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TQM
20,2 Reviewing the European
excellence model from a
management control view
98
Su Mi Dahlgaard-Park
Institute of Service Management, Lund University, Sweden

Abstract
Purpose The purpose of this paper is to review and identify the dominating paradigms within
management control theories in order to investigate adoptability of the European excellence model
(EEM) as an alternative management control model or a framework.
Design/methodology/approach The paper has conceptual character based on a literature
survey.
Findings The six dominating paradigms are identified within management control theories and
based on the analysis it is concluded that EEM can be adapted as a management control model if its
limitations are supplemented with other ideas or frameworks.
Originality/value This is the first study which investigates adaptability and adoptability of EEM
as a management control model.
Keywords Control, European quality model, Control systems, Evolution, Management activities
Paper type Conceptual paper

1. Introduction
Since the beginning of the twentieth century, where early management theoreticians
such as Taylor, Emerson, and Church introduced the basic ideas of control, the
concepts and frameworks of management control theory changed constantly. As Berry
et al. (1998) point it out, the early study of management control seems to be rooted in a
functionalistic and rather mechanical paradigm[1] in line with other general
management and organization theories, which were dominating in the same period.
However, the literature study on the subject shows that during the last several decades,
various alternative viewpoints based on different sets of conceptions and assumptions
have been presented.
Quality management (QM) is a management philosophy, which has evolved from a
rather narrow and mechanistic approach known as statistical quality control
introduced by Shewhart to a more holistic and humanistic approach under the term
total quality management (TQM) and business excellence (Dahlgaard-Park et al., 2001).
During the last five decades the basic assumptions and paradigms of quality have
constantly changed parallel with the general changes of paradigms in societies and
global environments. These changes are not unique within the quality field but more or
less in line with changes within other management fields including organizational
The TQM Journal theory and management control theory (Dahlgaard-Park, 1999).
Vol. 20 No. 2, 2008
pp. 98-119 Despite the increasing focus on QM during the 1980s and 1990s, and despite the fact
q Emerald Group Publishing Limited
1754-2731
that quality became a central agenda for top managers, there have been relatively
DOI 10.1108/17542730810857345 limited attempts on searching, reflecting and analysing its framework seen from a
broader theoretical perspective (Scott and Cole, 1999). In fact, this was also one of the The European
major criticisms, which the quality movement often received from various excellence model
theoreticians during the middle and last part of the 1990s in particular from
organization theorists (Dahlgaard-Park, 2006).
This criticism has been received in the quality research field with some surprise. One
of the reasons is that the development of the QM philosophy and in particular TQM was
based on an emergent need for a new management philosophy and a holistic/integrative 99
management model, which had an emphasis on quality as the main strategy for
improving competitiveness. The need for improving quality and thereby strengthen
competitiveness was perceived as an emergent task for major European and North
American companies, which were confronted with serious challenges from Japanese
companies. The Japanese companies had become masters in practicing company wide
quality control (CWQC) and in this way they gained a competitive advantage compared
to most western companies. This company wide approach to quality was unknown for
most Western companies until the 1980s, when it was understood what had happened in
Japan, and why a new management philosophy was needed. The huge interest toward
TQM during the last part of the 1980s and the 1990s should be understood with these
contextual factors as a background. The existing theories and models of organization
and management could not provide the necessary principles, tools and systems to meet
these new challenges and problems. For practitioners, the majority of the existing
management theories were considered to be either too theoretical or too fragmental.
As insiders in the quality field we find that much of the criticisms from
organization or management theorists are unreasonable, because those critics are often
based on insufficient knowledge on the quality movement and the becoming process
of TQM (Dahlgaard-Park, 2006). For instance lack of a generally agreed definition
was one of major criticisms toward quality management. However when I investigated
in several other management fields such as knowledge management, human resource
management, strategic management etc. it became clear for me that the phenomena of
lacking generally agreed definition was a common characteristic of those invested
management fields. This does not mean that all criticisms toward quality management
are irrelevant! I am more than critical for quality professionals intended or not intended
blindness to enlighten the difficulties in relationship with implementation of quality.
Especially the dilemma in terms of political, psychological, cultural and behaviour
resistances in organisations are most frequent obstacles when implementing quality
and hence there are strong needs for more focus on these uncovered or ignored areas.
I believe that other management theories can be used in reflecting and analysing the
quality frameworks and thereby to deepen quality professionals own understanding
on weaknesses as well as strengths of the quality frameworks.
With this consideration in background, I have chosen to investigate
management control theory one of the main management theories in order
to reflect the quality frameworks in light of management control view. Thus the
overall aim of the article is to compare the contemporary thinking within
management control theories with the contents and basic concepts/principles of
one of the leading quality award models the European excellence model (EEM).
In this article, we will assume that the leading quality award models such as the
Malcolm Baldrige Model and the EEM reflect the latest step in the evolution of
quality management theories.
TQM The purposes of this paper are to:
20,2 . review some of the main management control theories, and based on the
literature review (sections 2 and 3);
.
investigate whether the EEM is comparable to the current thinking within
management control theories (sections 4 and 5);
100 .
investigate the adoptability as well as adaptability of the model as a
management control model (section 6).

2. Reviewing management control theories

Review on selected literature on management control theories indicates that there are
various approaches based on different assumptions, focus areas, different weighting of
importance, etc.
Goal directed, adaptive, social structured, contingency (Berry et al., 1998),
bureaucratic, market and clan (Ouchi, 1980), cybernetic, homeostatic and political
paradigms (Hofstede, 1978), management principle, cybernetic, contingency, agency,
psychological, and case view (Merchant and Simon, 1986), technical-rational and
collectivist view (Ansari and Bell, 1991) are some examples of the different paradigms
identified in the management control theories. When taking time aspect in
consideration, we can observe several changes in wording.
The differences on definitions adopted by various experts reflect both the
theoreticians selection of a certain approach and the evolution aspect when the theories
are reviewed from a historical perspective. Here we have selected some definitions, which
indicate different viewpoints held by theorists in the field. At the same time we can
observe how definitions have been evolving during the last several decades.
Management Control is the process by which managers assure that resources are obtained
and used effectively and efficiently in the accomplishment of the organisations objectives
(Robert Anthony, 1965).
Management control is a social process in a social, or maybe socio-technical system (Geert
Hofstede, 1978).
Organizational Control is defined as the systematic process through which managers regulate
organizational activities to make them consistent with the expectations established in plans
and to help them achieve all predetermined standards of performance (K.A. Merchant, 1985).
Management control systems are broadly defined as the formalized routines, reports,
and procedures that use information to maintain or alter patterns in organizational
activity (Robert Simon, 1991).
Management control refers to all organizational arrangements, formal and informal, designed
to accomplish organizational objectives. It includes formal structure, operational controls,
rewards, budgeting, planning and other similar activities (Shahis L. Ansari and Jan Bell,
1991).
Management control is the process by which managers influence other members of the
organizations to implement the organizations strategies (Robert Anthony and Govindarajan,
2001).
The presented definitions indicate that there are both similarities and differences
between them. Here we assume that the similarities may be related to the core concepts
of management control, while the differences may be related to the various adopted The European
paradigms as scholars ideas about organizations vary and thereby also their excellence model
theorization vary. Another reason for various definitions may be related to the
evolutional aspect of management control theories. As it is observable in general
management as well as in organisation theories, people adopt new ideas and thereby
theorization varies (see for instance the managerial watch, Dahlgaard-Park, 2006, p. 217).
Most definitions seem to include the concepts of (systematic) process, managers, 101
objective(s)/goal(s)[2], strategy, effectiveness and efficiency, maintenance and assurance.
As several theorists (see Merchant and Simon, 1986, p. 184; Ansari and Bell, 1991, pp. 5-6)
point it out, most definitions of control seem to be centred on a few key issues; a focus on
the behaviour of organizational participants and a concern with the effect of this
behaviour on organizational outcomes. Focus on behaviour of organizational participant
is related to the concept of efficiency, and the concern with outcomes is related to
effectiveness. In line with these few key issues, most theorists (see Merchant, 1985; Lowe
and Machin, 1987) seem to agree, that some of the main functions of the management
control processes involves planning, setting standards of performance, coordinating,
communication information, evaluating, influencing people, and processing information.
If we focus on the differences between the definitions, we find several curious
phenomena. First, instead of organizational objective(s)/goal(s), the concept of
strategies seems to be adopted in the later definitions. Second, the role of managers
seems to be more explicitly expressed and rather narrowly defined in the early
definitions. For instance, Anthony in his latest definition from 1998 used management
influence, and in his early definition from 1965, he used managers assure. Third,
while Simon (1991) focuses on formalized aspects of management control processes
and the importance of using information, Hofstede (1978) considers the control process
as a social process, and in line with Hofstedes view, Ansari and Bell (1991) include
both formal and informal aspects in the process. Fourth, in the earlier definitions, the
role of predetermined organizational goal(s)/objective(s) is more explicitly expressed,
while this aspect is presented somewhat more ambiguously in the later definitions. As
mentioned above, one possible reason for these different views can be explained by
various paradigms held by the theorists and the evolutional aspects of organization,
people and management as parts of changing society.
Many theoreticians in management as well as organisation fields have attempted to
categorise theories in order to get an overview. Outcomes of these attempts became
basis for schools of management thought or management paradigms (see for instance,
Morgan, 1997/1986; Dahlgaard-Park, 2006). Merchant and Simon (1986) have identified
several approaches within the research field of management control. Those approaches
or paradigms introduced by Merchant and Simon (1986) within management control
literature are quite similar to the organisation paradigms introduced by Morgan, same
year (Morgan, 1997/1986) under the term of metaphors. It may be natural when we
consider the management control as a part of organization theories.
The following six management control approaches have been elaborated inspired
by several organization theorists and Merchant and Simons literature overview
together with my own literature review. The elaborated six approaches, which are
discussed in section 3 below, will be adopted as a conceptual multidimensional
framework for analysing the European excellence model in evaluating whether the
model can be considered as an excellent management control model.
TQM 3. Six alternative management control approaches
20,2 Bureaucratic and mechanic view of control
Bureaucratic and mechanic view of control use primarily formal mechanisms in
organizations in terms of objectives, rules, procedures, policies, hierarchy of authority,
reward systems, standardization, and other bureaucratic mechanisms to standardize
and influence behaviour, assess performance, and monitor undesirable deviations from
102 the standard (Ouchi, 1980; Daft, 2001). Formalization of every activity makes it
possible to standardize and thereby increase predictability. Organizations are viewed
here as a closed entity, and therefore the interdependence and interact ional aspects of
the organization and its environment are not considered. Here concepts of control and
related issues are treated as a discrete function of management (Merchant and Simon,
1986, p. 186) and the prevailing style is numerous listings of how-to-do oriented
prescriptive management principles and techniques (see Figure 1). The majority of the
early literature on management control, such as writings of Emmerson (1912), Church
(1914), Fayol (1916/1949), Diemer (1915) can be categorised in this approach.
Furthermore, most literature belonging to functionalist paradigms, where
management control procedures and processes are explained in relation to their
function in supporting managements purposes without doubting and questioning the
existence of unproblematic organizational goals (Berry et al., 1998), can be categorised
in this approach.

Cybernetic view of control

From a cybernetic view, every process of control, i.e. activities for planning, budgeting,
performance evaluation, comparison, discovering discrepancies and correction,
resource allocation and reward systems are seen from an information processing
view and considered as information-based activities. The core idea of the cybernetic
view is a systems self-regulating ability based on feed back loops[3], with the
objectives set in advance, outcomes compared with objectives, and discrepancies
reported to managers for correcting actions (Green and Welsh, 1988). Here detection of
error and correcting actions will take a place as a dynamic process depending on the
feedback loops (Morgan, 1997/1986; Hofstede, 1978).
Concepts of feed forward loops are involved in more advanced cybernetic control of
view, for instance when to evaluate the suitability of the existing rules and to
determine whether it is necessary to redefine the rules and the existing standard. The

Figure 1.
Bureaucratic and
mechanic school of MC
first generation theorists of the cybernetic view considered organizations as rather The European
closed system while the second-generation theorists held open system view. In this excellence model
view, the modelling and identifications of interrelations and causal patterns are
considered to be important (Merchant and Simon, 1986, p. 187; Hofstede, 1978, p. 232)
(see Figure 2).
Management control literature of Koontz and Bradspies (1972), Horngren (1982),
Amy (1979), Kaplan (1982) and Green and Welsh (1988), and Simon (1991) can be 103
categorized in this approach.

Agency view of control

Here an organization is viewed as a unity where agency relationships are central
elements. Agency relationships are defined as relationships, where one party (a
principal) delegates to another party (an agent) a service to be performed for
compensation (Merchant and Simon, 1986, p. 188). Thus, the two top management
relationships in an organizational context top management shareholders, and top
management subordinates are considered to be agency relationships. Here
organizations are regarded as a series of contractual relationships between principals
(owners or managers) and agents (employees). In this agency view, achieving a
commonality of interest between principals and their agents and minimizing total
agency costs in various settings are the main focus. Agency costs are costs associated
with monitoring agent behaviour and enforcing contracts (see Figure 3).
Control literature of Baiman (1982), Chow (1983), Waller and Chow (1985), Baiman
and Evans (1983) and Oviatt (1988) can be categorised under this approach.

Human resource view of control

This view is supported and inspired by the huge amount of literature related to the
human resource field. Some underlying assumptions are (Shafritz and Ott, 2001;
Merchant and Simon, 1986; Bolman and Deal, 1997):
.
Organizations exist to serve human needs, and thus the attention is payed on the
interplay between individuals and their work.
.
Organizations and people need each other.
.
A good fit between individuals and the organization benefits both: people find
meaningful, developing and satisfying work, and organizations get committed
people with creativity, talent and motivation.

Figure 2.
Cybernetic school of MC
TQM
20,2

104

Figure 3.
Agency school of MC

When organizations are viewed as coalitions of decision-making individuals

(Merchant and Simon, 1986), individuals cognitive variability and cognitive
limitations in terms of peoples way of motivation, inter personal behaviour,
learning, expectation, psychological well being, emotional processes etc. are considered
to be important. An early approach of human resource view has been based on more
closed system view, where employees are mainly considered as internal member of
organizations. A broader view of employees both as members of organizations and as
members of society and consideration of multiple human needs based on this more
open system view is a recent phenomenon.
Among others, writings of Argyris (1952), Becker and Green (1962), Schiff and
Lewin (1970), Rockness (1977), Hirst (1983) can be categorised under this approach (see
Figure 4).

Contingency view of control

One central premise of the contingency view of control is that there is no universal one
best approach, which is applicable to all organizations and in all circumstances (Otley,
1980, p. 305), and this premise further assumes that any way of organizing is not
equally effective. Organizational effectiveness and efficiency are affected by numerous
contingency factors such as size, scale, organizational life cycle, technology,
uncertainty, resource dependency, leadership style, organizational culture and
organizational structure. Therefore management must be concerned to find out the

Figure 4.
HR school of MC
good fits in relationship with its internal as well as environmental circumstances. The European
Organizations are viewed here as open systems, that need to adapt to environmental as excellence model
well as internal circumstances (see Figure 5).
Some recognised contingency factors include environment (Burns and Stalker, 1961;
Otley, 1980), strategic choice (Chandler, 1962; Porter, 1980), technology (Woodward,
1965; Zuboff, 1988) organizational structure (Hopwood, 1972; Otley, 1980; Mintzberg,
1979; Ouchi, 1977), and employee motivation (Etzioni, 1961). 105

Cultural view of control

The main premise of this view is that all ideas about organizations and related issues
are socially constructed through meaning creating processes of organizational
members (Berry et al., 1998). This view assumes that there exist organisational
cultures, similar to national cultures, which is composed of many intangible and often
irrational components. Organizational cultures, composed by values, norms, traditions,
mental models, perceptions, artefacts and beliefs, provide a social energy that force
people to act (Kilmann et al., 1985). Hence the cultural view rejects the idea that
rationally formulated objectives, rules, documents, and processes are the main driving
forces for all organizational activities.
Theorists advocating this view argue, that the influence of culture aspects on
accounting and control practices is significant (Ansari and Bell, 1991). Hence, they pay
attention on how individual and social actions come to define, refine and shape control
systems, and how the concepts of rationality and efficiency are used to legitimate
individual members political interests and to strengthen their power position.
Literature of Ansari and Bell (1991), clan control introduced by Ouchi (1980),
political paradigm introduced by Hofstede (1978), Miller and OLeary (1987), Birnberg
and Snodgrass (1988), and Gambling (1987), Gray (1990) can be considered to belong to
this view (see Figure 6).

4. The European excellence model a brief introduction

The following information and analyses are primarily based on the EFQM publications
The EFQM Excellent Model (1999a), The European Way to Excellence (1997) and
Assessing for Excellence (EFQM, 1999b).

Figure 5.
Contingency school of MC
TQM
20,2

106

Figure 6.
Culture school of MC

The History
The European Foundation for Quality Management (EFQM) is a membership based,
not for profit organisation, created in 1988 by 14 leading European businesses, with a
mission to be the driving force for sustainable excellence in Europe and a vision of a
world in which European organisations excel. Today EFQM has more than 800
members in 38 European countries.
EFQM launched the European Quality Award Model in 1991 and invited at the
same time companies in Europe to apply for the European Quality Award based on
their own self-assessment following the models fundamental concepts and criteria.
The first winner of the European quality award was Rank Xerox, Europe, in 1992.
Among the winners in subsequent years are Milliken Europe (1993), D2D (1994), Texas
Instruments Europe (1995), BRISA (1996), SGS-RHOMSSON Microelectronics (1997),
TNT UK (1998), Yellow Pages (1999), Nokia Mobile Phones, Europe and Africa (2000).
In 1997 the models name changed to The European excellence model, and the
models criteria, sub-criteria and potential areas to address were through a major
revision in 1999.

The structure of the model

The EFQM excellence model is as said above a non-prescriptive framework based on
nine criteria. Five of these are Enablers and four are Results (see Figure 7).
The Enabler criteria cover what an organization does. The Result criteria cover
what an organization achieves. Enablers cause Results.
The Model, which recognizes there are many approaches to achieving sustainable
excellence in all aspects of performance, is based on the premise that:
Excellent results with respect to performance, customers, people and society are achieved
through leadership driving policy and strategy that is delivered through people, partnerships
and resources and processes.
The arrows emphasize the dynamic nature of the model. They show innovation and
learning helping to improve enablers that in turn lead to improved results.
The models nine boxes, shown in Figure 7, represent the criteria which to assess an
organisations progress towards excellence. Each of the nine criteria has a definition
and a number of sub-criteria. The sub-criteria pose a number of questions that should
be considered in the course of an assessment.
 The European
excellence model

107

Figure 7.
The structure and criteria
of the EFQM model

Finally there are lists of possible areas to address under each sub-criterion. The areas
to address are not mandatory nor are they exhaustive lists but are intended to further
exemplify the meaning of the sub-criterion. (These possible areas to address are not
included in this paper).

5. The EEM criteria and the six management control approaches

In this section, all criteria including sub-criteria of the EEM will be presented. The five
enabler criteria will be compared with the six management control approaches developed
in section 3. The four result criteria are excluded in our comparisons, because it is
assumed that they are logical outcomes of the enablers (what the organization is doing).
In the comparisons the degree of interrelationships between the criteria and the
approaches will be indicated as H (High) and M (Moderate). The comparisons are
mainly based on the conceptual understanding of the approaches used as well as the
criteria in the EEM. In order to deepen the conceptual understanding of the criteria, the
suggested potential areas to address under each criterion as presented in the material
published by EFQM have also been studied and used. The degree of H (High) indicates
that there are explicitly expressed interrelationships between approaches and the
Excellence Model criteria. The degree of M (Moderate) indicates that there are some
interrelationships that are implicitly indicated.

Criterion 1: leadership
Definition: Excellent leaders develop and facilitate the achievement of the mission and
vision. They develop organisational values and systems required for sustainable
success and implement these via their actions and behaviours. During periods of
change they retain a constancy of purpose. Where required, such leaders are able to
change the direction of the organisation and inspire others to follow.
Sub-criteria:
. Leaders develop the mission, vision, values and ethics and are role models of a
culture of excellence.
.
Leaders are personally involved in ensuring the organisations management
system is developed, implemented and continuously improved.
TQM .
Leaders interact with customers, partners and representatives of society.
20,2 .
Leaders reinforce a culture of excellence with the organisations people.
.
Leaders identify and champion organisational change.
. According to Table I it is clear that the dominating approaches or paradigms
behind the main driver for excellence Leadership are the Cultural View
108 and the Human Resource view of control.

Criterion 2: policy and strategy

Definition: Excellent organisations implement their mission and vision by developing a
stakeholder focused strategy that takes account of the market and sector in which it
operates. Policies, plans, objectives and processes are developed and deployed to
deliver the strategy.
Sub-criteria:
.
Policy and strategy are based on the present and future needs and expectations
of stakeholders.
.
Policy and strategy are based on information from performance measurement,
research, learning and external related activities.
. Policy and strategy are developed, reviewed and updated.
.
Policy and strategy are communicated and deployed through a framework of key
processes.

As seen from Table II, the two approaches, which seem to dominate the Policy and
Strategy criterion, are the cybernetic approach and the contingency approach.
As said above one central premise of the contingency view of control is that there is no
universal one best approach applicable to all organizations and in all circumstances.
Therefore management must be concerned to find out the good fits in relationship with
its internal as well as environmental circumstances. The first two sub-criteria are
explicitly concerned on this issue.
From a cybernetic view, every process of control, i.e. activities for planning,
budgeting, performance evaluation, comparison, discovering discrepancies and

Table I.
Human
Interrelationships
Bureaucratic Cybernetic Agency resource Contingency Culture
between leadership
criteria and the six M H M H
management control
approaches Notes: H High; M Moderate

Table II.
Human
Interrelationships
Bureaucratic Cybernetic Agency resource Contingency Culture
between policy and
strategy criteria and the M H M M H
six management control
approaches Notes: H High; M Moderate
correction, resource allocation and reward systems are seen from an information The European
processing view and considered as information-based activities. The core idea of the excellence model
cybernetic view is a systems self-regulating ability based on both negative feedback
loops and feed forward loops. All sub-criteria reflect more or less the importance of
information flow and information based activities.
The problem here, as we see it, is how to balance these two dominating approaches?
There seems to be a risk that the rational and top-down expert oriented cybernetic 109
approach will be the dominating approach when deciding on the strategies, policies,
and overall goals, and also in the policy deployment process. When considering that
there was no interrelationship identified concerning the cultural approach, this risk
seems obvious.

Criterion 3: people
Definition: Excellent organisations manage, develop and release the full potential of
their people at an individual, team-based and organisational level. They promote
fairness and equality and involve and empower their people. They care for,
communicate, reward and recognise, in a way that motivates staff and builds
commitment to using their skills and knowledge for the benefit of the organisation.
Sub-criteria:
.
People resources are planned, managed and improved.
.
Peoples knowledge and competencies are identified, developed and sustained.
.
People are involved and empowered.
.
People and the organisation have a dialogue.

As seen from Table III, the two dominant approaches are the human resource approach
and the cultural approach. We find that logical and consistent with the dominating
approaches behind the Leadership Criterion. The fourth sub-criteria focusing on the
necessity of dialogue between people and organization is interpreted here as being
related to the agency approach, hence the interrelationship is indicated as M
(moderate). Cybernetic approach is identified both in the first and second sub-criteria,
because we interpreted that improvement of people resource and peoples knowledge
as well as competencies are only possible when the organizations systematically
measure and collect information concerning on these factors. As we regard the people
criterion to be one of the most important contingency factors, the interrelationship on
this approach is defined to be M (Moderate).

Criterion 4: partnerships and resources

Definition: Excellent organisations plan and manage external partnerships, suppliers
and internal resources in order to support policy and strategy and the effective

Human
Table III.
Bureaucratic Cybernetic Agency resource Contingency Culture
Interrelationships
M M H M H between people criteria
and the six management
Notes: H High; M Moderate control approaches
TQM operation of processes. During planning and whilst managing partnerships and
20,2 resources they balance the current and future needs of the organisation, the community
and the environment.
Sub-criteria:
.
External partnerships are managed.
.
Finances are managed.
110 .
Buildings, equipment and materials are managed.
.
Technology is managed.
.
Information and knowledge are managed.

As seen from Table IV, the dominating approach behind this criterion is the cybernetic
approach. We find that logical in relation to the management of finances, buildings,
technology etc., i.e. in relation to management of hardware, but in relation to the
management of external partnerships, and also to management of information and
knowledge we do not find it logical. Here we need other approaches and assumptions,
which can take part on more software including the informal dimension. The culture
and human resource approaches seem to have been neglected in these relationships.

Criterion 5: processes
Definition: Excellent organisations design, manage and improve processes in order to
fully satisfy, and generate increasing value for, customers and other stakeholders.
Sub-criteria:
.
Processes are systematically designed and managed.
.
Processes are improved, as needed, using innovation in order to fully satisfy and
generate increasing value for customers and other stakeholders.
.
Products and services are designed and developed based on customer needs and
expectations.
.
Products and services are produced, delivered and serviced.
. Customer relationships are managed and enhanced.

Here the dominating approach seems to be the Cybernetic (see Table V), while no
interrelationships are identified regarding the Culture approach. In order to have
success with process management including process improvements, creating an
organizational culture based on empowerment and trust are critical success factors,
and these critical success factors do not seem to be presented here.
The dominating cybernetic view can be seen as an overly rational approach, which
focuses and emphasizes the formal aspects of organizations. Here every process of
control, i.e. activities for planning, budgeting, performance evaluation, comparison,

Table IV.
Human
Interrelationships
Bureaucratic Cybernetic Agency resource Contingency Culture
between partnership and
resources criteria and the M H M M
six management control
approaches Notes: H High; M Moderate
discovering discrepancies and correction, resource allocation and reward systems are The European
seen from an information processing view and are considered as information-based excellence model
activities. This tendency is in our view a barrier for several of the fundamental
assumptions behind the EEM.
In the following section, the summary of the comparative results will be presented
and further discussed.
111
6. An excellent model for management control?
A summary of the comparisons in Tables I-V is shown in Table VI. Some observations
which can be seen from Table VI are:
.
All criteria show more or less interrelationships with the six management control
approaches.
. The most dominating approaches on the first criterion (leadership) are the
human resource approach and culture approach. These two approaches are also
dominating on the third (people) criteria, which can be interpreted as logical.
What seems not so logical is that these two approaches only have moderate
interrelationships on the criteria of policy and strategy and processes.
.
The cybernetic approach has a high interrelationship with the criteria of policy
and strategy, partnership and resources, and processes. This observation seems
surprising compared to the previous observation. It seems that there is lack of
consistency between leadership (the main driver of excellence) and the other
criteria of the model.
.
The culture approach has high interrelationships with the Leadership criterion as
well as the People criterion, but no significant interrelationships with the other
enabler criteria. There seems to be a risk that the intended direction for building the
proper culture would not be followed in practice (in the processes where actual
action are taking place). Thus a gap seems to exist between intention and practices.
.
The cybernetic approach is dominating in several enabler criteria. In relationship
with the two previous observations, this indicates that the importance of
informal and rather intangible aspects which are often not straightforward to
quantify and measure, are underestimated in the model.

Based on the analysis, we will discuss the suitability of the European Excellence Model
for management control in terms of advantages as well as disadvantages.

Advantages of the European excellence model as a management control model

The European excellence model can be considered as a holistic and integrative
approach, where strategic, managerial and operational control processes are integrated
in the model. Anthony (1965) and Anthony and Dearden (1980) have made a clear

Table V.
Human
Interrelationships
Bureaucratic Cybernetic Agency resource Contingency Culture
between processes
M H M M M criteria and the six
management control
Notes: H High; M Moderate approaches
 20,2

112
TQM

Table VI.
Interrelationships

control approaches
and the six management
between the EEM criteria
Approaches criteria Bureaucratic Cypernetic Agency Human resource Contingency Culture

Leadership M H M H
Policy and strategy M H M M H
People M M H M H
Partnership and resources M H M M
Process M H M M M
Notes: H High; M Moderate
distinction between these three different control processes, where the management The European
control process is rather narrowly defined without integrating other processes. excellence model
However, several theorists (see Berry et al., 1998; Lowe and Puxty, 1989; Simon, 1991)
argue for the necessity of a more integrated and a holistic management control view
seen from a system perspective. The excellence model incorporates the three different
control processes as interrelated enablers. The strategic planning is explicitly
incorporated in the criterion of policy and strategy, the operational control is explicitly 113
incorporated in the process criterion, and the management control is embedded in all
four enabler criteria.
The excellence models integrative and holistic character can be supported by
another fact, observed in our analysis. As observed through the previous sections,
elements of all six management control approaches are more or less incorporated in the
excellence model.
Another advantage of the model is the linkage between the various enabler criteria
(leadership, people, policy and strategy, partnerships and resources and processes) and
the result criteria concerned with the achievement of organizational goals in terms of
people results, customer results, society results and key performance result criteria.
The cause and effect relationships are clearly indicated in a dynamic process oriented
system model. In addition, the cause and effect relationship is grounded in ideas about
the generation, processing and feedback mechanisms of information. Through the
enabler criteria, information is expected to be generated and processed. The result
criteria in terms of people and customer satisfaction, impact on society as well as
business results are expected to be utilised as feed forward loops in an ongoing
process, and in this way, it is assumed to increase learning and improvement activities
by reassessing goals, strategies and standards in the enabler criteria. Utilising both
feedback and feed-forward loops in correcting, maintaining and improving
organisational performances can be seen as a good usage of the cybernetic approach
as it incorporates both the first and second generation of cybernetic ideas. The first
generation of cybernetic ideas in terms of feedback loop for correcting and maintaining
the current standards (morphostasis) and the second generation of cybernectic in terms
of feedforward loop for improving and setting a new standard (morphogenesis).
Seen from a system approach, the model is based on an open system theory, which
fully recognises the importance of interaction between organisation and the
environment in a broad sense.

Limitations and disadvantages of the EEM

As observed in the summary (Table VI), the model is based on the structure, model
criteria and the eight fundamental concepts (see section 3), and these frameworks can
be a hindrance to accept and consider other alternative possibilities to achieve
excellence. Although the model is relatively complex, the model does not encompass all
possible variables. A model is in its nature always a simplified and generalised version
of a reality. Thus it cannot cover all aspects of real situation. Further the law of
requisite variety (Ashby, 1963; Morgan, 1997/1986) warns us that any systems
internal complexity and diversity level should correspond or match to the complexity
and variety of its environments if the system shall deal challenges. It is then almost
obvious that a simple model will not be able to cope the complexity of a system with
high degree of uncertainty and unpredictability.
TQM Clear indications of cause and effect relationships in terms of enabler and results
20,2 criteria may be questioned. Furthermore the model pays little attention to
contextual/contingency factors. For instance, the right approaches to implement may
vary depending on numerous contingency factors such as organizations size, age,
business fields, maturity and motivation levels of employees, educational background of
employees, organizational culture, speed of change in markets and customer demands etc.
114 The inconsistency between intention and practices discussed previously can be a
problem, when adopting the model. The inconsistency is observed between leadership
intention and the practices (processes), in particular. The culture aspect in terms of
value, vision and mission building was explicitly focused under Leadership, while this
focus was more or less ignored in policy and strategy, partnership and resources as
well as in the process criterion. These inconsistencies seem to be a major defect of the
model and may have been the reason for many companies problems with
implementing the model as an overall framework for strategic planning and
improvement of the business. Political, psychological, and other behaviour resistances
which cause high failure rates in relationship with implementation of quality system
may partly be connected to the inconsistencies between leadership intention and the
practices (processes). As a human being is basically also a political being, power and
political aspects together with psychological aspect have to be recognised and be
thoroughly treated within the frameworks of quality management. Continuous
ignoring these aspects, there will be continuous high rates of failures. Also in relation
to an award approach these inconsistencies seem to be a major problem both for
companies applying for the European Quality Award and for the examiners.

7. Conclusions and questions for further research

Through this paper management control theories are examined in relationship with the
EEM. We have further investigated whether the EEM is comparable to the current
thinking within management control theories. Based on the analysis, adaptability of
the model as a management control model was examined by identifying and
discussing advantages as well as disadvantages of the model.
Despite the recognized limitations and disadvantages of the EEM, we consider that
the model may be a useful management control model as a guiding framework. My
recommendation is that the best strategy for using the model as a management control
model is adaptation rather than adoption. This is the same conclusion, which
Dahlgaard and Dahlgaard-Park (2006) came to after having compared the EEMs criteria
with the critical success factors for innovation and new product development identified
through a comprehensive literature review. Through this comparison it was obvious that
several major critical success factors were not addressed in the EEM. Hence before
applying the EEM for improving innovation and new product development it is
recommended to be critical first and to use all existing knowledge and experiences to
revise the model so that it better fits with the given context. This is called adaptation.
Another recommendation for overcoming the limitation of the model is to
supplement with other approaches, for instance the four Ps (People, Partnership,
Processes and Products/services) and the four aspects of organizational realities, see
Table VII (Dahlgaard-Park and Dahlgaard, 2006, 2007). In this approach
organisational realities are understood as a dynamic interplay and mutual
interrelationship between the micro-macro and the subjective-objective aspects.
 The European
Subjective/intangible Objective/tangible
excellence model
Micro/individual Individual feelings, perceptions, Individuals patterns of behaviour
assumptions, values, thoughts, Leadership behaviour and patterns
intentions and will, beliefs, motives, Patterns of interactions
meaning creations, desires, motivation, Patterns of partnership
commitment, loyalty (Building Individual work 115
leadership, Building people, Building Individual work performance (Building
partnership) leadership, Building people, Building
partnership, Building processes)
Macro/collective Groups, departmental and Vision, mission statement, Symbols,
organizational norms, values, political Ceremony, Traditions, Patterns of inter
interest, power relationships, informal group/inter departmental interaction
power structure, conflicts, and partnership, Patterns of inter
interpersonal-, inter group meaning organizational partnership, Groups,
creations (Building leadership, departmental and organizational work
Building people, Building partnership) processes, Training and education
programmes, Rules, Techniques,
Communication channel, Structures,
Manuals, Technology, Routines,
Products (Building Leadership, Table VII.
Building People, Building Partnership, The four aspects of
Building Processes, Building Products) organizational realities

When we combine the EEM with this approach much of the problems caused by an
oversimplification can be overcome as the four aspects and their interrelationships
reflect the very complex nature of the organisational reality.
When we analyse EEM in relationship with the four organizational realities, it is
also obvious that EEM focuses on the macro-objective aspects of organisational
realities and very little attention is paid to other aspects. This is another way to
illustrate some possible reasons for high implementation failure rates of the EEM and
quality management in general.
If organizations are aware of the limitations, inconsistencies and the risks connected
with the application of the model, they may be able to overcome the problems
mentioned above.
As far as the literature review is concerned, there is no model from the area of
management control, which is compatible to the EEM. Parallel with the launch and
application of the EEM (1991) a considerable number of theoreticians and companies
have made efforts in adopting and integrating the balanced scorecard model (Kaplan
and Norton, 1992, 1996) as a management control model.
The strength of the balanced scorecard is its simplicity, which maybe is the main
reason for its growing popularity all over the world. Its simplicity makes the balanced
scorecard easy to understand and hence easy to communicate to people at all levels from
top management to middle management and to the shop floor level. People understand
easily and accept that objectives (critical success factors), measures (key performance
indicators) and targets have to be established for each of the four perspectives of the
model (financial, customer, process and learning/growth). Its weakness is that it is not
easy to understand the linkages and hence the cause-effect relationships between the
TQM objectives (CSF), measures (KPI) and targets of the four perspectives. This
20,2 understanding is important when implementing and using the balanced scorecard for
controlling and improving daily operations. For that purpose a more detailed model is
needed such as the EEM shown in Figure 1. So the balanced scorecard is considered as
less applicable as a management control model than the European excellence model.
The analysis and summary presented in section 5 and 6 are based on comparisons of
116 the definitions, concepts and approaches of management control (section 2 and 3) and the
fundamental concepts, structure and criteria of the EEM (section 4 and 5). In this way, we
can say that the conclusions are based on a systematic desk research approach, which of
course has its limitations. Hence further research is needed in order to supplement the
theoretical approach in this report with a collection of empirical evidence on:
. How various ordinary companies and award winning companies are using the
EFQM excellence model as a management control model?
.
Why they are using the model the way they are doing?
.
What are major problems when using the model in a real set?

This paper is the first step in starting such a research project.

Notes
1. Frameworks, schools of thought, models, perspectives are some corresponding terms to the
term of paradigm (see more about paradigm Kuhn, 1970; Burrell and Morgan, 1979;
Morgan, 1997/1986; Scott, 2003, Dahlgaard-Park, 2002).
2. Anthony and Dearden (1980) made distinction between the two concepts of goals and
objectives. The concept of goals are used as overall aims of the organization in a broad term,
while the concept of objectives are used as the more specific statements of planned
accomplishments in a given time period.
3. Feed back loops assume that the system has capabilities to set goals, measure performance,
compare performance with the goals (the standard), feed back information about negative
discrepancies into the process and take corrective actions in order to reduce discrepancies in
the future. Feed forward loops assume that interventions are programmed in advance and
the goals (standards) are continuously candidates for questioning and change.

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About the author

Su Mi Dahlgaard-Park Lic. Econ., Dr. Phil., is currently Research Director and Professor at
Institute of Service Management, Lund University, Sweden. Her research areas have been human
resource management, quality management, organization theory, learning and knowledge
management, and organizational change. Within these areas she has published more than 100
research papers and books. She has received several awards for her research, teaching and
publications, among others, Emerald Literati Award for outstanding paper. She is an
academician of IAQ (International Academy for Quality); co-founder and co-chair of the
International QMOD (Quality Management and Organizational Development) Conference during
the last ten years; member of editorial boards in scientific journals of TQM Magazine, European
Quality, International Journal of Management History, The Asian Journal of Quality, Euro Asian
Journal of Management and Chinese Management Studies. She is a frequent keynote speaker at
conferences, universities and organizations throughout the world. Su Mi can be contacted at:
[email protected]

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