Measurements of Organizational Excellence – Development of Holistic Excellence Practices for Free Zones in Dubai

Introduction

The United Arab Emirates (UAE) government has prioritized excellence, quality service and performance to ensure progress towards the vision of making the country one of the five best places to live in the world (Shayah & Qifeng, 2015). The Government Excellence program aspires to achieve this vision by implementing an internationally accredited organizational excellence framework or model and launching a variety of initiatives to foster a culture of creativity and a drive for achievement amongst all public sector employees. The UAE also aims to be a destination for excellence, innovation, and development (Sampler & Eigner, 2008), in a bid to attract investment, grow the economy, sustain competitive advantage and reinforce the leading position of UAE (Shayah & Qifeng, 2015).

Such ambitious vision would compel organizations to pay attention to external and internal factors that could impact productivity or organisational goals (Lasrado, 2018). This is because organizational activities can be influenced by customer views, supplier relationship, competitor action and government policy, which all subsequently impact outputs of an organization (Fourati-Jamoussi & Niamba, 2016). Impacts of these factors on organization may vary depending on organization type, size and country location (Sharma & Kodali, 2012). These factors internal and external alike, influence organizational performance positively or negatively (Gavrea, Ilieş, & Stegerean, 2011). Thus, not surprising that the impact of Covid-19 appears to be threatening the investment and growth of the economy and ability of organizations including that of the Free Zones to compete and achieve its excellence goals.

Free Zones in Dubai are known as free trade zones because of their essential economic areas where services and goods are traded at preferential customs and tax rates. The purpose of Free Zones is to boost international business in Dubai by offering benefits to investors and businesses especially 100% foreign company ownership (Alhubaishi & Ahmad, 2014). It is noticed that due to Covid-19 impacts in 2020, some Dubai Free Zones were unable to deliver on their excellence goals. Realisation that external factor such as a public health emergency can significantly affect decades of hard work and investments in organizational excellence in the Free Zones have motivated a review of measurements of organizational excellence. This paper examines measurements of organizational excellence by reviewing past studies on excellence, excellence models and factors contributing to excellence. The purpose of this is to determine main measurements of organizational excellence in order to develop holistic excellence practices for the Free Zones in Dubai.

Literature Review – Excellence in Organizations

In many parts of the world, the business environment has become very competitive. It is no longer enough for an organization to be good, to survive they need to excel (Harrington, 2005). The term excellence is used to explain the context of business excellence or organizational excellence as used in this paper. In literature, these different excellence terms are used in reference to the quality of service, extraordinary operations, as well as the connection between operation and customer satisfaction (Porter & Tanner, 2013). Excellence is defined as a process that starts with the organizations’ determination to provide value to the customer and other stakeholders based on a set of fundamental concepts or values (Kanji, 2012). It is the ongoing efforts to establish an internal framework of standards and processes to achieve consistently superior performance to exceed objectives, customer needs, or expectations (ASQ, 2019).

Organizational excellence may also be defined as a set of eight organizational properties that organization must observe to have a successful business (Hussain, Khalid & Waheed, 2010). Organizational excellence refers to the identification and use of best management practices that are common to high-performing organizations that when applied successfully can generate results for the organization (Ringrose, 2016). This definition supports the use of framework or model to achieve excellence, hence the definition by Ringrose (2013). Ringrose explained that organizational excellence and its framework helps organization to integrate the best of practices and principles to enable organizations perform better (Ringrose, 2013). In this sense, organizational excellence is considered as a holistic approach applied and working within the management system of an organization or a holistic approach applied to a specific area of management (Ringrose, 2013).

Viewed from these perspectives, organizational excellence needs to encompass all aspect of the organization to the point where results are ascertained. This may be challenging for organizations to achieve. Sadeh (2017) emphasised the use of teamwork as the driving effort for achieving organizational excellence. Therefore, organizational excellence is defined as an output that can be achieved through teamwork and collaboration (Mohamed, et al. 2018). This explanation is also shared by Anthony and Bhattacharyya (2010) which defined organizational excellence as the capacity of one performance variable to influence other factors that contribute to performance of an organization. Therefore, this paper explains organizational excellence as the ability of an organization to perform extraordinarily well due to controlled, standardized, simplified and centrally managed operations that enable the organization to deliver to the customer (Porter & Tanner, 2013). This definition is adopted because it presents organizational excellence as a process that caters for quality or extraordinary, and process through which organization is able to align its processes, operation with satisfaction of customers and stakeholders. Furthermore, it alludes to organization being a process that starts with the determination of an organization to provide value to customers through design and standardized management.

The definitions of organizational excellence allure to the importance of organizational excellence to any organization. There is a sense that certain factors in the organization may contribute to, or help the organization achieve excellence. Organization culture is one of the factors identified as a critical factor that contributes to organizational improvement, organizational strategies, improvement of all levels of organization, thereby leading to organizational excellence (McMaulle, Brown & Cliffe, 2001; Hofstede,1991; Lakhe & Mohany, 1994). Similar to this, Lasrado (2020) also identified organizational culture and transformational leadership as key factors that impact organizational excellence. Beyond these factors, top management, employees and organizational norms and values are considered as driving factors on the path to organizational excellence (Hussain et al. 2010). However, Hussain et al (2010) identified other key factors such as employee’s motivation, healthy business organization, customer satisfaction and healthy work environment to contribute to organizational excellence. More recent studies identified employee engagement as a major factor that contribute to organizational excellence because of the characteristics of employee engagement. According to Stoyanova and Iliev (2017) explained that engaged employee identified with the organization, and they can be relied on to achieve results for the organization. This argument as identified in Bulgaria by Stoyanova and Iliev (2017) positions employee engagement as central to organizational excellence.

In more recent studies by Ershadi and Dehdazzi (2019), strategic thinking is seen to influence or contribute to organizational excellence, but only when moderated by organizational forgetting. Organizational forgetting is described as learning, the inability of an organization in coding and documenting knowledge and lack of incentives to share knowledge (Ershadi & Dehdazzi, 2019). Learning is important, but only when it is well managed. According to Islam, Ashi, Reda & Zafar (2017) strategic knowledge management is a major driving factor for organizational excellence. This builds on studies by Mousakhani and Rouzbehani (2014) who found use of knowledge management practices and dedicated resources as pivotal to organizational excellence. A critical review of factors driving organizational excellence indicate that views differ on the factors that contribute to organizational excellence. Regardless, it is noted that all factors are internal factors which can be found within an organization. They can be classified as factors that management need to manage, oversee or lead, or those where employee play crucial role like employee engagement. This implies that both management and employees need to be involved for organizational excellence to be successfully achieved in an organization

Rationale for Organizational Excellence in Free Zones of Dubai

Organizational excellence has been applied to different organizations; private or public, for-profit or not-for-profit and small or large (Prashar, 2017). Free Zones have been growing around the world, largely because they compensate for the immobility of land as a factor of production which makes them a preferred platform for global trade and trading (Keshavarzian, 2010). In light of this, Free Zones are seen as key ingredient for international business in advancing them and in maximizing trade benefits (AlKhanbouli & Tsagdis, 2017). Countries around the world including the UAE have been using Free Zones to attract and achieve foreign direct investment (FDI), provide employment, increase exports, and experiment with new policy (Farole & Akinci, 2011). Free-trade zone in Dubai (FTZs) are seen as economic zones which are set up to provide tax concessions and customs duty benefits to foreign investors (Alhubaishi & Ahmad, 2014).

In Dubai, there are more than 30 Free Zones which are governed by a special rules and regulations as done for all other free zones in the UAE (Shayah & Qifeng, 2015). Free Zones are developed based on categories with the view to cater for the interest of companies within that category (Cranidge, 1998). They offer license, trading and services to foreign investors wanting to set up their business (Alhubaishi, & Ahmad, 2014). Offering such a range of services to investors who can also be called customers suggest the importance of excellence. It also implies that Free Zones need to operate through collaboration with stakeholders and commitment and hard work of their staff to provide required services to investors (Keshavarzian, 2010). When considered from this perspective, it may become challenging to manage and satisfy the needs of stakeholders, customers and staff alike.

Para-González, Jiménez-Jiménez and Martínez-Lorente (2018) highlight that non-financial performance measures are important to stakeholders because stakeholders can be involved in organizations based on their goals, expectations and commitment to excellence. An organization that has adopted organizational excellence as a core value and also prioritizes the creation and implementation of new or improved services is expected to have higher business results (Sandeh 2017). Such organization is also observed to be able to retain its stakeholders and / or customers who are involved in the organization (Para-González et al. 2018). However, service businesses often feel the pressure of higher customer expectations. Customers now want customized services with immediate results and thus services, like products need to be dynamic and appeal to the customers desires (Para-González, et al. 2018). The increasing access to mobile and self-service possibilities, the proliferation of smart devices and the use of big data and advanced analytics are also transforming the service delivery (Jian & Wang, 2013). To keep customers, stakeholders and staff engaged and satisfied, organizations ought to continuously assess their excellence activities and its effects on customer, stakeholders and staff satisfaction respectively. While organizations especially the free zones in Dubai may say their commitment to excellence remains unchanged, overall performance and customer results tend to be lower compared to its key performance results (AlKhanbouli & Tsagdis, 2017).

Dwindling customer results and inconsistent key performance results are further linked to challenges associated with excellence commitment or implementation of excellence models (Mendes & Lourenco, 2014). Directly linked to be hindering organizational quality and performance in many organisations, Mendes and Lourenco (2014) identified internal factors such as management, lack of resources, organizational culture among other as factors as those hinder program implementation and overall organizational performance. Similar internal problems have been identified in Asia and Pacific, Africa and Middle East by authors such as Venkatraman and Fahd (2016); Sahoo and Yadav (2018); Belhadi, Touriki and El Fezazi (2018); Kim and Park (2020) and Kaur, Singh and Singh (2020). These problems or lapses in organizations committed to excellence provide learning opportunities for UAE Free Zones especially those in Dubai. Following the global pandemic impact on economic activities around the world, it is pertinent to revisit the measurements of organizational excellence in order to propose holistic organizational excellence practices for organizations to better manage their commitments to organizational excellence. The UAE Free Zones, especially those in Dubai which is the economic hub would benefit from such proposal and better empirical-based explanations on how to move forward.

Organizations are constantly seeking to balance higher levels of quality and excellence with reducing cost, reducing waste and reducing time so they can remain in business by satisfying clients (Evans & Lindsay, 2013). The expectation is that an organization that provides ‘excellent’ services will outperform its competitors. This is the premise for several organizational excellence awards found all around the globe (Oakland & Tanner, 2008). Excellence awards focus on continuous process improvement efforts by organizations to provide superior customer value and meet customer needs (Oakland & Tanner, 2008). This premise led to the development of different excellence awards and frameworks to guide organizations that are interested in evaluating their performance or sustaining excellence (Lasrado & Pereira, 2018). Studies have argued that the rates of failure, and obstacles to organizational excellence implementation are similar to those of other business strategies (Cândido & Santos, 2011). This have been experienced in UAE Free Zones where there is fierce competition between the free zones in Dubai and this makes it challenging for staff to cope with, and meet the demands of customers (AlKhanbouli & Tsagdis, 2017).

For example, processes put in place in the Free Zone are continuously competing with lower cost of operating business in the mainland of Dubai (Shayah & Qifeng, 2015). Fierce competition and continuous demands of clients are just some of the factors that limit leadership and organizational goals in the Free Zones despite their commitment to excellence awards (Alhubaishi & Ahmad, 2014). For example, in some Free Zones in UAE people or staff performance in the organization and customer results tend to be lower compared to its key performance results (AlKhanbouli & Tsagdis, 2017). Problems highlight the importance and need for organizational excellence in UAE Free Zones. The influence of organizational excellence in organizations especially on performance is mentioned in literature but not clearly defined and empirically supported in the UAE (Lasrado, 2018), nor in Free Zones. Therefore, organizational excellence is important for organizations especially those committed to excellence goal such as Dubai Free Zones. But how should organizational excellence be measured or assessed? This question is answered by comparing measurements used by different authors over the past few years.

Methodology

A systematic review approach was adopted as the methodology for this paper. Given the aim of this study is to review concept of organizational excellence with different dimensions that are important for high performing organizations, searches of published articles between 2014 and 2020 were critically reviewed. Keywords such as ‘excellence’, ‘organizational excellence’, ‘business excellence’ were searched for using SCOPUS database and google scholar. Articles from all types of journal ranking were reviewed since Free Zones are not commonly researched sector as discovered during this systematic review. Therefore, no sorting process was used to eliminate any journal type. Over 50 articles published over six years were systematically reviewed to select those that focused on certain criteria for measuring organizational excellence or excellence outcomes. While other published materials were used throughout this paper, seven were selected based on their focus on two or more criteria for assessing organizational excellence. The rationale for selecting these seven publications is based on the understanding that organizational excellence is not assessed using one criterion. Using seven publications to determine dimensions of organizational excellence may be considered as limitation of this study, they provide benchmark for building future studies. The next section presents and discusses the study findings.

Findings and Discussion

Organizational excellence is reviewed as a concept that has different dimensions that are important for high performing organizations. But this is only possible when excellence is well utilized to enhance organizational performance. An overview of excellence concepts and organizational excellence indicate that elements such as leadership, people, processes, policy and strategy as well as partnership and resources are common measures of organizational excellence. Leadership and people were acknowledged by Afshinpour (2014) and Bell, Chan, and Nel (2014) as an important factor in organizational performance especially in the employee satisfaction. Katou (2015) further explained that specific leadership such as transformational leadership strongly influence performance of an organization, thereby alluring to the link between leadership, people and partnerships and resources. Hsiao and Wu (2020) as well as Hutahayan (2020) explained the role of policy and strategy, as well as process in organisation aiming for excellence and success. Therefore, organizational excellence is observed in literature to have dimensions such as leadership, people (staff), processes and policy and resources which may be challenging to manage by organizations regardless of commitment to excellence (Afshinpour, 2014; Bell et al. 2014; Katou, 2015). Table 1 presents an analysis of the recent studies between 2000 and 2019 that have explored the five measures of organizational excellence for their studies. These measures also viewed as enablers; are leadership, people, policy and strategy, partnership and resources and processes.

It is noticed in Table 1 that out of the nine publications reviewed, five used all five measures to assess organizational excellence in different organisations. Publications in 2016, 2017 and 2019 all used the five measurements to assess organizational excellence in health, manufacturing and banking sectors. These are organizations that provide goods and services that involve dealing with clients / customers and stakeholders alike. Table 1 also shows gaps that exist in organizational studies. Measurement criteria like people, leadership and processes appear to be consistently researched since 2016 till date. Policy and strategy as well as partnership and resources tend not to be used as measurement criteria as much as others. This review bridges the gap by combining all measurements as a holistic measurement for excellence practice in Dubai Free Zones.

In spite of the positive view of excellence, many organizations are not able to fully embed excellence factors nor models in their organizational practices (Dahlgaard et al. 2013). Though this may be due to both internal and external reasons. It can also be challenging for organizations to turn its excellence vision into reality (Gómez, Martínez Costa & Martínez Lorente, 2017) especially when external factors such as a global pandemic affects the ability of organizations to operate. Barriers may be due to organizational size, organizational culture and level of commitment (Corbett & Angell, 2011). However, the motivation of the management, the number of people involved, the organizational structure and system infrastructure, and degree of quality maturity of the organization can enable excellence (Para-González et al., 2013). Such barriers and challenges implementing and embedding organizational excellence all support arguments for developing and applying organizational excellence as a holistic practice in organizations especially in Dubai Free Zones which have been affected by the pandemic.

Organizational excellence is important to organizations with vision to achieve its goal amidst ongoing global problem impact the ability of organizations to operate effectively and excellently. However, it can be challenging to implement or achieve without a good understanding of how to maximise the potentials of all five measures in Table 1, hence the need for a holistic practice going forward. It is rational to imply that an organization with strong leadership and clear strategic direction would retain and develop its people, partnerships and processes to deliver quality products and services to their customers (Hemsworth, 2016). A combination of strong leadership, clear strategic direction, developed people, partnerships and processes that deliver quality products and services help to achieve intended results of an organization and its stakeholders (Gómez et al. 2017; Rodríguez-González et al. 2019). In time past, attention is often focused on the role of strong leadership in achieving excellence goal without commitments to other dimensions presented in Table 1. Strong leadership only may be insufficient for organizations especially Dubia Free Zones in the pandemic recovery period.

Recommendations for Holistic Excellence Practices in Dubai Free Zones

Al-Din and Abouzid (2016) researched on the relevance of effective leadership, fact-based decisions, strategic planning, participation and teamwork, focus on the satisfaction of the beneficiary, continuous improvement and excellence all contribute to organizational excellence. Strengthening the arguments for holistic excellence practice, Dubai Free Zones may need to innovate themselves to develop and practice organizational excellence with a focus on incorporating all five dimensions of organizational excellence. Hedaoo and Sangode (2019) argue for having working teams, employee involvements, relationship with clients and recognition of employees to excellence to ensure appropriate results. While committed leaderships is identified as part of the process, emphasises were equally placed on other factors which can be classified as people; policy and strategy; partnership and resources; and processes (Nwachukwu, Chladkova & Zufan, 2017). Using committed leadership (Hedaoo & Sangode, 2019), Dubai Free Zones may need to measure its organizational excellence outcomes by revisiting status of people; policy and strategy; partnership and resources; and processes. Therefore, it is recommended that, the practice of excellence in Free Zones especially Dubai Free Zones apply performance management process that focuses on links between organisational strategy and excellence outcomes. This recommendation aims to motivate holistic excellence practices that may help to objectively determine the direct impact of excellence on intended, yet measurable outcomes.

However, it is acknowledged that such a recommendation may be challenging to implement without support or leadership of management. Tricker (2014) explained responsibility of management, resource management, product realization, improvement and measurement analysis are essential for quality and excellence in service organizations. In service organizations; large or small, achieving excellence is more important than retaining customers and / or client base (Tricker, 2014). With innovation playing important role in helping to achieve this (AlKhanbouli & Tsagdis, 2017), Mohammed, Tibek and Endot (2013) further revealed that factual approach to decision making, results and analysis are needed for leadership of an organization to ensure that they remain customer focused, involve staff and use process approach to ensure continual improvement. Tricker (2014) and Mohammed et al. (2013) have reinforced the need for, and importance of what is called holistic excellence practice in this paper. While more literature may be used to support arguments for holistic excellence practice through measurement of organizational excellence dimensions, Yousif, Najm and Al-Ensour (2017) reveal that quality and excellence is possible through engagement of staff, relationship with customer and relationships with suppliers and continuous improvement. It is therefore recommended that management commit resources to holistic excellence practice with the view to achieve better outcomes with customer or client retention. A goal that would align with organisational objectives of any service organisation including the Free Zones in Dubai.

It is then recommended that Dubai Free Zones revisit their relationship status with staff, customers, clients and other stakeholders to determine how organizational excellence may be continuously improve as the Free Zones and other organizations begin their pandemic recovery activities. Such recommendation and those discussed in this section may also motivate future studies. Free Zones are scarcely researched. Therefore, it is recommended that future studies may investigate factors that may influence organizational excellence in Free Zones. This paper suggests that there is need for better understanding of how organizational excellence works in Free Zones context when five dimensions are measured against their overall performance. Combined measurement criteria reviewed in this paper provide a defined set of parameters for deciding the requirements for organization to achieve excellence. This means that the leadership, people, policy and strategy, processes and partnerships and resources can be used to determine the strengths and areas for improvement in Dubai Free Zones in their commitment to achieving organizational excellence. Future studies may assess the direct and indirect impacts of the dimensions mentioned in this paper on performance of Dubai Free Zones or any Free Zones.

Conclusion

The study provides insights into measurements of organizational excellence in general with the view to determine appropriate measures for Dubai Free Zones to revisit their commitments to excellence goal. Combining the least and most researched organizational excellence measurement criteria position this study to contribute to knowledge. First contribution is that it identifies and discusses concepts of organizational excellence in order to make an argument for a revisit of organizational excellence in Dubai Free Zones. No research on Dubai or UAE Free Zones is included in Table 1. Therefore, investigating the impact of people (staff), leadership, policy and strategy, partnership and resources, and processes as measurement of organizational excellence in Dubai free zones will be filling current gap in studies on organizational excellence. Table 1 also highlights the second contribution of this paper to knowledge. Measurements like policy and strategy and partnership and resources are not as researched as other three measurements. Including them in the measurements of organizational excellence in Dubai Free Zones will be addressing gaps in organizational excellence studies as well as in the UAE. In applied sense, this paper provides arguments for and rationale for organizations especially Free Zones to revisit their concepts and measurements of organizational excellence in light of the pandemic impacts. While it is naïve to imply that explanations in this paper are ready-made solutions, they provide context for how organizational excellence may be approached by organizations going forward.

References