TQM in Indian auto component SMEs: role of contextual or institutional factors

Abstract

Over the past few years, the small business sector has gained lot of prominence in the entrepreneurship literature as it has emerged as a leading force creating an impact on the growth of national economies. Small and medium enterprises (SMEs) in Indian auto component sector are facing stiff competition from large companies as they could provide products of greater value with lower cost as compared to SMEs. To meet these challenges, SMEs must implement TQM, which is recognised as a resource for promoting organisational innovation. This study aims to investigate the effect of contextual factors namely 'size', 'age' and 'geographical location' of company on TQM implementation in Indian auto component SMEs. The study provides empirical evidence that a context-dependent argument for TQM implementation does not hold good. Research findings suggest that the extent of TQM implementation in these SMEs is governed by institutional factors as suggested by institutional theory.