Comparing the environmental and quality initiatives of Baldrige award winners

Production and Operations Management, Fall 2001 by Angell, Linda C

COMPARING THE ENVIRONMENTAL AND QUALITY INITIATIVES OF BALDRIGE AWARD WINNERS*

Can best-practice quality firms leverage their quality programs for environmental management? This paper explores this question by comparing the implementation of successful and unsuccessful quality and environmental initiatives in five manufacturing- and five service-sector Malcolm Baldrige National Quality Award (MBNQA) winners. The results lead to a series of propositions to guide future research. While the literature suggests that quality and environmental programs are closely related, this study finds that drivers of successful environmental initiatives are not the same as those for successful quality initiatives.

(TQM; MBNQA; ENVIRONMENT; OPERATIONS; STRATEGY)

Introduction

The Malcolm Baldrige National Quality Award (MBNQA) identifies and rewards bestpractice U.S. firms for their innovations in, and contributions to, the practice of Total Quality Management (TQM). TQM "is a systems approach to management that aims to always increase value to customers by designing and continuously improving organizational processes and systems. TQM is concerned with managing the entire organizational system, not only subsystems or functional denartments within a cornoration" (Stahl 1995).

Often under the popularized term of Total Quality Environmental Management (TQEM), theory, and preliminary research results tentatively conclude that TQM philosophies and tools can be leveraged for environmental management (GEMI 1993; Russell and Sacchi 1997; Curkovic, Melnyk, Handfield, and Calantone 2000). Shrivastava (1995) and Willig (1994) have noted that the majority of environmental impacts are relatively small and are therefore perfect candidates for continual improvement techniques. Hart's (1995) natural resourcebased view argues: "Those firms with demonstrated capabilities in TQM ... will be able to accumulate the resources necessary for pollution prevention more quickly than firms without such prior capability." This view is supported by Kim (1990), Kleiner (1991), Roome (1992), Sheridan (1992), Welford (1992), and Taylor and Welford (1993), all of whom argue that one characteristic of environmentally proactive firms is the ability to transfer learning and generate momentum from existing programs, such as quality. Going one step further, McInerney and White (1995) illustrated how several major firms view pollution and inefficiency to be identical problems, and therefore combine quality and environmental efforts to obtain a competitive advantage. Leading firms now move beyond mere regulatory compliance to focus on continuous environmental improvement (Hemenway and Hale 1996).

In order to further explore the linkage between TQM and environmental programs, this paper compares the implementation of quality and environmental initiatives in best practice, MBNQA-winning firms. The next section of the paper provides a brief overview of the literature relating quality and environmental management and presents a conceptual framework of operational change to structure our discussion of results. The third section of the paper describes the research methodology, which involved a series of 1.5 hour telephone interviews with quality and manufacturing managers in 10 large Baldrige award-winning companiesfive operating in the manufacturing sector and another five in the service sector. In the Results and Discussion section, the approaches to implementing successful and unsuccessful quality and environmental initiatives are examined in these organizations. Research propositions are generated from this analysis to help guide future empirical studies.

Literature Review

Leveraging Quality Management for Environmental Programs

While the relationship between the natural environment and quality management has received considerable attention, researchers are only beginning to explore how these programs are most effectively integrated. The costs and benefits of quality and environmental management have a number of theoretical similarities, suggesting that a cost of quality model may be applied to environmental issues (Klassen and McLaughlin 1993; Madu, Kuei, and Winkur 1995). Green (1993) adapted Deming's 14 points to illustrate how they can provide a strong foundation for building an effective environmental program.

Mixed research results have generated an emphatic debate about the pros and cons of linking quality and environmental programs. The Total Quality Management Center of the U.S. Conference Board highlighted several benefits of this synergy, including decreased costs, improved long-term position, increased customer focus, and process simplification (Powell 1995). McInerney and White (1995) studied 10 "corporate success stories of the 1990s" and concluded that there is a significant linkage between environmental and quality programs and performance. They argue that "Those companies that pollute the least have the highest quality products and services" (p. 4). In addition, they found that environmental leaders focus on reaching a goal of "zero emissions," which is best achieved by "continual, relentless cost reduction and quality improvement" (p. 14). Hart and Ahuja (1994) concurred, finding that a reduction in environmental emissions leads to improved financial performance after 1 or 2 years.