Malcolm Baldrige Award: Purpose

When was the last time you won an award? Maybe it was a trophy for a winning soccer season or completing a dance recital. Businesses also love to win awards, as it appeals to their competitive spirit.

In this lesson, we will learn about the Malcolm Baldrige National Quality Award that 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. The award is given yearly in six different categories, including education, service, manufacturing, small business, healthcare, and nonprofit.

Let’s take a look at the impact of the award overall in the business community and through individual corporate winners.

Baldrige Award’s Impact

The Baldrige Award is not just bragging rights for the corporate winners. First of all, any American company that wins the award automatically gets a boost in their reputation for product quality. Nestle Purina Pet Care was a winner in 2010, and the prize brought consumer confidence in the quality of their product. This has resulted in Nestle ranking number one in market share for pet food products.

The award is also important because it has established a set of widely accepted guidelines to assist businesses in providing a competent quality management program. Companies who aspire to win the award must be knowledgeable about the specific guidelines that are necessary for establishing an effective quality management program and excellent customer satisfaction.

The criteria consist of seven areas: leadership, information and analysis, strategic quality planning, human resource utilization, quality assurance of products and services, quality results, and customer satisfaction. Within each of these areas, processes must be developed that lead to an improvement in quality management.

Another important impact is that the winners of the award provide industry benchmarks. Medical service company winners, such as AtlantiCare, provided a benchmark for their competitors to copy to improve the overall industry.

AtlantiCare won the award for their quality of services programs, which focused on three specific areas designed to promote many stages of an individual’s life. AtlantiCare’s core competency is the integration of three services: health care delivery, health engagement, and health information. The company embraced the idea of providing quality services in a proactive way to help educate their constituents about keeping healthy to avoid health problems in the future. In addition, they implemented technology to help monitor and treat their patients quickly and effectively.

Companies use the criteria, tools, and assessments to help evaluate their own corporate quality improvement efforts. Many companies view the winners as mentors and try to emulate their processes that brought forth a quality management award.

The impact of winning the award has a huge benefit to the company’s finances. For example, past winners who have established superior quality management programs have higher productivity and profitability, improved market share, excellent customer relations, and improved employee relations. For example, St. David’s HealthCare, a 2014 award recipient, has seen net revenue growth of more than 70%.

In addition, Sunny Fresh Foods, now known as Cargill Kitchen Solutions, an award recipient in 1999 and 2005, saw multiple benefits to winning the award. Revenues increased 93% after it first received the award. The company also saw a significant increase in overall market share.

Lesson Summary

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.

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

Malcolm Baldrige National Quality Award: Snapshot

The Malcolm Baldrige National Quality Award was created by the U.S. Congress in 1987 to acknowledge companies that have executed strong quality management programs. The six categories for the award include education, service, manufacturing, small business, healthcare, and nonprofit.

The award helped establish wide guidelines for quality management competence and has led to industry benchmarks. Winners of the award can look forward to increased revenue and market share.

Learning Outcome

After reviewing this lesson, you should be able to identify the Malcolm Baldrige National Quality Award and describe its impact, including the benefits for winners.