The Integrated Relationship among Organizational Learning, TQM and Firm’s Business Performance: A Structural Equation Modeling Approach

Abstract

The methodology of the organizational learning and total quality management (TQM) in the industry is becoming crucial, but there are few empirical studies to investigate the relationship between organizational learning and TQM on business performance in non-life insurance industry. The purpose of this paper is to understand the integrated relationship between organizational learning and TQM as two sources of sustainable competitive advantage. The paper proposes several hypotheses related to the relationship among organizational learning, TQM and business performance. A survey method is used to collect empirical data from non-life insurance companies in Taiwan. In this study, 414 effective questionnaires are analyzed and structural equation modeling (SEM) is used to verify the research framework and hypotheses. The empirical findings indicate that: (1) Organizational learning has significant and positive effects on TQM, (2) Both organizational learning and TQM have significant and positive effects on business performance, (3) TQM fosters business performance and play a mediating role between organizational learning and business performance. Therefore, the study demonstrates that the model can integrate organizational learning and TQM practices and enhance business excellence in financial service organizations, and also extend the prior research and contribute to the existing body of literature.