Total Quality Management Deming Prize Management Essay

The Deming prize is an award given to the company that has highest continued development of quality control in Japan. It was established by the Union of Japanese Scientists and Engineers (JUSE) in December 1950 to appreciate and honor of Dr. William Edwards Deming for his contribution in quality control and development of Statistical Quality of Control in Japanese industry.

This award have high role in supporting the Total Quality Management (TQM) in many ways. Firstly this award acts as a catalyst for companies in Japan on implementing TQM. They will develop a new and effective quality management method for their own benefit. If the method have major influence directly or indirectly on the development of quality control, then they will established the method for implementation and can be practice by others company. For a company, getting Deming prize award is an advantage for them because it will lift up their reputation among others competitor on eyes of client. Besides this award can measure their achievement in continuous improvement further implementing the Total Quality Management (TQM).


There are three categories of award, The Deming Prize for Individuals, The Deming Application Prize or Deming Prize and The Quality Control Award for Operation Business Unit.

The Deming Application Prize given to companies or divisions of companies that have achieved distinctive performance improvement through the application of TQM in a designated year while The Deming Prize for Individuals given to individuals who have made outstanding contributions to the study of TQM or statistical methods used for TQM, or individuals who have made outstanding contributions in the dissemination of TQM. [1] Then for The Quality Control Award for Operations Business Units is given to operations business units of a company that have achieved distinctive performance improvement through the application of quality control/management in the pursuit of TQM in a designated year. [2]

There is also The Deming Application Prize for Overseas Companies. In 1984, overseas companies can apply for Deming prize with established of the Deming Application Prize Administrative Regulation. Then in 1997, it was change to enable overseas companies to apply for the Quality Control Award for Operations Business Units. [3] Nowadays, The Deming Application Prize, the Quality Control Award for Operations Business Units, and the Japan Quality Medal are open to overseas companies. However, the Deming Prize for Individuals is open only to Japanese candidates.

There are three type of organization that has implemented TQM qualified for receiving the Deming Prize. They are:

Customer-oriented business objectives and strategies are established in a positive manner according to the management philosophy, type of industry, business scale, and business environment with the clear management belief.

TQM has been implemented properly to achieve business objectives and strategies as mentioned in Item 1 above.

The business objectives and strategies in the Item 1 above have been achieving effects as an outcome of the Item 2 above.

After an organization applies for this award, they will go through 2 examinations. First is the document examination that is based on the description of TQM Practice and if pass the document examination then they will have an on-site examination. Committee will judge on the evaluation criteria and reports the result to the Deming Prize Committee. Once they determine the winner, they will publish with the reason why the organization receives the prize followed by the award ceremony.


The Deming Application Prize is given to an applicant company that effectively practices TQM suitable to its management principles, type of industry, and business scope. More specifically, the following viewpoints are used for the examination to determine whether or not the applicant should be awarded the Prize.


Policies pursued for management quality, and quality control

Method of establishing policies

Justifiability and consistency of policies

Utilization of statistical methods

Transmission and diffusion of policies

Review of policies and the results achieved

Relationship between policies and long- and short-term planning

Organizational and its management

Explicitness of the scopes of authority and responsibility

Appropriateness of delegations of authority

Interdivisional cooperation

Committees and their activities

Utilization of staff

Utilization of QC Circle activities

Quality control diagnosis

Education and dissemination

Education programs and results

Quality- and control-consciousness, degrees of understanding of quality control

Teaching of statistical concepts and methods, and the extent of their dissemination

Grasp of the effectiveness of quality control

Education of related company (particularly those in the same group, sub-contractors, consignees, and distributers)

QC circle activities

System of suggesting ways of improvements and its actual conditions

Collection and use of information of quality

Collection of external information

Transmission of information between divisions

Speed of information transmission (use of computers)

Data processing statistical analysis of information and utilization of the results


Selection of key problems and themes

Propriety of the analytical approach

Utilization of statistical methods

Linkage with proper technology

Quality analysis, process analysis

Utilization of analytical results

Assertiveness of improvement suggestions


Systematization of standards

Method of establishing, revising, and abolishing standards

Outcome of the establishment, revision, or abolition of standards

Contents of the standards

Utilization of statistical methods

Accumulation of technology

Utilization of standards


Systems for the control of quality and such related matters as cost and quantity

Control items and control points

Utilization of such statistical control methods as control charts and other statistical concepts

Contribution to performance of QC circle activities

Actual conditions of control activities

State of maters under control

Quality assurance

Procedure for the development of new products and services (analysis and upgrading of quality, checking of design, reliability, and other properties)

Safety and immunity from product liability

Customer satisfaction

Process design, process analysis, and process control and improvement

Process capability

Instrumentation, gauging, testing, and inspecting

Equipment maintenance, and control of subcontracting, purchasing, and services

Quality assurance system and its audit

Utilization of statistical methods

Evaluation and audit of quality

Actual state of quality assurance


Measurements of results

Substantive results in quality, services, delivery time, cost, profits, safety, environments, etc.

Intangible results

Measures for overcoming defects

Planning for the future

Grasp of the present state of affairs and the concreteness of the plan

Measures for overcoming defects

Plans for further advances

Linkage with the long-term plans

Effect of the Deming Prize

From the date of establishment until now there more than 200 organizations have receive/awarded the Deming Prize. Study and information from these prize winner organizations show that there are several positive effects impact of been awarded with Deming Prize.

Quality Stabilization and Improvement

Concept of quality and controlling business activities with reduction of part defects, service defects, installation defect and market claim have allowed organization to provide customer with quality products and services that are matched with customer requirements and organization policies. Due to this improvement many organizations have acquired a world-class reputation.

Productivity Improvement/Cost Reduction

Activities such as lower manufacturing defects, increased customer satisfaction, reduce man-hour and improve production control systems have also enhanced productivity.

Expanded Sales

With strengthen their management system have contribute to capture new customer and market which have improved customer satisfaction and result in increased sales.

Increased Profits

By improvement cost reduction and expand sales of course will increased profit for the organization. This shows implementing TQM will result of highly cost effective business performance.

Thorough Implementation of Management Plans/Business Plans

In order to secure profits, the management or business plan plans must base on the profit plans. By analyze historical business performance can improve the deficiency and will efficiently policies and objective of business plans.

Realization of Top Management’s Dreams

To realize top managements dream the main factor that hold this is the organization culture and tradition or the habit. Top management at these organizations often pleasantly states, “We were able to achieve at once many things we had wanted to accomplish for years.” [4]

TQM by Total Participation and Improvement of the Organizational Constitution

Some top management says, “Through challenging for the Deming Prize, we became convinced that it is possible for us to accomplish anything when all our employees cooperate. We have become much better at interdepartmental communications and cross functional management.” [5]

Others than that are Heightened Motivation to Manage and Improve as Well as to Promote Standardization, Uniting Total Organizational Power and Enhancing Morale and Establishment of Various Management Systems and the Total Management System


In order to check for effectiveness of something or some method, people usually tend to compared with others method that is closed to it. Same goes to The Deming Prize. Here I will compare and differentiate the Deming Prize with the Baldrige Award and ISO 9000.


Baldrige Award

Deming Prize

ISO 9000


Encourage sharing of competitiveness learning and drive this learning nationally

Award companies that continually apply company-wide quality control based on

statistical quality control

Provide common basis for assuring buyers that specific practices, including documentation conform with provider’s state quality systems


Customer satisfaction

prevention of quality problems

Customer satisfaction

prevention of quality problems

Conformity to practices

specified in the registrant’s own quality system


Limited to U.S. companies only

Individuals, factories and divisions or small companies worldwide

Companies, divisions and facilities around the world

Time frame

1 year cycles

renew after 5 years

2 to 5 years preparation with JUSE

apply when ready

Takes 6 to 12months depending on starting point and urgency

Information sharing

Winners required to share nonproprietary information on quality strategies with other US organizations


of information is voluntary and minimal


have no obligations to share information with others

The actual Deming Prize which is provided to businesses offers a good impact directly and indirectly within the improvement high quality management within the Japanese.

The Deming winning firms from the Toyota group represented companies with significantly more experience in TQM on average prior to competing for the Deming Prize than the rest of our sample. Further, we suggested that the degree of experience in TQM could play a moderating role in the relationship between winning a quality award and firm performance. For example, researchers have found that while the phenomenon of the winner’s curse rarely dissipates, it can diminish in size (Lindand Plott, 1991). In one study, Hanson and Lott (1991) found that reducing the uncertainty over an item’s value can decrease the average price paid by the winners. Therefore, the reduction of uncertainty appears to have a moderating effect on the size of the winner’s curse. Further, Lind and Plott (1991) found that in winner’s curse situations, experience is related to the degree of uncertainty reduction. Specifically, the more experience a firm has with the item that it is bidding for, the more efficient and effective those firms are in providing the winning bid. It would seem reasonable to suggest that the degree of experience a firm has with TQM, the more efficient and effective they could be in “bidding” for a quality award.

Further, it is also reasonable to argue that firms with more experience in TQM prior to competing for a quality award will not have to focus as exclusively on winning to the degree that an inexperienced firm would. Therefore, experience would also have a moderating effect on the dangers of simplicity. In sum, by moderating the effects of both the dangers of simplicity and the winner’s curse, experience would have a moderating influence on the relationship between winning a quality award and firm performance. More specifically, the more experience the firm in TQM prior to competing for a quality award, the less likely they will be adversely affected by the dangers of simplicity and the winner’s curse and thus the more likely they will experience improvements in performance after winning a quality award. Conversely, the less experience the firm in TQM has prior to competing for a quality award the more likely is it that they will be adversely affected by the dangers of simplicity and the winner’s curse and thus the more likely that these firms will experience performance shortfalls after winning a quality award.


In my opinion, The Deming Prize has major contribution in affect the implementation of the TQM among the companies. People tend to seek for this award by making improvement involve of all company from top management to general worker. If they don’t win the award but their own achievement is not a waste. Other than that, an organization that have implemented of TQM will gain improvement in productivity, cost reduction and stability of quality besides expand sales and increased profit.


[1] Anshuman Sharma, Kushal Rastogi, Priya Rajvansh, Deming Prize

[2] Anshuman Sharma, Kushal Rastogi, Priya Rajvansh, Deming Prize

[3] /11 December 2012 / 9.12a.m.

[4] Introduction of the Deming prize 2012 for overseas.

Gary Dessler, Dana L. Farrow Implementing a Successful Quality Improvement Programme in a Service Company: Winning the Deming Prize

T. Fasil, H. Osada An Empirical Study on Deming Prize Winners from India and Thailand

Graduate School of Innovation Management, Tokyo Institute of Technology, Tokyo, Japan

Anthony L. Iaquinto Can winners be losers? The case of the Deming prize for quality and performance among large Japanese manufacturing firms

The W. Edwards Deming Institute

Union of Japanese Scientists and Engineers (JUSE)

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