IMPACT OF QUALITY MANAGEMENT PRACTICES ON BUSINESS PERFORMANCE: A RESEARCH MODEL DEVELOPMENT

Abstract

Many papers have been published on the impact of quality management practices on firm performance. But very few papers have been published about the implementation of total quality management in Indonesia. Hofstede et al. [1] describes Indonesia has special characteristics, i.e. the highest power distance index in the world, one of the lowest world rankings for individualism, and high uncertainty avoidance index. Some papers have reported that the effectiveness of quality management implementation is significantly influenced by organizational culture stemming from national culture. The next thing, Calingo [2] states that companies that use product quality as their competitive attribute have higher profit margins and bigger market share. So, whether product quality as a competitive attributes influences the relationship between quality management practices and firm performance or not needs to be proven. The aim of this paper is to develop a research model on the implementation of quality management in Indonesia and its impact on firm performance. In this research model, the authors will specifically include organizational culture and product quality as a competitive attribute. This paper will present a literature review of the model development, the identified research gap and research questions, the research hypotheses, and the resulted research model.