All entries for February 2013

February 06, 2013

Excellence models and their theoretical basis: The Commonality–Logic

The value and contribution brought about by the world wide movements and campaigns on developing business excellence has also been undeniably significant and remarkable (Dahlgaard & Eskildsen, 1999; Dahlgaard-Park & Dahlgaard, 2006). Nevertheless, the quantity of the models developed and the scale of their global application will not disguise the challenges arising from within. As part of my research focus at the moment, one challenge is about our understanding on the underlying theoretical basis upon which all or most of the excellence models are based. If such basis do exist, the next question would be how comfortable are we about its validity and appropriateness for today’s requirement.

To this end, I would like put forth a hypothesis that all business excellence models (or frameworks used interchangeably later) are based on one theory defined herewith as the ‘commonality logic’. The commonality logic in the context of assessing business excellence means a reasoning and decision approach that is based on identifying and measuring against the common factors of business excellence. This logic suggests two points: 1) all excellent companies have a set of common characters; 2) any non-excellent company can become excellent one if it acquires those common factors. Those ‘factors’ are often referred to as in the forms of KPIs, success factors, principles, traits, characters, excellence measures and so on that are common to all excellent companies. We hereby define this underlying assumption as the ‘commonality logic’.

The evidences to support the hypothesis are fortunately readily available in the plethora of literatures. Peters and Waterman’s (1982) work is regarded as a seminal contribution to the understanding of the common traits of the ‘excellence’ companies with the eight attributes of excellence defined. Hayes and Wheelwright (1984) provided a major sea-change to their connection between internal development and the evolution to ‘external excellence’, and provided the four common stages of excellence development. Schonberger (1986) picks up the same issues as Hayes and Wheelwright and coined the phrase World Class Manufacturing and in his follow-up book “World Class Manufacturing: The next decade” (Schonberger, 1996) described the 16 common principles that underscored the importance of connecting customer-focus with employee-drive and data-based process performance. In the European Excellence Model there are clearly defined 5 enablers and 4 results (EFQM, 1999a,b) in what is called the 9 factors model. The 9 factors are to be assessed as the common dimensions of measures for excellence. The Baldridge Excellence Model sets up seven common categories of criteria for the organizational performance excellence (Lee, et al., 2003; Pannirselvam and Ferguson, 2001), of which six of them are about the approaches and development (including: leadership, strategic planning, customer focus, information / analysis, workforce, and processes) and the seventh criterion is the business performance results. Xerox has defined excellence as being certified with a high score on six common excellence criteria (Fornari and Maszle, 2004 ). This fact finding can surely go on and on.

The only consistent feature of all the models being examined is that they appear to have identified and truly believed in a set of common dimensions of logistics measures. If a company can score well on those dimensions, it will be regarded as an excellence company. The rationale is simply because that all other excellence companies appear to have those factors in common, which is basically the commonality-logic in practice.

Commonality-logic is obviously a valid and powerful logic in many circumstances. Many management theories are largely based on this logic. The argument, however, is often revolved around the choices of the common factors or components, but no one questions the underlying assumption of commonality-logic itself. This appears exactly what has happed to all those diverse varieties of frameworks, some of which may be very disagreeable with one another. Different frameworks have different choices of factors, structures, flows and measures, albeit there is always a significant degree of overlap in between. In the case of measuring logistics performance, we argue that the commonality-logic should not be applied in isolation.

I would like to challenge the research community by arguing that this logic has a pitfall and could even be theoretically fraud. The biggest fallacy of the commonality-logic, however, lies in its lack of falsification (Lakatos, 1978; Lakatos and Feyerabend, 1999). In other words, the conclusion drawn from the commonality logic may fail the falsification test even though they passes the positivist test, and hence the commonality-logic as defined above is certainly not perfect in view of strictly scientific methodology. A practical implication of this view is that it is still possible to identify some excellent companies that do not necessarily meet all the conditions of common factors; and some companies that do so may still not really the world class excellent companies. Thus, a derived further hypothesis would be: to rely on the commonality logic alone is not a secured theoretical approach to evaluate business excellence. This hypothesis is to be tested immediately in the next section. 

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