RESEARCH PROPOSAL 1

Convergence of planning and execution in

business management

Development: The EFQM Excellence Model

Edgar Girón

HHL - Leipzig Graduate School of Management

Jahnallee 59 ∙ 04109 Leipzig ∙ Germany

edgar.giron@hhl.de

March 18, 2011

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1 Introduction

Several factors are known to contribute to failure of organizations, including inappropriate

business strategies (Holbeche, 2005), but what about execution of the strategy or the

sustainability factors and managerial resources to make a strategy for everything managers have

to do in the company, from managing leadership to managing relations with different

stakeholders, from managing processes to managing people. A company has three specific

challenges in sustaining success: operating effectively while growing rapidly, when competing

on price and retaining the initial entrepreneurial spirit of a younger, smaller company (Berry,

1999). The following pretends to question literature out there which refers to having structured

approaches or say established procedures for running a business.

2 Motivation of the Study

As more and more countries implement far-reaching economic policy reforms to participate in

the process of globalization they considerably change the world’s economic landscape (Hiemenz,

1999), still can be seen that international competition ranks high on the list of issues confronting

firms today (Porter, 1986). In this scenario is not uncommon to find that consumers and

managers struggle to determine who they are and who they ought to be (Levy, 1999).

Increasingly the environment in which organizations compete is dynamic and rapidly

changing, requiring constant modification of strategies and operations to reflect these changing

circumstances (Kennerley, 2003). According to the European Foundation for Quality

Management, managers should develop structured methods (Hakes, 2007) for everything the

management team does in order to achieve excellence. It also states that excellent results are

directly linked to the execution, which is in line with the fact that many organizations have
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redesigned their measurement systems to ensure that they reflect their current environment and

strategies (Kennerley, 2003).

According to the law of diminishing returns from an employee perspective, change seems

to result in greater pressure on individuals as their workloads increase and targets become ever

more stretching (Holbeche, 2005) which is part of the everyday life at work of managers.

Managers should struggle every day with planning and finding methods and structured

approaches that gets the job done, this in the ideal case as planning and control have long been

accepted as fundamental to the practice of management (Camillus, 1986). Even when control is

an essential aspect of all organizational functioning it is not as well understood as planning,

leadership, or structural design (Flamholtz, 1996).

The EFQM model invites companies to adopt a Managing by Objectives approach in

which managers and employees define goals for every department, project, and person and use

them to monitor subsequent performance (Draft & Marcic, 2010). Also states that an excellent

organization is that in which managers have developed structured approaches for everything they

do regarding to five dimensions: leadership, policy & strategy, people, partnerships and

resources and processes, products and services (Hakes, 2007).

Based on the stated this research addresses the convergence of planning and execution in

business management taking as an example the EFQM Excellence methodology.

3 Objectives and Research Questions

As many companies are successful, many others fail to succeed and end up destroying value for

the shareholders and for society. Corporate bankruptcy frequently leads to the dismissal of a

debtor’s managers and the elimination of its equity interest (Adler, Capkun, Weiss, 2006). This
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means that managers are held responsible for the success or failure of a company, in this case

measurement systems have to be designed in order to reflect their performance and these

measurements should reflect the way the management does things in the company. There is

insufficient literature about balance between planning and execution and about the issue of

managers developing structured methods for every move thing that is done in the company. If

performance results can be measured is not clear on how this results are achieved if they are to

be measured which leads to the following research questions:

1. Do well designed measurement systems reflect whether management achieves

their goals through structured approaches or through empirical approaches?

2. How can balance between planning, designing structured approaches to

management and execution be achieved?

3. How operational goals can affect strategic goals and how to prevent it?

4. Can innovation be affected if structured approaches are adopted for everything

the management does?

4 Outline

In order to have a complete result out of this research the following initiatives have to be

followed:

1. Direct communication with the European Foundation for Quality Management

since it is publicly known though their website which enterprises have been

awarded with the quality EFQM Excellence Award but no public information
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about the detail of the results. This information is needed in order to know if the

link between results and how things are done can be made.

2. Empirical research has to be made through the evaluation of companies results

and how they do things in order to confirm if excellent results or lack of results

are due to excessive, medium or no planning at all.

3. Further research from a significant sample through questionnaires has to be made

in companies to determine whether they have obtained their results they wanted

but having to leave strategy or strategic planning aside.

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References

Holbeche, L. (2005). The high performance organization: creating dynamic stability and

sustainable success. Butterworth-Heinemann.

Berry, LL. (1999). Discovering the soul of service: the nine drivers of sustainable

business success. Simon and Schuster.

Hakes, C. (2007). The EFQM excellence model to assess organizational performance: a

management guide. The Van Haren Publishing.

Porter, ME. (1986). Competition in global industries (pp. 15-22). Harvard Business

Press.

Levy, SJ. (1999). Brands, consumers, symbols, & research: Sidney J. Levy on marketing.

Sage Publications, Inc.

Kennerley M., Neely A., (2003). "Measuring performance in a changing business

environment". International Journal of Operations & Production Management, Vol. 23 Iss: 2,

pp.213 – 229

Kennerley M., Neely A., Adams C., (2003). "Survival of the fittest: measuring

performance in a changing business environment". Measuring Business Excellence, Vol. 7 Iss:

4, pp.37 – 43

Daft, RL., & Marcic, D. (2010). Understanding management. South-Western Pub.

Camillus, JC. (1986). Strategic planning and management control: systems for survival

and success. Simon & Schuster Trade Division.

Flamholtz, E. (1996). Effective management control: theory and practice. Springer.

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Adler B. E., Capkun V., Weiss L. A. (2006). Destruction of Value in the New Era of

Chapter 11. NYU Working Paper No. CLB-06-032. Retreived from SSRN Web site:

http://ssrn.com/abstract=1291620