The Role of Hard TQM on the Relationship between Soft TQM and FinancialPerformance of Hotels and Travel Agents in Egypt

Abstract

Inthelast60years,TotalQualityManagement(TQM)hasbeen under review (theoretically) and under examination (empirically) from several scholars all over the world. Although TQM practices in the manufacturing industry are well studied, fewer attempts have been conducted to examine itsconnotations and effects in the service industry, and particularly in the tourism sector. Two main categories of TQM practices were explored: Soft TQM (STQM)activities/practicesand Hard TQM (HTQM) activities/practices. It is arguable that both TQM practices enhance financial performance, but these relationshipshave not been completely tested in the tourism sector. The main aim of this paper is toassess the impact of STQMon financial performance through the mediating role of HTQM practices. The data were collected from surveying 380 general managers working in hotels and travel agentsin Egypt. A total of 285 valid questionnaires were attained with a response rate reached 75%. Structural equation modelling (SEM) results indicate that STQMimproves financial performance, and HTQMhasa direct influence on financial performance.The results show that 14 out of 15 proposed hypotheses were supported. Therefore, it is important that hotels and travel agents allocate their resources to implement both STQMand HTQM practices to exploit the effectiveness and efficiency of the entireTQM system. Finally, generalconclusions and limitations are outlined.