Relationship between quality management practices and the performance of small and medium size enterprises (SMEs) in Ghana

Abstract

PurposeThe purpose of this paper is to investigate the relationship between quality management practices and SME performance in Ghana.Design/methodology/approachBased on the literature, the paper adopted the MBNQA variables of leadership, strategic planning, human resource, customer focus, information and analysis, process management, and quality and operational results as tools of quality management practices. Seven hypotheses were postulated to examine the relationship of each of the MBNQA variables with the five SME performance indicators of profitability, customer satisfaction, sales growth, employee morale, and market share. A survey comprising 80 questions was administered to a sample of 200 small firms employing fewer than 50 workers and covering all sectors in Ghana. The questionnaire asked the participants to indicate on a five‐point Likert scale the extent to which each quality management practice was evident or was practiced of those that influence their firms' performance. Statistical analyses were conducted using SPSS to calculate descriptive statistics, reliability analysis, correlation and regression.FindingsOverall, the paper found a number of significant relationships between the quality management variables and firm performance. It also found support for the argument that quality management practices improve organizational performance in both large and small businesses and in any part of the world.Originality/valueThese findings have added to the body of knowledge that quality management practices improve organizational performance. Contrary to some studies conducted recently in Ghana to investigate the relationship between sophisticated planning and performance that did not find any significant relationship, the study reports a significant positive relationship.