricted hierarchical communication system; to co-create innovation without looking at internal value creation system alone; and to cultivate individual learning, imaginative and innovative capabilities without keeping tight control and restriction on them. According to Vanderpoel (n.d.), the most successful company is the one which holds onto the old practices as long as it is good, and embrace the new practices just as soon as it is better. Therefore, organisations need to change and embrace the new "magic formulas": learning organisation and knowledge management that are capable to manage innovation efficient in order to drive business excellence.

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