TOTAL QUALITY MANAGEMENT AND THE BALANCED SCORECARD APPROACH: A CRITICAL ANALYSIS OF THEIR POTENTIAL RELATIONSHIPS AND DIRECTIONS FOR RESEARCH

Abstract

Total quality management (TQM) practices have been implemented by firms interested in enhancing their survival prospects by including quality and continuous improvement into their strategic priorities. Using financial and non-financial measures, the balanced scorecard (BSC) approach appraises four dimensions of firm performance: customers, financial (or shareholders), learning and growth, and internal business processes. This paper attempts to establish a link between these two approaches and in so doing it identifies future research opportunities in relation to these two approaches. The paper suggests that TQM does not consider employee satisfaction in its search for continuous improvement, but the BSC does consider employee satisfaction. Therefore, by adopting a BSC a firm that has adopted TQM will overcome this oversight which will in turn increase employee satisfaction and subsequently firm performance. These issues are assessed from the managerial and critical literatures. The final part of this paper identifies research issues into the nature, impact and value of the TQM–BSC “fit”.