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Journal of Management and Marketing Research
What Management and Quality, Page 1
What Management and Quality Theories
Are Best for Small Businesses?
Mildred Golden Pryor
Texas A&M University-Commerce
Leslie Toombs
University of Texas at Permian Basin
Donna Anderson
Texas A&M University-Commerce
J. Chris White
ViaSim
ABSTRACT
Understanding and using management models, standards, and assessment tools, in
conjunction with quality concepts and tools, can help ensure that businesses and other
organizations survive and flourish over the long term. The use of quality initiatives will help
businesses: (1) Document and improve processes; (2) Understand customer requirements and
ensure that their products and services meet those requirements; and (3) Streamline
relationships between internal customers and suppliers and employees of the business and
external customers and suppliers. However, implementing a quality initiative stops short of
managing a business from a strategic, systems perspective that can be accomplished using
various management models, quality award criteria, and standards. This paper proposes that
organizations should use a model which integrates quality concepts and strategic
management concepts into a powerful systemic structure called the 5P’s Model. The authors
suggest that this model is especially effective for small businesses since they are not as
complex as larger organizations. In other words, they can more easily develop and align their
respective Purposes, Principles, Processes, People, and Performance which are the elements
of the 5P’s Model.
KEY WORDS: 5P’s Model, Quality, Quality Improvement, Quality Standards, Strategic
Management Models, Strategic Quality Management, Management System
Journal of Management and Marketing Research
What Management and Quality, Page 2
INTRODUCTION
The entrepreneurial spirit is essential for the economic well being of a nation and the
free enterprise system itself. Entrepreneurs have the passion for ensuring that their
businesses survive because business success means personal success. As they create
businesses, they generally think of providing the best products and services at the best prices
so that they can acquire customers. So, without contemplating definitions of quality, small
business creators begin their journey with a passion for excellence. Yet many of these
entrepreneurs do not have the background, expertise, or desire to manage their businesses
strategically, and they often do not implement quality systems and initiatives until they are
required to do so by customers.
QUALITY INITIATIVES
Managers who wish to implement quality initiatives should study quality models,
concepts, and tools developed and popularized by W. Edwards Deming (1986, 1939), Joseph
Juran (1995, 1993, 1992, 1989, 1988), Philip Crosby (1994, 1984, 1979), Kaoru Ishikawa
(1985, 1982), Mildred Golden Pryor, J. Chris White, and Leslie A. Toombs (1998), Pryor and
Cullen (1993, May-June), and others. In order to understand quality initiatives, one must first
understand what quality is. Deming (1986, 1939) was one of the first to talk about meeting
or exceeding customers’ expectations and requirements that are determined or modified
through continuous communication between customers, front-line associates, and
management. Juran (1995) says that quality is fitness for use. Crosby (1979) refers to quality
as conformance to requirements, not goodness. Neither Deming, Juran, nor Crosby
specifically addresses processes, relationships, or value in their definitions of quality. Of the
three experts, only Deming includes a focus on customers. This paper will use the following
definition of quality (Pryor, White, and Toombs, 1998, p. 2.3):
“Quality refers to the extent to which processes, products, services, and
relationships are free from defects, constraints, and items which do not
add value for the customer.”
Using Pryor’s definition of quality, small businesses can implement a variety of
quality initiatives such as Six Sigma (Harry and Schroeder, 2000), Strategic quality
management (Pryor, White & Toombs, 1998), and Total quality management (Ishikawa,
1985; Feigenbaum, 1991; Harrington, 1995; Juran, 1995) as well as various organizational
development initiatives relating to teams, empowerment, and other concepts that have the
potential of improving all aspects of a business. However, in order to ensure long-term
survival and success, major change or improvement initiatives should be implemented in
conjunction with the use of various management models such as the Strategic management
Model, the 5P’s Model, and the Malcolm Baldrige National quality Award Criteria. In other
words, quality initiatives should be integrated into the strategic management of an
organization. The model which integrates quality into the strategic management of an
organization and requires the alignment of its elements is the 5P’s Model also referred to as
the 5P’s Strategic Leadership Model.
MANAGEMENT MODELS
Traditionally, small organizations have been less likely to utilize strategic
management models and strategic planning concepts than large organizations for many
reasons: (1) Small organizations are often family-owned; (2) Small business leaders are often
more focused on day-to-day operations as opposed to management models and strategic
Journal of Management and Marketing Research
What Management and Quality, Page 3
management systems; (3) Small businesses have less money to spend on training; and (4)
Their competitors generally operate the way they do – without using management models and
implementing improvement systems. Also, entrepreneurs who develop small businesses
usually have little desire to establish routine processes and procedures. On the other hand,
large organizations often have strategic planning departments, more people who encountered
management models and strategic concepts when they completed their management or other
college degrees, more money to spend on training, and large competitors which are
strategically-focused and competitively-driven.
This paper proposes various management models that small business leaders can use
to integrate quality initiatives into the strategic management of their organizations. In so
doing, they can increase the probability of their organizations long-term survival.
Strategic Management Model
One such model is the Strategic management Model proposed by Pryor, White and
Toombs (1998) whereby small business owners or managers understand and utilize elements
of Strategic management to manage their business. The Strategic management Model
includes a SWOT analysis (i.e., analyzing a firm’s internal strengths and weaknesses and its
external threats and opportunities), as well as mission, vision, values, goals and objectives,
strategy formulation and deployment, measurement and feedback, critical success factors,
and competitive advantage. Those elements are defined in Table 1.
Table 1
Strategic Management Model Elements
Source: Summarized and adapted from Hitt, Ireland, and Hoskisson (2004); and
Pryor, White and Toombs (1998).
Strategic Elements Definition
SWOT Analysis Analysis of internal strengths & weaknesses
And external threats & opportunities
Mission Why an organization exists
Vision
Where or what an organization wants to be in the
future
Core Values
Principles that people in an organization care
about and believe in that influence their behavior
Go
als and Objectives
Broad, high
-
level desired results as well as
specific, measurable outcomes necessary to
make the vision a reality
Strategy Formulation
The plan of how and when to achieve the goals
and objectives
Strategy Deployment Deployment or execution of Strategic Plans
Measurement & Control The monitoring and feedback element that
answers the questions “How is the organization
doing?” and “Are any modifications necessary?”
Critical Success Factors
What an organization has to do right to succeed
Distinctive
Competencies
Unique capabilities that give an organization an
advantage over its competitors
Journal of Management and Marketing Research
What Management and Quality, Page 4
Several of the original “Quality gurus” suggested that strategic management or
strategic planning is essential for quality initiatives to be successful (Deming, 1986; Juran,
1988; Crosby, 1994). Many authors suggest using a variety of business excellence models,
criteria, theories, tools, standards, strategies, environmental analyses, training, surveys, and
research to manage and improve small businesses (Hewitt, 1997; Jarvis, Curran, Kitching,
and Lightfoot, 2000, Collyer, 1996; Hamzah and Ho, 1994; Hansson and Klefsjo, 2003;
Wessel and Burcher, 2004; Gulbro and Shonesy, 2000; Cagliano, Spina, Verganti, and
Zotteri, 1998; Bilston and Sohal, 1995; McAdam and Fulton, 2002; Boon and Ram, 1998;
Nwankwo, 2000; Anderson and Sohal, 1999; Davig, Brown, Friel, and Tabibzadeh, 2003;
McNamee, and Greenan, and McFerran, 1999).
Other authors (and this paper) insist that quality initiatives must be integrated into the
strategic management of organizations (Chandler and McEvoy, 2000, Fall; Pryor, Anderson,
Toombs and Humphreys, 2007; Pryor, White, and Toombs, 1998; Pryor and , May-June,
1993; Butz, 1995; Garvin, 1988,). To further emphasize this point, Butz (1995, May, p.106)
states the following about Total quality management:
“Many argue that TQM [continuous improvement] is already linked to the
company strategy because most strategic plans include quality goals, TQM is
led by the senior management team, and projects are chosen based on their
importance in achieving business success. While all of this is true, it doesn’t
go far enough. strategic planning and TQM must become a single process.”
The following pictorial further emphasizes the impact that the customer should have on the
management of an organization and the extent to which strategic planning and quality
initiatives must be integrated to achieve the required results.
Figure 1
Strategic Planning, The Missing Link
Customer
Strategic
planning
TQM
culture
Continuous
improvement
Results
Source: Butz, H.E. (1995, May). Strategic planning: The missing link in TQM,” Quality
Progress, Vol. 28, No. 5 pp. 105-108.
5P’s Model
While the Strategic management Model is a model which small business leaders
should use for long-term survival and success, it does not include all of the elements of the
5P’s Model, developed by Pryor, White, and Toombs (1998). The establishment of strategic
Journal of Management and Marketing Research
What Management and Quality, Page 5
direction and the strategic management model is included in one of five elements necessary
for an organization to be successful. For pneumonic reasons, the authors call this element
Purpose. The other four elements are Principles, Processes, People, and Performance. The
5P’s Model and the alignment of the 5P’s are depicted as follows:
Figure 2
The 5P’s Model
Purpose
Principles, Processes
People
Performance
Sources: Pryor, M. G., White, J. C., and Toombs, L. A., Strategic quality
management: A Strategic, Systems Approach to quality, Thomson Learning, 1998.
Pryor, M. G., Anderson, D., Toombs, L. A., Humphreys, J. H. (2007). Strategic
implementation as a core competency: The 5P's model. Journal of Management
Research, 7(1), 3-17.
The arrows in Figure 2 depict the connection between strategy (Purpose) and structure
(Principles as internal structures and Processes as external structures) and the influence of
structures on employee behavior (People) and corresponding results (Performance). Strategy
drives structure; structure drives behavior; and behavior drives results. The arrow from
Performance to Purpose represents the feedback mechanism for guiding an organization
toward its objectives. This feedback connection is essential to successful Strategic quality
management. The primary motivation of the 5P’s Model (an essential ingredient in Strategic
quality management) is to guide an organization toward performance excellence, world-class
status, and long-term survival. Metrics and measurements are vital to track status and gage
success in this endeavor.
Some elements of the 5P’s Model are similar to the Strategic management Model
previously mentioned. However, the individual five elements are not only important as
individual elements. Their alignment is also important. The individual elements of the
5P’s Model are discussed below:
Purpose
The purpose of an organization, in the 5P’s Model, involves all the elements that constitute
the strategic intention of the organization. This includes the organization’s mission, vision,
goals, and objectives, as well as strategies for achieving the vision, mission, and goals. Small
Journal of Management and Marketing Research
What Management and Quality, Page 6
business leaders must establish the strategic direction and goals of their organizations as well
as the strategies and tactics for achieving them. Since strategies drive structure (Chandler,
1962), Processes and Principles should be aligned with Purpose.
Principles
These are the guiding philosophies, assumptions, or attitudes about how the organization
should operate and conduct business. They are the integrity base, ethics, and core values to
which employees are expected to make a commitment when they are hired. These core
values are the foundation for the way decisions are made and employees behave. Leaders of
small businesses, especially family-owned small businesses, understand the principles upon
which their organizations were founded and upon which they currently operate. However,
they may or may not understand how to convey those principles to their employees or how to
align principles with the other elements of the 5P’s Model.
Processes
Processes are the organizational structures, systems, and procedures that are used to make the
products or perform the services that the organization provides, as well as the infrastructure
and rules that support these systems and procedures. Performance appraisal methods,
communication patterns, and production systems are examples of processes. In small
businesses, processes are generally defined by the people doing the job and are often not well
documented. It is difficult to manage and improve (or even replicate) undocumented
processes. Therefore, small business leaders should ensure that all processes are documented
by checklists, process maps, or process flowcharts. Streamlined Processes that are well
documented and Principles that are well communicated can drive behavior that is necessary
to achieve Performance excellence.
People
They are the employees (individuals and teams) who perform work that is consistent with the
Principles and Processes of an organization to achieve its Purpose. They are the active
components through which work results are accomplished. Purpose, Principles, and
Processes must be in place before People can be consistently effective. If small business
leaders understand and can align Purpose, Principles, Processes, and People, they are more
likely to achieve Performance excellence.
Performance
Performance encompasses all the metrics, measurements, and expected results that indicate
the status of the organization and are used as criteria for decision making. Performance
results are fed back into the strategic management process to provide a means of feedback
and control. It is essential that small business leaders understand and establish measurement
and feedback systems for their organizations long-term survive and profitability.
It is not enough just to understand and apply the elements of the 5P’s Model
separately. The 5P’s must be aligned with each other in order to achieve maximum
efficiency and effectiveness. For example, if organizational leaders want People to work in
teams, they must set up Processes to reward team success, not just individual employee
success. If one of the organization’s core values (Principles) is performance excellence, then
Performance must be evaluated and improved. In other words, metrics systems must be
Journal of Management and Marketing Research
What Management and Quality, Page 7
developed that measure the right things—safety, security, quality, on-time delivery, etc.;
baselines and targets must established; actual results must be compared to targets; and the
results must be fed back through the system so that Processes, products, services, and
relationships can be improved. Using the 5P’s Model, small business leaders would
incorporate the Strategic management Model and could incorporate the use of award criteria
and standards included in this paper to assess, manage, and improve their organizations.
QUALITY AWARD CRITERIA AND STANDARDS
As mentioned previously, there are many different types of award criteria and
standards. The ones that are discussed in this paper are the Malcolm Baldrige National
quality Award Criteria, ISO 9000, ISO 14000, and the Small Business Standard. In the web
site for its Small Business Guide to Making Standards Work, the British Standards Institute
(n.d.) notes that “All businesses can benefit from standards, from small local firms to global
heavyweights. Through strategic standardization, market access, innovation and profitability
are all given powerful support, while regulatory obligations can be met simply and
effectively.”
Malcolm Baldrige National quality Award Criteria
The United States made its first national commitments to excellence in terms of
quality, speed, and efficiency when President Reagan issued Executive Order No. 12552 in
1986 and Executive Order No. 12637 in 1988. The latter Executive Order gave the following
definition of an organizational performance standard:
“Organizational performance standard means a statement that quantifies and
describes the desired level of quality, timeliness, and efficiency of services to
be provided by an organization.”
Then when the Malcolm Baldrige National quality Award (MBNQA) was established
in 1988, the United States provided a management model or a management System that
people can use to assess and operate their businesses with the expectation of excellence as the
result. According to the MBNQA Criteria for Performance Excellence booklet (2009), the
Baldrige Criteria strengthen U.S. competitiveness in three ways: (1) helping improve
organizational performance practices, capabilities, and results; facilitating communication
and sharing of best practices information among U.S. organizations of all types; and serving
as a tool for understanding and managing performance and guiding organizational planning
and opportunities for learning. The Criteria for Performance Excellence booklet (2006)
further states, “The Criteria are designed to help organizations use an integrated approach to
organizational performance management that results in:
Delivery of ever-improving value to customers, contributing to marketplace success;
Improvement of overall organizational effectiveness and capabilities; and
Organizational and personal learning.”
In other words, the MBNQA Criteria can be used by small business leaders as a management
model to systematically understand and manage all aspects of their business; as a tool to
assess and improve their organization and its operations; and as a tool for benchmarking other
organizations (especially MBNQA recipients) and learning from them.
The seven categories of the MBNQA Criteria are Leadership, Strategic Planning,
Customer Focus, Measurement, Analysis, and Knowledge management, Workforce Focus,
Process management, and Results. The Criteria are based on the following core values and
concepts: visionary leadership, customer-driven excellence, organizational and personal
learning, valuing employees and partners, agility, focus on the future, managing for
Journal of Management and Marketing Research
What Management and Quality, Page 8
innovation, management by fact, social responsibility, focus on results and creating value,
and systems perspective. To properly use the MBNQA Criteria for assessment or to
strategically manage a business, one must understand each individual category of the Criteria
and the core values and concepts upon which they are based as well as the necessity for
alignment among the seven categories. However, the Criteria, core values, concepts, and
framework are fully explained in the Criteria for Performance Excellence booklet previous
mentioned. This booklet can be obtained from the web site of National Institute of Standards
and Technology (NIST), an agency under the U.S. Department of Commerce or from the
American Society for quality (ASQ) which assists in administering the Baldrige Award
Program under contract to NIST. Therefore, these Criteria are available to any organization
throughout the world which can access NIST or ASQ by internet or telephone (NIST, n.d.).
In addition to the United States of America, various continents, countries, states, cities
and other governmental entities have excellence awards with criteria that are similar to the
Baldrige Criteria for Performance Excellence. Examples are the European quality Award, the
Deming Prize, the Japan quality Award, and the many U.S. state awards (e.g., Texas) simply
utilize the Baldrige Criteria as the state criteria for performance excellence.
ISO and Other Standards
On the website for the International Organization for Standardization (2006) two ISO
standards were referred to as "generic management system standards" because they can be
applied to any organization, of any size, in any industry or sector of activity, whether outputs
are products or services. These organizations may be business enterprises, healthcare
organizations, government agencies, etc. The ISO website further clarified the word generic
as meaning that any organization regardless of its scope of activity can establish a quality
management or an environmental management system and can use the relevant standards of
ISO 9000 and ISO 14000 as the basis for system requirements. management system was
defined on the ISO website (ISOa, n.d.) as follows:
"Management system refers to the organization's structure for managing its
processes - or activities - that transform inputs of resources into a product or
service which meet the organization's objectives, such as satisfying the
customer's quality requirements, complying with regulations, or meeting
environmental objectives.”
With the above definition of management system, small business leaders can then use ISO
9000 and ISO 14000 standards to help manage and improve their organizations.
ISO 9000
The International Organization for Standardization indicates that the ISO 9000
family of standards addresses quality management" which refers to what an organization
does to fulfill: (1) the customer's quality requirements, and (2) applicable regulatory
requirements, while aiming to (3) enhance customer satisfaction, and (4) achieve
continual improvement of its performance in pursuit of these objectives (ISOb, n.d.).
In 2006, the International Organization for Standardization website stipulated that
“ISO 9001:2000 is used if you are seeking to establish a management system that provides
confidence in the conformance of your product to established or specified requirements” and
“ISO 9004:2000 is used to extend the benefits obtained from ISO 9001:2000 to all parties
that are interested in or affected by your business operations. Interested parties include your
employees, owners, suppliers and society in general.” There are similarities between the
previously-discussed Categories of the MBNQA Criteria and the eight principles included in
Journal of Management and Marketing Research
What Management and Quality, Page 9
ISO 9000: Principle 1 (Customer Focus); Principle 2 (Leadership); Principle 3 (Involvement
of People); Principle 4 (Process Approach); Principle 5 (System Approach to management);
Principle 6 (Continual Improvement); Principle 7 (Factual Approach to Decision Making);
and Principle 8M (Mutually Beneficial Supplier Relationships). These principles are very
important to small businesses just as they are to medium and large size businesses.
ISO 14000
The ISO 14000 family of standards is primarily concerned with environmental
management. The website for the International Organization for Standardization (2006)
indicates that this means two things: “(1) Minimize harmful effects on the environment
caused by its activities; and (2) Achieve continual improvement of an organization’s
environmental performance
(http://www.iso.org/iso/iso_catalogue/management_standards/iso_9000_iso_14000.htm).
Like ISO 9000, ISO 14000 is a generic standard and is applicable to all organizations
regardless of size, product or service, and type of organization or industry.
ISO 9000 and ISO 14000 are respectively quality and Environmental standards that
can be used for assessment and compliance. Together they comprise a significant part of a
sophisticated management model which can help ensure an organization’s long-term
commitment to performance excellence and survivability. Today, many organizations require
their suppliers to be ISO 9000 and/or ISO 14000 certified.
Small Business Standards
The Small Business Standard, developed by the management consultants with the
Chartered quality Institute (CQI), is another business standard/model which could be useful
to small businesses. On its website, CQI (2007) states: The Small Business Standard “has
been designed for use in ventures such as micro businesses, small and medium size
businesses. Where the term ‘management’ is used in relation to a micro business it may
simply mean the proprietor.”
The Small Business Standard is divided into nine sections: (1) management
responsibility; (2) Business reviews; (3) Customer care; (4) Staff and employees; (5) Work
environment and processes; (6) Suppliers; (7) Documentation; (8) Preventing and correcting
product or service problems; and (9) Records. While the standard is simplistic when
compared with the Strategic management Model, the 5P’s Model, or the MBNQA Criteria, it
has many of the key ingredients of an organizational management system. It would be a
good starting point for leaders of small businesses who wish to systematically manage and
improve their organizations (CQI, 2007).
On the website of the British Standards Institute, the following information is
provided about the application of standards in small businesses:
Small . . . businesses can achieve real benefits from standards. Here (in the
Small Business Guide to Making Standards Work) you will find the
information and resources small . . . enterprises need to make the best possible
use of, and contribution to, the standardization process. Used to best
advantage, standards can: (1) eliminate inefficiencies in resource allocation;
(2) improve speed to market and reduce risk; and (3) enable effective
competition with larger organisations (British Standards Institute, n.d.).
Journal of Management and Marketing Research
What Management and Quality, Page 10
CONCLUSION AND RECOMMENDATIONS
In order to improve their organizations and their operations, small business leaders
should utilize various management models and standards in conjunction with quality
initiatives and tools. In fact, they should integrate quality initiatives into the strategic
management of their organizations. Management models suggested in this paper for use by
small business leaders were The Strategic management Model, The 5P’s Model, and The
Malcolm Baldrige National quality Award Criteria. Using either or all of the three
management models would benefit small business leaders who seek to manage their
organizations from strategic, systems, and continuous improvement perspectives. In addition
to the management models, three standards discussed were: ISO 9000 and ISO 14000, which
were developed by the International Organization for Standardization, and The Small
Business Standard, developed and distributed by the Chartered quality Institute. These
standards all have key elements that would benefit small businesses and other organizations
in terms of management from a strategic perspective, in terms of improving of their
organizations and operations, and in terms of long term viability and profitability. The
standards discussed are really management models, with ISO 9000 focusing on quality, ISO
14000 being an environmental standard, and The Small Business Standard serving as a
simplistic adaptation of various quality criteria.
This paper is the theoretical basis for ongoing empirical research efforts to attempt to
determine which models and standards are being utilized by small businesses that have been
successful and profitable over the long term. The paper suggests that the 5P’s Model is a
more sophisticated model which integrates elements of other models, criteria, and standards
and proposes additional elements as well as the alignment of all elements. Yet this
sophisticated model can be easily understood and utilized by small business leaders. Case
studies of small businesses are being developed as the authors seek to determine the extent to
which quality improvement initiatives are being integrated into the strategic management of
successful small businesses.
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