ANALYSIS ON THE TOTAL QUALITY MANAGEMENT (TQM) PRACTICES TOWARDS BUSINESS PERFORMANCE; A CASE STUDY

Wahyu Ismail Kurnia,Kuswandi Arifin,Seherdi Siman,Muhammad Isradi Zainal

doi:10.17358/jabm.7.2.306

Abstract

The improvement of company management quality to achieve competitive advantage must be appropriate in the term of applying the concept or strategy of improvement, because it can affect the company's success in competition with its competitors. Total Quality Management (TQM) is one of the concepts which is in regard with improving the quality of company management by considering almost all company aspects. It is proven through the claim of most academics and practitioners who say that TQM can improve company's business performance. This research aims to find out the implications of TQM practices on the business performance of PT. XYZ which is engaged in cement business. There are 10 TQM indicators and 3 company’s business performance indicators used, as well as 250 respondents who involved in this research. The approach of Structural Equations Modeling (SEM) is used in data processing and analysis. The software used are SPSS version 22 and SPSS-AMOS version 21. The results show that the practices of TQM have a positive effect on company’s business performance significantly. Moreover, each constructs of TQM variables and company's business performance show the adequate level of validity and is declared as capable in representing each variable. After all, this research is adequate to prove that TQM practices can significantly bring positive impact towards the business performance of XYZ Ltd. Keywords: business performance, competitive advantage, management quality, structural equations modeling (SEM), total quality management (TQM)

Highlights

Rapid changes in the use of technology, social needs, and environmental aspects have become a major challenge for companies in maintaining and achieving competitive advantage in the last decade (Cancino et al 2018)
Normality testing was built upon the value of critical ratio skewness and critical ratio kurtosis based on the conditions of ± 2.58
Total Quality Management (TQM) was one of management quality improvement strategies that had been proven to be able to give a positive effect on company performance significantly, as proved by practitioners and academics

Summary

Introduction

Rapid changes in the use of technology, social needs, and environmental aspects have become a major challenge for companies in maintaining and achieving competitive advantage in the last decade (Cancino et al 2018). Company’s awareness is needed to change their business activities to be more innovative and higher in quality so that they are able to get out from the failure to compete both in national and international level (Zakuan et al 2010). The success achieved by the company depends on the accuracy of strategy applied This is the result of the soaring competition level and change in the business world, that the attention on improving the quality of company’s activities becomes the key to successfully achieving competitive advantage. The implementation of TQM cannot be successful unless employees are directly involved in the business process by attending courses and trainings to be more competent (Khanna and Gupta, 2014)

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