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Dubai Airport Free Zone Authority’s Excellence Program Case Study


Introduction

The Dubai Airport Free Zone Authority (DAFZA) is a free economic zone that was established in 1996; today, it is ranked as the number one free zone in the world (Department of Economic Development 2014). Multiple businesses operate in the zone due to the high profitability and convenience of DAFZA; furthermore, it offers a strategic location and infrastructure (more than 1300 companies present, operating in Dubai International Airport), taxation leverage, support from the United Arab Emirates government (visa processing/registration for businesses and employees) and has been awarded various certifications and awards (e.g. Best Economic Free Zone in the Middle East – 2013, Dubai Quality Award [DQA]– 2014, etc.) (DAFZ 2017). The company’s leadership comprises several executive representatives, including the chairman of DAFZA, director-general, assistant director-general, assistant director-general of finance and commercial division, people growth and strategy, relationships management, etc. These individuals control various aspects of the quality structure of DAFZA, which can be illustrated as shown in Figure 1:

Quality management structure at DAFZA.
Figure 1: Quality management structure at DAFZA.

The Corporate Social Responsibility (CSR) element is a framework developed by the company that uses specific policies to guide managerial practices about ethics (business needs to be socially responsible), environment (to ensure its protection), people (to ensure wellbeing and satisfaction of people, including employees) and society (to support the development of society). All employees are encouraged to take part in CSR activities, and each department provides suggestions related to any CSR activity before the preparation of annual business plans (DAFZ 2017). Recently, DAFZA developed a framework, corporate national responsibility (CNR), which follows international standards in establishing and controlling organizational social responsibility.

Key Drivers for Excellence Program Adoption

The key drivers for the adoption of the excellence program for DAFZA have been the three steps formulated in the strategic planning that they have used to achieve their objectives and goals. DAFZA develops strategic plans every two years. Important drivers of a successful strategic plan that leads to organizational sustainability and business excellence include approach, deployment, and assessment and refinement (the RADAR framework). In the first step, the strategic model is divided into two major parts: Strategic Planning Path and Strategic Learning (Department of Economic Development 2014).

DAFZA continually monitors the business environment so that evaluation of its objectives, missions, and goals is possible in real-time; with this approach, the organizations able to improve its services as rapidly as possible and align this information with the corporate SWOT. To control systematic deployment, DAFZA ensures that all its departments and units take part in reviewing its mission and vision via surveys and focus interviews. SWOT analyses of different departments are also conducted, as well as PESTEL analysis, to formulate and set future strategic goals, using Key Performance Indicator (KPI) to measure achievement (Department of Economic Development 2014). A unique aspect of DAFZA is the use of the ADKAR model, which focuses on human resources and their involvement in the change process. The implementation of this framework aligns with DAFZA’s CSR and CNR frameworks, which also consider social responsibility, human involvement, and the wellbeing of stakeholders to be corporate responsibilities.

The third key driver involves assessment and refinement, which focus on reviewing and comparing DAFZA’s strategy section, best company practices (about the global arena), risk analysis, and KPIs. The latter is crucial for organizational performance but might require additional alteration due to a changing external business environment or the need for a better competitive advantage (Department of Economic Development 2014). Thus, the outputs of KPIs are analyzed to assess whether DAFZA’s strategy is relevant and dynamic.

It should be noted that a unique business environment has supported DAFZA’s excellence. First, the UAE allows 100% foreign ownership and levies a reduced corporate income tax on foreign corporations, which makes DAFZA more attractive for foreign investment (Shayah & Qifeng 2015). Second, ready-made factories and excellent infrastructure increase the provision of services to stakeholders, leading to higher customer (and employee) satisfaction. Third, quick approval procedures and government support for visa processing and other aspects critical for business functioning serve to increase DAFZA’s competitive advantage in the market and emphasize the importance of quality management and its impact on strategic goals, thus adding company value from the customers’ point of view.

RADAR Methodology

The European Foundation for Quality Management (EFQM) Excellence Model uses the RADAR methodology (or logic) to provide a framework or tool to evaluate organizational performance. The RADAR methodology relies on the following steps:

  1. Determine the results by assessing and considering trends, comparisons, targets, etc.
  2. Develop specific approaches to attain results.
  3. Deploy these approaches systematically.
  4. Assess and review these approaches by evaluating and monitoring the results achieved (Uygur & Sümerli 2013).

Thus, an organization using RADAR can enhance organizational performance by emphasizing core aspects of performance. Results indicate what the organization has achieved; if the organization aims to achieve excellence, it must strive for results that indicate a positive tendency or good performance. To do this, the company needs to set achievable and reasonable goals, ensure that its performance is high, and be able to compete with other businesses and align its strategy with the chosen approach.

To add value to a company, the approach must be developed thoroughly. A well-defined approach focused on shareholder’s requirements and integrated must be expected if the company wants to achieve business excellence (Uygur & Sümerli 2013). At the same time, it is essential to assess whether the approach aligns with organizational policies and strategies; if not, it is less likely to be effective.

Deployment helps organizations actualize their approach; for example, it can include cooperation between various departments and individuals to determine and review the company’s vision, mission, and values (as at DAFZA) (Department of Economic Development 2014; Fonseca 2015). Deployment is necessary because it answers the following questions: How, where, and when were these approaches implemented? (EFQM 2012). To achieve excellence, the approach needs to be implemented systematically and in relevant areas.

The concluding step is to assess and review the implemented approaches. To do this, the company monitors and analyses the achieved results; assessment and review can help companies determine what can be done to improve organizational performance and what has been learned (EFQM 2012). Organizations that have achieved excellence will assess their approaches systematically and regularly perform learning activities.

To add value to the company, it is also suggested to divide the assessment into two areas: one assessment of enablers and another of results. The first area evaluates adopted approaches and analyses their effectiveness over time. The second area targets results, their relevance to the organizational strategy, and the presence of positive trends in organizational performance.

Participation in Contents and Firm Performance

National and international quality awards are used to promote quality awareness at the national or global levels. Standardized evaluation criteria are provided so that candidates can engage in self-assessment and identify the weaknesses and issues they need to address. As Lin and Su (2013) point out, the question of whether quality awards indeed improve organizational performance is critical when assessing awards’ effectiveness. In their study, the authors found that “75% of the award winners experienced positive average abnormal returns, indicating that the implementation of an effective quality improvement program could provide a long-term return to the market value of firms” (Lin & Su 2013, p. 66).

In the case of DAFZA, it was able to exceed its KPI targets, generate a 42% rise in revenues, achieve a higher satisfaction rate (84.65%), and recognize 30% of the organization’s employees with awards and rewards (Department of Economic Development 2014). Thus, the company was able to increase its competitive advantage in the market, which can provide a basis for further improvement and support a focus on performance excellence (Evans 2013; Rausand 2013). At the same time, as not one but several companies usually take part in quality awards and win in different categories, the emergence of new (or old) rivals in the market, their recognizability, and promotion can make the business environment more competitive and impact customer loyalty. If the company is unable to provide quality services at the same levels, winners in other categories may decrease its market value, which can negatively impact business excellence and employee motivation.

Business Excellence and Company Performance

Business excellence directly relates to the eight fundamental concepts of EFQM: adding value, creating a sustainable future, developing organizational capability, harnessing creativity, leading with vision, managing with agility, succeeding through talent, and sustaining outstanding results (EFQM 2013). To ensure that all these concepts are integrated into business excellence, the company needs to use the RADAR framework to determine the results, plan and deploy approaches and then go on to assess and refine the approaches. To use the RADAR methodology, the company needs enablers (i.e. flexible leadership, stakeholder-focused strategy, people with developed capabilities, external partnerships, and resources and processes that are managed in such a way they can generate value for customers and other stakeholders).

When enablers are present, and the fundamental concepts are clear, RADAR is implemented. Based on the effectiveness of the chosen approaches and the company’s ability to use RADAR and enablers as required, customer results, people results, society results, and business results will indicate whether the company has reached business excellence (Matthies-Baraibar et al. 2014). Excellent companies are not only able to evaluate whether their strategy is successful via specific key indicators but also can set clear targets for key results, demonstrate good business results over the term of three years and understand how these key results can be compared to data about other companies (EFQM 2013). As can be seen, organizational performance is a set of various components, indicators, and approaches that, if developed and implemented correctly, can significantly improve the results obtained by the company and show whether the company is close to becoming excellent. Only a thorough, attentive, and detailed evaluation of organizational performance can lead to business excellence.

Reference List

DAFZ 2017, , Web.

Department of Economic Development 2014, Share best practice 2014, Web.

EFQM 2012, Radar logic, Web.

EFQM 2013, An overview of the EFQM excellence model, Web.

Evans, JR 2013, Quality & performance excellence, Cengage Learning, Boston, MA.

Fonseca, LM 2015, ‘From quality gurus and TQM to ISO 9001: 2015: a review of several quality paths’, International Journal for Quality Research, vol. 9, no. 1, pp. 167-180.

Lin, CS & Su, CT 2013, ‘The Taiwan national quality award and market value of the firms: an empirical study’, International Journal of Production Economics, vol. 144, no. 1, pp. 57-67.

Matthies-Baraibar, C, Arcelay-Salazar, A, Cantero-González, D, Colina-Alonso, A, García-Urbaneja, M, González-Llinares, RM & Olaetxea-Urizar, E 2014, ‘Is organizational progress in the EFQM model related to employee satisfaction?’, BMC Health Services Research, vol. 14, no. 1, pp. 468-478.

Rausand, M, 2013, Risk assessment: theory, methods, and applications, John Wiley & Sons, New York, NY.

Shayah, MH & Qifeng, Y 2015, ‘Development of free zones in United Arab Emirates’, International Review of Research in Emerging Markets and the Global Economy, vol. 1, no. 2, 2015, pp. 286-294.

Uygur, A & Sümerli, S 2013, ‘EFQM excellence model’, International Review of Management and Business Research, vol. 2, no. 4, pp. 980-994.

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IvyPanda. (2021, January 10). Dubai Airport Free Zone Authority's Excellence Program. Retrieved from https://ivypanda.com/essays/dubai-airport-free-zone-authoritys-excellence-program/

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