Dr. Fulvio Paparo Tartu 09/12/2005

3. QUALITY MANAGEMENT IN BUSINESS AND NON-BUSINESS SECTORSThe differences and the similarities A new strategic vision The stakeholder in the excellence models Dr. Fulvio Paparo Tartu 09/12/2005

4. Introduction • My participation at this event wants to value the present listeners supplying you the opportunity to get a criteria to see if there are fundamental differences between "QUALITY MANAGEMENT IN BUSINESS AND NON-BUSINESS SECTORS" through a specific view and concept of what must be an organisation oriented to excellence.

5. The scope of the enterprise • Which is the primary scope of every enterprise? • The primary scope of every enterprise is to reach the institutional objectives, those for which it exists. • Such scope implies the ability to generate value fromthe plurality of subjects.

6. The definition of stakeholder • ISO 9000 definition : "Persons or group of persons having an interest in the performances or in the success of the organization". • ISO 9004 explicitly says: “The parts interested of an organization comprise: the customers, the staff, the property, the suppliers and the partner, the society". • EFQM: “All those who have an interest in an organisation, its activities and its achievements. These may include customers, partners, employees, shareholders, owners, government and regulators”.

7. From a point of view of the enterprise there exists a variety of actors who contribute to the success of the organization and what happens is conditioned from the mutual satisfaction in the total relationship. • If the argument in the previous sentence is true, the excellence of the enterprise depends on the maximization of the contribution of its stakeholders, of their level of satisfaction. Such actors must enter in the strategic picture of the organization. • Aware or less, the modern "models of excellence" have carried out a large problem.

8. The policy of the enterprise on regarding its stakeholder become a characterizing feature of the visible and declared profile of the enterprise.It is important not only for the financial analysts but alsofor employment issues, for business partner or aspirants, for educational institutes. • It is a relationship do ut des that however in the excellent organization often exceeds the contractual scheme in order to become "pact for the success of the enterprise", mutual collaboration, and this is worth for the profit and not profit organizations. • The final ideal is the satisfaction of all the interested parts. That demands a true relationship of partnership.

9. Figure 1.Value flowsin order to reach the results Area of means of the organization Area of the results of the organization Preferences of the customers Systemic factors: - leadership - organization - strategies, plans - human resources - other resources Processes Institutional results of the organization Maximum synergic effect company-stakeholder

10. Figure 2. The flows of value exchanged between the organization and its stakeholders Organisation Stakeholder Results of the organization Results of the stakeholders A true relationship of partnership involves interchange and a fair division of the benefits. The necessity to fairly satisfy the requirements of the organization and the stakeholders is clearly bilateral.

11. Figure 3. Strategically balanced satisfaction of the customers, the company, the stakeholder Area of means of the organization Balanced Maximization of the results Clients satisfaction Processes Systemic factors: - leadership - organisation - strategies, plans - human resources - other resources Company satisfaction Stakeholder satisfaction

12. The organizations are social bodies more than technical systems. • The satisfaction of the stakeholder in a balanced relationship of giving and to have (win-win relationship)is an intrinsic factor to the relationship, is an ethic matter. It represents the assumption of the knowledge of the necessity to stretch to a harmonic equilibrium of powers in the multiple relationships of the enterprise and also of the public organizations, with the market, the shareholders, the society, the dependents, the business partners. The various relationships are not separate among them, but interacting. • The real acceptance of such logic would represent a sort of revolution in the vision of the enterprise and of the organisations in general. • In the focus of the enterprise there must be the person.

13. Politicalorganizations • Particularly important considerations can be made also in the relationshipbetween the representative organisations and the political government. • Taking under consideration that in the liberal democracies the fundamental rights are personal rights the person is the original stakeholderin relation toany of the organization represented in the figure at the next slide.

14. Figure 4. A stakeholder to the political system, with rights and duties that must be specified to him. Political organizations to world-wide level Political organizations to supernational level Political organizations to national level Complexity of the organization Political organizations to locale/regionale level Level base of the organizations of persons Company Association of citizens Association of consumers Non-profit organization Level base of the persons like individuals The organizations to the higher levels would have to consider the organizations to the inferior levels and the individuals like stakeholder (not like "slave", as often it happens in the hierarchical-authoritarian organizations).

15. Political Organizations • Each one of the entities evidenced in figure 4 represents a internal stakeholder to the political system of belongings, with rights and duties that must be specific. • The system will work well and much better if there will be more harmonic and balanced division of the duties and the benefits between the various categories of stakeholder. • Systems in which a stakeholder, or a group of them, who acts dishonestly on others, will be unavoidably unbalanced. • These concepts make part of a strategic vision of the stakeholder. It stretches to the maximum involvement and contribution to the organization and at the same time to their maximum gratification.

16. Pathologies provoked from a lack of strategic management of the stakeholder The distortions that carry to serious organizational pathologies lead back in general to two causes, often concomitant: 1) the customer is not more to the centre of the attention of the company 2) a stakeholder (or a group of them) assumes the windward on the others

17. Conclusive synthesis /1 1- Total quality management has born as a strategy of quality focused on the complete satisfaction of the expectations of the customers. 2- Todays models, so called “models of excellence", place the satisfaction of the customers to the first place between the business priorities, but they evidence also the necessity to satisfy the requirements of other actors, defined interested parts or stakeholders. 3- These topic have been developed however prevalently on the customer, with the consequence that the problem of the other stakeholders have not been, today, adequately deepened.

18. Conclusive synthesis /2 4- The deepening of the theme of the stakeholder, in a generalized manner and in the specificity of each category, helps to comprise the evolution of the roles in action in the enterprises and in the other types of organization and thefuture evolutions, inorder to make to grow the quality of the organizations andtheir performances. 5- The more meaningful implications of the models of excellence in relation to the stakeholder, those of greater strategic importance, are not still well perceived. 6- To perceive these models is necessary to verify the real will of the enterprises and the public organizations to apply this concepts in their fullness.

19. fulvio.paparo@iol.it Email: www.eqmc.it Web site: