An empirical examination of quality tools impact on financial performances: Evidence from Serbia

Vesna Spasojević-Brkić,Milivoj Klarin,Nikola Dondur,Tijana Đurđević,Snežana Omić

doi:10.5937/sjm1201077s

Abstract

This study examines the impact of quality tools on financial performances using a sample of 119 Serbian industrial firms. Factor and reliability analysis are used to show that quality tools may be classified into three primary categories: quality tools for reviewing current conditions (for decision making), quality tools for analyzing current conditions (for problems solving) and quality tools for production planning and control (for improvement). The relationships between these 3 groups of quality tools and financial performances were tested using the stepwise regression analysis. It was concluded that the first group of quality tools (quality tools for reviewing current condition, e.g. for decision making) has significant impact on most of the dimensions of financial performances, while for the second and third group there is no statistical support. Influence of the first group of quality

Highlights

The results show that there is a large percent of companies using quality tools and that using those tools leads to performance improvement
Respondents needed to mark the value of using the certain tool on the scale 1 to 5, while financial performance measures were sales revenue, company profit and total revenue per employee
In Serbian industrial context the quality tools have been classified into three groups: quality tools for reviewing current condition, quality tools for analyzing current condition and quality tools for production planning and control

Summary

Introduction

Even though quality tools and techniques improve the quality and overall business performance, little research has an empirical support for these relationships (Handfield, Jayaram & Ghosh, 1999), so the problem of finding empirical support of these. V.Spasojević Brkić / SJM 7 (1) (2011) 77 - 87 relationships is a major driver for this research. All quality tools used were classified into groups using factor and reliability analysis. Relationships between the groups of quality tool factors, and financial performance measures (sales revenue, company profit and total revenue per employee) were tested using regression analysis. These relationships were tested through the sample of 119 Serbian industrial firms

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Methods

Conclusion