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Journal of the Academy of Marketing Science
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The Impact of High-Quality Firm Achievements on Shareholder Value: Focus on Malcolm Baldrige and J. D. Power and Associates Awards

Siva K. Balasubramanian

Southern Illinois University, siva{at}cba.siu.edu

Ike Mathur

Southern Illinois University, imathur{at}cba.siu.edu

Ramendra Thakur

Utah Valley State College, ramendra{at}siu.edu

Marketing managers face increasing pressure to justify any strategic action with financial metrics that facilitate comparative evaluations with alternative options. Using event study method, the authors focus attention on the impact of high-profile quality achievement awards on the stock prices of the award-winning firms. Two types of awards are investigated: the Malcolm Baldrige National Quality Award (MBNQA) and J. D. Power and Associates Awards (JDPAA). Previous event studies found no major impact of MBNQA announcements on the stock price of MBNQA winners; in contrast, this study’s results show that these awards generate significant shareholder value for MBNQA winners. With respect to the JDPAA, the authors’ analyses did not find any such impact in the Automotive, Travel, and Finance categories. Multiple regression analyses suggest that firms with higher amounts of intangible assets are more likely to create shareholder value. Implications of the results for different decision horizon perspectives are derived.

Key Words: high-quality awards • financial impact • shareholder wealth • J. D. Power and Associates • Malcolm Baldrige National Quality Award

Journal of the Academy of Marketing Science, Vol. 33, No. 4, 413-422 (2005)
DOI: 10.1177/0092070305277691
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