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[SCOPUS] Development of an Index for Evaluating National Quality Competitiveness based on WEF and IMD Compiled Indices

Cho, Insu., Lee, Kiwon., Park, Heejun., Park, Myungho., & Kim, Joseph Kichul. (2014). Development  of an index for evaluating national quality competitiveness based on WEF and  IMD complied indices. Quality Innovation Prosperity, 18(1), 47-66.

Purpose - Because of globalization, rapid technical change, and shrinking economic distance, businesses operating beyond their national boundaries cannot depend upon previously proven domestic quality practices. Therefore this study was conducted to develop a national quality competitiveness index (NQCI), necessary to establish national policy standards for quality improvements.
Methodology/approach - For the NQCI, the World Economic Forum (WEF) and the International Institute for Management Development (IMD), internationally recognized indices for national competitiveness, were used. Among the 51 indicators selected from WEF and IMD, indicators that are overlapping in meaning were combined, resulting in a total of 35 indicators for the NQCI. We conducted statistical verifications such as factor analysis and cluster analysis to validate the NQCI.
Findings - The NQCI was composed of 34 indicators divided into four different perspectives (sustainable capability, basic infrastructure capability, primary activity capability, and innovation capability). To conduct an empirical analysis of the NQCI, it was applied to the 18 countries during 2005-2010. The results of applying the NQCI were used for identifying the differences between high and low ranked countries. In the case of countries ranked higher in NQCI, particularly the scores of primary activity capability and innovation capability had relatively large influences on national quality competitiveness. On the other hand, in the case of countries that ranked lower in the NQCI, it was important that the government plays a central role in strengthening quality competitiveness and implementing industrial modernization steps.
Research Limitation/implication - The NQCI has practical implications. First, the NQCI allows the comparison and identification of the current standings of countries in national quality competitiveness using objective data. Second, the index allows the identification of detailed factors necessary for quality improvement through an analysis of the relative differences between indicators. Third, the index can act as a practical guideline for investing in identified vulnerable areas to improve national quality competitiveness.
However, the application of and comparison via the NQCI is limited to the target countries of the WEF and IMD.
Originality/value - This study was conducted to promote the understanding of the importance of quality management at the national level. These findings also help government establish quality policies that are more concrete through quantified indices.