Quality practices and customer/supplier management in Australian service organizations

Abstract

There have been many research studies conducted in the Australian manufacturing industry to test the relationship between quality management practices and organizational performance. However, there is a significant gap in the literature of similar studies in the services sector. This paper therefore reports on a cross-sectional study conducted in the Australian services sector in which the extent of implementation of quality management practices with customers and suppliers, and the links between specific practices and performance outcomes are considered. The sample for the study (N = 141) is drawn from small to medium-sized service organizations. Overall, the findings indicate that quality management practices are not widely implemented with customers and suppliers in services. However, when the relationship between specific quality practices with customers and suppliers, and performance outcomes are explored by Multiple Regression Analysis, the most significant predictor of improved systems, improved responsiveness, increased quality of service and improved competitive advantage, is the involvement of suppliers in system change and improvement. Other significant factors include the use of customer satisfaction surveys, and the existence of strategic alliances. The implication of these findings for managers in service organizations, who are seeking more value from their customer/supplier interface, is that organizations should involve suppliers in their system changes and improvement projects.