Total business excellence - a new management model for operationalizing excellence

Abstract

Purpose

- The purpose of this paper is to identify and address the underlying causes of costly quality/ethical problems that have prevented companies to achieve and sustain excellence. More broadly, the study has leveraged data from multiple sources to determine root-cause issues and propose a new management model that enables leadership to prevent and effectively address quality/ethical problems by operationalizing excellence. For the purpose of this research, operationalization is defined in terms of developing a sustained culture of excellence and enabling a firm to systematically prevent, detect, and address costly problems in their daily operations.

Design/methodology/approach

- The study has defined the concept of excellence in terms of measurable results based on ten critical success factors: products, financials, stakeholders, employees, leadership, societal, operational, innovation, alignment, and ethical excellence. To identify and address the underlying causes, this study has used a spiral research model to develop and improve an assessment process for the consistent examination of three types of firms: national quality award recipients, successful and responsible Fortune-500 companies, and landmark ethical violators. Findings from case studies were then substantiated using results from current research studies and conclusions from over 20 years of international field work/experience.

Findings

- To operationalize excellence, this study found that organizations need to develop a foundation for two tightly coupled and inseparable variables: ethics, excellence. Case studies show when these two variables are inadequately planned, integrated, checked, and enforced across business operations, they cause serious and costly problems. This foundation enables a firm to maximize performance, the return on investment, and to sustain performance in each of these critical success factors (CSFs) using the following interconnected building blocks of excellence: grander purpose, measurable results, effective collaboration, leadership development, individual development, continuous alignment, continuous innovation, ethics management, and ethics foundation.

Research limitations/implications

- The application of the assessment instrument proved to be complex due to the difficulties of transforming conjecture into certainty using existing online corporate records (e.g. understanding true leadership intention). Findings of this study are applicable to any industry and type and size company. The building blocks of this new management model should not be developed and implemented in an isolated, standalone, or piecemeal manner; nor should they be forced onto an organization as a new program. For best results, each building block needs to be implemented as an interconnected component of a complete and total system of management and infused into the fabric of the culture as a normal part of the daily operations.

Originality/value

- Total business excellence is a proposed new management model for operationalizing excellence. This new model serves three major purposes. First, it enables an enterprise to responsibly deliver a continuous flow of innovative and competitive products as defined and measured by ten CSFs. Second, it enables management to prevent costly quality/ethical problems by developing a unified and responsible strategy for planning, execution, and quality. Most importantly, it provides a missing platform of opportunity where individuals can incrementally grow and develop as they add meaningful personal, professional, and societal value.

1. Introduction

With the emergence of a global society, many organizations have formed a chain of value networked organizations spreading their operations to the far corners of the globe. In this and other models of collaborative excellence, each member organization is expected to contribute to the value chain based on their unique strengths, competencies, and areas of specialty (Lee et al. , 2006; Sundharam et al. , 2013). This approach provides a number of benefits such as added resources, speed, flexibility, and responsiveness required to deal with a turbulent and unpredictable business environment. However, it also presents leadership with a new set of complex problems/challenges that require a unified and responsible strategy for: planning, execution, and quality (Matthew et al. , 2012). These problems are often magnified when dealing with different cultures, languages, and nationalities across the globe (Adler et al. , 2011). Case studies show, when ethics and excellence are inadequately planned, integrated, checked, and enforced in these cross-functional business operations, companies cause serious/costly international incidents and landmark ethical violations such as:

the ten-year institutional cover up of general motor's ignition switch flaws resulting in 30 fatalities to date, an estimated cost of 7 billion dollars in fines/damages, and being identified as one of "America's Nine Most Damaged Brands" (Verschoor, 2014; Edwards, 2014);

the gross negligence, serious safety violations and irresponsible corporate actions resulting in the 1984 Bhopal disaster, serious environmental damage and the death of 15,000 individuals (Ramanathan, 2010);

the unethical leadership, corporate wrongdoings, unfair corporate practices, misleading financial representation, and collusion with its auditors resulting in the bankruptcy of ENRON corporation (Cohen, 2002);

the irresponsible disposal of more than 18 billion gallons of toxic waste over a 25-year period in the Ecuadorian rivers and Amazon rainforest resulting in severe health problems and irreversible environmental damage (Kimerling, 2001);

the fraudulent marketing of drugs for unapproved and off the label uses resulting in the largest healthcare fraud settlement of the time ($7 billion dollars of criminal fines) and unintended health consequences (Evans, 2010);

the unfair labor practices and breach of code-of-conduct resulting in public humiliation, international customer boycotts, and the near bankruptcy of Nike Corporation (ICMR, 2002);

the use of dangerous, high risk, and poisonous material in the development and manufacturing of products such as the use of lead in toys resulting in poisoning generations of children (Gilbert and Wisner, 2010); and

the use of irresponsible and illegal sales/marketing tactics to discredit a competitor, stifle innovation, and a deliberate attempt to cover up evidence resulting in a multibillion dollar antitrust fine (ICMR, 2009).

To proactively prevent and address these costly problems, companies have traditionally taken one of two approaches. First, they have enhanced many of their internal programs dealing with better training, good leadership, and effective collaboration and communication (e.g. Baumann and Andraski, 2010). Second, they have relied on new programs to overcome many of these challenges such as corporate responsibility, total quality management (TQM), and strategic planning (McGrath, 2013; Frost, 2010, 2011; Taneja et al. , 2011). Moreover, many of these improvements have included enabling factors previously ignored/overlooked in earlier quality management frameworks such as better human resource management and stakeholder satisfaction (Matthew et al. , 2012). However, despite the recent emphasis placed on these critical programs, many organizations continue to experience costly quality/ethical problems (Edwards, 2014; Davies, 2014; Evans, 2010; Gilbert and Wisner, 2010).

This study asks why do companies continue to repeat many of the same costly quality and ethical mistakes. Moreover, what management model and culture is needed to operationalize multiple dimensions of excellence as measured by ten CSFs: product/service excellence; financial excellence; stakeholder excellence; employee/individual excellence; leadership excellence; societal excellence; operational excellence; innovational excellence; alignment excellence; and ethical excellence (for additional details, refer to Sections 3 and 4).

What case studies will show is that most companies are currently using an incomplete and loosely defined compliance-based management of ethics. This approach is primarily intended to protect an enterprise from legal ramifications, maintain an image of integrity, and address many of the low-road ethical violations such as disobeying local, state, or federal laws. However, it does not address many of the high-road ethical violations that require a values-and-integrity-based management model that depends on sound individual judgment and discretionary effort; good ethical reasoning; a caring and responsible attitude; and a strong commitment to do the right thing (Petrick, 2011; De Colle et al. , 2014; Winrow et al. , 2012; Sternberg, 2011; Paine, 1994, 2007). One example of this high-road violation that could have been avoided is general motor's ten-year ignition switch safety scandal discussed earlier.

To close the remaining gaps, leadership must shift the enterprise from a purely compliance-based management of ethics to an integrated compliance-based and value-based approach. To make this transformation, this study has asked what specific employee/organizational competencies and capabilities, cultural sensitivities, and foundational requirements are needed for the enterprise to operationalize excellence and systematically prevent major planning and execution, quality, and ethical problems.

What this study has found and will show is that the development of a responsible and sustainable framework for business excellence (BE) requires the systematic operationalization of two tightly coupled and inseparable variables: ethics, excellence. To substantiate findings, this study has developed and applied an assessment instrument to compare and contrast three groups of enterprises in a variety of industries: BE/national quality award/total quality management recipients (T1 group), successful and responsible Fortune-500 companies (T2 group) and landmark ethical violators (T3 group). This paper presents findings and implications on existing BE/NQA/TQM frameworks.

2. Literature review

A review of current research studies combined with 20+ years of international field work showed that the development of a new management model to operationalize excellence requires findings from three separate but closely linked research tracks. These tracks include: the impact and application of ethics and social responsibility on BE; the impact of effective leadership and human resource management on performance, growth, and development; and the impact of quality initiatives and their evolution to BE/TQM programs.

In the first track, this study has leveraged learning from the compliance-based management of ethics, which is considered to be the low-road approach, as well as findings from the value-based approach which is referred to as high-road, integrity-based, and/or virtue ethics (van Zyl, 2002; Dawson and Bartholomew, 2003; Becker, 2004; Paine, 1994, 1997; Ryan and Trahan, 2007; Roberts, 2009; Hemphill and Lillevik, 2011). The reasoning process for the use of this research track was to leverage the learning to build a solid and unmovable foundation to operationalize and then sustain excellence (Sankowska, 2013; Taneja et al. , 2011; Srinivasan, 2010; Paine, 2003). This learning was complemented by the research on the use of universal moral values for the development of corporate code-of-ethics (Sims, 2000; Dawson and Bartholomew, 2003; Becker, 2004; Bowen, 2004; Schwarts, 2005; Maximiano, 2007; Elango et al. , 2010; Visser, 2011; Hemphill and Lillevik, 2011; Bolton et al. , 2011; Audi, 2012).

In the compliance-based management approach, standards are created using federal, state, and corporate laws, principles, and guidelines (e.g. code-of-conduct); procedures are established to prevent and detect criminal behavior, and then individuals/groups are trained, monitored, and expected to adhere to these guidelines. This approach is intended to protect an enterprise from legal ramifications and maintain an image of integrity. While the value-based management of ethics has a greater customer focus, it is built around shared principles, deals with a set of universal moral principles, and is expected to be developed and maintained from the grounds-up using employee discipline, integrity, and empowerment (Piper et al. , 1993; Paine, 1994, 2007; Sims, 2000; Audi, 2012).

A central theme that runs through value-based management of ethics is that individuals are not bad or unethical by nature. Rather, it highlights the urgency and need for a set of universally applicable and recognizable ethical qualities/virtues. This need suggests that ethical qualities are not only appealing and applicable to all races and cultures but are also an integral part of what makes us human (e.g. Dawson and Bartholomew, 2003; Kung, 2009). However, those innate human qualities must be nurtured and developed within every individual (Piper et al. , 1993; Ferdowsian, 2009; Audi, 2012). This development, individual transformation, and internalization of ethics takes time, effort, and self-discipline; it demands good role models and leadership support; and it requires a nurturing work environment (Sims, 2000; Jiang et al. , 2011). For example, a meaningful system of ethics needs to raise awareness, sensitivity and encourage individuals to internalize a line of ethical reasoning such as: "Is my decision right or wrong (good or bad)? Am I dealing with factual information or is this just conjecture? What is the consequence of my action (or decision)? Will my actions be beneficial or cause harm? Is this decision fair and equitable? Did I give the individual what they were due? Would I want to be treated this way?" This mindset, line of reasoning, and congruence between individual and organizational ethics is often lacking which leads to an ethical violation (Bowen, 2004; Kaptein, 1998, 2008; Kaptein and Bons (2014); Elango et al. , 2010; Jiang et al. , 2011; Sternberg, 2011). In fact, whether we are struggling with a race/gender pay differential issue, British petroleum's safety and ethical violations in the Gulf of Mexico, or trying to understand what would motivate an individual to use lead and other hazardous substances in children's toys, these are all good examples of novel situations or symptoms of unethical/immoral behavior that are primarily driven by greed, short-term gains, lies and deception, abuse of power, partisan politics, prejudices, and other ethical failures (e.g. Visser, 2011).

What this study found is that no new or enhanced compliance-based or value-based effort alone would change the culture of greed and scheming, stop the abuse and misuse of power and position, or prevent individuals and organizations to ride (or bypass) the traditional system of compliance and control (Cunningham and Harris, 2006; Rosenson, 2005; Petrick, 2011; Paine, 1994, 2007; De Colle et al. , 2014). In fact, research suggests ethical laws and principles are inherently incomplete and inadequate because they impede moral reasoning (Lager, 2010; Michael, 2006; Lim and Phillips, 2008); they are deliberately minimalistic in nature (Thompson, 1987); they carry non-criminal penalties (Rosenson, 2005); they do not inspire human excellence and distinction (Paine, 1994); they proscribe a small area of conduct, focussing on the domain of financial conflicts of interest; they deliberately circumscribe the scope of ethics (Rosenson, 2005) and are far too fragmentary to address our inner-most thoughts and actions (legislate morality). Moreover, a stream of well-supported research on ethics suggests that compliance and control-based programs tend to develop resistance and rebellion to change (e.g. Lager, 2010), place focus solely on the letter of the law and thus reduce needed discretionary effort to fully understand and address potential ethical violations (e.g. Rosenson, 2005; Sternberg, 2011), channel behavior in harmful directions (Paine, 1994, 1997) and weaken an individual's ability to exercise their own moral judgment (e.g. Agboola and Salawu, 2011; Lager, 2010; Stansbury and Barry, 2007; Paine, 1994, 1997; Roberts, 2009; Hemphill and Lillevik, 2011). This claim is more so true when executives are in collusion with owners, board of directors, external auditors and other major stakeholders of the organization (e.g. Enron and Arthur Andersen). The fact of the matter is that our existing system of training and education, our ethics and value system, our current legal system and the consequences of the justice system have proven to be inadequate in preventing ethical lapses. Additionally, each of these prior efforts has proven to be too fragmentary and incomplete to stop, reduce, and prevent unethical/immoral behaviors and actions (Rosenson, 2005; Lennick and Keil, 2008; Paine, 1997; Porter and Kramer, 2006). For example, the 2011 Pennsylvania State University sex abuse scandal demonstrated that officials followed the letter of the law by immediately reporting the incident to their superiors, but failed to take necessary and discretionary steps to report the act of sex abuse to the police, to the Department of Public Welfare, or go public with the incident which would have prevented additional ethical violations (Gill and Allen, 2013).

What we found is that even if ethical laws did carry criminal penalties, evidence suggests that the serious gaps in ethics, the ingenious loopholes people and enterprises find to bypass existing laws and regulations cannot be bridged by a mere handful of new (or enhanced) laws, institutional guidelines and procedures alone (Rosenson, 2005; Lager, 2010; Shadnam and Lawrence, 2011); nor can these issues be addressed by traditional or popular approaches in changing behavior and culture such as coercion, compliance, oversight or a new code-of-conduct (Paine, 1994; Stansbury and Barry, 2007; Maximiano, 2007; Roberts, 2009; Lager, 2010; Kaptein, 2010). For example, many companies will gladly pay fines and penalties when profits outweigh penalties. A few good examples of such companies would be Pfizer, Eli Lilly, Bristol-Meyers Squibb, and four other drug makers who paid a total of $7 billion in fines and penalties between 2004 and 2010. Six out of seven of these companies openly admitted in court they had marketed medicines for unapproved uses (Evans, 2010). Based on these findings and case studies, this study determined that a BE/NQA/TQM framework needs to start from a solid and complete foundation of compliance-based management of ethics and gradually shift the enterprise to an integrated system of compliance and value-based approach to ethics.

The second research track drew from a qualitative international study published in 2002 which highlighted and grouped a number of external and internal motivational factors/drivers that makeup a "top-performing employee" in the high-tech industry (Ferdowsian, 2002). This study came across six major categories or groups of external and internal motivational factors that made a significant and sustained contribution to individual performance, creativity, excellence, health, and overall satisfaction in/out of work. These factors included leadership, management, the work environment, the job/work itself, the strength of the individual's emotional intelligence (Goleman, 1997; Mayer et al. , 2004), and a number of internal, but often silent or unspoken, factors such as the maturity of the individual's ethical capabilities. This internal factor was identified to be a source of unlimited or renewable individual energy, motivation, commitment, creativity, performance, responsibility, ethical reasoning and decision making, knowledge management, and personal satisfaction (Paine, 2003; Sternberg, 2011; Tseng and Fan, 2011). Unlimited and renewable in the sense that the individual would willingly and tirelessly follow-through with their work (goals and objectives) with little to no regard or expectation for an immediate reward, recognition, or other financially motivated external incentives. What made this find even more fascinating and relevant to this study is that the individual would continue to follow-through with their objectives even in the face of severe difficulties or repeated failures. This internal factor was determined to be a penetrating inner vision or sense of one's worth (who they are), their purpose and role in life (calling), and how they believe they can serve and add value to the society (Noddings, 2010; Fry et al. , 2010; Collins, 2001) - spiritual perception (Effendi, 1955). In support of this initial finding, it was determined that other researchers have come to the same or similar conclusions (e.g. Covey, 2004; Collins, 2001). For example, this penetrating inner vision was identified and documented in 2004 by Dr Covey in his book "The 8th Habit-From Effectiveness to Greatness" as spiritual quotient (Covey, 2004).

To substantiate this initial finding, this effort was followed up with an assessment and synthesis of current research, industry experience, and best practices in several closely linked areas such as management/leadership, human and organizational behavior, human resources, training and education and business ethics (e.g. Lim and Phillips, 2008; Antonaras et al. , 2011). Moreover, the study leveraged over 20 years of field experience with both blue-collar and white collar employees in the USA, Costa Rica, Malaysia, Philippines, China, and the Caribbean to develop a research instrument to analyze companies (for details, refer to the Design methodology section). This research track facilitated the development of the overall structure and the major components of the assessment process by highlighting the impact and inter-dependencies of the criteria as well as the required foundation necessary to achieve organizational excellence. It also provided evidence that an enterprise can achieve the highest level of sustained performance, innovation, and cohesion if they operationalize ethics, enable their people to develop to their full potential and then leverage that potential to achieve excellence (personal, professional, and societal). Moreover, it showed that in addition to a clear vision and mission, a grander purpose was necessary to bind and align the entire enterprise with a greater cause enabling it to deliver results, rapidly change direction and move very cohesively as a single entity; especially if that enterprise was spread over several continents.

The third research track dealt with the emergence and continuous improvement of the culture of quality and BE during the last few decades. This track helped to identify the remaining capabilities and foundational requirements needed to achieve the highest levels of quality (or excellence), sustain that level of performance over the long run, and be able to systematically identify and prevent serious and costly problem. The quality movement started with the establishment of Japan's national quality award (NQA) for the industry (1951) and its morphosis to a more mature and holistic framework for total quality management (Black and Porter, 1996). The objective of this movement was to achieve sustained BE through the effective management of total quality in every aspect of organizational governance. By some accounts, the business community has witnessed the development and deployment of over 100 NQAs with the goal of managing all critical aspects of organizational excellence (Talwar, 2011; Nitin et al. , 2011). From one perspective, each of these frameworks were offshoots of the engineering and manufacturing-centric total quality control initiative introduced by Dr Deming and were later based on the framework of an existing NQA. Nonetheless, each award has gradually evolved into a more holistic and total model for BE/TQM (BE/TQM). Even though the global business community has not, yet, settled on a common framework and definition for excellence, the concept of TQM and BE has been rapidly converging and becoming one and the same (Bou-Llusar et al. , 2003/2005; Ionica et al. , 2010; Oakland, 1989).

While the major goal and success criteria for each of these national quality standards has basically remained the same, each framework has gone through multiple iterations and has been progressively improved and modernized over time (Lee et al. , 2006). Moreover, each BE/NQA/TQM framework has emphasized one or more aspects of excellence depending on their experience, their cultural differences and the needs/requirements of their localities. Six decades later, we find a number of fundamental commonalties in these frameworks based on the needs of the times, the interaction and dependencies of requirements, and the significance and impact of ethics and social responsibility on how results are delivered. For example, it has become evident that the achievement of excellence is highly unlikely if leadership overlooks: the overall welfare, satisfaction, engagement, and alignment of the workforce with the overall goals and objectives of the organization; the needs, requirements, and expectations of their market and customer base and the responsible way by which leadership plans, executes, and delivers products/services that add meaningful value to the society (Bou-Llusar et al. , 2003/2005; Visser, 2011; Nitin et al. , 2011; Jiang et al. , 2011; Edgeman and Eskildsen, 2012).

The study next looked at the characteristics and success criterions for those enterprises that had received one or more NQAs (e.g. US Baldrige Quality Award). It then compared the criteria for Japan's Deming Prize to that of the TQM criterions set by 19 other national award frameworks. These frameworks include: the US Malcolm Baldrige NQA, the European Excellence Award, the Australian BE Award, the Canadian Award for Excellence, the Japan Quality Award, the Singapore Quality Award, the Indian Golden Peacock NQA, the Rajiv Gandhi NQA, the Brazilian NQA, the UK NQA, the Israeli NQA, the Belarus NQA, the Malaysian Prime Minister's Quality Award, the Fiji Quality Award, the Mongolian NQA, the French NQA, the Swedish Model for Performance Excellence, the Thailand Quality Award, and the Hungarian NQA. In the next step, we reviewed the various iterations made to the Baldrige Quality Award and compared the Baldrige Quality recipients during the last three years. This track narrowed down the major characteristics of those companies that have achieved the highest excellence awards which enabled us to develop a working framework for our assessment instrument (Nitin et al. , 2011; Talwar, 2011; Jiang et al. , 2011). For details on the development of this assessment instrument, refer to the next section.

3. Design/methodology/approach

To substantiate findings and use a well-rounded research methodology, the study leveraged data and learning from three sources: current research, case studies, and field observations. For a consistent analysis of case studies, the study used a spiral research model to develop, improve, and apply an assessment process to compare and contrast three different groups of firms: BE/NQA/TQM recipients (T1 group), successful and responsible Fortune-500 companies (T2 group), and landmark ethical violators (T3 group). The spiral process used findings from current research studies and field observations to develop the assessment instrument, it leveraged the learning from the application of this instrument to continuously improve the process, and then it applied the improved process to identify root-cause issues. Findings from the application of the assessment process were then substantiated once again using results from current research studies and conclusions from over 20 years of field observations.

The assessment process was developed and followed seven major design criterions and 11 qualities commonly attributed to organizations that had prevented costly quality/ethical problems, were able to achieve excellence in one or more of the ten areas/dimensions of total BE defined earlier, and/or were able to sustain superior performance over time. These qualities included:

meet/exceed the criteria for the existing BE/NQA/TQM frameworks currently managing every aspect of organizational excellence (e.g. Bou-Llusar et al. , 2003/2005; Lee et al. , 2006; Talwar, 2011);

meet/exceed the criteria for quality and social responsibility frameworks outlined by the international organization for standards ISO9000 and ISO16000 (Frost, 2010, 2011);

provide an enhanced BE/NQA/TQM framework that enables an enterprise to shift from a low-road and compliance-based management approach to ethics (Roberts, 2009) to an integrated and complete system of compliance and value-based (high-road) management approach (Paine, 1994, 1997; van Zyl, 2002; Becker, 2004; Ryan and Trahan, 2007);

deliver meaningful results that matter and add value to the society, to stakeholders, and meets the needs of a demanding and turbulent global business environment (Freeman, 1984; Freeman et al. , 2007; Steib, 2009; Visser, 2011);

deliver superior results with the least amount of friction, internal conflict/competition, and confusion over roles, responsibilities, and expectation from each member of the enterprise (Adler et al. , 2011; Jiang et al. , 2011; Lennick and Keil, 2008; O'Reilly III and Pfeffer, 2000; Rama et al. , 2009; Sims, 2000);

provide a meaningful and stable grander purpose that unites and aligns stakeholders, enabling the enterprise to develop a transient competitive advantage and move cohesively as a whole (Ferdowsian, 2002; McGrath, 2013);

develop the workforce to their full potential and leverage that potential to deliver leaders that can add value to their company, to their profession, to their own lives, and to the society (Collins, 2001; Ferdowsian, 2002; Covey, 2004);

develop intellectually savvy and ethical leadership that cares, whose purpose is to serve, are roles models of good behavior/character, and champions of positive change (Greenleaf, 1970/1991, 1972/2009; Kung, 2009; Collins, 2001; Lennick and Keil, 2008);

provide a system of effective collaboration, decision making, and problem solving enabling the enterprise to continually improve, strategically develop and deliver results, and generate new products/services (Adler et al. , 2011);

demonstrate that individuals, leadership, and the enterprise take initiative, follows through, and enforce what they claim (Trevino and Weaver, 2001; Reed et al. , 2011); and

provide a consistent, meaningful, and complete foundation to develop and infuse ethical excellence/social responsibility at all levels of the organization (Fry et al. , 2010).

As a baseline and the first design criterion, the assessment process was to meet the requirements set by the top national BE/NQA/TQM frameworks as well as the ISO9000/16000 family of international standards. This meant this self-assessment instrument had to meet 18 different major categories of criterions that manage every aspect of BE established by the prior quality frameworks. These critical aspects include: delivering value-added results that matter; leadership/management development and excellence; clarity of mission and vision; internal and external quality assurance; long-term strategic planning; meaningful corporate values and principles; human resource management and development; effective collaboration, decision making, and conflict resolution; individual creativity and organizational innovation; workforce health, welfare, and satisfaction; information technology development and application; supplier and business partner management; customer care, service, and satisfaction; customer and market needs, requirements, and expectations; clarity and consistency of internal and external communications; system of measurement, analysis, and knowledge management; continuous improvement and process management, and ethics and social responsibility.

Second, the assessment process was designed to demonstrate that words, claims, and legal documents of an enterprise were followed through by meaningful and verifiable actions. To achieve this, the study found that each criteria for excellence had to be traced and checked at four separate but logically connected stages of the BE/NQA/TQM process: check for evidence of the availability of the criteria (e.g. discussed internally, externally, and documented); check for the planning and integration of the criteria into the entire enterprise; check if the criteria is implemented or executed; and check if the criteria is consistently enforced. For example, the study checked to see if an enterprise has the right values and whether those values were planned, integrated, implemented, and consistently enforced when delivering results. More specifically, the assessment process had to validate factors such as consumer safety, security, and privacy; environmental and social impact; workforce impact, and other related factors were considered in the design, development, manufacturing, sale, and marketing of the products/services.

Third, the assessment process had to provide a consistent scoring for each of the case studies analyzed. To achieve this, an 11-point scale was used to gauge or assess each criterion as it went from one phase to the next phase of the BE/NQA/TQM process (0-10). A score of 0 meant no clear evidence of the criteria was found in the enterprise (e.g. not discussed nor documented); a score of 5 meant some evidence of the criteria was found in the enterprise (e.g. discussed publically); a score of 7 meant the criteria was clearly discussed internally, externally, and applied in some areas and a score of 10 meant the criteria was met, discussed internally/externally, and could now be planned, applied, and enforced. Additionally, this assessment has a total of 106-specific criterions (for details, refer to the Results, findings, and call-to-action section). This meant a perfect score would amount to 4240 points: 106×10×4 (106 criterions, ten points per criteria, and four stages of compliance).

Fourth, the assessment process was designed to check that the firm was functioning, moving, and changing direction like a very cohesive system where all its parts (members, processes, and business units) were interconnected, working together well (e.g. little/no friction and internal competition), were receiving the required input from other components, and were providing output/feedback to the other components of the system. This meant that the assessment process had to place greater focus on the enablers, the inter-dependencies, and the foundational aspects of organizational excellence often ignored/overlooked (Sankowska, 2013; Fry et al. , 2010). Research shows many of these enablers and inter-dependencies work together to achieve and sustain the highest level of performance and develop the cultural sensitivities required for BE (Ferdowsian, 2002; Bou-Llusar et al. , 2003/2005; Nitin et al. , 2011; Talwar, 2011; Sankowska, 2013). These areas include: establishing a foundation and a system for effective collaboration during decision making, conflict resolution, and problem solving; establishing an integrated and complete foundation for a compliance and value-based management of ethics (corporate responsibility included); establishing a foundation for strategic and cultural alignment; developing a culture of management/leadership excellence; developing a culture of continuous learning and improvement; establishing a foundation for individual creativity and organizational innovation; establishing a foundation for integrated and complete human resources development and performance management; a delivering meaningful products/services that matter and have a positive social value; and establishing a meaningful grander purpose that can bind, align, and unite an enterprise.

Fifth, the assessment process was designed to check for a complete and effective system of collaboration that could be used concurrently for effective decision making, conflict resolution, and problem solving. This meant that the assessment process had to look for a clear and specific set of collaboration principles, behaviors (roles, responsibilities, and expectations); a process that would be conducive to creativity and ethical decision making; and that the collaboration principles/behaviors were integrated into other building blocks of excellence such as in the leadership and human resources development modules, the continuous innovation module, the stakeholder alignment module, and the foundation and management of ethics (Tables I-III).

Sixth, the assessment process checked for a lifelong development and performance management process (PMP) similar to the concept of a financial 401K. However, in this case the goal and approach behind this initiative would be the full investment in human capital, to provide opportunities that would enable an employee to grow and incrementally develop ethical and intellectual capabilities, to enable the employee to leverage these new capabilities to add meaningful societal value, and to ensure that these long-term benefits would be transferrable from one organization to another organization - the concept of ethical 401K (for details, refer to Section 4).

Finally, the assessment process defines ethics and ethical excellence based on the learning from the three research tracks discussed earlier. Based on these findings, the study concluded that the assessment process should check to ensure the firm had adopted and integrated a core set of universally recognizable, acceptable, and required principles and virtues into the culture or the fabric of the enterprise such as their decision making and conflict-resolution processes; their leadership, management training and development programs; their human resource management programs; and other areas of organizational governance and business administration (Tables II-III, and Section 4).

Once this instrument and assessment process was complete, it was used to compare and contrast a number of medium to large national/multinational organizations in a variety of for-profit, non-profit, and government industries. Organizations selected were primarily from the computer/electronics, automotive, defense, mining, oil/gas, service/hospitality, and healthcare industries. These companies were divided in three groups. The first group of organizations selected was those enterprises with a proven track record of excellence and the required capabilities and foundation to prevent costly problems (T1). For this group, the study selected those organizations that had received one or more BE/NQA/TQM awards. For the second group, we selected a number of successful Fortune-500 companies with proven results and a track record of social responsibility (T2). The third and final group of enterprises we compared with the first two groups were those organizations with one or more well-documented landmark ethical violations (T3). For this group, we selected a number of organizations that were currently in operation as well as those that had declared bankruptcy as a result of serious ethical violations. Using this approach, the study began to identify significant and verifiable patterns after assessing 50 organizations. To demonstrate these patterns, this study has presented an average of the major categories for BE and each type of companies assessed. Additionally, each graph presents three additional examples of individual organizations that would help to demonstrate a few common patterns identified during the assessment process (a total of six items per graph):

(Equation 1)

where n is the number of companies accessed (for each major category of the BE/NQA process):

(Equation 2)

where n is the number of companies accessed (for each major category of the BE/NQA process):

(Equation 3)

where n is the number of companies accessed (for each major category of the BE/NQA process).

To select companies for assessment, the study referred to a number of sources. First, we referenced several lists of the world's most and least ethical companies. One of these lists included Covalence's annual ranking of the overall ethical performance of multinational companies. This ranking provided a reputation index tracking the world's largest companies on environmental, social, governance, corporate social responsibility, ethics, and sustainability issues. The second list leveraged was CoreBrand's 22 year old Corporate Branding Index® (2015), of the most respected and least respected companies in terms of brand reputation which provides a BrandPower Rankings of enterprises using 10,000 business decision makers. The third list of documents referenced were the BE/NQA/TQM quality documents provided by each of the NQA recipients. Fourth, the study leveraged in-depth scholarly/peer-reviewed journals on each company. Fifth, we reviewed available and publically disclosed internal documents and websites for each company. Sixth, we reviewed well-documented case studies on environmental, labor, and ethical violations documented for each company. Finally, we referred to available government documents such as presidential reports and Securities and Exchange Commission (SEC) filings and reports on corporate fraud and misconduct. In sum, the study tapped into any/all documents it could find without the need for permission to study the company from within.

4. Results, findings, and call-to-action

This study starts by confirming a number of fundamental findings from earlier studies. First, BE initiatives can only be regarded successful when they have created an environment where people can learn, share knowledge, and make contributions (Tseng and Fan, 2011; Matthew et al. , 2012; Sankowska, 2013). Second, the success of these initiatives are marginal at best as long as organizations continue to push a few top criterions for excellence while they ignore, marginalize, or delay the implementation of the remaining criterions. Third, to achieve and maintain total BE, an enterprise needs to pay attention to all the enabling factors and consider the impact of each criteria for excellence as if it were part of a more comprehensive and interdependent system of excellence (e.g. Bou-Llusar et al. , 2003/2005). Finally, the best strategy in operationalizing excellence is to avoid implementing a continuous stream of new programs. Instead, an enterprise needs to provide a stable foundation for excellence and then infuse the criteria for excellence in the day-to-day operations and the fabric of the culture (Sims, 2000; Paine, 2003; Sankowska, 2013; Kaptein, 1998, 2008; Kaptein and Bons, 2014).

In line with this initial finding, this study has identified nine major components or subsystems required to achieve and maintain total BE. Each sub-system is an integrated building block of a much larger and more comprehensive system of excellence. Moreover, each component closely interacts with and is dependent on the other components for its success. For example, the development of a superior leadership program requires a good system for individual development and performance management. Combined, these nine components develop a very cohesive and synergistic enterprise: ethics foundation; ethics management; individual development; leadership development; effective collaboration; stakeholder alignment; continuous innovation; measurable results; and grander purpose.

The significance and impact of each of these nine building blocks of excellence has been substantiated by this and other studies. Nonetheless, the merit of this research is not in the identification of a few standalone components of BE. Instead, these nine subsystems should be viewed holistically as a complete system of excellence. In turn, this system enables an enterprise to achieve superior results by leveraging the synergy and momentum that result from effective collaboration, cooperation and alignment (e.g. cohesion).

A close examination of these nine building blocks of total excellence demonstrates the enabling feature, the dependencies, and the interaction of each component with the other components. Combined, these integrated building blocks come together to build a solid and unmovable foundation for excellence, form the culture of the enterprise, help to differentiate it from its competitors and enables the enterprise to provide a sustained competitive advantage even during the most turbulent and uncertain market conditions.

Many of these components are closely aligned with prior BE/NQA/TQM frameworks presented during the last few decades. However, unlike each of the existing BE/NQA/TQM approaches that start with leadership and end with results, this new framework starts with building a solid foundation for ethics and excellence and ends with developing a meaningful grander purpose that overarches the entire enterprise, guides/directs decision making, and sustains the highest performance and superior results. Moreover, this study found that a top-down layered approach in viewing BE would be more accurate (Figure 1). Similar to the layers of an onion, this top-down layered approach shows the enablers and dependencies of each layer from the most visible top layer down to the core (or foundation) of the enterprise.

Ethics foundation

From the standpoint of organizational need, gap, and impact (Table IV), the most significant component required to achieve and maintain total BE was determined to be the establishment of a foundation for the operationalization of two tightly coupled variables: ethics and excellence (Figure 2). This foundation serves as a platform where products and programs are launched from, guided/directed, and maintained in a state of excellence. It also serves as a structural core which holds and integrates the other components into a cohesive whole. Each of these building blocks of excellence are measured in terms of ten CSFs or dimensions of excellence (For details, refer to the Methodology section).

This foundation works in conjunction with the other components to develop a grander purpose, actualize human potential, develop exceptional leadership, nurture an environment for effective collaboration and creativity, prevent significant ethical/quality problems, and enable individuals to make sound ethical decisions under the most difficult and unpredictable circumstances (Audi, 2012). To be effective, this sub-system needs to meet the following criterions which also serve as a call-to-action:

evidence of "ethics" and "excellence" as two concrete and measurable CSFs;

evidence of excellence defined in terms of ten specific and measurable CSFs;

evidence of ethical excellence defined in terms of a core set of "universal virtues and principles";

evidence of universal virtues/principles used to define values, guidelines, laws, and principles;

evidence of universal virtues/principles used in decision making and conflict-resolution process;

evidence of universal virtues/principles used to define trust, honesty, integrity, responsibility;

evidence of universal virtues/principles used to develop a grander purpose for the enterprise;

evidence of universal virtues/principles used to develop HR, staffing, integration, and culture;

evidence of universal virtues/principles used to develop employee training and development;

evidence of universal virtues/principles used to develop leadership training and development;

evidence of universal virtues/principles used in R & D, Plng, Mfg, Sales, Marketing, Finance/Actg; and

evidence of universal virtues/principles used consistently in internal and external org. processes.

Ethics management

This component of BE initiates and sustains the operationalization process. It validates that ethics and excellence are both being effectively managed at the different levels of the enterprise. Moreover, it provides direction to individuals, business units, and leadership to effectively manage these variables at the individual level. Case studies show that most companies are currently using an incomplete compliance-based management process to maintain an image of integrity. To prevent problems, an enterprise needs an integrated compliance and value-based approach (Table V and Figure 3):

evidence of a compliance-based management of ethics (detect and prevent ethical problems):

evidence of a four-stage ethics compliance process to plan, integrate, execute, enforce;

evidence of clear ethical standards, laws, principles, guidelines (e.g. code-of-conduct);

evidence of enterprise expectation for ethics and excellence training, audits and testing;

evidence of established procedures to detect and prevent criminal/unethical behavior; and

evidence of significant, timely and consistent consequences for unethical behavior.

evidence of a value-based management of ethics (develop and internalize ethical capabilities):

evidence of enterprise expectation for good ethical: behavior, conduct, and character;

evidence of enterprise expectation for ethics: training, application, and development;

evidence of enterprise expectation for accountability using measurable consequences;

evidence of leadership role modeling/championing good ethical behavior and conduct;

evidence of clear and measurable processes for full individual/leadership development;

evidence of fair and pragmatic opportunities for full individual/leadership development;

evidence of opportunities for individuals to add meaningful/measurable societal value;

evidence of individuals practicing sound ethical reasoning in internal/external decisions;

evidence of individuals exercising discretionary effort to id/prevent ethical problems; and

evidence of fair stakeholder treatment: employees, customers, owners, environment.

Individual development

This component of Total BE provides evidence that an enterprise is developing and leveraging the greatest number of top/star performers to achieve its objectives. This is demonstrated by providing opportunities for full and lifelong human development and performance management (Figure 4). Full potential is defined in terms of: work/life skills, competencies, and experiences; ethical capabilities; leadership capabilities; self-concept/lifelong objectives; and the ability to deliver meaningful and value-added results. Moreover, findings suggest that full human potential is actualized when individuals are provided training and opportunities to identify and close the gaps in these five major areas (ethical 401K). To be effective, this component of BE consists of the following criterions (Table VI):

evidence of "individual excellence" (IE) as a clear and measurable enterprise success factor;

evidence of IE defined in terms of: intellect, ethics, skills, knowledge, valued results/services;

evidence of leadership expectation/focus on individual excellence (not internal competition);

evidence of an excellence-based PMP (not internal competition);

evidence of individual performance compared to world-class performance vs their co-workers;

evidence of a lifelong development plan (LDP) and a PMP;

evidence of a consistent/integrated world-class LDP and PMP (HR management process (HRM));

evidence of gap closure in work-related skills/competencies (task, job, career, and field of work);

evidence of gap closure in ethical, behavioral and attitude deficiencies (character development);

evidence of gap closure in short/mid/long-term individual goals, objectives, and deliverables;

evidence of gap closure in leadership development (e.g. visioning, systems thinking, ethics, etc.); and

evidence of clear, significant, and timely consequences for misbehavior (e.g. ethical deviations).

Leadership development

This building block of total BE provides evidence of a consistent and measurable process for leadership development. As a baseline, this process starts with the fundamental requirements outlined for individual development discussed earlier. However, it complements those requirements by developing strong technical, non-technical, and community leadership capabilities. These capabilities are developed when an enterprise places added focus on improving the powers of imagination (e.g. vision, foresight/insight and systems thinking), comprehension, thought process, and memory. Combined, the individual and leadership development components deliver a continuous stream of visionary, intellectual, and ethical leaders that can serve in a variety of capacities in/out of the enterprise. To be effective, the leadership development initiative needs to meet the following criterions (Figure 5):

evidence of management/leadership (M/L) excellence as an enterprise CSF;

evidence of M/L excellence defined as: intellect, ethics, M/L skills, knowledge, results, service;

evidence of ethical training, development, and good behavior/conduct as a job expectation;

evidence of good ethical behavior/conduct as a prerequisite for promotion and compensation;

evidence of engagement, support, and role modeling as an enterprise-wide job expectation;

evidence of integrity defined as: truthfulness, trustworthiness, justice, caring, accountability;

evidence of accountability/reliability defined in terms of alignment of individual words/actions;

evidence of fairness/justice defined in terms of individual treatment, opportunities, and rights;

evidence of training for internal senses: imagination, comprehension, thought process, memory; and

evidence of commitment defined in terms of stakeholder excellence, satisfaction, and results.

Effective collaboration

This component nurtures a safe, healthy, and productive environment for effective collaboration (e.g. consultative decision making). It breaks repeated cycles of poor/ineffective decisions (or indecisions) by providing a process to remove unproductive internal infighting, competition and power struggles; eliminate excessive gossip and backbiting; eliminate selfish and self-centered behavior; eliminate personal biases/prejudices and develop greater cooperation and cohesion. Case studies show that this component is, by far, one of the most important but most lacking/neglected components. To be effective, this component needs to meet the following criterions (Tables I-VIII and Figure 6):

evidence of "collaborative excellence" as an enterprise expectation and CSF;

evidence of significant, timely, and consistent set of consequences for ineffective collaboration;

evidence of a formal set of principles for effective collaboration (e.g. laws of decision making);

evidence of a formal set of behaviors for collaboration (roles, responsibilities, and expectations);

evidence of principles/behaviors for collaboration being derived from the "ethics foundation";

evidence of principles/behaviors for collaboration incorporated into decision-making process;

evidence of principles/behaviors for collaboration incorporated into conflict-resolution process;

evidence of principles/behaviors for collaboration incorporated into product development cycle;

evidence of principles/behaviors for collaboration incorporated into sales/marketing programs;

evidence of principles/behaviors for collaboration incorporated into HRM/development process;

evidence of effective collaboration/cooperation between individuals/groups in the enterprise;

evidence of ideas/feedback being properly solicited and dispositioned in/out of the enterprise; and

evidence of consistent use of collaboration principles/behaviors in all business units/operations.

Stakeholder alignment

This component of total BE provides the means for continuous alignment of individuals, groups, and business units in/out of the enterprise. This alignment includes traditional processes such as ensuring individuals/groups are clear about the purpose, vision, and mission of the enterprise; how vision and mission are being realized and what role they play in the execution of the strategic goals and objectives of the enterprise. It also includes the alignment of the external processes dealing with stakeholders, the markets and societal needs, and expectations for the enterprise. To be effective, this component is expected to meet the following criterions (Figure 7 and Table IX):

evidence of alignment, cohesion, and collaboration as a corporate CSF;

evidence of alignment, cohesion, and collaboration as an enterprise expectation for success;

evidence of internal alignment: purpose, vision, mission, objectives, roles, values, end-state;

evidence of external alignment: stakeholder engagement, satisfaction, support, championship;

evidence of the clarity of roles, responsibilities, expectations, and contributions per individual;

evidence of alignment of competing purposes: employees, leadership, customers, enterprise;

evidence of alignment of written/legal/formal and unwritten/unspoken/informal org. messages;

evidence of a dynamic, market-driven, multi-directional visioning, and strategic planning process;

evidence of opportunities for individuals to engage and make positive enterprise contributions;

evidence of opportunities for individuals to engage and make community/societal contributions;

evidence of individual health, satisfaction, and commitment to the enterprise and the society;

evidence of a multiple, concurrent, and continuous flow of research and development cycles; and

evidence of a clear, data-based, and customer and market-driven product end-of-life processes.

Continuous innovation

This component of total BE demonstrates whether or not an enterprise is developing a culture of continuous innovation. Case studies show that the development of a culture of innovation requires: good leadership and management; effective collaboration and decision making; a culture of risk taking, experimentation, learning, and improvement; a consistent and measurable process to encourage, recognize, compensate, and track innovation; and an enterprise-wide focus on the training and development of the sense of creativity (focus on: imagination (vision, foresight, and insight), comprehension, thought process, and memory). To create a culture of innovation, the following conditions and criterions need to be met (Figure 8 and Table X):

evidence of individual creativity and organizational innovation as two enterprise success factors;

evidence of continuous learning, improvement, and creativity as an enterprise job expectation;

evidence of continuous creativity as a means/prerequisite for achieving individual excellence;

evidence of individual excellence as a measurable aspect of PMP;

evidence of individual excellence as a condition for success, compensation, career advancement;

evidence of leadership expectation for risk taking, experimentation, learning, and improvement;

evidence of enterprise commitment to individual/group excellence vs internal competition;

evidence of leadership/enterprise support, encouragement, and opportunities for excellence;

evidence of a fair/consistent/measurable compensation process for creativity and excellence;

evidence of employee inclusion, engagement, and collaboration as an enterprise expectation;

evidence of effective collaboration to nurture a culture of inclusion, engagement, and creativity; and

evidence of enterprise training on: imagination, thought process, comprehension, and memory.

Measurable results

The ability of the enterprise to responsibly deliver a continuous flow of competitive, value-added, and superior business results was determined to an essential component for achieving total and sustained BE. However, superior results are not defined in terms of products/services or financial results alone. Rather, success is defined in terms of ten integrated CSFs. These ten success factors are also referred to as ten dimensions of total BE. Each factor results from the interaction of one or more of the subsystems or serves as an input into the other subsystems (Figure 9: T1 vs T3 average):

evidence of product/service excellence as an enterprise CSF;

evidence of financial excellence as an enterprise CSF (e.g. output, profit, stock value);

evidence of stakeholder excellence as an enterprise CSF (satisfaction and championship);

evidence of individual excellence as an enterprise CSF (satisfaction thru full development);

evidence of leadership excellence as an enterprise CSF (intellectual, ethical, personal);

evidence of societal excellence as an enterprise CSF (e.g. positive impact of enterprise);

evidence of operational excellence as an enterprise CSF (internal/external processes);

evidence of alignment excellence as an enterprise CSF (e.g. collaboration/cooperation);

evidence of innovation excellence as an enterprise CSF (e.g. continuous improvement); and

evidence of ethical excellence as an enterprise CSF (integrated compliance/value-based) (Table XI).

Grander purpose

This component of total BE provides a compelling reason for a firm's long-term existence and success. It provides the necessary motivation for achieving excellence by answering three key questions: why should I bend every nerve to achieve excellence? What does excellence look/feel like (end-state)? How does excellence, measurably, impact my work/life? This laser-like focus serves to: align multiple competing purposes (leadership, individuals, groups, owners, and customers); provide a mechanism to help individuals calibrate their day-to-day activities against a stable, meaningful and non-financially motivated target; and when combined with universal virtues, it provides an overarching mechanism for guidance/direction for effective decision making (Audi, 2012).

This component works in conjunction with the other subsystems to prevent serious ethical failures. Unlike existing approaches in creating this level of focus which tend to be more short-term, product-centric and technical in nature (e.g. vision, mission, corporate values), case studies show that a grander purpose is a necessary component for achieving and maintaining total BE (Figure 10: T1 vs T3-average). To be effective, this sub-system is expected to meet the following criterions:

evidence of a stable, well-recognized/accepted, and non-financially centered grander purpose;

evidence of grander purpose adding meaningful and measurable value for stakeholders/society;

evidence of grander purpose providing guidance, direction, and reasoning for decision making;

evidence of enterprise mission, vision and strategic planning derived from the grander purpose;

evidence of alignment between stakeholders and strategic goals, plans, and grander purpose;

evidence of strategic planning process being aligned with the grander purpose of the enterprise;

evidence of the enterprise grander purpose being infused/integrated into the daily operations;

evidence of the leadership/management of the enterprise championing the grander purpose; and

evidence of stakeholder alignment and championship of the grander purpose of the enterprise (Table XII).

5. Conclusions

Total BE provides a new management model for operationalizing excellence. This new model provides three measurable benefits not provided in previous quality frameworks. First, it enables an enterprise to responsibly deliver a continuous flow of innovative and competitive products as defined and measured by ten CSFs. Second, it enables management to prevent costly quality/ethical problems by developing a unified and responsible strategy for planning, execution, and quality. Most importantly, it provides a missing platform of opportunity where individuals can incrementally grow and develop as they add meaningful personal, professional, and societal value (for details and call-to-action, refer to Section 4).

One of the first conclusions arrived at is that neither a heavy-handed top-down leadership approach nor a bottoms-up grassroots effort is adequate enough to nurture and develop a culture of ethics/excellence. In and of itself, neither approach will develop: the right foundation, the required core capabilities, and/or the cultural sensitivities necessary to operationalize ethics/excellence and prevent major quality and ethical problems. Instead, this transformation needs to occur gradually and spread concurrently throughout the organization in a multilateral and multi-directional way. This process is especially applicable to companies whose operations are distributed globally and require a unified and responsible strategy for planning, execution, and quality to prevent major problems (for details and call-to-action, refer to Section 4).

To begin this transformation process, the enterprise needs to first use a four-phase system of compliance-based management of ethics to develop the required cultural sensitivities and individual awareness. This can be accomplished by incorporating checks and balances (e.g. audits) at four different stages of the BE/NQA/TQM process. These four stages include: check to ensure the enterprise meets the criteria for BE (presence of the criteria); check to ensure criterions are planned and integrated into the products and services, into the business operations, and into other aspect of organizational governance; check for the proactive implementation/execution of those plan; and check for the consistency of enforcement throughout the enterprise (Figures 2-10).

Once a compliance framework has been established, the enterprise needs to move from a purely compliance-based management of ethics to an integrated compliance and value-based process. This integrated approach continues to strengthen the compliance end by closing any gaps and loopholes that would enable individuals/groups to deviate from the rule of law and encourage them to do the right/ethical thing. However, it also begins a cultural transformation process, enabling the enterprise to verifiably develop essential capabilities needed to handle high-road issues discussed earlier. These capabilities include: individual responsibility, personal initiative and a strong sense of commitment to do the right thing (for details and call-to-action, refer to the "Ethics Foundation" and "Ethics Management" modules contained in Section 4).

A common pattern identified with companies that have experienced serious planning, execution, quality, and ethical problems is that they would receive a low grade in all four phases of the assessment process (e.g. 2, 2, 2, 1) or a high grade for the first phase of the process followed by a significant downward trend for the remaining three phases (e.g. 9, 3, 2, 1). This undesirable flat or L-shaped pattern demonstrated a lack of alignment and consistency between what the enterprise claims and what they do (Figure 6). Case studies show that many companies do not plan and integrate the criteria for excellence into their products and services, they do not take initiative (or have any intention of taking initiative) to implement those criterions and they clearly do not enforce the requirements (Figure 3: T1 vs T3-average).

From the standpoint of vulnerability and risk, results show the lower the score in any of these four stages of the assessment process, the higher the probability of intentional/unintentional ethical deviances on the part of the members of the workforce, the management/leadership team and/or their suppliers. For example, if ethical behavior/conduct is questionable or open to interpretation (not well-defined, planned, integrated, executed, and enforced); if leadership does not encourage and role model good ethical behavior due to financial pressures, personal biases, or leadership inabilities and if unethical behavior/action is not followed by timely, consistent, and meaningful consequences then a sense of responsibility and good ethical behavior is not being developed and internalized. Case studies show that the absence of these cultural sensitivities will result in serious problems and costly ethical violations in the research, design, testing, manufacturing, sales, or marketing cycles of product development (for details and call-to-action, refer to the "Individual Development" and "Leadership Development" modules contained in Section 4).

The next finding deals with a significant gap in leadership capability and the impact of this capability on one of the more common challenges faced by companies today. This challenge has to do with the inability of leadership to maximize the use of its tangible and intangible resources due to excessive conflict and infighting, intense internal competition, and lack of alignment and cohesion. More specifically, we found a direct correlation between ethical excellence, leadership excellence, and BE. To cohesively achieve superior results and sustain organizational excellence, the enterprise needs to develop and strengthen ethical and leadership excellence. Interesting enough, superior results and enterprise-wide cohesion comes from the establishment of a foundation for ethics, excellence, and the gradual development of the required capabilities (for details and call-to-action, refer to Section 4).

A good indication that your enterprise is ready and able to proactively and systematically predict, identify, and prevent serious problems is to receive a high and even-handed grade (8-10 points) at each of the four stages of the assessment process as it evaluates the criteria for organizational excellence (e.g. 10, 9, 9, 10). This trend was quite common among those companies that had received the BE and NQAs as well as many of the successful and well-respected Fortune-500 companies that had incorporated similar checks and balances for each of the four stages of the assessment process - compliance-based management capability (Figure 5).

Another major learning highlighted by this research provides clear evidence for high-probability execution, quality, and ethical problems down the road. What we found is that many well-respected and time-tested Fortune-500 companies start with a high-grade point during the first phase of excellence (8-10 points), they get an average or lower grade during the second and third phases of the assessment, but they get higher than average grades during the final phase of the assessment process (e.g. 9, 5, 5, 9). This U-shaped pattern demonstrates that these companies initially meet or exceed the initial requirements for excellence (first phase). However, they have significant gaps in their planning, integration, and implementation phases (second and third phases). Moreover, it also suggests that these companies have to work hard to enforce the requirements for organizational excellence because they lack the required foundation for compliance-based management of ethics (final phase). Additionally, this approach leaves the enterprise exposed and vulnerable to high risk and irresponsible actions (Figures 8 and 9).

One of the most fascinating patterns identified among many successful Fortune-500 companies assessed is that they are able to deliver good results though they are inefficient and stagnant. More specifically, when it comes to their core products/services, these companies are able to deliver quality results, their products/services are in demand and valued by customers, and the enterprise seems to be financially sound and secure. Nonetheless, many of the same companies are stagnant in the sense that their stock values may not have moved for many years, they may be slow to respond to new ideas and a demanding and volatile market, they may not be able to take advantage of new opportunities or penetrate new markets, they may not be able to show innovation outside of the domain of their core products/services, they occasionally cause serious and costly ethical/quality problems, and they may not be able to leverage the full potential of their workforce to maximize results. A closer look at these companies unveiled a number of commonalities and gaps in capabilities. These problems include: the lack of a clear system for individual creativity and organizational innovation; the presence of excessive internal conflict, infighting, and competition; the lack of a grander purpose that would unite the entire enterprise; the lack of a clear and complete system of ethics, and a de-motivating and unhealthy human resource environment (Figures 2-9).

One of the most significant gaps identified by the case studies is that many of the companies assessed lacked a formal and complete system of collaboration necessary for effective decision making, conflict resolution, and innovation (Adler et al. , 2011; Edgeman and Eskildsen, 2012). To identify the gaps in these capabilities, the assessment process checked for the existence of decision-making principles, behaviors (roles, responsibilities, and expectations), and a consistent and formal process for effective collaboration. Moreover, the assessment process checked for alignment between the decision-making principles and behaviors with that of the criteria for ethical excellence and corporate responsibility (for details and call-to-action, refer to the "Effective Collaboration" module contained in Section 4).

As a result of these findings, this study has also established a direct correlation and causal relationship between organizational excellence, ethical excellence, leadership excellence, human resource excellence and individual creativity and organizational innovation (e.g. Sankowska, 2013). This means these factors are all interconnected, impact one another in a positive or negative way, and need to be considered as part of the overall system for total organizational excellence (Figure 9).

Finally, to maximize the benefits of this new management model; to eliminate any undesirable side-effects and/or negative impact to the daily operations; to avoid any stakeholder suspicion and ill-feeling toward leadership; to increase stakeholder engagement and ownership for the process; and to ensure an incremental and measurable shift in the culture of ethics/excellence, leadership and organizational practitioners are asked to implement the call-to-action contained in each of the nine modules of total BE outlined in Section 4. Moreover, the building blocks of this new management model should not be developed in isolation or implemented in a piecemeal manner and then pushed/forced onto an organization as a new management program. For best results, each of the building blocks needs to be implemented as an interconnected component of a complete and total system of management and then gradually infused into the fabric of the culture and day-to-day operations.

6. Limitations of the study

The number of case studies examined was limited to 50 companies. These organizations were of three types: BE/NQA/TQM recipients, successful and responsible Fortune-500 companies, and landmark ethical violators. Nonetheless, clear and verifiable patterns of organizational behavior began to emerge after assessing 20 organizations. To demonstrate these common patterns, this study presents an average for each major category of the three types of companies assessed. To highlight a point for discussion, three additional examples of individual companies assessed (a total of 6 items per graph or figure). One of the conclusions arrived at is that a larger sample size would not significantly change the findings. Instead, a well-crafted internal self-assessment that would cut across the entire culture of the organization would better highlight the gaps in capabilities, the cultural insensitivities, and foundational deficiencies. Additionally, the self-assessment instrument developed and used for this study was designed to enable leadership to conduct a practical, meaningful, and honest assessment of their enterprise. Needless to say, an unrealistic or dishonest assessment will result in intentional/unintentional accuracies. Finally, this self-assessment process is designed to replace the criteria for any existing BE/NQA/TQM framework. However, similar to all existing BE/NQA/TQM frameworks, it requires a complete user's guide and a training manual.

The assessment process searches for conclusive evidence that would demonstrate the criterions for BE are planned and integrated into every aspect of the management of the enterprise. These aspects include: product development, sales, and marketing; business administration, governance, and operations; workforce development, assessment, and performance management (management/leadership included); collaboration, decision making, and conflict resolution, and supplier management. Needless to say, finding this level of detail in the publically available documents of an enterprise proved to be a challenge and explains the smooth U-shaped patterns in the figures. What this suggests is that either the enterprise did not have these plans in place or they did not want to divulge this level of detail to the public for competitive reasons. Nonetheless, to raise the confidence level that an enterprise is ready to deliver sustained BE, it is necessary to deliberately and proactively develop and document the plans for BE for internal use as well as for external consumption.

The integrated capabilities, cultural sensitivities, and foundational requirements for managing every aspect of organizational excellence need to be gradually and systematically infused into the enterprise. To achieve this, BE/NQA/TQM should not be treated as a side or ancillary program; nor should it be managed as a secondary or support program driven by one or two organizational units and pushed onto the organization. Rather, BE/NQA/TQM capabilities need to be infused into the culture of the enterprise as an integral part of product development, sales and marketing, and other aspects of business operations and organizational governance. To make a meaningful shift in the culture of excellence, an enterprise needs to first provide the foundation and environment required to gradually develop these capabilities by incorporating checks and balances at four different stages of the BE/NQA/TQM process: they need to check to ensure they meet the criteria for organizational excellence; they need to plan and integrate those criterions into their products and services, into their business operations, and into every aspect of organizational governance; they need to consistently implement those plans throughout the entire enterprise; and they need to consistently enforce those requirements throughout the entire organization.

Figure 1 Total business excellence (TBE)

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Figure 2 Ethics foundation

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Figure 3 Ethics management

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Figure 4 Individual development

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Figure 5 Leadership development

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Figure 6 Effective collaboration

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Figure 7 Stakeholder alignment

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Figure 8 Continuous innovation

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Figure 9 Measurable results

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Figure 10 Grander purpose

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Table I Example of collaborative decision making, conflict resolution, and problem-solving principles and behaviors

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Table II Universal principles (source of knowledge, volition, and action)

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Table III Critical set of universal virtues/capabilities required for developing a good character and an ethical compass

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Table IV Ethics foundation

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Table V Ethics management

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Table VI Employee/individual development

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Table VII Leadership development

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Table VIII Effective collaboration

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Table IX Stakeholder alignment

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Table X Continuous innovation

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Table XI Measurable results

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Table XII Grander purpose

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Equation 1

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Equation 2

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Equation 3

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About the author

Dr Mehran C. Ferdowsian is a Professor of Leadership and Business Administration with two areas of concentration: engineering management; ethics and business excellence. He has 30 years of demonstrated and progressive international industry experience at the Intel Corporation (USA, Malaysia, Costa Rica, and China) and as a business owner (Grenada, WI). This experience includes business administration; engineering management; IT/factory automation; ethics/corporate responsibility; workforce, organization, and leadership development; and staffing/employee integration. He has received 19 division/outstanding awards at the Intel Corporation and published 64 peer-reviewed technical/non-technical papers. Among, his publications are The Handbook of High-Performance Virtual Teams (2008, Chapter Owner) and Ethical Solutions - Creating an Ethical and High-performing Business Community (2009). He has received a Doctoral Degree in Management from the School of Advanced Studies at the University of Phoenix, a MS Degree in Applied Information Management from the University of Oregon, and a BS Degree in Computer Science from the Oregon State University. Dr Mehran C. Ferdowsian can be contacted at: [email protected]

References

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Further reading

Antoine Mach, C.V. ( 2001 ), "Covalence Reputation Index, tracks world's largest companies on environmental, social, governance, corporate social responsibility, ethics, and sustainability", Geneva, available at: www.ethicalquote.com

Graham, B. and William, K.R. ( 2011 ), "Deep water-the Gulf oil disaster and the future of offshore drilling", report to the President, National Commission on the BP Deepwater Horizon oil Spill and Offshore Drilling, January, available at: www.oilspillcommission-gov/final-report

KPMG Advisory N.V., "Laan van Langerhuize 1, 1186 DS Amsterdam, Postbus 74105, 1070 BC", Amsterdam, available at: www.KPMG.nl

Mohanty, J. and Nagpur, B.P.R. ( 2012 ), " Influence of organizational culture on organizational citizenship behavior: a three-sector study ",Global Journal of Business Research , Vol. 6 No. 1, pp. 65 - 76 .

Po Keung, I. ( 2009 ), " The challenge of developing business ethics in China ",Journal of Business Ethics , Vol. 88, pp. 211 - 224 .

Sekerka, L.E., Comer, D.R. and Goodwin, L.N. ( 2014 ), " Positive organizational ethics: cultivating and sustaining moral performance ",Journal of Business Ethics , Vol. 119, pp. 435 - 444 . doi: 10-1007/s10551-013-1911-z.

Smith, N.C. and Ansett, S. ( 2011 ), "What's at stake? stakeholder engagement strategy as the key to sustainable growth", working papers collection, INSEAD, Social Innovation Centre, Boutevard de constance, Fontainebleau, Issue 25, pp. 2-35.

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Wieland, J. ( 2009 ), "Global economic ethic as transcultural management", paper presented at the Global Business Ethos Declaration Symposium, New York, NY, October 6.