One proven approach to increasing national productivity and enhancing competitiveness is the establishment of a national quality award program. That was the premise behind the establishment of the Malcolm Baldrige National Quality Award, established by an act of US Congress in 1987. Originally a business-oriented framework for manufacturing, service, and small businesses, it was expanded in 1998 to include healthcare and educational organizations and then extended to nonprofit organizations as well. The main objective of the award program, which is given by the US president, is to recognize achievements in quality and performance. The award is not given for specific products or services. Malcolm Baldrige was the US Secretary of Commerce from 1981 until his accidental death in July 1987. He was a proponent of quality management as a key to national prosperity and long-term strength. He took a personal interest in the quality improvement act that was eventually named after him and helped draft one of the early versions. In recognition of Baldrige’s contributions, the US Congress named the award in his honor. The Baldrige performance excellence criteria are a framework that any organization can use to improve overall performance. Seven categories make up the award criteria:
2. Strategic planning;
3. Customer and market focus;
4. Measurement, analysis, and knowledge management;
5. Human resource focus;
6. Process management; and
7. Business results.
These seven categories are further subdivided into 19 items, each focusing on a major requirement. The criteria for the Malcolm Baldrige National Quality Award have played a major role in achieving the goals established by the US Congress. They now are accepted widely around the world as a framework for performance excellence. The criteria are designed to help organizations enhance their competitiveness through a continuing improvement process by focusing on two goals: delivering ever-improving value to customers and improving overall organizational performance.
In general, a merger is a combination of two companies to form a new one. Such actions are commonly voluntary and can involve stock swaps or cash payments to the target company. A stock swap is often used as it allows the shareholders of the two companies to share the risk involved in the deal. A merger can resemble a takeover but result in a new company name, which may combine the names of the original companies, and in new branding. In some cases, terming the combination a merger rather than an acquisition is done purely for political or marketing reasons.
Mergers and acquisitions (M&As) are increasingly becoming an important strategy in the corporate world to enhance shareholder value. Often M&As are undertaken by companies for eliminating inefficiencies, expanding their operations into new geographic areas, increasing their productivity and profitability, and for increasing market share. Although not all M&As are successful, in theory it is believed that mergers create synergies and economies of scale by expanding operations, cutting costs, and raising productivity. Companies can benefit from M&As in a number of ways. With greater economy of scale, a combined company can often reduce duplicated departments or operations, lowering the costs of the company relative to the revenue stream and thus increasing productivity and profit. By buying other companies with unique technologies, a large company can maintain or develop a competitive edge. Companies buy other companies to reach new markets and grow revenues and earnings. A merger may expand two companies’ marketing and distribution reach, giving them new sales and growth opportunities. A merger can also improve a company’s standing in the investment community as bigger firms often fare better in raising capital than smaller ones. Finally, assuming that a company will be absorbing a major competitor, it can significantly increase its market power.