A new model of the impact of quality management principles on return on equity

Abstract

The main purpose of the study was to determine the extent to which implementing the ISO 9001:2015 quality management system (QMS) principles impacts company financial performance measured by return on equity (ROE). A questionnaire was developed and validated through a three-step process. A total of 316 fully compiled questionnaires were included in the survey. Spearman’s correlation analysis and factor analysis were applied to identify correlations between the implementation of the QMS principles and company ROE. Statistically significant positive correlations were found between all seven QMS principles. In terms of financial performance, each QMS principle has a positive impact on ROE, although these correlations are statistically insignificant. The implementation of the seven QMS principles is only to a lesser extent a direct element of company performance. Based on the research findings, an original model was developed proposing the QMS principles as elements influencing company performance. Further research is proposed to investigate QMS maturity, replicate the study in small enterprises, and develop a model of indirect factors that link implementation of QMS principles to improved ROE.