Learning by Applying: The Case of the Malcolm Baldrige National Quality Award

This paper examines whether organizations improve their quality performance after applying for the Malcolm Baldrige National Quality Award (MBNQA). Using longitudinal data on organizations' actual scores on MBNQA applications between 1990 and 2006, we examine whether quality performance improved after organizations' initial application, the relationship between organizations' initial quality performance and subsequent improvement, and whether quality improvement differed based on applicants' industry sector. We examine these questions using the Heckman two-stage econometric modeling strategy. Building upon the organizational learning and absorptive capacity literatures, we find that organizations improve their quality performance after their first MBNQA application, initial quality performance displays an inverted U-shaped relationship with quality improvement such that organizations with low (but not the lowest) quality scores on their initial MBNQA application saw the largest subsequent quality gains, and organizations in the manufacturing sector experienced larger quality gains than organizations in other sectors. Analyses at the subcategory level reveal a pattern of findings that further corroborates our theory. We describe the implications of these findings with regard to operations management theory, managerial practice, and public policy.