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Total quality management practices

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and performance outcomes in Spanish
service companies
a b
Carmen Jaca & Evangelos Psomas
a
Industrial Management Department, University of Navarra,
Tecnun-University of Navarra, P° Manuel Lardizabal, 13. 20018,
San Sebastian, Spain
b
Department of Business Administration of Food and Agricultural
Enterprises, University of Patras, George Seferis str., GR-301 00,
Agrinio, Greece
Published online: 24 Jul 2015.

To cite this article: Carmen Jaca & Evangelos Psomas (2015): Total quality management practices
and performance outcomes in Spanish service companies, Total Quality Management & Business
Excellence, DOI: 10.1080/14783363.2015.1068588

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 Total Quality Management, 2015
http://dx.doi.org/10.1080/14783363.2015.1068588

Total quality management practices and performance outcomes in

Spanish service companies
∗
Carmen Jacaa and Evangelos Psomasb
a
Industrial Management Department, University of Navarra, Tecnun-University of Navarra, P8
Manuel Lardizabal, 13. 20018, San Sebastian, Spain; bDepartment of Business Administration of
Food and Agricultural Enterprises, University of Patras, George Seferis str., GR-301 00,
Agrinio, Greece

The present study focuses on total quality management (TQM) implementation in

service companies. The purpose of the study is to determine the latent factors of the
Downloaded by [New York University] at 03:52 04 August 2015

TQM practices implemented as well as the dimensions of the respective

performance outcomes. A research project was carried out in 72 Spanish service
companies, using the questionnaire method. Two measurement models were
formulated. The first model includes the TQM practices, while the second contains
the performance outcomes. Exploratory factor analyses are applied to extract the
latent factors. The TQM factors revealed by this study are the quality practices of
top management, process management, employee quality management, customer
focus and employee knowledge and education. The dimensions of the performance
outcomes are financial performance, customer satisfaction, product/service quality
performance and operational performance. In this study, TQM adoption in service
companies is decoded by determining specific TQM factors. Moreover, the
performance outcomes from TQM are classified. The TQM factors and the
dimensions of performance outcomes expand the literature on TQM in the services
sector.
Keywords: total quality management; performance outcomes; service companies;
Spain

Introduction
In recent years, the importance of the services sector has been increasing in Europe. In
2012, more than two-thirds of all employees in the European Union were working in
market-oriented services such as trade, transportation, accommodation, food services,
information and financial activities (Teichgraber, 2013). In Spain, the number of service
companies account for more than 80% of the total, according to the National Institute
of Spanish Statistics (INE, 2012). Given that the services sector is one of the most devel-
oped sectors not only in Spain but also worldwide, the need to increase a service com-
pany’s efficiency, effectiveness and customer satisfaction is evident. Thus, the concern
for increasing company performance and competitiveness has favoured the development
of quality management (Trigueros Pina & Sansalvador Sellés, 2008).
Many authors have studied Spanish firms, finding positive outcomes from the
implementation of quality management systems in different service fields such as hotels
(Alvarez, Jaca, Viles, & Colomer, 2012; Claver-Cortés, Pereira-Moliner, Tari, &
Molina-Azorin, 2008), banking (Petnji, Marimon, & Casadesus, 2011), healthcare
(Sanchez et al., 2006), local government (Suarez-Barraza, Smith, & Dahlgaard-Park,

∗
Corresponding author. Email: epsomas@cc.uoi.gr

# 2015 Taylor & Francis

 2 C. Jaca and E. Psomas

2009) and consultancy (Viadiu, Fa, & Saizarbitoria, 2002). In northern Spain, many
service companies have adopted the European Foundation of Quality Management
(EFQM) model as a framework for the development of total quality management
(TQM). Heras, Cilleruelo, and Iradi (2008) also state that service industries in this
region lead Europe in terms of implementing the ISO 9001 standard and winning
EFQM awards. It is worth noting that in Spain the non-profit organisation Euskalit has sup-
ported more than 700 companies in implementing quality improvement methodologies,
especially service companies (Heras-Saizarbitoria, Casadesús, & Marimin, 2011).
Even though TQM first appeared in the manufacturing sector (Lam, Lee, Ooi, & Phu-
savat, 2012; Ou-Yang & Tsai, 2014), it is now widely applied in both manufacturing and
service companies (Boateng-Okrah & Fening, 2012; Lam et al., 2012). While there is con-
siderable research and knowledge in the adoption of TQM practices in manufacturing
environment, there is still a lack of TQM studies in the services sector (Alonso-
Almeida, Marimon, & Bernardo, 2013; Huq, 2005; Samat, Ramayah, & Saad, 2006;
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Yapa, 2012). According to Sit, Ooi, Loke, and Han (2011), Al-Tabbaa, Gadd, and
Ankrah (2013), Boulter, Bendell, and Dahlgaard (2013) and Calvo-Mora, Picón, Ruiz,
and Cauzo (2014), there is still not an appropriate framework for applying TQM,
especially in the services sector. Based on this gap in the literature, researchers suggest
that future research should focus on TQM implementation across service companies
(Abusa & Gibson, 2013), investigating the factors that are essential and critical for the suc-
cessful implementation of TQM in the services sector (Al-Tabbaa et al., 2013; Mensah,
Copuroglu, & Fening, 2012) as well as the respective outcomes (Lam et al., 2012;
Singh & Sushil, 2013).
Thus, the present study contributes to the existing literature by focusing on TQM
implementation in the services sector. Based on a sample of Spanish services compa-
nies, the study aims to analyse the TQM practices implemented and the respective
business performance outcomes and to determine their underlying structure (latent
factors). Exploratory factor analysis (EFA) is applied to extract and validate the
TQM factors and the performance dimensions. The findings of this study provide valu-
able knowledge about TQM from the services sector perspective. The findings can help
academics and quality practitioners who would like to support and promote TQM in the
services sector.
The rest of the paper is structured as follows. The next section presents a review of the
literature and the research questions. This is followed by the methodology and the results
of the study. Finally, the paper ends with the conclusions, the practical implications, the
limitations of the study and future research recommendations.

Literature review and research hypotheses

TQM in the services sector
TQM is a total, company-wide effort that concerns top management, all employees, sup-
pliers, and customers and seeks to continually improve the quality of products/services and
processes in order to meet the needs and expectations of costumers (Dean & Bowen, 1994;
Martinez-Costa & Jimenez-Jimenez, 2009). According to Chowdhury (2014), TQM is not
a management technique or a defined set of procedures, but a concept that lies in the appli-
cation of quality principles to all departments or functional areas of workplace of the
organisation. In the last years, TQM has received worldwide interest from academia,
especially regarding the TQM elements and practices (Lam, Lee, Ooi, & Lin, 2011;
Santos-Vijande & Álvarez-Gonzalez, 2009). The key to achieving TQM knowledge
 Total Quality Management 3

depends on the development of valid and reliable measures which replicate the actual
TQM elements that companies adopt in the real world. Not only should the measurement
be consistent within a particular study, but also across many studies (Jitpaiboon & Rao,
2007).
According to Voon, Abdullah, Lee, and Kueh (2014), the components of TQM for
service quality advancement include: total employee involvement, continuous improve-
ment, continuous training, teamwork, empowerment, top management commitment and
support, democratic management style, customer satisfaction focus and quality culture.
Talib, Rahman, and Qureshi (2013), studying TQM implementation in Indian service com-
panies, focus on factors such as top management commitment, customer focus, training
and education, continuous improvement and innovation, supplier management, employee
involvement, information and analysis, process management, quality systems, benchmark-
ing, quality culture, human resource management, strategic planning, employee encour-
agement, teamwork, communication, and product and service design. Lam et al. (2012)
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base their study of the Malaysian services industry on six factors of TQM, namely top
management leadership, strategic planning, process management, information and analy-
sis, customer focus and human resource management. Delić, Radlovački, Kamberović,
Maksimović, and Pečujlija (2014) use the following factors to build a model for their
research in ISO 9001 certified Serbian service organisations: leadership, quality planning,
employee management, learning, supplier management, customer focus, process manage-
ment and continuous improvement.
Some surveys have also been conducted to explore the application of components of
TQM in Spanish companies. For example, Calvo-Mora et al. (2014), studying TQM
factors in Spanish firms including service companies, focus on the most studied TQM
factors in the literature, specifically on leadership and top management commitment, stra-
tegic planning, continuous improvement, customer focus, data-based management, human
resources management, processes management, and control and supplier management.
Soria-Garcia and Martı́nez-Lorente (2014) identify the most important factors in the
quality management applied in the Spanish educational sector and emphasise practices
such as the commitment and involvement of top school officials, quality culture, quality
information and communication, product-educational service design, process manage-
ment, training, internal customer involvement, external customer involvement and suppli-
ers’ involvement.
The above-mentioned research studies are used as the basis for drawing the measured
variables (describing TQM practices) of the TQM factors identified in the literature.
Therefore, bearing in mind the purpose of the present study as well as the future research
proposals suggested by many authors, the following research question was formulated and
examined through this study:
RQ1: What is the underlying structure (latent factors) of the TQM practices implemented in
services companies?

Performance outcomes from TQM implementation

When TQM is analysed in terms of performance, some studies operationalise performance
only at operating levels, like Samson and Terziovski (1999) do, while others like Hen-
dricks and Singhal (2001) or York and Miree (2004) measure only financial performance.
Some authors measure company performance from quality management implementation
at three levels; one such author is Kaynak (2003), who identifies and validates three
dimensions of firm performance relevant to TQM: financial and market performance,
 4 C. Jaca and E. Psomas

quality performance and inventory management performance. Similarly, Calvo-Mora

et al. (2014) state that in general, the effects of TQM are measured through three types
of results: quality, operational and economic-financial. On the other hand, Mensah et al.
(2012) note that the organisational performance mostly influenced by TQM can be
broadly categorised into four main groups: financial and market performance, organis-
ational effectiveness, customer satisfaction and employee satisfaction. Along the same
line, Bolboli and Reiche (2013) extend the range of TQM benefits, including reduced oper-
ational cost, higher productivity, efficiency and growth, increased market share and profits,
and innovation development.
With regard to the performance dimensions of service companies, some authors
analyse financial and operational performance as dimensions that are affected by TQM
(Brah, Wong, & Rao, 2000; Kaynak, 2003). Customer satisfaction is also a dimension
of performance in the services sector that is considered by a large number of studies
(Agus, Krishnan, & Kadir, 2000; Brah, Tee, & Rao, 2002; Sit, Ooi, Lin, & Chong,
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2009). Many authors also include service or product quality performance as a key indicator
of a service activity’s performance (Brah & Lim, 2006; Hasan & Kerr, 2003; Kumar,
Choisne, & Grosbois, 2009; Prajogo, 2005). Karimi, Safari, Hashemi, and Kalantar
(2014) study a criterion set of TQM outcomes in service companies, including product
and service outcomes, customer-focused outcomes, financial and market outcomes,
human resource outcomes, organisational effectiveness outcomes and social responsibility
outcomes.
The above-mentioned research studies are used as the basis for drawing the measured
variables (describing performance outcomes from TQM) of the performance dimensions
identified in the literature. Bearing in mind the purpose of the present study as well as
the future research proposals suggested by many authors, a second research question
was formulated and examined through this study:
RQ2: What is the underlying structure (latent factors/dimensions) of the performance out-
comes from TQM implementation in service companies?

Methodology
Questionnaire development
In order to answer the two research questions, a research project was carried out in 72
Spanish services companies. A questionnaire was used as the data collection method,
the design of which was based on a comprehensive literature review in the field of
TQM. The initial version of the questionnaire was revised based on the recommendations
of academics and experts in the field (Stouthuysen, Slabbinck, & Roodhooft, 2012). Fur-
thermore, based on a pilot study, the questionnaire items were improved and modified in
terms of clarity (Stouthuysen et al., 2012). The final version of the questionnaire includes
questions about company profile, TQM practices and performance outcomes (reflecting
TQM benefits). Based on a seven-point Likert scale (where 1 represented ‘strongly dis-
agree’ and 7 represented ‘strongly agree’), the respondents were asked to indicate their
degree of agreement or disagreement with these statements.

Sample
A sample of 400 Spanish service companies operating in Northern Spain was randomly
selected from those recorded in the Euskalit database. These service companies were
selected given that they have shown their commitment to quality management through
 Total Quality Management 5

their participation in activities related to business excellence (Heras et al., 2008). The
questionnaire was addressed to all these service companies, and it was requested that
the questionnaire be answered by the company representative in charge of quality manage-
ment. Follow-up reminder emails were sent after the initial e-mailing to increase the
response rate (Singh, 2008). Finally, 72 completed questionnaires were received – a
response rate of 18%, which is acceptable compared to the response rate of the research
studies by Prajogo, McDermott, and Goh (2008), Karapetrovic, Casadesus Fa, and
Heras Saizarbitoria (2010) and Agarwal and Selen (2011).
Comparing the responses from early and late responding companies (Kim, Kumar, &
Kumar, 2012; Singh, Power, & Chuong, 2011), it was confirmed that non-response bias is
not a cause for concern in this study. Moreover, since the questionnaire was completed by
a single respondent from each company, the common method variance was checked by
applying the single-factor test (Martinez-Costa & Martinez-Lorente, 2008). This
method produced poor results, confirming that common method variance is not a substan-
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tive problem.

Data analysis
The distributional properties of each variable were reviewed. All univariate statistics, that
is, the mean, standard deviation, skewness and kurtosis (, +1), and the standardised
residuals (, +2.5) of the variables used suggest that there are no significant departures
from normality, based on the thresholds suggested by Hair, Black, Babin, Anderson, and
Tatham (2005). This indicates but does not guarantee multivariate normality (Agarwal &
Selen, 2011; Singh et al., 2011). As such, the departure from multivariate normality is not
regarded as a serious issue in our analysis. In order to extract the latent factors of the TQM
practices and performance outcomes, EFA was applied using the principal component
factor extraction method and the orthogonal varimax rotation method (Gunday, Ulusoy,
Kilic, & Alpkan, 2011; Sadikoglu & Zehir, 2010). Reliability analysis of all the latent
factors was also applied by calculating the Cronbach’s alpha coefficients (Sadikoglu &
Zehir, 2010).

Results
Company profiles
Most of the sample service companies are small- and medium-sized enterprises (SMEs),
given that 48.6% employ fewer than 100 employees, 12.5% have more than 100 and
fewer than 250 employees, and 6.9% have more than 250 and fewer than 500 employees.
However, it is worth noting that 31.9% of the sample companies employ more than 500
employees. The service companies participating in the present study belong to several
sectors such as education, healthcare, wholesale/distribution, retail, banking/finance,
repair/maintenance, communications, insurance, and food and beverage catering. Half
of the responding service companies have been certified according to ISO 9001, 35%
according to ISO 14001 and 25% according to ISO 18001. It is worth noting that 13%
of the sample service companies have already adopted the TQM principles given that
they have been awarded by Euskalit due to the adoption of the EFQM framework. As
far as the profile of the quality manager of the companies is concerned, 95% are at least
university graduates, while 70% have more than 15 years’ experience in the services
sector.
 6 C. Jaca and E. Psomas

EFA of the TQM practices

The TQM practices identified in the literature are used as measured variables in an EFA.
Items that demonstrate cross-loading greater than 0.4 on more than one latent factor are
dropped since they do not provide pure measures of a specific factor. The result is the
establishment of five latent factors (Kaiser – Meyer – Olkin ¼ 0.921, Bartlett’s test of
sphericity ¼ 2542.077, p ¼ .00, eigenvalue . 1, Measures of Sampling Adequacy .
0.80, factor loadings . 0.530, Cumulative Variance ¼ 76.40%), as shown in Table 1.
The extracted latent factors are explained using the measured variable loadings and can
be labelled as follows: quality practices of top management, process management,
employee quality management, customer focus, and employee knowledge and education.
The Cronbach’s alpha coefficients for the TQM factors are above 0.7, exceeding the
minimum threshold level of 0.7 (Oliveira & Roth, 2012). Therefore, the selected items
reliably estimate the TQM latent factors.
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EFA of company performance outcomes

The performance outcomes from TQM implementation identified in the literature were used
as measured variables of an EFA. Items that demonstrate cross-loading greater than 0.4 on
more than one latent factor are dropped since they do not provide pure measures of a specific
factor. The result is the establishment of four latent factors – performance dimensions
(Kaiser – Meyer – Olkin ¼ 0.830, Bartlett’s test of sphericity ¼ 786.799, p ¼ .00, eigen-
value . 1, measures of sampling adequacy . 0.74, factor loadings . 0.521, cumulative
variance ¼ 71.99%), which are shown in Table 2. The extracted latent factors are explained
using the measured variable loadings and can be labelled as follows: financial performance,
customer satisfaction, product/service quality performance and operational performance.
The Cronbach’s alpha coefficients of the performance dimensions are above 0.7, exceeding
the minimum threshold level of 0.7 (Oliveira & Roth, 2012). Therefore, the selected items
reliably estimate the latent factors – performance dimensions.

Discussion
Discussing the company profiles
The small-medium character of the Spanish service companies (based on the number of
employees) is reflected in the present study findings, without ignoring, however, that
that the large enterprises are well represented in the research sample. Similarly, the man-
ufacturing and non-manufacturing Spanish companies studied by Santos-Vijande and
Álvarez-Gonzalez (2009) are mostly SMEs, with a lower representation of large-sized
companies, compared to the present study. The samples of the Spanish service companies
in the studies of Karapetrovic et al. (2010) and Trigueros Pina and Sansalvador Sellés
(2008) are also mostly composed of SMEs. From the above-mentioned studies in the
quality management field as well as the present study, it is obvious that SMEs dominate
in the Spanish services sector. This is in line with Rubio-Andrada, Alonso-Almeida,
and Rodrı́guez-Anton (2011), according to whom the dominant entrepreneurial structure
in the services sector of the European Union countries is mainly composed of SMEs.

Discussing the TQM practices

In analysing the TQM practices implemented by service companies, it is revealed that
five latent factors better depict the TQM approach in this sector. More specifically, the
 Total Quality Management 7

Table 1. EFA of the TQM practices in service companies.

Kaiser –Meyer– Olkin ¼ 0.921 Factor loadings
a a
Measured variables F1 F2 F3a F4a F5a
Top management actively participates in quality 0.833
improvement efforts
Top management sets the quality issues in the agenda 0.818
of the managers’ meetings
Top management supports the quality improvement 0.751
efforts by providing resources
The quality policy is taken into consideration in 0.668
strategic planning
Quality data are taken into consideration in decision- 0.647
making
The quality policy and objectives are communicated 0.621
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throughout the company

Top management gives the authority to employees to 0.533
manage quality problems
The company sets quality objectives for managers 0.530
and employees
Process and product nonconformities are detected 0.769
through internal audits
The points/places where time is lost are detected to 0.734
minimize the cost of the internal processes
The critical processes are determined and evaluated 0.703
Specific organisational structure has been formulated 0.680
to support quality improvement
Mistakes are precluded in the process design 0.660
The processes are studied and improved 0.580
Quality data are taken into consideration from 0.535
managers in the planning and control process
Employees who improve quality are awarded 0.807
Employees are evaluated 0.799
Employees are motivated to improve their 0.734
performance
Employees participate in the decision-making 0.582
process and in setting quality objectives
Employees take initiatives 0.552
Customers are encouraged to submit complaints and 0.776
proposals for quality improvement
Customer complaints, satisfaction level and 0.758
proposals for quality improvement are selected
The company’s managers/employees are in close 0.646
contact with the customers
The educational programs are evaluated 0.864
The educational subjects are absorbed 0.771
The employees have knowledge and know-how 0.615
The employees are educated in quality management 0.586
and problem-solving techniques
Eigenvalue 19.47 1.87 1.64 1.21 1.01
Cumulative variance % 59.00 64.67 69.64 73.33 76.40
Cronbach’s a 0.953 0.931 0.927 0.897 0.833
a
F1 ¼ Quality practices of top management, F2 ¼ Process management, F3 ¼ Employee quality management,
F4 ¼ Customer focus and F5 ¼ Employee knowledge and education.
 8 C. Jaca and E. Psomas

Table 2. EFA of services company performance outcomes.

Kaiser –Meyer– Olkin ¼ 0.830 Factor loadings
a
Measured variables R1 R2a R3a R4a
The company’s net profit 0.932
The company’s profitability 0.910
The company’s cash flow from operations 0.895
The company’s sales increase 0.727
The company’s financial indexes 0.658
The company’s penetration/access in domestic and foreign 0.616
markets
Customer satisfaction from after sales services 0.811
Customer satisfaction from products 0.804
Customer retention and loyalty 0.799
The reliability of the products provided (the maintenance of 0.769
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the quality characteristics in a long period of time)

The conformance of the products according to the customer 0.766
specifications
The predominance of the company’s products in relation to the 0.706
products of the major competitors
The company’s productivity 0.868
The company’s effectiveness 0.825
Providing products on time 0.521
Eigenvalue 6.56 2.66 1.28 1.01
Cumulative Variance % 41.01 57.67 65.68 71.99
Cronbach’s a 0.898 0.863 0.798 0.741
a
R1 ¼ Financial performance, R2 ¼ Customer satisfaction, R3 ¼ Product/service quality performance and R4
¼ Operational performance.

quality practices of top management, process management, employee quality manage-

ment, customer focus, and employee knowledge and education are the main factors that
the sample service companies base their effort to establish a total quality approach.
Based on the content of the TQM factors revealed, it is apparent that four out of
the five factors concern the human aspect of the management system implemented by
the companies. More specifically, the members of the top management team, the employ-
ees and the customers themselves are the pillars on which a TQM framework is
formulated.
In other words, both top management and employees who operate in the internal
business environment and the customers who belong to the external business environment
are the driver for establishing and maintaining TQM. This means that top management and
employees should be the centre point of the management system, and all the TQM
elements should be centred on them. For example, strategic planning, supplier manage-
ment, information and analysis, continuous improvement, process management and edu-
cation and development should be implemented based on top management’s and
employees’ will, know-how, capability and needs. Similarly, Lau and Tang (2009)
support the idea that achieving business excellence requires the commitment of everyone
in an organisation. Customers should also be the centre point of the management system
and all the TQM elements should be established so as to have the customer himself as the
focus. More specifically, customer needs, requirements, desires and expectations should
be clearly determined, and all managerial aspects should be properly designed with
them in mind in order to satisfy them.
 Total Quality Management 9

The present study’s findings discussed above are in line with the findings of the study
by Calvo-Mora et al. (2014) in Spanish firms, including service companies. These authors
state that for an organisation to be capable of improving key business results, it is necess-
ary to orientate its leadership and management of human resources towards a culture of
quality, learning and continuous improvement. This group of factors as well as the
group of the TQM factors revealed through the present study correspond to those that
the literature specialised in TQM call social or soft factors. Similarly, Zárraga-Rodrı́guez
and Alvarez (2013) interviewed Basque Country Quality award winners and identified
elements based on the human aspect of management – leadership, involvement, teamwork
communication and consensus – as being the values of the companies’ quality culture that
lead to the efficient management of information. The importance of human aspects in
establishing a robust TQM model is also demonstrated by Tarı́ (2005) through a study
on ISO 9001 certified firms in Spain. He concludes that companies wishing to go
beyond ISO 9001 towards TQM must improve all the human aspects in order to
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improve their competitiveness.

Discussing the performance outcomes

In analysing the performance outcomes from TQM implementation in service companies,
it is revealed that four latent factors better describe the TQM benefits derived. More
specifically, the improvement of financial performance, customer satisfaction, product/
service quality performance and operational performance are the dimensions of the
most tangible outcomes that service companies determine due to their effort to establish
a TQM model in their management style. In considering these performance dimensions,
it is apparent that they concern the internal and external business environment.
However, not all the elements of both environments (internal and external) are represented
by these dimensions. More specifically, as far as the internal business environment is con-
cerned, even though factors regarding the human aspect are among the TQM factors that
are taken under consideration by the sample service companies, it is worth noting that the
respective outcomes are not actually determined. In other words, performance dimensions
describing outcomes relating to all company employees, including the top management
team, are not included in the perceived categories of the TQM benefits that companies
derive. However, the human aspect does indeed contribute to improvements in all the
internal environment parameters, including company operations, the operational output
(i.e. the product/service provided) and company earnings. On the other hand, with
regard to the external business environment, the performance dimensions revealed
concern only the customer. Company performance outcomes from TQM implementation
that are related to the society where the company operates and the broad market place are
not actually perceived by the sample service companies. The fact that performance out-
comes from TQM implementation that describe society and the market place (external
business environment) as well as company employees (internal business environment)
are not mentioned by the service companies is justified, as these benefits may be considered
by the companies’ indirect rather than direct outcomes. As Choi and Eboch (1998) state,
managers perceive that the primary objective of implementing TQM practices is to satisfy
the customer, and that is the reason why they are unaware of other benefits, such as
employee satisfaction. Therefore, only direct benefits, such as those concerning a com-
pany’s product/service, operations, customers and financial situation, are mostly evident.
The findings of the present study are in line with the results of Jiménez-Jimenéz and
Martı́nez-Costa (2009) in Spanish organisations, including service companies.
 10 C. Jaca and E. Psomas

Performance outcomes regarding employees and society are not also considered by these
organisations as tangible benefits from TQM implementation. Santos-Vijande and
Álvarez-Gonzalez (2009), however, do not mention benefits to society, but they do
include employees as recipients of direct benefits from a company’s effort to implement
TQM. They note that a wide range of internal benefits (more satisfied, efficient and com-
mitted employees, more efficient processes and lower costs of non-quality) and external
benefits (enhanced customer satisfaction and loyalty, a better company image, and
increased market share) are widely defined as outcomes of TQM practices.

Conclusions and practical implications

In the light of the previous research studies carried out worldwide so far, and stimulated by
the literature gap and the suggestions for future research made by experts in the field, the
present study contributes to the existing literature by exploring TQM in the service sector.
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More specifically, the study contributes to the literature by determining specific TQM
factors on which a service company can base their TQM approach. These factors,
which are oriented towards the human aspect of a company – meaning the top manage-
ment team, employees and customers, are the quality practices of top management,
process management, employee quality management, customer focus, and employee
knowledge and education. Moreover, the study contributes to the literature by determining
the dimensions of the performance outcomes from TQM implementation. These dimen-
sions concern the improvement areas of a service company with regard to its products/ser-
vices, operations, financial situation and customers.
In determining the underlying structure of the TQM practices implemented by service
companies, the TQM concept is decoded. This in turn results in the TQM philosophy being
more easily understood and implemented in the services business environment. In doing
so, a means is also provided to quality-mature services companies for maintaining a
quality management system that is in line with the TQM philosophy. Similarly, non-
quality-mature companies are provided with a means for smoothly transforming their tra-
ditional management system to TQM. Moreover, in determining the underlying structure
of the most created performance outcomes, a clear view is provided to service companies
in terms of the benefits derived through implementing TQM practices. Having knowledge
of what is to be gained from TQM practices can stimulate service companies as they travel
down the road to business excellence.

Limitations and future research recommendations

This study suffers from a few limitations. For example, the small sample size of the parti-
cipating service companies limits the possibility of applying more advanced statistical
techniques. The sample companies also belong to different sub-sectors and operate not
only in one European country but just in the northern part of the country. Furthermore,
the data collected constitute subjective business evidence from those who are responsible
for quality in their company. Based on these limitations, future research studies should be
carried out worldwide in order to confirm the present study findings and make them more
generalised.

Disclosure statement
No potential conflict of interest was reported by the authors.
 Total Quality Management 11

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