Standardization and integrated management
systems - A business-practitioner’s viewpoints
Academician, International Academy for Quality (IAQ)
Venture Knowledgist Quality Integration
firstname.lastname@example.org , www.QualityIntegration.biz
January 29, 2010 Ver. 1.2
These pages are licensed
under the Creative Commons 3.0 License
(Mention the origin)
Standardization and integrated management
systems - A business-practitioner’s viewpoints
1. Rectifying conceptual problems
- Even experts should appreciate traditions and recognized practices of business
2. Applying standards with integration, responsiveness and innovation
- Organizations aim at competitiveness and sustained business success
3. Considering business environments
- Organizations and their business management must adapt themselves to the
prevailing business realities.
4. Appreciating information and knowledge in managing an organization
- Core of a management system consists of information and knowledge. Mainly
the system is a mental system.
5. Performance of a management system as a fuzzy issue
- A management system must be always ready but never finished.
2 Integration covers all aspects and expertise subject matters
needed for the management of an organization.
Major problems in ISO management standards
1. System approach is unclear and not business-focused.
2. There is confusion between the system management and system requirements.
3. Process approach is unclear.
4. Integration should be understood as business-integration.
5. This spiral model is 6. PDCA is a business 7. This diagram does not
unpractical and naive for management model not a process support business-integration
management purposes. It model. This does not cover all that is necessary in the
does not follow Juran’s necessary strategic and system and process
original business-based ideas operational management needs. approaches. The core should
neither modern PDCA All stakeholders should be consists of general business
3 practices. considered. What is the quality (or management elements.
X) management system?
Juran’s quality spiral model, The “Big Q” approach
The original spiral model covers
the organizational business scope
comprehensively including all
necessary management aspects
embedded in a natural and logical
way within business activities. It is
principally a descriptive model and
does not yet give any practical
Planning, controlling, and improving the performance
of business (processes)
Problem A P
cases Rectifying sporadic
(defects) C D problems
(2) Performance control Prevention
(3) Small step improvement
(4) Breakthrough C D
(5) New Performance A P Control with new limits
planning C D
0376/2.1.2010/jan (Ref. Dr. Juran: Trilogy Approach)
The PDCA Model is a recognized multipurpose
methodology for business management.
The PDCA Model (called also as Deming / Shewhart Cycle) has a long history and a great variety of
different applications, possibilities, and uses in the field of general business management:
– Original PDSA (Plan-Do-Study-Act) model was created by American Walter Shewhart in the
1920’s and used for production control.
– The model became popular through American W. Edwards Deming’s lectures of managerial
quality during several decades (from 1950’s to 1990’s).
– American Joseph Juran’s Trilogy Model (1964) contains the same elements as the PDCA
model. He especially emphasized differences between control and breakthrough. His spiral
model was presented in his well-known Quality Control Handbook (1975).
– In the 1980’s Japanese Kaoru Ishikawa and Masaaki Imai emphasized problem solving and
continual improvement (“Kaizen”) according to the PDCA model.
– Later Japanese Shoji Shiba has made remarkable work by combining the original PDCA model
with the ideas of managing knowledge and of Buddhist philosophy.
– In late 1990’s and early 2000’s the SixSigma methodology for large scale business
performance improvements was developed by Motorola and became popular by its successful
application in General Electric. Also SixSigma is based on the PDCA approach.
– The PDCA model has also consistent linkages with traditional systems theory and systems
– To the international standardization the model was used at first in standards ISO 9000:2000 for
6 quality management from where it came e.g. to information security management standards a
few years later.
A triple PDCA (*), a model for good management:
Coordinated activities to direct and control an organization (**)
ACTING (A): PLANNING (P):
• Preventing actions • Business and
• Improving actions management models
• Re-engineering • Business plan Applying a triple PDCA model
• Communicating • Approaches and (“The Eyes of Buddha” (***)):
• Recognizing and methodology 1. Rational control (operational)
rewarding A P 2. Continual rational small step
C D improvement (operational),
CHECKING (C): DOING (D): “Kaizen” approach
• Assessing the • Deploying the approach 3. Innovative breakthrough
performance and achieving the results changes (strategic)
• Reviewing the • Controlling operational
• Corrective actions
2343x/15.12.2008/jan (*) Deming / Shewhart, (**) ISO 9000, (***) Shiba; Bodhnath Stupa, Kathmandu
Systemic management of business resources
Managing based on
system recognition and
Plus ca change,
plus c'est la
3077/2.9.2007/jan (Ref.: Repenning & Sterman)
ISO 9000 quality management principles, QMP
These principles can be used by senior management as a framework to guide their organizations
towards improved performance. The principles are derived from the collective experience and
knowledge of the international experts.
* Principle 1: Customer focus
* Principle 2: Leadership
* Principle 3: Involvement of people
* Principle 4: Process approach
* Principle 5: System approach to management
* Principle 6: Continual improvement
* Principle 7: Factual approach to decision making
* Principle 8: Mutually beneficial supplier relationships
These principles are relevant for all areas
organizational business management including
9 also all expert disciplines.
ISO 9000 Quality management principle #5:
System approach to management
”Identifying, understanding and managing interrelated processes as a system contributes
to the organization's effectiveness and efficiency in achieving its objectives”
• Integration and alignment of the processes that will best achieve the desired results.
• Ability to focus effort on the key processes.
• Providing confidence to interested parties as to the consistency, effectiveness and
efficiency of the organization.
Applying the principle of system approach to management typically leads to:
• Structuring a system to achieve the organization's objectives in the most effective and
• Understanding the interdependencies between the processes of the system.
• Structured approaches that harmonize and integrate processes.
• Providing a better understanding of the roles and responsibilities necessary for
achieving common objectives and thereby reducing cross-functional barriers.
• Understanding organizational capabilities and establishing resource constraints prior to
• Targeting and defining how specific activities within a system should operate.
• Continually improving the system through measurement and evaluation.
10 This principle is relevant for all areas of organizational management.
3728/2.1.2010/jan An organization is managed as one single system.
System (*) is a set of interrelated or interacting A system’s Management
elements (processes). creators and
- A system is an entity that maintains its existence
and functions as a whole through the interaction of
its parts. A system
- A system has always an aim or purpose defined (and its elements)
by the system’s creators or owners. The system is
just created to accomplish its aim.
- A system has interactions and transactions with
its environment to get input from and to provide Inputs and outputs through
output for system’s stakeholders. Stakeholders interactions and transactions
may set requirements to the system.
- A system is managed as a whole. Management is System environment
based on knowledge and information and PDCA (Stakeholders and system-competitors)
management model (feedback).
An organization is a system. System management domain System requirements
Internal interest External interest
11 Effectiveness and efficiency Effectiveness
(Ref. Russell's paradox)
3732/20.1.2010/jan (*) Ref. ISO 9000 definition
Two principal domains, management and assurance,
of the organizational management
AA/B Organization A
AB/C Organization B1
Organization C Aim of the approaches:
Organization B2 M Excellence (internal interest)
MC A Confidence (external interest)
- MA, MB, MC:O rganization-internal (business) management (system)
- AA/B, AB/C: Assurance between organizations (based on organization-internal management system)
At all organizational levels there should be consistency among these disciplines. Both management
12 and assurance consist of many different expertises.
Quality management (QM) and quality assurance (QA)
as consistent parts of an organization’s quality approach
QM business system aspects QM = Quality management
(QMS = Quality Management System) (focus on excellence of a business
approach), ISO 9004
QA = Quality assurance
(focus on confidence for
product conformity), ISO 9001
ISO 9000 standards cannot be
QA elements understood by ISO 9001 only.
ISO 9001 is a part of ISO 9004:
- in standard documents as a whole
- in individual standard clauses
A QMS covers the whole business
QM principles management system (BMS).
Situation is very analogous with all expertise areas of business
13 management, e.g. information security management.
Quality assurance (QA):
- strengthening the confidence among the customers
Process (product realization) Output/Product
Input Product delivery Customer
Quality assurance (*)
(*) Standard model ISO 9001 or tailored, and “e-Certificate”
quality assurance plan / agreement
Managing activities and responsibilities (a management
system) cover the whole organization.
Breakthrough Top management
Improvement Unit / function managers
activities and professionals
Routine Process owners
Process team members
15 Portion of time spent on activity
1365/12.1.2009/jan (Ref.: The Itoh Model, Singh Soin)
Infrastructure and elements
of an organizational management system
Strategies plans projects,
Mission ”Becoming Better”
existence) Resources, Operational
Policies documents, ”Earning Money”
SHARED BUSINESS VALUES
Purpose Strategic plans Realization means Action
of the 3...5 1...3 0,4...1 just now
company years years year
16 Separate X systems within this typical business framework are very artificial.
All X actions must be integrated with the management system.
Integration is the main strategy for a professional
expertise approach within an organization (system)
Integration means: Expertises may include:
• Implementing effective and efficient expertise –Finance
items embedded within normal business –Quality
management activities (especially in business
processes) –Business risks
• Acting against building distinct ”expertise –Information security
systems” (i.e. lack of integration). Business- –Human resources
separated expertise initiatives are artificial. –Information and communications
One must understand and take into account the –Occupational health and safety
nature of the organizational system, its business –Environmental protection
and its realities when implementing expertise –Innovation
initiatives of business management. Integration is
always an organization-dedicated solution. –Ethics
Cross-application of all expertise areas is needed. –etc.
E.g. information security is needed in quality
management and quality in information security
of the standards ”systematicity”
Business standards are established through
orgnizations’ business structures and processes.
18 Separate management systems are illusions.
Management integration takes place at two levels
• The strategic level, where one makes decisions and undertakes measures concerning
the entire organization (business system of business processes) and considers
especially the future competitiveness of the organization.
• The operational level, where decisions and measures concerning daily management
are made and undertaken. Emphasis is on operational questions of the individual
These two managerial areas are very different by their purpose and therefore
different methodology is needed for them.
Integration covers all aspects needed for the
management of an organization.
Conflicts of needs and expectations
from specialized management areas
Finance Quality Risk
management management management
Occupational Information Environmental
health and safety security management
A consistent and balanced
Conflicts: - on strategic level: General manager’s commitment integration is needed
20 - on operational level: Business processes’ commitment for avoiding conflicts!
Integrating specialized domains of management
standardization and ensuring natural business diversity
The Finnish model Finance
for integration (MSS) Product General management
quality system based on PDCA
Ethics responsibilities health and safety
and business Organizational
system identity & privacy
3342/20.8..2009/jan (Ref.: ISO Management systems standardization, MSS)
From a business
to satisfying AN ORGANIZATION
* Political impact
requirements * Consultancy
Action plans Infrastructure
+ Needs and expectations:
(Business creator) apprecia- * Price and cost
22 Profound knowledge: Business management sciences and experiences +
Expertises in quality, information security, environmental protection, etc.
Defining a business-integrated
expertise management, “X management”
X management: Coordinated activities to direct X:
and control an organization with regard to X –Finance
Note: X management is not management of X but
management of an organization.
X management is a responsibility of the business –Human resources
management, and it is taking place through the –Information and communications
managing actions of business leaders. –Knowledge
–Occupational health and safety
Experts have assisting roles both in X
management. Cooperation of different experts is
strongly recommended. –Innovation
3736/3.1.2010/jan (Ref. e.g. ISO 9000)
X management system, a core concept
in X management standardization
There are two elements in the concept X management system, XMS:
1. Management System (of an organization), MS:
- System to establish policy and objectives (of an organization) and to achieve
- A qualifier (attribute) characterizing a management system (MS)
characterizing how X is taken into account in the management system
XMS = X of/in/for MS
XMS is a concept for systematic approach, “systematicity”, for X in an organization’s
XMS is principally aimed for organization’s own internal business management needs
In fact, the concept XMS is not at all needed for practical quality approaches in
organizations. It has caused a lot of confusions, especially when translated into
Necessary emphases in modern X management?
– Implementing effective / efficient and business- X management
relevant X principles and methodology X of/in/for management
embedded within organization’s normal activities
of strategic and operational management
– Being able to adjust quickly to suddenly altered Dynamic and flexible
external conditions, and to resume stable business management
operation without undue delay
– Striving continuously for new organization-
dedicated innovative and unique solutions and An organization’s unique
encouraging various choices for X management approach
in different organizations.
A problem among management standards users:
Standards crumble organizations’ identity
There are still organizations that build and maintain separate
systems for specialized management areas including quality,
information security, environmental protection, OH&S, etc.
Even that is promoted by consultation and training.
Organizations’ specialized systems - e.g. based on different
standards - are distinct from the business systems.
Still the usage of different standards is promoted by different
Standards users have different (and even strange) opinions about
There are very little evidence on innovative standards applications.
Standardization and users’ business reality
Standardization Y: Issue Y / Standard element Y / Consensus process Y
Standardization X: Issue X / Standard element X / Consensus process X
Practical realization of
the subject area
Organization A: Realization elements A: Innovation process A
27 Organization B: Realization elements B: Innovation process B
ISO 9000 Quality management principle #4:
”A desired result is achieved more efficiently when activities and related resources are
managed as a process.”
* Lower costs and shorter cycle times through effective use of resources.
* Improved, consistent and predictable results.
* Focused and prioritized improvement opportunities.
Applying the principle of process approach typically leads to:
* Systematically defining the activities necessary to obtain a desired result.
* Establishing clear responsibility and accountability for managing key activities.
* Analysing and measuring of the capability of key activities.
* Identifying the interfaces of key activities within and between the functions of the
* Focusing on the factors such as resources, methods, and materials that will improve key
activities of the organization.
* Evaluating risks, consequences and impacts of activities on customers, suppliers and
other interested parties.
28 This principle is relevant for all areas of organizational management.
3738/2.1.2010/jan An organization is managed as one single system of processes.
Historical notes for the process approach
• Process approach was used already in ancient plant and construction activities. The concept
is often referred to in cases of natural development.
• Through industrialization processes became an everyday concept in so called process
• From 1980’s process approach has been used for computers’ internal activities according to
structured analysis and design technique (SADT).
• In a large scale business process approach has been used comprehensively for the benefits of
business management only for less than twenty years, and during that time a lot of practical
means have been developed for that purpose.
• Process management thinking got learning from system theory and system dynamics.
• To the quality management standards ISO 9000, process concept was introduced in the 1990’s
and just in very recent years the methodology came to the other international management
standards, e.g. information security management standards.
• BPR (Business Process Reengineering) is a concept for process improvements according to
the ideas of PDCA model. It was particularly promoted by Michael Hammer, James A. Champy
and Tom Peters in the 1990’s.
• BPM (Business Process Management) has become during the recent years a popular concept
within IT experts in automating business processes according to SOA (Service Oriented
• Today organizations’ all business processes are “complex responsive processes of relating”.
A business is a system of processes
A business system consists of processes:
3740/2.1.2010/jan (Ref. Dr. Deming, 1950)
What is a (business) process?
Process means a continuous(*) activity by organized resources for fulfilling organization’s
– Processes put into practice organization’s business / action plan.
– Operational every day work is done in processes. Process
– Processes produce outputs (results) to the stakeholders. (acting)
There are always processes in all organizations.
Structure (e.g. organizational structure) is a
contradictory dimension to the processes.
The both are needed – in fact they are also always
existing in organizations. They cannot be replaced by
each other. Process is the primary one, The structure Structure
should serve it.
Modern organizational processes are “complex responsive processes of relating”.
The key business management from the quality point of view is: How to manage
3041/20.8.2005/jan (*) A project is a singular or unique process.
The process/structure dilemma:
Managing for balance
Functionality Structure #1
Active Balance issues:
Skilled - Freedom / control
Agile - Awareness / instructions
Adaptive - People / systems
Flexible - Proactive /reactive
Structure (being, existing):
Planned, Built, Passive, Past, Prescribed, Stagnant
Enterprice identity is based on
its business structures and processes
Modern Times (1936): A story of industry, of individual enterprise - humanity crusading in the pursuit of happiness.
A comprehensive process management model C D
Business performance assessment and review
Process performance assessments (audits)
Re-design and Corrective Conformity
re-engineering action check
Performance control e
A business process Output s Process
Inputs data u
• require- outputs
Work activity r
• needs data e Other
• requisites Other m processes
People resources Procedures e
34 Other processes Preventive action,
New foundations for business infrastructure
Uncertainty and ambiguity
Emergence and self-organizing networks of actors
Many heterigeneous global actors in virtual networks
All linked with everything else, all linkages not known
Customers and other stakeholders differentiating with singular needs
Pradoxal freedom of the actors (”both-and” instead of ”either-or”)
Signifigance of immaterial issues (information, knowledge, services)
Informal learning and serendipity
Increased speed of activities and change
Signifigance of transaction phenomena
Complex responsive processes of relating
Simultaneous agility and maturity requirements
Immense pressure / stress of business leaders
Certainty and predictability
1544/2.9.2009/jan (Refs.:D Zohar, R D Stacey)
Crises in business expertises:
To adapt to the needs of modern society
Speed Marshall McLuhan:
Changes Business ” Today each of us lives
Agility environments hundred years in a decade.”
Complexity and society
Established business expertises
Are the experts not able to follow the general development of organizations' business
development and trends of the society at large?
Are they providing only "Plus ca change, plus c'est la même chose “?
Customer’s differentiation and
Customer differentiation Organization’s capabilities
lll lV lll lV
l ll l ll
Customer’s needs Production and
Uniform Differentiated Low logistics High
2377/20.9.2002/jan (Ref.: D Peppers, M Rogers)
Activities within complex responsive processes
All kinds of activities
Low Innovation may exist in networking
control - “Zone of
Trial & Error
High Certainty Low
3430/15.1.2008/jan (Ref.: Stacey: http://www.plexusinstitute.org/edgeware/archive/think/main_aides3.htm l)
Performance of business networks is influenced by
individual actors’ power and communication abilities
Real networks are unplanned and emergent
systems. Their growth is sporadic and self-
organizing. An actor’s impact in a network:
• Access = Actor’s easiness getting to the
resources of the network
• Reach = Actor’s potential wielding influence
in the network
• Control = Actor’s ability to control over the
resources of the network
Power law of the scale-free
Knots with k links
Many knots with
Few knots with
Business network is not any business system.
3721x/16.11.2009/jan Number of links (k)
Modes of operation in business processes
All business processes and activities consist of actions
with three concurrent dimensions comprising different
degrees of freedom and variety:
2. Organic responsive
Variety 1. Mechanistic complex, organized innovative
Degrees of serial interacting actors
freedom automatic networks variative
accuracy concurrent variable rules
due order communion personified
Operational and structural complexity
1754x/27.1.2005/jan (Ref.: Legat)
Management of an organization is particularly related
to managing organizational information / knowledge
Procedure document, standard,
operational model, recorded operation,
factual knowledge, etc. (explicit issue)
Conscious Reality of the issue in the minds of the
individuals and in the practical operations
(implicit / tacit contents of the issue)
Sub-conscious – This part is the most significant
regarding to the actions for the
– The contents may change due to
time and situation and depending on
influences and learning.
Empirical fact-based information and inherent
knowledge are needed for successful management
- explicit records Reflecting and deciding
- tacit knowledge Plan / Act
You get what
A P you measure
Environments Measuring ...
42 The performance reality of the company business processes
Business performance or X management
is not any on/off concept!
Specific actions (strokes or tricks)
Enhancing an organization’s business performance
(from early stage to maturity) – X Integration
Business performance is a fuzzy concept:
Excellence 1 = perfect
Grade of business performance
with a third party
ness Need of change?
How to get the change happen?
0 = good-for-
0 10 30 40 60 70 90 100
Assessed overall business performance %
(*) Third party certifications do not define any particular level of performance.
Organizations cannot differ from the others on the basis of third party certificates
Theses of the new approach
for applying X management and related standards
Striving for competitive X integration by:
• Recognizing performance excellence instead of a narrow X conformity thinking
• Striving for flexible realization of X in management and leadership instead of distinct X
management by using effective managerial methodology
• Applying innovative “systematicity” (systematic approach) of the X in management instead of
formal and distinct X management systems
• Using business-related X management principles and actions instead of fulfilling formal and
general X assurance requirements only
• Setting stretched business objectives instead of minimum standard requirements
• Aiming at innovative and unique solutions instead of stereotyped systems
• Relying on internal business performance self-assessments and advanced X assurance
communication instead of third party audits and certifications of “artificial” X systems
• Getting advantage of tacit knowledge instead of only records of explicit data and information
• Networking with partners and recognized world-wide communities of multifarious expertise
• Supporting various ways of collaborative learning instead of narrow-minded continual
• Reinforcing and using company’s own internal awareness and expertise instead of passive use
of external consultants
There will be also in future standards-experts who don’t understand or
don’t want to understand business realities of real organizations.
Consensus process of standardization has a detrimental influence on
the clarity and ambiguity of general standards: “Stupidity
condenses in the masses - The mob has many heads but no brains”
However, standards must not hinder creative applications of the
standards by responsible organizations.