Malcolm Baldrige National Quality

Award: Purpose & Impact

Fransiska Handoko, CHA., CHIA

STPBI MEM 2018 1

 Purpose
The Malcolm Baldrige National Quality Award is
given to American companies that show a
commitment to quality management programs.
The award was created by the U.S. Congress in
1987 and is named after a former Secretary of
Commerce, Malcolm Baldrige Jr. The award offers
commendation to U.S. companies that have
executed strong quality management systems.

STPBI MEM 2018 Fransiska Handoko, CHA., CHIA 2

 Purpose
The award is given yearly in six different
categories:
1) Education
2) Service
3) Manufacturing
4) Small Business
5) Healthcare
6) Nonprofit

STPBI MEM 2018 Fransiska Handoko, CHA., CHIA 3

 Impact
The award has many direct impacts, such as:
 Bragging rights for the corporate winners
 Boost in company winner's reputation for
product quality
 Establishes a set of widely accepted guidelines
to assist businesses in providing a competent
quality management program
 Provides industry benchmarks
 Huge benefit to the company's finances
STPBI MEM 2018 Fransiska Handoko, CHA., CHIA 4
 Criteria
The Baldrige Award requires businesses
to show achievement or improvement in
these seven areas.
1) Leadership: This includes how the
managers lead the company as well
as how the company helps lead the
local community.
2) Strategy: The company needs to
show how it strategically plans its
directions.
STPBI MEM 2018 Fransiska Handoko, CHA., CHIA 5
 3) Customers: How the company
maintains strong and lasting
customer relationships.
4) Measurement, analysis, and
knowledge management: The
company shows how it acquires
the data needed to function as well
as to determine performance.
5) Workforce: How the employees
and staff are involved and
empowered.
STPBI MEM 2018 Fransiska Handoko, CHA., CHIA 6
 6) Operations: The company shows
how it creates, manages, and makes
its operations and key processes
better.
7) Results: How satisfied customers are
with the company. How its finances,
suppliers, partners, human
resources, governance, and social
responsibility measure up to the
competition

STPBI MEM 2018 Fransiska Handoko, CHA., CHIA 7

Deserving the Award – Service Category
The Ritz-Carlton (now part
of Marriott International)
received this award in
both 1992 and 1999.
The company is known for
its excellence in customer
service and excellent
leadership, keeping the
company profitable and
growing.

STPBI MEM 2018 Fransiska Handoko, CHA., CHIA 8

VIDEO
https://study.com/academy/lesson/case-
study-ritz-carlton-malcolm-baldrige-
national-quality-award.html#lesson

STPBI MEM 2018 Fransiska Handoko, CHA., CHIA 9

The Ritz-Carlton Case Study
How the Ritz-Carlton operates clearly matches up with
the seven criteria required for the Baldrige Award:
1. Leadership - The Ritz-Carlton excels in its leadership as
shown by the 96 percent of employees who embrace the
company culture of excellent guest service. Such a
strong company culture could only be achieved with
excellent leadership.
2. Strategy - How the company trains its employees to
note the preferences of customers fits this second
criteria.
3. Customers - The 92 to 97 percent of satisfied
customers satisfies the customers criteria.
STPBI MEM 2018 Fransiska Handoko, CHA., CHIA 10
The Ritz-Carlton Case Study
4. Measurement - The company satisfies this criteria by
keeping preference information about individual
customers.
5. Workforce - It meets the workforce criteria when its
employees are empowered to make decisions to help
solve customer problems. Furthermore, each year Ritz-
Carlton employees spend over 100 hours training on
improving customer service.
6. Operations - The operations criteria is fulfilled when
the Ritz-Carlton puts into practice feedback received
from customers. Furthermore, the company brags that
its hotel rooms are ''never older than 90 days'' because
of its revolutionary maintenance program.
STPBI MEM 2018 Fransiska Handoko, CHA., CHIA 11
The Ritz-Carlton Case Study
7. Results - Ritz-Carlton already has a positive track
record of satisfied customers and financial growth year
after year.

STPBI MEM 2018 Fransiska Handoko, CHA., CHIA 12

 Quiz & Worksheet

1. When the Ritz-Carlton keeps track of customer

preferences in a database, which of these
Baldrige criteria does it meet?
a) Leadership
b) Strategy
c) Measurement
d) Operations

STPBI MEM 2018 Fransiska Handoko, CHA., CHIA 13

2. What does the Ritz-Carlton do to meet the customers
criteria for the Baldrige Award?
a) It makes sure to solve customer problems within 24
hours.
b) The company's income grows from year to year.
c) It keeps a customer profile for each customer with
preferences.
d) Managers spend time thinking about what can be
improved.
3. Which Baldrige criteria does the Ritz-Carlton meet when
96 percent of employees know and fully understand the
company's motto of excellence in service?
e) Leadership
f) Customers
g) Operations
h) Workforce
STPBI MEM 2018 Fransiska Handoko, CHA., CHIA 14
 4. In which of the following years did the Ritz-
Carlton win a Baldrige Award?
a) 1980
b) 1985
c) 1992
d) 1990

5. The Baldrige Award is awarded to how many

companies each year?
e) 10
f) 15
g) 18
h) 21
STPBI MEM 2018 Fransiska Handoko, CHA., CHIA 15
 Next..

STPBI MEM 2018 Fransiska Handoko, CHA., CHIA 16