Abstract
This report entails an analysis of the business excellence model. The report has focused on two main companies, which operate in Dubai. The two companies, viz. Emirates Gas and ENOC Lubricants & Grease Manufacturing Plant (ELOMP) are well-established companies operating as subsidiary firms to ENOC. Since their inception, the two firms have managed to achieve optimal operational efficiency as evidenced by their recognition during the recent Dubai Excellence Awards. The report evaluates the challenges encountered by the two firms in their quest to achieve business excellence. Some of the challenges identified relate to the lack of cooperation amongst internal stakeholders, employee resistance, poor group dynamics, information overload, and financial constraints. However, the commitments of the firms’ management teams towards achieving business excellence have enabled the firms to overcome these barriers. The report further recommends what the firms’ management teams should consider in order to sustain their level of business excellence.
Introduction
Background to the study
Emirates Gas (EMGAS) is a subsidiary of ENOC, which is a government-owned entity. ENOC has vast interests in the economy of Dubai that ranges from an exploration of oil to the marketing and distribution of oil products. The company ranks as the market leader with regard to the supply of liquefied petroleum gases. The firm has been in existence for over 30 years, and it has managed to develop a high level of customer loyalty. The Dubai government recognises EMGAS as a key contributor to the Dubai economy (Bitar, 2013).
The firm specialises in the distribution of natural gas, which is sold locally and regionally in the gulf region. EMGAS has established an extensive distribution network as evidenced by a fleet of road tankers. Moreover, EMGAS also plays a significant role in the development and marketing of specialised gas products such as aerosol propellants, Liquefied Natural Gas (LNG), and Compressed Natural Gas (CNG). The company also produces gas used in welding. The firm intends to venture into the international market in an effort to improve its market reach. The firm holds a number of internationally accredited certifications such as OHSAS 18001, ISO 14001 (EMS), ISO 9001 (QMS), and 10002 Customer Care System.
In 2013, EMGAS won the Dubai Quality Award for its excellence in business, which is a business excellence award. The Dubai Quality Award is similar to the European Foundation for Quality Management [EFQM]. Its success has arisen from the integration of effective strategic and operating management practices such as employee training, safety, and environment protection. The firm intends to position itself as a dynamic and reliable supplier of petroleum gas in the world. In a bid to achieve this objective, EMGAS is focused on exceeding the corporate, customer, and community requirements.
ENOC Lubricants & Grease Manufacturing Plant (ELOMP) is a well-established grease and lubricant manufacturing company, which operates in the UAE. The firm is headquartered at Fujairah Port. The firm has integrated effective strategic management practices. ELOMP has integrated a number of quality systems such as ISO 9001: 2001, health and safety management, and environmental systems such as 18001: 2007 OSHAS. In 2013, the firm received Dubai Quality Appreciation certification in 2013. ELOMP has won ISO 17025 for its effective laboratory systems.
Research objective
This research paper analyses the extent to which EMIGAS and ELOMP have integrated the concept of business excellence. The paper mainly focuses on the possible barriers encountered in implementing the EFQM model in ELOMP and EMGAS, coupled with how they overcame the barriers.
Business excellence models
Porter and Tanner (2012) argue that business excellence “is a systematic use of quality management principles and tools in business management whose objective is to improve organisational performance based on a number of principles, which include customer focus, stakeholder value, and process management” (p. 8). Moreover, Alavi and Leidner (2001) assert that business excellence is concerned with improving an organisation’s processes and management systems.
Subsequently, business excellence models are developed with the objective of assisting organisations to improve their performance by understanding their weaknesses and strengths, hence assisting the organisations’ management teams in identifying areas of improvement (Tapping, Luyster & Shuker, 2002). Some of the business excellence frameworks that have been developed include the European Foundation for Quality Management [EFQM] excellence award, the Australian Business Excellence Award, and the Japan Quality Award.
Literature review
Requirements of a successful business excellence model
According to Chao (2007), the business excellence model is based on a number of core values and concepts, which constitute the core elements of successful organisations. Some of these core values include
Visionary leadership
The success of an organisation is greatly influenced by the effectiveness with which the organisational leaders create a sense of direction amongst the followers. In a bid to achieve this goal, organisational leaders have an obligation to ensure that employees develop a culture of customer focus and strong organisational values. Subsequently, leaders in different organisations must ensure that employees understand the organisation’s objectives. This aspect contributes towards the establishment of a balance between the organisation and the various stakeholders.
Customer-oriented
The business excellence model integrated must be focused on providing customers with high-quality products and services. Subsequently, it is imperative for organisations’ management teams to appreciate the customers’ needs. This move improves the effectiveness and efficiency with which an organisation creates value for its customers.
Innovation focus
This element advocates for organisations to invest in research and development in order to improve their products and services. In a bid to achieve the desired level of innovation, it is imperative for organisational leaders to consider improving their workforces’ level of competence. Furthermore, organisations should incorporate effective strategies to manage and sustain innovation (Kuo & Lee, 2011).
Knowledge-driven system
Attaining superior organisational performance requires an organisation to transform itself into a knowledge-based entity. However, this goal can only be achieved if an organisation utilises the data and information available in its decision-making process. Consequently, organisational managers should track their firm’s performance continuously.
People
In a bid to achieve business excellence, it is imperative for organisational managers to be concerned on how to develop a satisfied workforce, which is only achievable if the organisation’s management team values its workforce. For example, it is essential for organisations to incorporate an effective employee appraisal system. Furthermore, organisational leaders should be concerned with nurturing enabling environment for working. Attaching value to employees increases the rate of employee retention, and hence the rate of organisational performance.
Partnership and resources
Business excellence require organisations to develop and manage a high degree of collaboration with various external stakeholders. Moreover, organisations seeking a high level of business excellence must integrate effective systems to manage their resources in order to enhance the effective implementation of its strategies and policies.
Result orientation
Achieving business excellence requires the organisation to be concerned with the results attained. Sajan (2013) argues that result orientation enables organisational leaders to maintain a balance between the firm and the various internal and external stakeholders.
Agility
The intensity of competition within the business environment has increased significantly over the past few decades. The intensity of competition is evidenced by the high rate at which new products are being introduced in the market. Subsequently, it is imperative for organisations to ensure that they are flexible in their operation by investing in new and continuous product improvement (Winchell, 2006).
Systems’ perspective
Business excellence requires organisational processes to operate interdependently. The various organisational processes must be linked to a larger system. This aspect enhances the effectiveness with which an organisation attains the desired level of value addition. Moreover, adopting a systems approach improves the efficiency with which an organisation undertakes continuous product improvement.
Organisational and personal learning
Business excellence model requires organisations to improve their workforce continuously through employee training and development. This aspect enhances the effectiveness with which an organisation achieves continuous growth.
Corporate social responsibility
AQchieving business excellence requires organisations to recognise that their success originates from the society within which the firm operates. Consequently, it is imperative for organisational managers to ensure that their organisation operates in a manner that does not affect society negatively by focusing on various issues such as safety, health, and the environment.
Methodology
The success of a particular study is greatly influenced by the effectiveness of the research methodology. The research methodology entails a number of aspects such as the research design, data collection method, data analysis, and presentation. In a bid to study the barriers encountered in implementing the EFQM framework in ELOMP and EMIGAS and the approaches used to overcome such barriers, this study has adopted the qualitative research design. The decision to use a qualitative research design is informed by the need to ensure that sufficient data is gathered in order to undertake an in-depth analysis of the barriers to implementing and EFQM.
Population and sample
The report has specifically targeted employees in ELOMP and EMGAS companies, which operate in Dubai. Considering the fact that the two firms have a large number of employees, it would take a substantial amount of time to conduct a study on all the employees. Subsequently, the random sampling technique is integrated in selecting respondents from the two companies. Random sampling technique was incorporated to eliminate bias in selecting the respondents. Consequently, all employees were given the same opportunity of being incorporated in the study.
A sample of 10 respondents was considered whereby 5 were selected from each company.
Data collection
The quality of data collected influences the credibility of a particular research study. Subsequently, researchers should adopt effective data collection techniques and instruments. Moreover, it is essential for researchers to ensure that the data collected is handled effectively to avoid the occurrence of missing information during the data analysis stage.
The researcher will adopt both primary and secondary methods of data collection. The primary method of data collection will entail the use of interviews. The interviews will be conducted by using open-ended and close-ended questionnaires, which will be emailed to the respondents. Other data collection instruments, which will be used, include telephones. By adopting these data collection instruments, the researcher was minimised the cost of the study. The data collected was stored in tape recordings.
Some of the respondents who will be interviewed include the companies’ supervisors and operations managers. The decision to consider employees from these levels of management arises from the view that they are charged with the responsibility of implementing various business processes and strategies aimed at achieving business excellence. Subsequently, they have a better understanding of the barriers encountered in the process of implementing the EFQM.
On the other hand, secondary methods of data collection will entail reviewing available publications such as books and reports on business excellence. However, the researcher will ensure that only credible publications and reports are utilised. Moreover, the researcher will also utilise information provided in the companies’ websites and compare the information with other sources in order to draw a conclusive outcome.
Data analysis and presentation
The researcher is committed to ensuring that the research is of great significance to the target audience. Thus, the researcher will integrate an effective data analysis system. Data analysis is conducted using Microsoft Excel. Using Microsoft Excel enabled the researcher to present the research findings using tables, graphs, and charts.
Findings
ELOMP and EMGAS have integrated effective strategic management practices, as evidenced by their success in attaining business excellence. However, the two firms have encountered a number of challenges in their quest to achieve business excellence. Seventy-five percent (75%) of the respondents from EMGAS and 74% of respondents from ELOMP interviewed cited the lack of cooperation and dedication as one of the major challenges encountered in implementing the EFQM model. The two companies are organised into a number of departments, such as marketing, production, finance, research, and development. Lack of cooperation amongst the various departments is one of the greatest hurdles experienced by the two firms in their quest to formulate and implement strategies aimed at achieving business excellence.
The firms encountered a challenge in their quest to develop a strong team culture. Sixty percent (60%) of respondents from EMGAS and 65% of respondents from ELOMP interviewed argued that their effort to implement the EFQM model was adversely affected by a lack of interdepartmental interaction. Therefore, the employees’ capacity to share knowledge and information was adversely affected. Effective communication processes are essential in an organisation’s quest to stimulate a high level of engagement amongst employees. When asked the reason for the lack of cooperation, the managers and supervisors argued that lack of effective team dynamics affected their effort to implement EFQM.
Moreover, sixty-nine percent (69%) of the respondents from EMGAS and 72% of respondents from ELOMP argued that the lack of effective team culture affected the firms’ effort to develop an effective information system. Consequently, their efforts to transform the organisation into a knowledge-based entity and hence their level of innovation was adversely affected.
Eighty percent (80%) of respondents from EMGAS and 77% of respondents from ELOMP interviewed were of the opinion that their effort to implement the EFQM model was faced by resistance from employees. The respondents argued that the employees perceived the process of implementing the EFQM model as a threat to their job. This aspect arises from the view that that the process of implementing the EFQM model required the firms to adjust some of their operations. Moreover, the firms’ failure to implement the EFQM model also arose from a power clash between managers and employees. Some of the employees in the lower levels of management perceived the process of implementing the EFQM business excellence model as a responsibility of the individuals in the top levels of management.
Fifty-six percent (56%) of respondents from EMGAS and 60% of respondents from ELOMP interviewed cited the existence of power clash amongst employees as a major hindrance in the process of implementing the EFQM. The Existence of power clashes hindered the process of implementing the EFQM model by influencing the level of commitment amongst the supervisors in executing the tasks delegated. Furthermore, the respondents were of the opinion that they experienced a challenge in their quest to nurture a high level of engagement towards the EFQM implementation process.
Ninety-five percent (95%) of the respondents from EMGAS and 97% of respondents from ELOMP interviewed cited financial constraints as another major hindrance in their firm’s effort to implement the EFQM model. These respondents were of the opinion that implementing EFQM required their firms to improve their operations by increasing their investment in various aspects such as integrating effective information management systems, investing in continuous research and development in order to undertake new product development and continuous product improvement. The respondents cited lack of adequate finance as a major hindrance in the firms’ effort to transform the organisation into an innovation-based entity.
The success with which an organisation achieves business excellence is subject to the effectiveness with which it manages and utilises various data and information. Sixty percent (60%) of respondents from EMIGAS and 70% of respondents from ELOMP argued that their organisations encountered a challenge in dealing with the voluminous data and information encountered in their operation. Subsequently, they experienced information overload, which was not effectively being utilised in the firm’s operational processes. The chart below illustrates a summary of the study’s findings.
Strategies to deal with the barriers
Leadership and strategy formulation
ELOMP and EMGAS have adopted a transformational leadership style. Subsequently, the two firms provide employees with an opportunity to contribute to the decision and strategy formulation process. The transformational leadership strategy adopted plays a vital role in improving the degree of organisational identification amongst employees.
Effective strategy formulation is fundamental in an organisation’s efforts to attain business excellence. However, organisational managers must integrate effective strategy formulation process, engagement of the various people and effective strategic communication. Marti and Cabrita (2012) argue that strategy formulation and implementation is a key component in an organisation’s effort to achieve business excellence. Strategy formulation is mainly the responsibility of senior managers. However, it is imperative for organisations to nurture a high level of engagement amongst the employees’ different levels of management.
In their quest to achieve business excellence, EMGAS and ELOMP integrated a number of organisational values, which entail nurturing a high level of partnership and teamwork. The organisations’ management teams have integrated effective leadership in an effort to nurture a strong relationship amongst employees. Moreover, the two firms’ management teams are focused on nurturing a conducive environment for working by promoting mutually beneficial and trusting relationship amongst employees. EMGAS and ElOMP have continuously involved their employees from different departments in the strategy formulation process.
ELOMP and EMGAS have adopted various frameworks in their strategy formulation processes. Examples of such frameworks include Porter’s five forces and the BCG Matrix. By adopting these frameworks, EMGAS and ELOMP have formulated long-term strategies, hence improving their competitive advantage. Moreover, the firms ensure that employees are integrated into the process of evaluating the organisation’s performance using the above strategies.
In a bid to operationalise the strategy formulation, EMGAS and ELOMP have integrated effective internal communication strategy by adopting the ‘plan on a page’ technique. This technique aids in simplifying the strategy formulation process. Adopting this technique has played a critical role in ensuring that all employees understand the significance and the role of the strategy in achieving organisational success. Furthermore, adopting this technique has greatly promoted the effectiveness with which the firm prioritises the strategy formulation process. Subsequently, a high level of employee involvement has enabled the two firms to operationalise their strategy (Charantimath, 2007).
Alternative sources of finance
The existence of financial constraints is a major hindrance in an organisation’s efforts to implement effective organisational strategies. Most small and medium-sized enterprises are experiencing a challenge in their quest to achieve their profit maximisation objective. Chase and Aquilano (2006) further assert that most organisations do not have the necessary financial capacity to achieve the desired level of growth. The situation has been worsened by the recent global economic trends such as the global economic recession.
In a bid to deal with financial constraints, EMGAS and ELOMP have adopted alternative sources of finance. One of the alternative sources of finance adopted by the two firms is bank loans. Furthermore, the firms have adopted partnerships with other firms in order to improve their financing capability. Furthermore, the firms have managed to deal with financial constraints, which is a hindrance in their effort to achieve business excellence by diversifying their investment. Subsequently, ELOMP and EMGAS have increased their financial capacity.
Management information systems
EMGAS and ELOMP management teams have recognised the importance of utilising data and information from internal and internal sources in their quest to achieve business excellence. Beynon-Davies (2002) asserts that effective data management is critical in an organisation’s efforts to improve the effectiveness and efficiency of the decision-making process. In their quest to nurture achieve efficiency in their decision-making process, EMGAS and ELOMP have integrated diverse management information systems by incorporating different information communication technologies. Some of the information management information systems that the firms have integrated include decision support systems, transaction processing systems, and expert management systems.
Curtis and Cobham (2008) assert that integrating management information systems improves organisations’ operational efficiency. By integrating MIS, ELOMP and EMGAS have achieved efficiency in their efforts to record, store, and utilise various forms of data, hence improving their performance. For example, integrating transaction processing systems have improved ELOMP and EMGAS efficiency in developing a strong relationship with their clients by enhancing the organisations’ internal operations and the supply chain management processes. Moreover, transaction-processing systems have significantly improved the effectiveness with which the firm’s record movement of raw materials and finished products. Subsequently, effective integration of management information systems has enhanced the firms’ competitive advantage. The decision support systems have enabled the firms to be effective in their decision-making process.
In an effort to ensure effective data management, the integration of the above management information systems has improved the effectiveness with which the firms utilise ‘big data’ in their operation. Laudon and Laudon (2006) are of the opinion that ‘big data’ will form the basis upon which organisations undertake their product innovation. In an effort to utilise big data, EMGAS and ELOMP have integrated a comprehensive customer relationship management system. The system aims at assisting the firms in their quest to interact with customers, hence understanding their needs. Subsequently, big data constitutes fundamental components in the two firms’ effort to introduce new products in the market (Kettinger & Hackbarth, 2004). Furthermore, ELOMP and EMGAS have undertaken product improvement based on the findings generated from their CRM systems.
Group dynamics
Over the past few years, ELOMP and EMGAS have managed to develop a strong organisational culture, which has led to a high degree of collaboration amongst employees by integrating an effective group structure. Employees from different departments in the two firms operate as a group, which has improved the firm’s efficiency with regard to information sharing.
In the course of their operation, ELOMP and EMGAS have integrated project-based approach in an effort to achieve business excellence. However, the firms recognise that their success depends on the effectiveness of the commitment of the various project teams. In a bid to create an effective working environment, EMGAS and ELOMP ensure that roles and responsibilities are defined clearly. Moreover, the firm provides the team members with the discretion to make decisions on how the tasks delegated should be completed. This move has played a fundamental role in nurturing a high degree of satisfaction amongst employees.
Moreover, providing employees with the discretion to make decisions on how to execute the tasks assigned enhances their level of job satisfaction, which arises from the view that employees develop the perception that they have the opportunity to progress through their career. Employees have become conscious of the need to progress through their career. Subsequently, it is crucial for organisations’ management teams to create a working environment that fosters career development.
Internal communication systems
Prior to implementing major organisational change, ELOMP and EMGAS ensure that employees are adequately informed of the intended change. Subsequently, the two firms have eliminated uncertainty amongst employees. Vonderembse and White (2004) assert that employees resist change if they are not adequately informed about its significance in the organisation, coupled with how they are likely to benefit.
Furthermore, the firms have improved employee relationship by implementing both vertical and horizontal internal communication systems. Therefore, employees from diverse departments share work-related information, hence improving their operational efficiency. On the other hand, adopting the bottom-up approach in their communication process enables the firms’ employees to raise various work-related issues with the top management.
Conclusion
The study shows that achieving business excellence is a critical element in organisations’ effort to attain long term success. Attaing business excellence requires organisations to incorporate the various key components of business excellence in their strategic management practices. Some of these elements include integrating effective leadership, partnerships, effective management of resources, customer focus, society orientation, effective policy and strategy formulation, people results, and key performance results.
However, various barriers might impede the organisations’ effort to attain the desired level of excellence. These barriers emanate from internal and external sources. Subsequently, it is imperative for firms’ management teams to conduct a comprehensive assessment of their performance in order to identify the possible challenges affecting their operations.
The research shows that ELOMP and EMGAS have managed to achieve business excellence, as evidenced by their recognition during the Dubai Excellence Awards. Despite this aspect, the two firms encountered a number of barriers. Some of these barriers relate to employee resistance, information and data overload, financial constraints, and lack of cooperation from employees. Despite these barriers, the two firms incorporated a number of strategies in an effort to deal with these challenges. Some of the strategies adopted include fostering financial stability by seeking alternative sources of finance, integrating information management systems, incorporating effective group dynamics, and integrating effective internal communications systems. These strategies have greatly enhanced the effectiveness with which ELOMP and EMGAS nurture a collaborative working environment. Furthermore, integrating management information systems such as transaction processing systems have enhanced the firm’s supply chain management activities.
Recommendations
Despite ELOMP and EMGAS’ past success with regard to business excellence, it is imperative for the two firms’ management teams to consider how they can sustain their level of business excellence. Consequently, ELOMP and EMGAS should consider the following:
- The two firms should consider adopting a business excellence model, which focuses on both the external and internal stakeholders. This move will improve the effectiveness with which the firms achieve the desired level of success with regard to formulation and implementation of their operational policies such as corporate social responsibilities, customer relationship management, and employee management.
- EMGAS and ELOMP should focus on creating an enabling environment for working in order to enhance the level of employee motivation by improving the extent to which the firms provide employees with an opportunity to achieve their career development goals.
- The two firms should focus on identifying gaps in their strategic management practices, which will enable them to gain insight on how to make the necessary adjustments.
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