What Is The EFQM model? The EFQM Model In A Nutshell

The EFQM model is a management framework helping organizations manage change and improve performance. The EFQM model was launched by the European Foundation for Quality Management in 1992 to increase the competitiveness of European companies.

Understanding the EFQM model

The EFQM model was launched by the European Foundation for Quality Management in 1992 to increase the competitiveness of European companies.

To facilitate this, the model incorporates a self-assessment framework measuring the strengths and weaknesses of an organization across all its operations.

The EFQM model is non-prescriptive and does not advocate strict adherence to rules or procedures.

Instead, it provides a broad overview of what is required to achieve organizational excellence. 

Since its release, however, the model has evolved to reflect an increasingly dynamic global marketplace.

The latest version has seen the framework transition from a simple assessment tool to one that offers a basic methodology for managing change and its associated impacts. 

Let’s take a look at the key components of the revised model in the following sections.

The three questions of the EFQM model

The model is now based on the answering of three questions:


Why does the organization exist? What purpose does it fulfill? Why was one strategy chosen over another?


How does the organization intend to deliver on its purpose or strategy?


What has the organization achieved? What does it want to accomplish in the future?

Direction, execution, and results then drive the rest of the framework, with each question supported by a few key criteria in the form of guiding principles.

The seven criteria of the EFQM model

With the above said, we will now take a look at the seven main criteria and how they are distributed across the three questions.


Criterion 1: Purpose, vision, and strategy

Organizational excellence is underpinned by an inspiring purpose, an aspirational vision, and a strategy that delivers.

Criterion 2: Organizational culture and leadership

Culture refers to the values exhibited by employees that influence behavior over time.

Leadership in the EFQM model means the organization is recognized as a role model by its peers.


Criterion 3: Engaging stakeholders

The organization must also identify its key stakeholders, or those most likely to play a role in organizational success.

Stakeholder relationships are built on transparency, accountability, and trust.

They are also involved in deploying strategy and are recognized for the contributions they make.

Criterion 4: Creating sustainable value

Long-term success and financial viability are enriched by purpose, strategy, and customer segmentation.

Sustainable value also means the organization acknowledges that stakeholder needs may change over time.

That is, products, services, and solutions may need to be adapted.

Criterion 5: Driving performance and transformation

Requiring the organization to successfully deliver business operations while reacting to internal and external change.

This allows it to deliver for today while preparing for tomorrow.


Criterion 6: Stakeholder perceptions

What are the personal experiences of stakeholders after dealing with the organization?

These perceptions can be obtained from surveys, focus groups, media reports, customer feedback, or external recognition.

Successful organizations continually meet the needs of stakeholders and can analyze past and current performance to measure progress.

Criterion 7: Strategic and operational performance

Lastly, how effectively does the organization fulfill its purpose, achieve its strategy, or create and deliver value?

Does it understand the cause and effect relationships that impact performance?

Current performance, measured by financial and non-financial models, should give clues to future performance with a relatively high degree of certainty.

Key takeaways

  • The EFQM model is a management framework helping organizations manage change and improve performance. It was created to help European businesses become more competitive and has since been tweaked and adapted.
  • The EFQM model encourages businesses to answer three questions around direction, execution, and results. These questions form the structural component of the framework.
  • The EFQM model also features seven key criteria distributed across the three structural components. These include purpose and strategy, culture and leadership, stakeholder engagement, sustainable value creation, performance and transformation, stakeholder perception, and strategic and operational performance.

What are the key questions the EFQM model asks?

The three questions the EFQM model asks revolves around the following:

What are the seven criteria of the EFQM model?

Who uses the EFQM model?

The EFQM model is used by many organizations, including businesses, government agencies, and non-profit organizations. It is prevalent in Europe, where it was developed, but it is also used by organizations worldwide. The EFQM model is a widely recognized and respected framework for assessing and improving organizational performance. Many organizations use it to help them achieve excellence and become more successful. It is often used with frameworks and models, such as the Balanced Scorecard and the Six Sigma methodology.

Types of Organizational Structures

Organizational Structures

Siloed Organizational Structures


In a functional organizational structure, groups and teams are organized based on function. Therefore, this organization follows a top-down structure, where most decision flows from top management to bottom. Thus, the bottom of the organization mostly follows the strategy detailed by the top of the organization.



Open Organizational Structures




In a flat organizational structure, there is little to no middle management between employees and executives. Therefore it reduces the space between employees and executives to enable an effective communication flow within the organization, thus being faster and leaner.

Connected Business Frameworks

Portfolio Management

Project portfolio management (PPM) is a systematic approach to selecting and managing a collection of projects aligned with organizational objectives. That is a business process of managing multiple projects which can be identified, prioritized, and managed within the organization. PPM helps organizations optimize their investments by allocating resources efficiently across all initiatives.

Kotter’s 8-Step Change Model

Harvard Business School professor Dr. John Kotter has been a thought-leader on organizational change, and he developed Kotter’s 8-step change model, which helps business managers deal with organizational change. Kotter created the 8-step model to drive organizational transformation.

Nadler-Tushman Congruence Model

The Nadler-Tushman Congruence Model was created by David Nadler and Michael Tushman at Columbia University. The Nadler-Tushman Congruence Model is a diagnostic tool that identifies problem areas within a company. In the context of business, congruence occurs when the goals of different people or interest groups coincide.

McKinsey’s Seven Degrees of Freedom

McKinsey’s Seven Degrees of Freedom for Growth is a strategy tool. Developed by partners at McKinsey and Company, the tool helps businesses understand which opportunities will contribute to expansion, and therefore it helps to prioritize those initiatives.

Mintzberg’s 5Ps

Mintzberg’s 5Ps of Strategy is a strategy development model that examines five different perspectives (plan, ploy, pattern, position, perspective) to develop a successful business strategy. A sixth perspective has been developed over the years, called Practice, which was created to help businesses execute their strategies.

COSO Framework

The COSO framework is a means of designing, implementing, and evaluating control within an organization. The COSO framework’s five components are control environment, risk assessment, control activities, information and communication, and monitoring activities. As a fraud risk management tool, businesses can design, implement, and evaluate internal control procedures.

TOWS Matrix

The TOWS Matrix is an acronym for Threats, Opportunities, Weaknesses, and Strengths. The matrix is a variation on the SWOT Analysis, and it seeks to address criticisms of the SWOT Analysis regarding its inability to show relationships between the various categories.

Lewin’s Change Management

Lewin’s change management model helps businesses manage the uncertainty and resistance associated with change. Kurt Lewin, one of the first academics to focus his research on group dynamics, developed a three-stage model. He proposed that the behavior of individuals happened as a function of group behavior.

Organizational Structure Case Studies

Airbnb Organizational Structure

Airbnb follows a holacracy model, or a sort of flat organizational structure, where teams are organized for projects, to move quickly and iterate fast, thus keeping a lean and flexible approach. Airbnb also moved to a hybrid model where employees can work from anywhere and meet on a quarterly basis to plan ahead, and connect to each other.

eBay Organizational Structure

eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.

IBM Organizational Structure

IBM has an organizational structure characterized by product-based divisions, enabling its strategy to develop innovative and competitive products in multiple markets. IBM is also characterized by function-based segments that support product development and innovation for each product-based division, which include Global Markets, Integrated Supply Chain, Research, Development, and Intellectual Property.

Sony Organizational Structure

Sony has a matrix organizational structure primarily based on function-based groups and product/business divisions. The structure also incorporates geographical divisions. In 2021, Sony announced the overhauling of its organizational structure, changing its name from Sony Corporation to Sony Group Corporation to better identify itself as the headquarters of the Sony group of companies skewing the company toward product divisions.

Facebook Organizational Structure

Facebook is characterized by a multi-faceted matrix organizational structure. The company utilizes a flat organizational structure in combination with corporate function-based teams and product-based or geographic divisions. The flat organization structure is organized around the leadership of Mark Zuckerberg, and the key executives around him. On the other hand, the function-based teams based on the main corporate functions (like HR, product management, investor relations, and so on).

Google Organizational Structure

Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.

Tesla Organizational Structure

Tesla is characterized by a functional organizational structure with aspects of a hierarchical structure. Tesla does employ functional centers that cover all business activities, including finance, sales, marketing, technology, engineering, design, and the offices of the CEO and chairperson. Tesla’s headquarters in Austin, Texas, decide the strategic direction of the company, with international operations given little autonomy.

McDonald’s Organizational Structure

McDonald’s has a divisional organizational structure where each division – based on geographical location – is assigned operational responsibilities and strategic objectives. The main geographical divisions are the US, internationally operated markets, and international developmental licensed markets. And on the other hand, the hierarchical leadership structure is organized around regional and functional divisions.

Walmart Organizational Structure

Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the current CEO Doug McMillon is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.

Microsoft Organizational Structure

Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time it also became more hierarchical, however still keeping its hybrid approach between functions, engineering groups, and management.

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