Abstract
The purpose of this study is to examine the relationship between Total Quality Management (TQM) practices, quality capabilities, competitiveness and firm performance. In this study, TQM has been conceptualized as soft and hard practices. An empirical analysis based upon an extensive validation process was applied to refine the construct scales, respectively. The sample consists of 423 valid responses for applying Structural Equation Modeling (SEM). Results derived from this study show that soft TQM practices have a direct, positive and significant relationship between quality capabilities, competitive strategies and Organizational performance. In addition, an indirect, positive and significant relationship on organizational performance through quality capabilities and competitive strategies was observed. The findings of this research show that hypotheses H3b, H4b and H6b do not support, the rest are in line with the model inference. Particularly, from the results indicate that soft TQM are the most important resource, which has strong effects on organizational performance. Results derived from this study might help managers to implement TQM practices in order to effectively allocate resources and improve financial performance. Thus, managers should consider that improvement in soft TQM would support the successful implementation of quality capabilities, competitive advantage and organizational performance. Much efforts relating to social aspects in TQM activities are particularly key issues to improve performance.
Highlights
Organizations often seek ways to improve their competitive advantage within their respective industries
The scale items for Total Quality Management (TQM) activity were adapted from Ahire et al (1996) and Powell (1995); the items of quality were adapted from Ahire and Dreyfus (2000), business performance were adapted from Powell (1995) and Venkatraman and Ramanujam (1986)
From the test results of the hypothesis H1a, H1b, H2a and H2b, both soft and hard TQM activities have significant effects toward quality capabilities. This means that no matter what kinds of TQM activities will result in quality improvement. This result fit to Deming's Chain Reaction Model, as he postulated that effective TQM activities would get better quality improvement
Summary
Organizations often seek ways to improve their competitive advantage within their respective industries. Many of them struggle to accomplish this goal with the use of a systematic approach to improve their organizational performance as it relates to quality products or services. Among those management approach, lots of researchers have indicated that the Total Quality Management (TQM) practices is a potentially useful tool for promoting business performance and increasing a company’s competitive advantage (Hendricks and Singhal, 2001a; MartinezLorente et al, 2000; Terziovski and Samson, 2000). TQM is a quality management approach that focuses on customer needs and process improvements. Organizations must strive to continuously improve these processes for surviving in a competitive environment
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