Effective quality management through third‐generation balanced scorecard

Quality initiatives in the West have produced limited long‐term success compared with equivalent initiatives in Japan. Some claim that this is due to the absence of explicit links between strategy and operational initiatives. The paper aims to tests this claim and suggests an approach that better supports quality management initiatives. The paper is based on a combination of literature review and case studies. It supports the assumption that an explicit link between strategy and operational initiatives is a critical success factor in deriving long‐term benefits from quality initiatives. It is an equally important feature of best practice performance management system design and the paper finds that quality management initiatives can be implemented more successfully, when associated with a robust corporate performance management approach based on modern strategic control principles. The paper demonstrates how the latest evolution of balanced scorecard – third‐generation balanced scorecard – adheres to such control principles and illustrates how it supports effective application of a number of popular quality management tools. The limited success of quality initiatives, along with the continued popularity of some of these tools, suggests that any approach, which effectively helps decrease the risk of failure, would carry significant value.