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Business in Hungary
The current paper explores quality on an example of three leading companies in Hungary, among which there are Burton-Apta, Westel Mobile Telecommunications Co., and Herend Porcelain Manufacturing. All of them care about employees, safety, social work, environmental protection, which leads to quality products and services. Not only key learning issues, but also the relevant ones will be mentioned in the paper. Positive and negative points of the analyzed article will be highlighted and supported by facts. Advice for a manufacturing company how to act in order to reach success and quality will be demonstrated in the practical part. Nobody would want to deny the fact that quality is a goal that every enterprise would like to achieve. Therefore, this article will show ways of quality improvement through the actions of finalists of the European award.
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Quality improvement as a result of the success of some companies in Hungary, among which there are Burton-Apta, Westel Mobile Telecommunications Co., and Herend Porcelain Manufacturing, is analyzed in the article. Many factors play a great role in creating quality products and services, for example, the strategy of the Hungarian enterprise Burton-Apta Refractory Manufacturing, a producer of the refractory-lined products for furnaces, combines achievement of financial progress and continuous improvement of activity with the satisfaction of the inquiries of buyers and its own employees. Westel Mobile Telecommunications Co. increases the quality of work and achieves success due to the creation of new workplaces, sponsorship, and donations. Employees in Herend Porcelain Manufacturing are interested in general success in order to keep ecological balance, to increase the qualification of employees, to increase safety, and to satisfy the consumer. All these factors help companies to compete successfully both in internal and external markets.
Key Learning Points
The principle of orientation on the consumer is in the first place among the factors of success in analyzed companies. They define this principle as the basis of their activity. Thus, attention to clients is not only the slogan but rather it is a well-thought and planned activity, the efficiency of which is rigidly estimated. These three leading companies consider that the employees, ready to meet the requirements of the employers and willing and capable to put in the work maximum efforts and creative abilities in the interests of the enterprise are their main competitive advantage. The development of employees is the main direction of the production strategy of the leading companies in Hungary. They are sure that quality is created by people and just quality brings satisfaction to consumers (Smith, 2000).
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It does not matter which way the companies choose for the involvement of employees, all their actions are kept within the general scheme that is clear to workers and other interested parties. Corporate culture serves as such a scheme. The aspiration to the creation of strong corporate culture is a distinctive feature of large leading organizations in Hungary in comparison with small enterprises and branches. In the course of the creation of the corporate culture focused on the consumer, understanding, and acceptance by all the employees of the principles put in the basis of activity of the company play a key role. These companies, finalists of the European award, begin this work already from the recruiting of employees; therefore, quality of work enormously differs from other enterprises (Nanda, 2005). Thus, nobody would want to deny the fact that an employee is the most important factor in the quality improvement process.
It is possible to allocate some relevant statements depending on the kind of activity of three leading companies.
A relevant factor in Burton-Apta is the ability of every employee to take on responsibilities. Delegation of powers is one of the fundamental principles of modern management. The European companies gravitate to horizontal structures of management and a higher decrease in the hierarchy. However, workers want to participate directly in the decision-making process, especially in the one concerning them. Managers in Burton-Apta take on responsibilities in order to make an example for ordinary employees and to teach them not to be afraid of responsibility. Employees’ understanding of their role in the activity of the company and results reached by it is the first step in the involvement of employees into affairs of the organization in Burton-Apta (Melton, Yates, & Iles-Smith, 2007).
A relevant factor in Westel Mobile Telecommunications Co. is a social activity. Interaction with society can be shown in various forms: starting from volunteering and implementation of charitable programs and finishing with sponsorship. Westel Mobile Telecommunications Co. constantly confirms its commitment to regional development with real actions. It is expressed in support of local business, implementation of socially useful projects, and contribution to an increase in employment. This activity has provided extremely high estimates of clients’ satisfaction with the company (Jain, 2001).
A relevant factor in Herend Porcelain Manufacturing is environmental protection. Nowadays, the environmental friendliness of production is one of the priorities for the developed European countries. However, attention to the environment is a very essential issue and a real competitive advantage for the finalist of the European award. Herend Porcelain Manufacturing widely uses environmental friendliness of production in advertising as the main difference from rival goods (Pyzdek & Keller, 2012).
Thus, all listed factors lift the prestige of the companies among consumers and employees, increase respect for them, and strengthen the loyalty of buyers to products.
It will be effective to build the modern organization of works for quality on the general global control. Analyzed companies can be studied as examples in order to avoid the gap between theory and practice. It is more than clear that there is a problem in quality all over the world that needs to be solved.
After analyzing the article, it is reasonable to mention that modern product quality control has to be guided by the nature of requirements, their structure, and dynamics directly; capacity and market condition; the incentives caused by the economic and technical competition, characteristic for the market relations. Modern quality management at the enterprise, irrespective of the form of ownership and the scale of production activity, has to combine optimum actions, methods, and means providing, on the one hand, production of products or rendering of service, satisfying the current inquiries and requirements of the market, and, on the other hand, development of the new product or the service, capable to satisfy future requirements and future inquiries of the market.
All over the world, quality has become a key factor in the achievement of competitive advantages. Moreover, it is not only the quality of products and services but, first of all, the quality of business processes and organization control systems. Awards for quality and achievement of superiority in business bring recognition to the best organizations and are an important element of the strategy of improvement, increasing productivity and competitiveness, both on micro and macroeconomic levels (Jeston & Nelis, 2008).
The European Quality Award (EQA) is the most prestigious European award for achievement of superiority. The European Foundation for Quality Management (EFQM) is the organizer and founder of the European award of quality. It includes more than 750 various European organizations, each of which seeks an increase of efficiency and achievement of superiority in business. The purpose of the creation of the Fund is to help the European organizations with an increase of their competitiveness through the improvement of methods of management and quality of processes of production and services. Some hundred organizations practically from all European countries took part in the competition for the European award of quality. Among the most famous winners of the last years, there are Burton-Apta, Westel Mobile Telecommunications Co., and Herend Porcelain Manufacturing (Smith, 2000).
The European model of quality, which combines strategies of the analyzed companies, is constructed on the interrelation of nine main categories:
- leadership and decision-making
- social responsibility in the management
- environment protection
- understanding of clients and the market
- development and strategy realization
- training and development of employees
- process of creation of values
- information management
- results of work
Marton Varga, the director of the company of Burton-Apta, is sure that balance between workers, consumers, other interested persons, and environmental requirements is a key to success. Therefore, the EFQM model is very useful for their development (Nanda, 2005).
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Another question which managers should face when using models of awards of quality is the absence of the regulated decisions, algorithms for improvement. Understanding of criteria of various models and their interrelation with business processes of the organization does not give a certain answer on how to implement improvements. The system leaves an opportunity for the user to define areas for improvement by himself/herself and to find improvement ways, applying various methods, tools, and approaches.
One of the main objectives not only of winners and students but also of all the participants of the competition is the development of a method of self-assessment of activity of the organization in compliance with the criteria of an award of quality. The organization of self-assessment on the basis of the criteria of an award promotes systematization and structuring of a control system in the company. The self-assessment is carried out for the purpose of the analysis of the business process and identification of the areas demanding prime improvements in conditions of the constantly changing environment. Constant self-assessment allows tracking dynamics of improvements and imparting the ideology of continuous improvement in the organization.
Leadership at the enterprise is a third important issue. Leadership is such a behavior of the head of the company that provides constancy and unity of the purposes and creates conditions for the organization’s prosperity as a whole and its certain members. The leadership of the management can be shown in various aspects. It can be viewed as an acceptance of responsibility for the risky decision, which, as a result, has allowed the organization to take a huge step forward in comparison with competitors. The definition of personal responsibility for the main processes of the company can be other manifestations of leadership. He/she has to develop process vision, to define its purposes and a task, and to provide their reflection in business plans; to make the plan of measures according to the solution of tasks, to create a team of performers, and to provide the possibility of an assessment of results; to improve the process, and to support carrying out of benchmarking. The system of fixing of processes for certain heads is the key principle of management. Thus, there are strong heads in all the analyzed Hungarian companies who have made positive changes. Therefore, it is possible to call the leadership of management as one of the decisive factors promoting the achievement of business perfection (Jain, 2001).
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Summing up the results, it is possible to allocate a number of directions in which the companies that have reached business perfection move. First of all, it is, of course, orientation on the consumer. The vast majority of organizations – finalists of the European award consider the satisfaction of the consumer as a basis of the activity. The second big block is to work with the employees. Many enterprises – finalists seek to create a strong corporate culture focused on the satisfaction of the consumer and improvement of activity and to use delegation of powers and the command organization of work for the involvement of workers in affairs of the company and increase of a level of responsibility for performing work.
The culture of continuous improvements is one of the important factors of the success of European organizations. In the constantly changing world, in the conditions of rigid competition, ensuring stability can not be a sufficient condition for the successful activity of the company anymore. The continuous improvement due to the use of new technologies, introductions of innovations, and encouragement of an initiative of employees can become a key to the achievement of a high level of competitiveness in the market.
The role of strategic planning is extremely high in the companies which have reached business perfection. At the prompt change of external conditions, the organization needs accurate, known, and accepted at all levels of management the course advancing the organization to achievement of long-term goals in order to keep stability. Besides, competent planning helps to find which ways will be most effective in this or that company. The analyzed article demonstrates a good example for other companies what steps they should take to reach success in quality (Pyzdek & Keller, 2012).
For the majority of the organizations participating in competitions of quality, receiving the award is not a priority. Quality awards are, first of all, models of improvement of the business, which allows heads to structure and systematize work in the company and to begin the improvement process. The popularity of models of quality awards as improvement models steadily grows among manufacturing companies. For instance, the following criteria and estimated elements can be proposed.
- The leading role of management — 100 points:
- Definition by heads of mission of the organization, strategy of its development and values, demonstration of commitment to a culture of quality on personal examples;
- Involvement of heads in work with consumers, partners, and representatives of the society;
- Motivation, support, and encouragement of the personnel of the organization by heads.
2. Policy and organization strategy in the field of quality — 100 points:
- Definition of existing and future requirements and expectations of interested parties for the development of policy and strategy;
- Development, analysis, and updating of policy and strategy;
- Informing employees about the policy and strategy of the company and their implementation.
3. The personnel — 120 points:
- Planning, management, and work improvement with the personnel;
- Personnel involvement in activities for the implementation of policy and strategy of the organization and investment with its powers;
- Encouragement of personnel and care of it.
4. Partnership and resources — 100 points:
- External partners;
- Financial resources;
- Information and knowledge.
5. The processes, which are carried out by the organization — 130 points:
- Systematic design and management of the processes;
- Design and development of production/services on the basis of expectations of consumers;
- Management and improvement of relationship with consumers.
6. The satisfaction of consumers with quality of production/services — 180 points:
- Perception indicators of consumers on the organization, quality of its products and services;
- Indicators of work of the organization for an increase in satisfaction of consumers.
7. The satisfaction of the personnel — 90 points:
- Perception indicators of the personnel on their work in the organization;
- Indicators of work of the organization for an increase in satisfaction of the personnel.
8. Influence of the organization on society — 60 points:
- Perception indicators of the society on activity of the organization;
- Indicators of work of the organization for an increase of satisfaction of the society.
9. Results of work of the organization — 120 points:
- Financial performance of the organization;
- Quality of production/services and other results of work of the organization.
The general assessment — 1000 points (Jain, 2001).
The analyzed companies receive all the advantages while participating in a competition or using models of awards as the instrument of management.
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Quality award as a competition:
- Victory in the competition is the recognition of the leadership of the organization by the business community and consumers.
- Quality confirmation and reliability of the organization for business partners and all interested parties.
- Independent expert assessment of the effectiveness of the management system and definition of areas where prime improvements are necessary.
- Participation in competition creates an image of the company seeking for improvement of the quality of business (Melton, Yates, & Iles-Smith, 2007).
Quality award as an instrument of management:
- The model and criteria of awards offer a ready strategy for the development of the company.
- Creation of an effective control system based on the principles of continuous improvement.
- Reduction in a common system of all actions on quality improvement.
- Self-improvement and measurement of dynamics of improvements of the company through self-assessment.
- Comparison of results of an assessment of the organization based on the criteria of awards with reference and results of competitors.
- The continuous search for the best business solutions, the catalyst of involvement of the company in the benchmarking process.
- Increase of productivity and competitiveness of the companies in the internal and world markets and, as a result, development of the national economy (Smith, 2000).
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Nobody would want to deny the fact that the analyzed article is informative and instructive. Burton-Apta, Westel Mobile Telecommunications Co., and Herend Porcelain Manufacturing are already the winners. They take common steps, but at the same time, their strategy is different. They have a lot of values, which they care about and develop. As a result, quality is achieved through the hard work of management and employees due to their knowledge of all the factors mentioned in the paper.
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