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Linkages between total quality management and

organisational performance: an empirical study for
Indian industry
a b c
R. L. Shrivastava , R. P. Mohanty & R. R. Lakhe
a
Department of Mechanical Engineering , Y.C. College of Engineering , Nagpur, India
b
Institute for Technology and Management Group of Institutions , Navi Mumbai, India
c
Shreyas Quality Management System , Nagpur, India
Published online: 21 Feb 2007.

To cite this article: R. L. Shrivastava , R. P. Mohanty & R. R. Lakhe (2006) Linkages between total quality management
and organisational performance: an empirical study for Indian industry, Production Planning & Control: The Management of
Operations, 17:1, 13-30, DOI: 10.1080/09537280500324265

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 Production Planning & Control,
Vol. 17, No. 1, January 2006, 13–30

Linkages between total quality management

and organisational performance: an empirical study
for Indian industry
R. L. SHRIVASTAVAy, R. P. MOHANTY*z and R. R. LAKHE§
yDepartment of Mechanical Engineering, Y.C. College of Engineering, Nagpur, India
zInstitute for Technology and Management Group of Institutions, Navi Mumbai, India
§Shreyas Quality Management System, Nagpur, India
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Many companies across the world are engaged in adopting total quality management (TQM)
to improve their operational performance. Managers are under increasing pressure to justify
the value and contribution of TQM program expenditures to the performance of the organi-
sation. This paper examines the need for establishing linkages between factors affecting TQM,
as well as organisational performance and suggests a comprehensive assessment framework.
A diagnostic instrument has been designed to test in Indian industries that have implemented
TQM during the last decade. The result of this empirical study establishes the strong and weak
linkages and helps to derive a few propositions for furtherance of the state-of-the-art in TQM.
Such a study has the potential to contribute in providing feedback to manage and improve
the TQM programs to better meet the needs of the organisation.

Keywords: Total quality management; Organisational performance; Empirical study;

Indian industry

1. Introduction affected by the quality of an organisation’s products,

services and performance (Mohanty and Lakhe 1998).
There are new forces and drivers in the global environ- TQM is a philosophy with worldwide appeal and the
ment that create both opportunities and problems for principles of TQM have received widespread attention
all business enterprises. We can classify these forces over the last two decades in many organisations—large
into the four Cs (4Cs)—the changing ‘customer’, or small, profit or non-profit, commercial or govern-
increasing ‘competition’, the rising ‘costs’, and impeding ment, manufacturing or service, etc. Frequently, TQM
‘crises’. To withstand these forces, or 4Cs, any company is used without a full understanding of its applicability,
should continuously improve its internal operation and effectiveness, or efficiency. Managers often lack the
strengthen its infrastructure. Contemporary strategic tools they need to decide if they are accomplishing the
thinking is dominated by the central notion that right activities. In addition, these managers often fail to
superior business performance is the result of the suc- learn if they are meeting the needs of their customers.
cessful implementation of total quality management Assessing the value of TQM to an organisation is really
(TQM). TQM is applied the world over for attaining being challenged as the organisation is running out of
customer satisfaction, reliability, productivity, market credibility and is no longer willing to give the benefit
share, profitability, and even survival, which are directly of the doubt. The TQM literature tackles this question
partially.
*Corresponding author. Email: rajendramohanty@hotmail. There are innumerable ways of implementing TQM.
com The approach and treatment significantly vary from
Production Planning & Control
ISSN 0953–7287 print/ISSN 1366–5871 online # 2006 Taylor & Francis
http://www.tandf.co.uk/journals
DOI: 10.1080/09537280500324265
 14 R. L. Shrivastava et al.
company to company and there is not much consensus
on the modalities of overall TQM implementation.
The intuition and judgment on the part of TQM practi-
tioners, organisation culture, managerial leadership
and contemporary business environment are some of
the factors that normally affect an approach for adop-
tion. Managers are under increasing pressure to justify
the value and contribution of TQM program expendi-
tures to the competitiveness of the organisation. TQM
assessment is not well established. Many possible
explanations for this difficulty are available. For exam-
ple, the role of the factors affecting TQM as well as
organisational performance can be subtle and difficult
to differentiate from other factors. Some companies
depend mostly on qualitative judgment rather than
quantitative measures. Some believe that the lack of
evidence of a payoff for the high investment in TQM
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programs could be interpreted as reflecting serious
measurement deficiencies. This paper examines the
need for TQM assessment and suggests a comprehensive
framework linked to organisational performance.
Further, a theoretically based, comprehensive set of
TQM assessment measures and a contingency theory
for selecting appropriate measures is essential for
providing managers with the guidance necessary to
develop their own assessment systems. These assessment
systems should have the potential to furnish the
feedback required to enhance the performance of the
organisation. Systematic measurements are needed to
guide managerial action. Without quantitative feedback,
managers are being dependant upon only experience,
intuition, and judgment.
The aim of this study is to design and test a diagnostic
instrument relating to a set of factors affecting TQM
and to critically examine whether these factors have
linkages with the factors affecting organisational perfor-
mance. We propose a more involved analysis that
includes structural, external and internal factors in
case of Indian organisations who have implemented
TQM during the last decade.
2. Literature review
The current literature on TQM is abundantly rich
because of contributions from innumerable researchers
and practitioners. However, there are only a few studies
available in different national settings linking TQM
factors with organisational performance (Zaire 1991,
Garvin 1986, Mohanty and Lakhe 1995, Mohanty
1996, 1997, Saraph et al. 1989, Benson et al. 1991,
Bohoris 1995, Powell 1995, Lam 1996, Flynn et al.
1994, Oakland 1992, Sink 1991). Many others have
proposed TQM factor models (Mehra et al. 2001),
which have been experimented in various national
settings and have come out with combinations of factors
that may be linked to the organisational performance.
Similar to TQM factors as evidenced in the literature,
the organisational performance measures have also
been covered and deliberated at length. Various
acclaimed researchers have described ways and means
by which organisation performance can be measured
and evaluated. Many other researchers (Ahire et al.
1996, Bohoris 1995, Benson et al. 1991, Dixon et al.
1990), have carried out significant research on perfor-
mance measures that represent organisational excel-
lence. These efforts have resulted into a collection of
all possible measures but a consensus has yet to emerge
to establish the linkages between TQM and organisa-
tional performance. Globerson (1985) and Maskell
(1989) have presented sets of guidelines detailing the
characteristics of performance measures, which have
often been reiterated in more recent literature (Dixon
et al. 1990, Lynch and Cross 1991, Neely et al. 1995).
A comprehensive review of this literature was under-
taken by Neely et al. (1999), and a set of 22 character-
istics were identified. However, in spite of the attention
gained by many companies in the TQM programmes
and the evident interest of senior managers in the
strategic management of quality, our knowledge of the
linkages between TQM and organisational performance
remains somewhat limited. Relatively, little attention
has been focused upon the fundamental questions of
how various elements of TQM can be effectively utilised
as a base for organisational excellence in achieving
sustainable competitive advantage.
Over the past 10 years a number of studies have been
reported in the literature, which have examined and
compared quality management practices in different
countries around the world. Some of the widely cited
studies include Garvin’s (1988) study of the quality of
air conditioners manufactured in Japan and the United
States and the International Quality Study (American
Quality Foundation 1991) conducted by Ernst and
Young for the American Quality Foundation, which
focused on the quality processes of organisations
in Canada, Germany, Japan and the USA. These
studies showed huge gaps between the East and the
West, with Japanese companies leading the Western
companies in their use of quality management practices.
Anderson and Sohal (1999) carried out a comprehensive
study for small business firms in Australia. This study
brought out the fact that a strong customer focus, good
information management, managerial leadership pro-
vide positive influence on the quality of outputs. Cerio
(2003) carried out a similar study for Spanish manufac-
turing firms, and tested a number of hypotheses to
relate quality management factors with the nature of
 Linkages between TQM and organisational performance
manufacturing industry. Arawati and Mokhtar (2000),
Quek and Yusof (2003) have established empirical
models relating to TQM factors affecting the perfor-
mance of Malaysian manufacturing companies.
Dahlgaard et al. (1998) made a detailed comparative
study to differentiate TQM practices in both Eastern
and Western economies. A more recent study by
Adam et al. (1994) focused on quality improvement
practices in Korea, New Zealand and the USA. They
extended the earlier work of Benson et al. (1991) to
relate quality improvement approaches to actual
operating and financial performance and found that in
each country a profile emerges for the organisation as
to what techniques towards improvement might be
most useful if the objective is to improve quality,
and productivity, and/or financial performance.
Interest in TQM has been strong over the past decade
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in India. Since in the Western world, quality oriented
strategies have become one of the leading methods to
develop industrial companies; Indian companies are
increasingly adopting TQM to compete globally. The
algorithm for selecting the appropriate dimensions
and measures has yet to be developed and will require
empirical research. How should the manager select
the appropriate TQM success dimensions and measures
for each given their organisational and environmental
context? How should the dimensions and measures
be combined? What is working in practice in successful
organisations? Research studies to answer these
questions should be both quantitative and qualitative;
to capture the broad, cross-sectional applications of
TQM assessment systems and the in-depth, complex
nature of the subject. Cross-sectional studies might
include Delphi groups or large-scale surveys of man-
agers to discover if these are the right success dimensions
and how these or other dimensions are being assessed
and what measures are being used. Such data could
then be examined to determine what organisational
and environmental contexts and groups of dimensions
and measures actually seem to work best. These
studies would be complemented by the use of in-depth
interviews and content analysis of organisational
documents to learn the details of assessment system
implementations.
With the foundation supplied by the model devel-
oped by Mohanty and Lakhe (1998) for Indian organi-
sations and the empirical tests introduced here in this
study, a contingency theory for TQM assessment is
aimed at. Such a theory may have the potential to
contribute to the value of TQM and the larger organisa-
tion by providing feedback to manage and improve
the variety of business processes/functions to
better meet the internal as well as external needs of
the organisation.
15
This paper primarily focuses on the study of the
connection between factors affecting TQM and organi-
sational performance. No two companies carry out
their TQM-strategy in the same way. Indeed, it depends
on the size of the company, its genesis of business,
location, technological requirements and human
resources. Nevertheless, some common components
can be found when studying both literature and practice.
Since TQM has matured as a philosophy as well as
a value, it is now a body of knowledge and an area of
professional practice (Mohanty 1997). The content or
subject matter of TQM is drawn from quality
engineering, psychology, sociology, business administra-
tion, economics, industrial engineering, systems engi-
neering, and the study of human and organisational
behaviour, etc. For now, suffice to say that there is
a large, reasonably cohesive, albeit somewhat eclectic,
body of knowledge underlying the practice and on
which most practitioners would agree—even if their
application of it does exhibit a high degree of variance.
We must also attribute this to the eclectic nature of
the discipline, which combines contributions from
diverse technical, humanistic and social disciplines
(Moren-Luzon and Peris 1998). For many practitioners,
these component bodies of knowledge are linked and
integrated by a set of concepts and principles. It is not
clear whether this area of professional practice should
be termed a profession, a discipline, an art, a set of
techniques, or a technology. It is now the time to
study the empirical underpinnings to enrich the profes-
sional practice.
3. The research process
The purpose of this research is to identify and interpret
the critical factors that affect TQM and organisational
performance and statistically validate if any correlation
exists between them. In order to drive this purpose,
a TQM model proposed by Mohanty and Lakhe
(1998) for Indian organisations is taken as the founda-
tion. The instrument developed for collecting the data
contains 18 variables; seven for pro-active business
orientation, six for internal support, three for competi-
tive assessment and two for participatory orientation.
The first and most important point to consider when
developing measures is to align all factors with organisa-
tional objectives. This should follow easily once the
TQM function is aligned with the strategic direction of
the organisation. The goal is to couple TQM factors
with performance in order to aid the quality function
in staying aligned with the organisation in a very
complex, ever-changing environment. Many authors
stressed that measures should be easy to implement
 16
Factors Affecting
TQM
Proactive Business Orientation
• Structure of planning
framework
• Technology policy
• Organisational goals
• Infrastructure
• Product design
• Flexibility
• Financial position
Internal support
• Top management support
• Employee relation
• Compatibility and
co-ordination
• Organisation size
• Customer interaction
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Competitive Assessment
• Competitive strategy
• Management risk taking ability
• Vendor relations
Participatory orientation
• Communication
• Team building approach
Figure 1. The test research model.
and understand. Mohanty and Lakhe (1998) suggested
the following criteria:
. Derived from customer requirements.
. Practical to implement.
. Easy to understand.
. Able to drive desired behaviour.
. Agreed to by the work groups involved.
The TQM is in the business of serving customers,
the end-users. Customers buy or use a product/service
based on the value or benefit it provides. Creating
value for customers requires a thorough understanding
of their requirements and expectations, and the ability
to translate this understanding into concrete perfor-
mance objectives to drive business activities. These
are derived through the examination of the literature
on quality measurements. One problem in reaching
consensus on dimensions is the broad range of
approaches used by various TQM authors. For exam-
ple, some authors focus on the technical and program-
matic properties of TQM, while others look at the
general management philosophy. This research looks
at the holistic picture when formulating constructs.
R. L. Shrivastava et al.
Organisational performance
measures
Quality
• Scrap level
• Rework level
• Waste reduction
Time
• Throughput time
• Delivery speed
• Supplier lead time
Customer satisfaction
• Customer complaints
• Customer satisfaction
• Market share
• Competitive position
Business results
• Profitability
• Internal and external
performance
• Business position
• Cost
Human resource
• Employee satisfaction
• Quality of work life
• Multi-skilled workforce
• Labour efficiency
Figure 1 represents the model that has been proposed
for an Indian national setting. The literature review
indicates wide variations in approach and definition
of organisation performance measures. A typology
was used that synthesised the characteristics of perfor-
mance measures. In order to ensure that the outputs
of the process are appropriate, the typology identified
the characteristics of well-designed performance
measures and appropriate dimensions of performance.
The data collected was factor analysed for establish-
ing the reliability and validity of the instrument. To
test the causal relationship multiple regression analysis
was carried out. The main reason for employing mul-
tiple regressions is to determine the minimum number
of a set of variables, which are most strongly related
to the dependent variable, and to estimate the per-
centage of variations in the dependent variable. The
sample is collected from organisations in an Indian
national setting. The criteria for selection of the
organisation was:
. It should be an ISO 9001:2000 QMS organisation.
. It has been using TQM for at least three years.
 Linkages between TQM and organisational performance 17

Table 1. Coefficient alphas, factor correlations median within from academia and industry managers. Further, the
and between for total sample (TQM factors). pre-test subjects also appreciated the measurement
Analysis Factor 1 Factor 2 Factor 3 Factor 4 items employed. The criterion related validity was
evaluated by examining the multiple correlation coeffi-
Factors matrix cients computed for the factors. The test of significance
Factor 1 (0.82) was used to test the relationships. Cronbach’s alpha for
Factor 2 0.36 (0.78)
Factor 3 0.12 0.32 (0.79) each factor was calculated and is presented in tables 1
Factor 4 24 0.36 0.26 (0.70) and 2. The coefficient was found to be 0.8 and 0.73,
indicating that measures have a high degree of criterion
Median item correlations
Within 0.39 0.53 0.23 0.31 related validity, when taken together. Finally, construct
Between 0.14 0.16 0.11 0.16 validity measures the extent to which the items in a
scale all measure the same construct. It was established
through the use of principal component factor analysis.
The factor matrices showed that they were uni-factorial
Table 2. Coefficient alphas, factor correlations median with Eigenvalues greater than the accepted criterion of
within and between for total sample (organisations 1.0. Thus, the findings indicate that the scales contained
performance measures). in the questionnaires have construct validity.
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Analysis Factor 1 Factor 2 Factor 3 Factor 4 Factor 5

Factor matrix 4. Analysis and results
Factor 1 (0.73)
Factor 2 0.29 (0.76)
Factor 3 0.32 0.37 (0.73) Figure 2 presents the classification of the industries
Factor 4 0.41 0.26 0.23 (0.71) that have responded to the questionnaire. It can be
Factor 5 0.38 0.33 0.34 0.19 (0.80) seen that the sample represents all types of industries
Median item correlations and has nearly equal representation of small, medium
Within 0.33 0.49 0.36 0.49 0.51 and large industries. The industries located in indust-
Between 0.17 0.17 0.21 0.19 0.15 rially developed regions are slightly more than that of
backward regions. There is good representation of
service industries in the respondents. The sample, thus,
represents a rational universe. The main purpose of this
The total sample was 258. In addition to the above
study is to investigate the correlation between TQM
sample size, another 40 units were selected and kept
factors and the organisational performance. The data
in the working list to accommodate non-response
collected was subjected to factor analysis using SPSS
from the units in the main list. The continuous efforts
package. The objective was to identify a relatively
by the authors and the support of the study organisa-
small number of factors that can be used to represent
tions generated a 57% response rate, which was quite relationships among sets of many interrelated variables.
encouraging. The data was analysed using SPSS Table 3 gives Varimax rotated factor analysis of TQM
package. factors, while table 4 gives it for performance measures.
The factor analysis was performed by principal Factor loadings for TQM factors and performance
component analysis using Varimax rotation. The test measures are given in tables 5 and 6 respectively.
of significance was used to test the relationships.
Cronbach’s alpha (Cronbach 1951) for each factor was
calculated and is presented in tables 1 and 2. Nunnaly 4.1 Interpretation of factors affecting TQM
(1978) states that an alpha value of 0.70 indicates a
strong alpha value with consistent inter item correla- Factor 1, accounting for 29.9% of common variance,
tions. Since alpha value for all the factors are found to is named as ‘pro-active business orientation’ which
be equal to or greater than 0.70, the scales developed accounts for all those items that form unique resources
here are judged to be reliable. Three different types of for a business enterprise. These include strategy-focused
validity are considered (i) content validity, (ii) criterion management actions, aggressive technology policy,
related validity and (iii) construct validity (see the strong quality planning and improvement initiative,
Appendix). We submit that the measures developed in creativity and innovations in product development
this study have content validity, since selection of and financial management policies. These resources
measurement items were based on both an exhaustive create asymmetry and differentiating advantages in
review of literature and detailed evaluation by experts relations to competitors.
 18 R. L. Shrivastava et al.

INDUSTRIAL CLASSIFICATION SIZE OF INDUSTRY

Agro and
Forest
service (C & based Large
FA, Software, Cal 10% Small
l Centre etc.) 20% Mineral and scale
scale
Metal based 25%
18%
33%
Textile and other
(leather, rubber,
plastic etc. 13%
Electrical and
Chemical Electronics Medium
and Food 16%
Chemical scale
and
based 42%
12% Beverages
11%

INDUSTRY LOCATION
TYPE
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Service
industry
Located in Located in 20%
industrially industrially
backward developed
region region
46% 54%
Manufacturing
industry
80%

Figure 2. Profile of respondent industries.

Table 3. Varimax rotated factor matrix on sampled data (TQM factors).

Percentage of Cumulative
Variable Communality Factor Eigenvalue variation percentage
QM 1 0.72512* I 7.18507 29.9 39.9
QM 2 0.59273* II 1.40298 7.8 47.7
QM 3 0.51874* III 1.30418 7.2 55.9
QM 4 0.52615* IV 1.23556 6.9 61.8
QM 5 0.65037*
QM 6 0.66296*
QM 7 0.61830*
QM 8 0.79557*
QM 9 0.58732*
QM 10 0.50254*
QM 11 0.62478*
QM 12 0.69606*
QM 13 0.55572*
QM 14 0.50070*
QM 15 0.70831*
QM 16 0.69127*
QM 17 0.54828*
QM 18 0.63287*
 Linkages between TQM and organisational performance 19

Table 4. Varimax rotated factor matrix on sampled data (performance measures).

Percentage of Cumulative
Variable Communality Factor Eigenvalue variation percentage
OPM 1 0.75513* I 5.28509 28.9 28.9
OPM 2 0.68274* II 1.50298 9.8 38.7
OPM 3 0.52895* III 1.40418 8.2 46.9
OPM 4 0.58615* IV 1.33556 6.9 53.8
OPM 5 0.70037* V 1.00098 5.8 59.6
OPM 6 0.70296*
OPM 7 0.69830*
OPM 8 0.81667*
OPM 9 0.55833*
OPM 10 0.58255*
OPM 11 0.64488*
OPM 12 0.61606*
OPM 13 0.62572*
OPM 14 0.53878*
OPM 15 0.68832*
OPM 16 0.68129*
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OPM 17 0.56829*
OPM 18 0.67387*

Table 5. TQM factors loading.

Proactive business Internal Competitive Participatory
Sr. no. Variable orientation I support II assessment III orientation IV
1 Technology policy 0.712
2 Structure of planning framework 0.691
3 Organisational goals 0.644
4 Infrastructure 0.597
5 Product design 0.605
6 Flexibility 0.582
7 Financial position 0.507
8 Top management support 0.808
9 Employee relation 0.705
10 Compatibility and co-ordination 0.571
11 Organisation size 0.533
12 Customer interaction 0.469
13 Recognition and reward systems 0.429
14 Competitive strategy 0.858
15 Management risk taking ability 0.757
16 Vendor relations 0.629
17 Communication 0.748
18 Team building approach 0.624

The second factor, ‘internal support’, accounts for
7.8% of common variance and includes such elements
as healthy employee and customer relations, system of
appreciation and recognition and sustained and active
top management support.
The third factor, ‘competitive assessment’, explaining
7.2% of the common variance, depicts an organisation
policy with regard to gathering and analysing infor-
mation on customers and competitors. This factor
includes competitive positioning and strategy, risk-
taking ability of the management and vendor relation-
ship management. The fourth factor, ‘participatory
orientation’, accounting for 6.9% of the common
variance has loading of such items as communication
processes and building productive action team, etc.
4.2 Interpretation of factors affecting organisational
performance
In case of organisations performance measures, a five-
factor model is considered.
. Factor 1, labelled as ‘quality dimensions’, accounts
for 28.9% of cumulative variance. This includes
such elements as scrap, rework and waste.
 20 R. L. Shrivastava et al.

Table 6. Factor loading (performance measures).

Customer Human Business
Sr. no. Variable Quality I Time II satisfaction III resource IV results V
1 Scrap level 0.728
2 Rework level 0.716
3 Waste reduction 0.629
4 Throughput time 0.618
5 Delivery speed 0.612
6 Supplier lead time 0.528
7 Customer complaints 0.892
8 Customer satisfaction 0.829
9 Market share 0.692
10 Competitive position 0.563
11 Labour efficiency 0.535
12 Multi-skilled work force 0.482
13 Employee satisfaction 0.446
14 Quality of work life 0.434
15 Profitability 0.787
16 Internal and external 0.622
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performance
17 Business position 0.754
18 Cost 0.812

Table 7. Means and analysis of variance for size of organisation.

Factor 1 Factor 2 Factor 3 Factor 4
Variable (TQM 1) (TQM 2) (TQM 3) (TQM 4)
Small scale organization 2.14 2.15 2.09 2.34
(less then 100 people and capital
investment up to Rs. 1 crore)
Medium scale organization 2.28 2.08 2.53 2.28
(101–250 people, capital investment
Rs. 10 crores)
Large scale organization 2.32 2.63 2.64 2.49
(>250 people, capital investment >
Rs. 10 crores)
F-ratio 45.37* 39.84* 54.37* 30.40
*P < 0.05; **P < 0.01; ***P < 0.001.

. Factor 2 explains that 9.8% of common variance
is labelled as the ‘time dimension’ of organisation’s
performance. The business is affected by the time
in various activities such as lead-time, delivery
speed and process through put time.
. Factor 3 explains 6.9% of common variance and
is called ‘customer satisfaction dimension’ and is
based on customer service, degree of competitive-
ness and market share.
. Factor 4, the ‘human resources dimension’,
explains 5.8% of common variance and is reflected
through the multi-skilled workforce, labour
efficiency, quality of work life and employee
satisfaction.
. Factor 5, ‘business results’, explains 8.21% of
the common variance and is an indicator of
internal and external performance, business
position, cost control, profitability and other
aspects related to finance policy of a business.
4.3 Relationship between the factors affecting TQM and
organisational size
Table 7 reports the means and analysis of variance of
TQM factors and the size of organisation. Organisations
have been classified into three categories: small-scale
(less than 100 employees and capital investment up to
10 million Indian rupees; 1 US dollar ¼ 45 Indian
rupees), medium scale (101–250 employees, capital
investment up to 100 million rupees) and large scale
(>251 people, capital investment more than 100 million
rupees). It is evident that factors such as, ‘pro-active
business orientation’, ‘internal support’ and ‘competitive
 Linkages between TQM and organisational performance
Table 8. Means and analysis of variance for type of organisation (manufacturing/service).
Factor 1
Variable (TQM 1)
Manufacturing sector 1.97
Service sector 2.47
F-ratio 23.22**
*P < 0.05; **P < 0.01.
assessment’ are strongly and significantly associated
with all the sizes. However, ‘participatory orientation’
does not show a significant relationship, due to the fact
that Indian companies do not lay strong emphasis on
communication and team building, more so in small
and medium size companies. This finding for Indian
companies corroborates with Wilkinson (1992) who
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pointed out that soft issues of quality such as inter-
personal relations, communication network, feedback
and team spirit are neglected and not evident in organi-
sations with employee strength of less than 250. This
finding is also supported by Powell (1995) based on an
empirical study of the performance consequences of
TQM implementation. The study found that even
though larger firms were more likely to adopt TQM
than smaller firms, the correlation between company
size and TQM suggested that company size might
impede successful TQM implementation. The study by
Fisher (1993) of Australian quality council member
companies (n ¼ 49), in order to test the perceptions of
CEOs on the link between TQM and organisational
performance, supports this. Fisher found that the nature
of the TQM implementation approach varied consid-
erably according to company size. Fisher found that
88% of the smaller companies (up to 100 employees)
adopted a standard approach to TQM, generally offered
by TQM consultants and had an immediate expectation
of monetary benefits to be gained. On the other hand,
94% of the larger companies (more than 500 employees)
developed their own approach to TQM and had a
reasonable expectation in terms of benefits to be gained.
Fisher stated: ‘the small companies expected benefits
sooner, but they were generally disappointed’.
4.4 Relationship between the factors affecting TQM and
organisational type
Table 8 presents the means and analysis of variance
factors on the type of organisation. The organisations
are classified as two types: manufacturing and service.
The analysis indicates that factors such as proactive
business orientation, internal support and participatory
orientation of TQM have significant association with
21
Factor 2 Factor 3 Factor 4
(TQM 2) (TQM 3) (TQM 4)
2.89 1.88 2.22
1.78 2.19 2.42
21.98* 12.47 19.48*
both types; while competitive assessment does not
show any significant association. This might be due to
the fact that manufacturing industries now analyse com-
petitive strategies and enhance their risk-taking ability.
Moreover, manufacturing industries depend signifi-
cantly on outside suppliers to meet their requirements
and thus their approach to suppliers has undergone
a sea change and become more pro-active. Supply
chain management finds itself more strongly rooted in
the manufacturing sector than in the service sector
(Mohanty 1997).
4.5 Relationship between the factors affecting TQM and
nature of industry
Table 9 presents the means and analysis of variance
results of TQM factors. The analysis reveals that
three factors, proactive business orientation, competi-
tive assessment, and participatory orientation, have
significant influence on all the sectors. Proactive busi-
ness orientation emerges as the most important one.
The most influential factors for the mineral based sector
is proactive business orientation; for the electrical and
electronic sector, competitive assessment, and for the
textile sector, participatory orientation. The electrical
and electronic sector is growing rapidly. The sector is
fiercely dominated by competition on a global level.
It thus requires a proper analysis of the strategies
adopted by the competitors in order to frame a
performance-oriented TQM strategy. The textile and
other sectors are managed in a traditional manner.
The age-old style of management requires involvement
of top management in order to reap the benefits of
TQM. The focus on participatory work culture will
provide an impetus to this sector.
4.6 Relationship between the factors affecting TQM and
organisational location
Table 10 indicates that all four factors have a
strong and significant influence on both types of
location. The pressures of competition are forcing all
 22 R. L. Shrivastava et al.

Table 9. Means and analysis of variance for type of organisation (manufacturing/service).

Factor 1 Factor 2 Factor 3 Factor 4
Variable (TQM 1) (TQM 2) (TQM 3) (TQM 4)
Agro and forest based sector 1.95 2.89 1.88 2.22
Mineral and metal based sector 2.46 1.78 2.19 2.42
Electrical and electronics sector 2.12 2.15 2.97 1.84
Food and beverages sector 1.76 2.79 2.68 1.89
Chemical and chemical based sector 2.33 1.65 2.79 2.36
Textile and other 1.45 1.39 1.98 2.54
(leather, rubber, plastic etc.) sector
Service sector 1.87 1.87 1.47 1.39
F-ratio 21.22** 20.98 14.47* 17.48*
*P < 0.05; **P < 0.01

Table 10. Means and analysis of variance for organisation location (industrially developed/
industrially backward).
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Factor 1 Factor 2 Factor 3 Factor 4

Variable (TQM 1) (TQM 2) (TQM 3) (TQM4)
Organisations located in 2.42 2.26 2.62 2.33
industrial developed region
Organisations located 2.14 2.23 2.08 2.56
in backward region
F-ratio 32.38** 29.84** 35.40*** 33.39**
*P < 0.05; **P < 0.01; ***P < 0.00.

organisations in all regions to think strategically in line
with current developments in technology. The analysis
further indicates that the focus on participatory orienta-
tion is less in the backward regions and that might be
due to the quality of manpower employed (a semi-skilled
and unskilled workforce).
4.7 Relationship between the factors affecting TQM and
organisational performance
Table 11 presents the correlation between TQM and
organisation performance.
Quality and pro-active business orientation
Quality showed significant relationship with Pro-
active business orientation (r ¼ 0.250 at P < 0.01). The
quality can be improved through planning framework,
technology policy, organisation goals and product
design.
Customer satisfaction and pro-active
business orientation
Customer satisfaction is influenced by pro-active
business orientation (r ¼ 0.080, at P < 0.05). Reducing
customer complaints and enhancing customer inter-
actions which in turn improves market position.
Business result and pro-active business orientation
With r ¼ 0.007, a moderate relationship exists between
the two. Better planning and flexibility reduce the size
of inventory holdings, while good design with the right
technology and proper infrastructure are known to
reduce costs. The twin advantages of reduced inventory
and reduced costs lead to improved profitability and
hence a better financial position in the long run. The
profitability of an organisation, competitive business
orientation, internal and external performance and
cost of operating processes require a top management-
supported proactive approach. Bounds and Dewhirst
(1991) corroborate these findings.
Human resource and pro-active business orientation
A positive relationship is indicated by (r ¼ 0.008).
Organisational goals with good planning framework
lead to enhanced employee satisfaction. Newer technol-
ogy and better infrastructure obviously improves the
quality of a working life which leads to work force
involvement and better financial returns for the
organisation. Human resource is considered to be the
significant contributory factor for organisational perfor-
mance improvement. Deming (1986) points out that a
motivated workforce can improve the business position
of an organisation.
 Linkages between TQM and organisational performance
Table 11. Correlation matrix of organisation’s performance with TQM factors.
TQM factors


o Pro-active



Organisation performance n business orientation
1. Quality 0.250**
2. Customer satisfaction 0.080*
3. Business results 0.007
4. Human resource 0.008
5. Time 0.011*
*P < 0.05; **P < 0.01.
Time and pro-active business orientation
Time dimension is influenced by pro-active business
orientation (r ¼ 0.011 at P < 0.05). Technologies, plan-
ning framework, improved design and flexibility in
operations have been responsible for delivery speed
and supplier lead-time reduction, as well as throughput
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time. Kano (1993) acknowledges that the primary
contributors to lowering productivity and delays in
supply are the rigid operations and obsolete technology.
Quality and internal support
This inter-relation has been found at r ¼ 0.008. The
soft practices under internal support such as organisa-
tion and reward system, co-ordination, employee
relations, have always known to reduce waste and
improve product quality. Innovation practices come
from involvement and support from top management
as well as interaction with customers. Lantelmec
(1994), in a study related to the construction industry,
concluded that the employee involvement and motiva-
tional schemes help reduce quality problems.
Customer satisfaction and internal support
This significant inter-relation (r ¼ 0.040 at P < 0.05)
can be understood by the fact that customer interaction,
compatibility and co-ordination greatly helps in ack-
nowledging and acting upon the customer complaints,
which is one of the significant parameters of customer
satisfaction.
Business results and internal support
Business results are influenced greatly by internal sup-
port as found in r ¼ 0.251 at P < 0.01. To succeed any
business needs the strong foundation of its soft systems
like top management support, employee relations,
co-ordination, etc. Such a dynamic system leads to
healthy managerial practices thereby making great
savings in inventory costs as well as production costs.
Human resource and internal support
At r ¼ 0.053 (at P < 0.01), this inter-relation is between
human resource management soft practices and
the intangible outputs of an organisation. With good
practices such as a recognition and reward system,
harmonious employee relations and collaborative
23
Internal Competitive Participatory
support assessment orientation
0.008 0.170* 0.010
0.040* 0.009 0.210**
0.251** 0.005 0.008
0.053*
0.004 0.090*
0.081* 0.062* 0.009
co-ordination supported actively by top management
are going to enhance the employees’ satisfaction level,
and improvement of quality of work life and the work
unit’s climate.
Time and internal support
This relationship is found to be significant (r ¼ 0.081 at
P < 0.05). The internal support parameters such as
customer interaction, healthy employee relations, good
co-ordination with top management backing will always
lead to reduction in throughput time, supplier lead time,
gains in productivity and reduction in process times.
Fisher (1993) concluded that high employee morale
results in higher productivity.
Quality and competitive assessment
Quality has a significant correlation with competitive
assessment (r ¼ 0.170 at P < 0.05). An organisation
equipped with a set of competitive strategies, and the
ability of management to take calculated risks, should
end-up with better performance on the quality front
exemplified by waste reduction, improved customer
service including delivery.
Customer satisfaction and competitive assessment
At r ¼ 0.009, a positive correlation is shown to exist
between competitive assessment and customer satisfac-
tion. An organisation working with a well proven
management’s sense of risk perception, well structured
strategies coupled with total involvement of employees
and integration of suppliers in its logistics processes,
will build customer loyalty in the company’s products
or services. This will be evident through market share
enhancement, reduction in customer complaints and
in getting repeat orders. Gennard et al. (2003) suggest
that for working towards customer satisfaction, it is
necessary to have continuous assessment of competitive
strategies and supplier relationship management as the
focus.
Business results and competitive assessment
The correlation (r ¼ 0.005) indicates the linkage
between business results and competitive assessment.
The relatively weak bond evident between these is
not very much off-track. An organisation with good
 24 R. L. Shrivastava et al.
well-articulated strategies with very active vendor
relations may have a very good potential to succeed
in today’s competitive environment.
Human resource and competitive assessment
A very surprising correlation (r ¼ 0.004) exists between
these two, which is contrary to beliefs and findings of
many researchers around the globe. Indian industries
are finding it hard to change their old mindset from
protected economy to globalisation. What is needed is
quality through work development. The characteristics
of quality through work development are:
. Investigation, analysis and subsequent changes of
the basic working processes concerning tasks,
flow of material and information as well as work
assignments and organisation.
. Emphasis on work development, goal-oriented
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working-groups, integration of work, develop-
ment of competence and decentralisation of
responsibility and authority.
. Work development is seen as a foundation on
which to build interest, involvement and motiva-
tion centred on continuous improvements and
quality.
. Improvement teams as a method to improve and
develop processes.
Time and competitive assessment
This correlation is found to be significant (r ¼ 0.062
at P < 0.05). It is quite normal to assume that an
organisation having committed vendor relationship
and competitive strategies should have its focus on
reducing the process time and improving the resource
utilisation. Productivity improvement may be another
impact of such healthy practices.
Quality and participatory orientation
At (r ¼ 0.010), the relationship between quality and
participatory orientation has not been found significant.
Teamwork and a better communication network in an
organisation does provide the desired improvements
in quality. With its support, other practices in the orga-
nisation become more competitive in gaining improved
organisation performance.
Customer satisfaction and participatory orientation
There is a very significant relationship between
customer satisfaction and participatory orientation.
Understanding customer specifications and needs, will
only be possible in an organisation, which has evolved
efficient communication links across all its functional
areas. Communication will lead to actions. Hence,
good communication followed by an integrated team
environment will only make responsive actions possible
on all feedbacks.
Business results and participatory orientation
Business results have shown a significant relationship
with participatory orientation (r ¼ 0.008 at P < 0.05).
Inventory costs have been one of the riding concerns
in Indian industry. Effective training followed by
concrete action plans requires a thorough understanding
of inventory management across all levels.
Human resources and participatory orientation
Another significant relationship is demonstrated
between human resources and participatory orientation
(r ¼ 0.090 at P < 0.05). Communication channels help
in improving understanding among workforce and
creating an environment of goodwill and trust,
fostering team spirit, etc.
Time and participatory orientation
Time and participatory orientation relationship is found
to be weak. Coherent team spirit and active communica-
tion make the organisation a great place to work.
But this in itself may not result in improvements in
time efficiency demonstrated by reduction in process
time or improvements in resource utilisation and
productivity. This may simply provide an infrastructure
in which to improve methods of planning and execution.
The study by Lee (1993) outlined the relationship
between teamwork and resource utilisation. They con-
cluded that the organisations having emphasis on team-
work show significant improvement in resource
utilisation.
4.8 Results of multiple regression analysis
In order to investigate the effects and magnitudes of
more than one TQM dimension (predictors) on various
organisational performance measures (criterion vari-
ables) regression analysis was performed. The multi-
collinearity test established the predictor variables,
i.e. TQM factors are independent. The multiple regres-
sion results are presented in table 12. It is evident
that all TQM dimensions significantly influenced
organisation performance measures. Analysis revealed
that quality performance is significantly influenced by
proactive business orientation (t ¼ 2.65, P < 0.01) and
internal support (t ¼ 1.49, P < 0.05). Pro-active business
orientation (t ¼ 1.99, P < 0.01), competitive assessment
(t ¼ 0.43, P < 0.05) and participatory orientation
(t ¼ 2.06, P < 0.01) is significantly influenced by customer
satisfaction. Competitive assessment (t ¼ 1.94, P < 0.01)
 Linkages between TQM and organisational performance 25

Table 12. Multiple regression analysis results—TQM factors and organisational performance measures.
TQM factors


o
Organisational Proactive business Internal Competitive Participatory

performance measures n orientationy supportz assessment§ orientation# Intercept Multiple R F. value
1. Quality performance 0.38 0.14 0.31 0.41 4.162 0.236 1.1466*
(scrap level, rework level, (2.65)** (1.49)* (0.50) (0.89)
waste reduction)
2. Customer satisfaction 0.72 0.39 0.61 0.47 3.915 0.282 1.6824
(customer complaints, (1.99)** (0.40) (0.43)* (2.06)**
customer satisfaction,
market share,
competitive position)
3. Business results 0.49 0.05 0.72 0.37 3.765 0.349 2.7077**
(profitability, internal and (1.89)** (0.18) (1.94)** (0.42)
external performance,
business position, cost)
4. Human resource
0.33 0.68
0.25 0.36 4.171 0.256 1.3652*
(employee satisfaction,
(2.49)** (1.49)*
(1.14)* (1.00)*
quality of work life,
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multi-skilled workforce,
labour efficiency)
5. Time 0.48 0.34 0.26 0.17 3.527 0.279 0.9650
(throughput time, (0.19) (1.28)* (0.39) (1.73)**
delivery speed,
supplier lead time)
*P < 0.05; **P < 0.01.
yStructure of planning framework, technology policy, organisational goals, infrastructure, product design, flexibility, financial position.
zTop management support, employee relation, compatibility and co-ordination, organisation size, customer interaction, recognition and reward
systems.
§Competitive strategy, management risk taking ability, vendor relations.
#Communication, team building approach.

and pro-active business orientation (t ¼ 1.89, P < 0.01)
significantly influence business results as depicted
through financial measures such as profitability,
cost reduction, and inventory reduction. The internal
support and participatory orientation do not show sig-
nificant influence on the business results. Human
resource performance, evident through employee
satisfaction, quality of work life, work force involve-
ment, etc., is influenced significantly by all four TQM
dimensions.
The time performance of the organisation as reflected
by process time, productivity, labour efficiency and
resource utilisation has significant influence on
internal support (t ¼ 1.28, P < 0.05) and participatory
orientation (t ¼ 1.73, P ¼ 0.01). It is evident through
the multiple regression analysis that pro-active
business orientation significantly affects all the measures
of an organisation’s performance. Top manage-
ment active involvement, through strategic planning,
a technology up-grade policy and financial strength,
results in improving the performance of all aspects of
an organisation. Thus, as many authors have stated
before, without leadership ‘from the top’, it is unlikely
organisations will attain high performance. Thus
proactive business orientation led from the top is
the critical success factor to overall organisation
performance.
Effect of internal support is significant for quality
performance and humane resource. These findings are
consistent with the literature (GAO Study 1991, Garvin
1988). Competitive assessment has been found to
significantly influence customer satisfaction and
business results, whilst participatory orientation has
significant association with human resource and
customer satisfaction.
Customer satisfaction and pro-active business
orientation as well as business results and competitive
assessment share stronger influential relationship. Thus,
it can be said that for achieving better customer satisfac-
tion, organisational goals need to be well defined with
flexibility in product/service design.
Figure 3 shows the structural coefficients of the
derived model. The significant coefficients are only
indicated on the model. Similarly, table 13 represents
the strong and weak relationships between organisation
performance measures and TQM factors.
 26 R. L. Shrivastava et al.

Business
0.49** results
0.72**
Pro-active
business
0.38** Competitive
orientation Quality
assessment
0.72**
performance
0.61*

Customer
0.14** satisfaction
0.47**

Internal 0.34** 0.17** Participatory

support Time orientation
0.68* dimension
0.36*
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Human
resource

TQM factors Organisational performance measures TQM factors

*P <0.01; **P < 0.05. Note: Only significant coefficients shown.

Figure 3. Structural coefficients of the derived TQM-performance model.

Table 13. TQM factors and organisation performance measures–relationships.

Organisational Relationship with TQM factors
Sr. performance
no. measures Strong
1 Quality Proactive business orientation,
internal support
2 Customer satisfaction Proactive business orientation,
competitive assessment,
participatory orientation
3 Business results Proactive business orientation,
competitive assessment
4 Human resource Proactive business orientation,
internal support,
competitive assessment
5 Time Internal support,
participatory orientation
Weak
Competitive assessment,
participatory orientation
Internal support
Internal support,
participatory orientation
—
Proactive business orientation,
competitive assessment

5. Implications for Indian industry . There is a lack of buy-in for TQM.

Mohanty and Lakhe (2004) have identified the following
generic problems in Indian industries that have adopted
TQM:
. TQM is based on control and domination.
. TQM is not viewed as a large-scale system change.
. TQM is imposed from the top as a new solution
for all problems.
. Stakeholder involvement in TQM is narrow.
. Organisational learning is restrictive.
. Linear thinking is deployed.
We observed the following issues during our extensive
interactions with a large number of executives represent-
ing various organisations, which are worth mentioning:
(i) Many Indian firms who have tried to adopt
TQM have wanted fast results. It should be
 Linkages between TQM and organisational performance
understood that TQM is not a ‘quick-fix’ solu-
tion but in essence is a systemic approach requir-
ing sound understanding of its fundamentals
and principles. The guiding principles behind
TQM are process thinking. The theme of
satisfying stakeholders in the most efficient and
effective way possible by means of improving
organisational processes, especially large, cross-
organisational ones, often proves very difficult.
In analysing processes, important elements of
success are involving the right people, using an
effective tool kit, and insisting on fact-based
assessment. If the team is not representative or
at the right organisational level, or if its work
is hampered by poor tools and superficiality,
the desired improvements will not be realised.
It is also important to set the right pace. Signi-
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ficant improvement can take months and years,
as well as major investment and employees’ time.
On the other hand, one-time, quick fixes will
yield more modest gains—but in the very near
term. Several companies have been successful at
mixing long-term projects with short-term
opportunities and pilot programmes. The
long-term projects promise the improvement,
but take considerable time and investment. The
short-term opportunities—identified through
the process thinking effort—are meant to show
progress and benefits quickly. The pilots are a
bridge between the short and long terms. They
begin to implement the longer-term vision while
providing credibility and some level of shorter-
term benefit. Most important, they move
under performing businesses in the direction of
sustainable high performance.
(ii) The ‘value chain’ of an organisation has now
seen backward integration with the active
involvement of vendors and suppliers. Supply
chain management (SCM) has emerged as a
focal area for most organisations. This philoso-
phy is based on integration and involvement of
all suppliers. Long-term commitment, joint
strategic plans, shared goals and mutual trust
are the cornerstones. Indian companies need to
evolve a stronger and lasting bond with their
suppliers to permeate the ethics of quality.
(iii) A learning organisation requires total freedom
of thought and action on the part of the manage-
ment. Each employee has to gear up to think and
acquire new knowledge and skill sets and keep
doing that for all time to come. This will neces-
sitate sweeping changes in the mindsets. Our
argument is simply that for working, learning,
and innovating to thrive collectively depends
27
on linking these three, in theory and in practice,
more closely, more realistically, and more
reflectively than is generally the case at present
in the Indian context.
(iv) The world today is technology driven and most
managers with whom the interaction took place
during this research agreed on this front. Indian
industries are positively but slowly moving in the
direction of adopting and integrating advanced
technologies in line with global standards.
However, new initiatives are required for the
development of indigenous, low-cost technolo-
gies which will be environment friendly. Green
technologies are the order of the day.
(v) A TQM culture involves empowerment and
accountability, i.e. delegating the ownership of
quality to the individuals who are responsible
for service delivery. However, for such a process
to be successful, there are four fundamental
issues which need to be addressed and organised
properly (Mohanty 1997). They are shared goals,
teamwork, autonomy and rewards (STAR).
Today, the emphasis is on collective wisdom
rather than individual brilliance and hence
when a performance appraisal system is
designed, the emphasis should be more on entire
team evaluation and much less on individual
assessment. World-class organisations have
demonstrated this. Indian companies while
implementing performance management system
must incorporate the following:
. Achievement culture: Rewards results, not
unproductive efforts. Work teams are self-
directed. Rules and structure serve the system,
and are not an end by themselves. A possible
downside is sustaining energy and enthusiasm
over time.
. Support culture: The employee is valued as a
person, as well as a worker. Employee har-
mony is important. Weakness is a possible
internal commitment without an external
task focus.
. Role culture: Rule of law with clear respons-
ibility and reward system. Provides stability,
justice, and efficiency. Weakness is impersonal
operating procedures and a stifling of creativ-
ity and innovation.
(vi) We could specifically identify the following
significant propositions:
. The greater the size of the firm, the higher
the scale of adoption of TQM practices.
. Plants that form part of a multinational
company register a higher scale of adoption
of TQM practices than those that do not.
 28 R. L. Shrivastava et al.
. Plants exporting a high percentage of their
products register a higher scale of adoption
of TQM practices.
. Plants manufacturing investment (intermedi-
ate) goods have more firmly rooted TQM
practices than those that manufacture consu-
mer goods.
. In plants where automation is greater TQM
practices register large-scale adoption.
. Plants that have undergone the greatest
technological change in recent years have
introduced the most TQM practices.
. Plants that have placed more importance on
process simplification and cycle time analysis
to improve business processes have adopted
TQM more quickly.
. The higher the level of competition faced
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by the companies, the higher is the scale of
TQM practices.
. Companies that have placed more importance
on incorporating customer research into the
design of new products and services have
adopted TQM more actively.
. Companies that have effectively used more
resources for developing employees in a
variety of skills have successfully deployed
TQM across all functions.
. Companies that have placed more importance
to employee participation in various forums
and regularly scheduled meetings about
quality have the highest rate of widespread
adoption of TQM.
6. Conclusions
The progress toward the development of a comprehen-
sive framework assessment is significant; yet much
work remains to be done. What are the factors of
TQM success that should be assessed? To help answer
the question of what dimensions and measures might be
appropriate, all of the success dimensions and measures
were placed in the context of the organisation and
environment and the important variables to consider
in these contexts were listed, providing the start of the
development of a contingency theory.
This research has reported that for organisations
concerned with customer satisfaction, the pro-active
business orientation and participatory orientation
focus are particularly important as these provide
the greatest positive influence. The product/
service design flexibility is an important element of
pro-active business orientation. The results are synony-
mous with the findings of Anderson and Sohal (1999).
Organisations desirous of improving their business
results and profitability need to concentrate on com-
petitive assessment and pro-active business orientation.
Internal support and participatory orientation do not
seem to have significant impact on business perfor-
mance. This is contrary to common belief. Assessment
of competitive strategies, benchmarking, risk taking
ability and good supplier relations propel the business
results. Pro-active business orientation has emerged as
the strongest quality dimension influencing all five
measures of organisation performance. Structure of
planning, setting organisational goals and communica-
tion at all levels within the organisations, proper
up-keep of infrastructure and achieving financial
balance seem to affect all the spheres of organisation
and result in improvement in quality. Internal
support indicated through good employee
relations, co-ordination and recognition and a reward
system do not seem to bring about a significant impact
on customer satisfaction.
The purpose of this paper was to propose some
empirical truths, with the goal of providing guidance
for a TQM program assessment selection strategy
that neither dictates a universal solution, which is
unrealistic for most organisations, nor advocates a
situation specific view that provides no assistance
beyond the given context. We propose that different
strategies are appropriate for each competitive busi-
ness setting. They differ from the universal view by
emphasising ‘it all depends’ and they differ from the
situation specific view by asserting that there are
classes of settings for which strategic generalisations
can be made
Appendix
Reliability and validity test
The reliability analysis of a questionnaire determines
its ability to yield consistent results. Reliability was
described as internal consistency, which is the degree
of intercorrrelation among the items which comprise
a scale (Flynn et al. 1990). Internal consistency can be
established using a co-efficient of reliability such as
Cronbach’s Alpha (Cronbach and Meehl 1955).
Alpha is the average of the correlation coefficient of
each item with each other item (Nunnally 1978) which
states that an alpha value of 0.70 indicates a strong
alpha value with consistent inter item correlations.
Since alpha values for all the four factors are
found to be equal to or greater than 0.70 the scales
developed here are judged to be reliable.
The validity of a measure refers to the extent to
which it measures what is intended to be measured.
 Linkages between TQM and organisational performance
Three different types of validity are considered:
1. Content validity.
2. Criterion-related validity.
3. Construct validity.
Content validity represents the adequacy with which a
specific domain of content has been sampled. A measure
has content validity if there is general agreement
among the subjects and researchers that the question-
naire has measurement items that cover all aspects of
the variable being measured. We argue that the measure
of the entrepreneurial stress developed in this study have
content validity since selection of measurement
items was based on both exhaustive review of literature
and detailed evaluation of academicians and entrepre-
neurs. Further, the pre-test subjects also appreciated
the measurement items employed.
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Criterion-related validity, sometimes called predictive
validity or external validity, is concerned with the
extent to which a measuring instrument is related to
an independent measure of the relevant criterion. The
criterion-related validity is estimated using validity
co-efficient, which is the correlation between predictor
and criterion score. Validity co-efficient is an index of
how well criterion scores can be predicted from the
instrument score. The criterion-related validity was
evaluated by examining the multiple correlation coeffi-
cient computed for the four factors and the measure of
stress. The stress was evaluated using the stress battery.
The multiple correlation coefficient was found to be 0.8,
indicating that the measures have a high degree of
criterion related validity when taken together.
Finally, construct validity measures the extent to
which the items in a scale all measure the same
construct. It was established through the use of principal
component factor analysis. The factor matrices showed
that they were unifactorial with Eigenvalues greater
than the accepted criterion of 1.0. Thus the findings
indicate that the scales contained in the questionnaire
have construct validity.
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R. L. Srivastava is an assistant professor at the Department of Mechanical Engineering

at Y.C. College of Engineering, India. He is actively engaged in teaching production
technology related subjects and research. His areas of interest are quality engineering and
management.

Professor R. P. Mohanty has 29 years experience in Academics in India and Foreign Universities
and 10 years in Indian Industry in top management positions. After superannuating, he is
engaged in leadership education, management consulting and managerial competency develop-
ment. He has published six text books, more than 200 research papers in reputed international
journals and more than 100 papers in Indian Journals and Newspapers. He has guided 12 PhD
research scholars and several hundreds of master theses. He has advised more than 25 big
companies in India and abroad in the areas of engineering and management. He has served as
Chairman and President of many professional associations in India and also as a board member
in international professional institutions. He represents in the Editorial Board of ten international
journals. He has been elected as a Fellow of Indian National Engineering Academy–2004;
towards outstanding contributions in Engineering. In the year 2003, he received the most
prestigious ‘Sir Visveswaraya Award’ for his outstanding contribution in the field of Technical
Education & Technology Management. Sambalpur University conferred upon ‘Intellectual
Colossus Award 2003’ as an honour to his profound contributions to the field of management
education in India and abroad. In 1997, he was chosen as the ‘Most Outstanding Academician’
and honored by ‘UNITOP’ award by the Indian Institution of Materials Management. In 1995,
the Indian Institution of Industrial Engineering honoured him with its highest award ‘Lilian
Gilbreth Award’ for his most significant and outstanding contribution to the field. In 1987, the
Indian Institution of Industrial Engineering awarded him ‘Ramaswamy Cup’ for his extra-
ordinary services to the I.E. profession. The American Biographical Institute has conferred
upon him the ‘Distinguished Leadership Award in Academics’. The Institution of Engineers
(India) awarded the ‘Best Researcher’.

R. R. Lakhe, after completion of his PhD in TQM, is engaged in consulting practices related to
Quality management and ISO. He has published a number of papers and text books along with
Professor R. P. Mohanty. His current area of interest relates to the establishment of quality
standards and documentation systems for Indian industries.