Are quality and innovation management conflicting activities?

Abstract

It is commonplace to assert that hard components of quality management inhibit innovation. In fact, the relationship between these two activities (quality and innovation management) is complex and, as claimed in this paper, bi-directional. Some recent works suggest that innovative companies are used to change management and therefore would find adopting quality management routines less demanding and less expensive than non-innovative companies. This paper builds on this view and proposes that innovation capabilities linked to certain valuable resources (better conditions) favor the implementation of hard components of total quality management. Innovation capabilities are key dynamic capabilities accumulated over time. In order to capture their complexities, they are modeled in a broad manner including both product and process innovations, as well as R&D and high technological level. For verifying the hypotheses, a random-effect probit model is tested on a large multi-industry panel of Spanish firms. Unobservable individual heterogeneity and time effects are controlled with this approach, which means a noteworthy improvement over previous research. The results strongly confirm the positive link between innovation capabilities and quality management. It is also demonstrated that some resources of the firm facilitate standardization and quality control activities. These findings have important managerial implications. On the one hand, developing innovation capabilities will permit companies to be proactive in the adoption of standardized management systems. On the other hand, quality and innovation departments should cooperate in order to ease the standardization of new products and processes.