Financial performance of Baldrige Award winners: a review and synthesis

Abstract

Purpose

The National Commission on Fiscal Responsibility and Reform recently released a preliminary report with recommendations on cutting costs in the federal government, and one of its recommendations included the elimination of the Baldrige Performance Excellence Program, formerly known as the Malcolm Baldrige Nationality Quality Award Program. Established by an act of Congress in 1987, during the Reagan Administration, the goal of the Malcolm Baldrige Nationality Quality Award Program was to stimulate and reward product quality excellence. Since the inception of the award, however, there has been a long‐standing controversy among industry leaders and academics on whether winning this award does enhance future financial performance and ultimately shareholders' wealth. This debate has again been recently fueled by the possible elimination of the program by the US government. This study, aims to shed further light on this subject by examining the academic research on the financial performance of the Baldrige Award winners.

Design/methodology/approach

The paper examines academic and professional research on whether the Award adds value to firms and their investors.

Findings

The conclusion, perhaps not surprisingly, is somewhat mixed; although there is parsimonious evidence to suggest that Award winners do witness an increase in market value. By and large, the authors feel that when all the benefits of the Baldrige Performance Excellence Program are considered and given the short‐term focus of studies in this area, the elimination of the program would be a terrible mistake.

Originality/value

The paper offers an original review and synthesis.

Citation

Jacob, R.A., Madu, C.N. and Tang, C. (2012), "Financial performance of Baldrige Award winners: a review and synthesis", International Journal of Quality & Reliability Management, Vol. 29 No. 2, pp. 233-240. https://doi.org/10.1108/02656711211199937