The influence of competitive strategy and organizational structure on the cost of quality in food and beverage (F&B) companies

Abstract

PurposeThis study aims at determining the influence of the competitive strategy types and organizational structure dimensions on Cost of Quality (CoQ) in Food and Beverage (F&B) small- and medium-sized enterprises (SMEs).Design/methodology/approachA survey questionnaire was sent to F&B companies in Greece and 307 responded positively and fully completed the questionnaire. The research model developed (consisting of the competitive strategy types, the organizational structure dimensions and CoQ) was tested using the exploratory and confirmatory factor analyses and the structural equation modeling (SEM) technique.FindingsThe findings indicated that cost leadership, centralization and formalization influence the CoQ positively and significantly. By contrast, differentiation does not influence CoQ.Research limitations/implicationsThe small sample of the responding companies operating in one country, the different F&B sub-sectors, the subjective perceptions of only one representative per company and the cross-sectional nature of the study are the main limitations of the present study.Practical implicationsThis paper provides academicians and practitioners with a better understanding of the factors that influence the quality-cost level.Originality/valueTo the best of the authors' knowledge, this is the first study that examines the effect of competitive strategy and organizational structure on CoQ.