Relationship Between TQM and Performance of Singapore Companies

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IJQRM
19,4 Relationship between TQM
and performance of Singapore
companies
356 Shaukat A. Brah and Serene S.L. Tee
Received June 2001 Department of Decision Sciences,
Revised January 2002 National University of Singapore, Singapore
B. Madhu Rao
Department of Applied Statistics and Operations Research,
Bowling Green State University, Bowling Green, Ohio, USA
Keywords TQM, Singapore, Organizational performance, Operations strategy, Operations
Abstract Total quality management (TQM) is widely accepted as a means of obtaining and
sustaining competitive edge. This study finds support for the proposition that TQM
implementation correlates with quality performance. Behavioral factors (role of top management
leadership, customer focus, human resource focus, and quality focus) as well as TQM tools and
techniques (corporate planning, process focus, and information and analysis) contribute to the
successful implementation of TQM. Also, the study finds that the size of the company (big or
small), the company's adoption of TQM, and the duration of a company's experience with TQM
affect the rigor of implementation and the resulting level of quality performance. However, the
nature of the company (manufacturing or service) does not seem to have a significant effect on the
rigor of quality management implementation and level of quality performance.
Introduction
Total quality management (TQM) has gained wide acceptance as a means of
gaining and sustaining a competitive edge in the global market. This is
evidenced by the emergence of many high profile awards such as the Malcolm
Baldrige National Quality Award of the USA, Deming Prize in Japan, European
Quality Prize and the Singapore Quality Award. TQM is a set of guiding
principles and practices, as well as a philosophy, that address not only the
management of quality but also the quality of management.
Some of the common themes in many definitions of TQM are continuous
improvement, customer orientation, employee empowerment, and top
management commitment with the implication that the interests of customers,
employees, shareholders, competitors and even society at large must be
considered. TQM philosophy emphasizes that by effectively managing
primary factors such as top management leadership for quality, supplier
quality management, process management, employee training and
empowerment, secondary benefits such as lower costs, improved reputation
and market share, increased employee motivation and satisfaction, and
International Journal of Quality &
Reliability Management,
improved profitability will inevitably follow.
Vol. 19 No. 4, 2002, pp. 356-379. Many studies established a definite positive association between the
# MCB UP Limited, 0265-671X
DOI 10.1108/02656710210421553 introduction of TQM and improved performance and conclude that firms that
have effectively implemented TQM outperform non-TQM firms on measures TQM and
such as profitability, revenues, costs, capital expenditure, total assets and Singapore
number of employees (Hendricks and Singhal, 1997). TQM is not without its companies
critics who argue that it is just another management fad (Yong and Wilkinson,
2001). Some studies have indicated that implementation of TQM does not result
in a significant improvement in performance and in some cases resulted in a
deterioration in performance. Reasons offered for TQM's failure to improve 357
performance include ineffective implementation, lack of suitable corporate
climate, poorly defined performance measurement, lack of management
support, attempting to replicate successful programs without adapting them to
the unique features of their organization, failure to integrate TQM with existing
managerial systems, and lack of an appropriate reward and recognition
system. The success and the eventual benefits due to TQM very much depend
on organizational context, including the firm's size, the nature of its products,
and industry characteristics.
It is generally believed that TQM would succeed if implemented as a major
organizational change and a long-term paradigm shift, rather than as a quick
fix. Ahire and Rana (1995) argue that TQM requires significant investment in
terms of financial, technical, and human resource over several years before
achieving the desired results or real progress towards these results. Sterman
et al. (1997) suggest that in the long run, TQM increases productivity, raises
quality, and lowers costs, while in the short run it can disrupt prevailing
organizational routines and accounting practices and create operational and
financial stresses that may undercut organizational commitment to continuous
improvement.
The objective of this study is to develop a quality framework to determine the
success factors of a quality program through an examination of the relationship
between individual quality management practices, quality performance,
customer satisfaction and employee satisfaction. The study also investigates
whether quality performance is a function of the nature and size of the
organization and the duration of the TQM implementation. The study is limited
to organizations operating in Singapore. Quazi et al. (1998) and Brah et al. (2000)
represent some of the earlier studies dealing with TQM implementations in
Singapore. Yong and Wilkinson (1999) provide a comparative summary of TQM
implementations in USA, UK, Europe, and Singapore.
A quality framework
Literature on TQM implementations suggests various measures referred to as
organizational performance (Sterman et al., 1997), corporate performance
(Easton and Jarrell, 1994), business performance (Brah et al., 2000), operational
performance (Samson and Terziovski, 1999; Hendricks and Singhal, 1997),
plant performance (Choi and Eboch, 1998), financial performance (Agus and
Hassan, 2000) and stock price performance (Hendricks and Singhal, 2001). Each
of these measures focuses on a different aspect of the benefits due to TQM.
Some of the indicators such as plant and operational performance are primary
IJQRM measures because they follow directly from the actions taken during TQM
19,4 implementations, whereas business, financial performance etc. are secondary
measures because they are a consequence of the implementation of TQM. In
this study quality performance is used as the primary measure, and customer
satisfaction and employee satisfaction are used as the secondary measures of
the success of TQM programs. Quality performance is a composite measure of
358 all aspects of an organization's supplier, product, process and service quality
performance. Success of a TQM program as measured by quality performance
would lead to success in the two secondary measures of customer satisfaction
and employee satisfaction.
Internal as well as external environmental factors influence the quality
performance of an organization. External environments consist of market,
legal, technological, socio-cultural and international factors. In markets with
intense competition and low barriers to entry, customer quality demands are
likely to be high. In some instances the minimal quality standards may be set
by the legal or regulatory environment, which in turn determines the level of
quality performance an organization needs to achieve. Advances in
technological environment can also lead to reduction in the cost of quality and
improvement in quality performance (e.g. e-commerce, computer-integrated
manufacturing). Socio-cultural factors associated with the workforce determine
how effectively and quickly the concepts of quality management are accepted
and have a strong influence on the quality performance. Also, as customers
become sophisticated, continuous improvements in product quality are
essential to satisfy their needs. Finally, factors such as foreign competition and
rise of internationally recognized quality awards force companies to compete to
world-class standards. Many of these factors, while being important to the
quality performance, are not entirely under the control of the management.
This study focuses exclusively on factors under the control of the management
and internal to the organization as discussed below.
Several studies (Saraph et al., 1989; Flynn et al., 1994; Ahire et al., 1996; Black
and Porter, 1996; Motwani, 2001) independently developed constructs or
internal factors critical to the successful implementation of TQM. Some studies
differentiate the role of tools such as benchmarking, quality training, flexible
manufacturing, and process improvement etc., from the role of behavioral
factors such as top management commitment, employee empowerment and
open organizational culture in TQM implementations. These studies have
consistently concluded that behavioral factors can improve organizational
performance and create competitive advantage more strongly than the formal
tools of TQM (Powell, 1995; Terziovski and Samson, 1999; Brah et al., 2000). The
following set of seven internal environmental factors, including the traditional
tools as well as behavioral factors, is considered in the present study.
(1) Corporate planning. Effective strategic and business planning and
deployment of plans, along with the focus on the requirements of
customers, suppliers, and other stakeholders are crucial to the success of
TQM implementations.
(2) Role of top management leadership. Personal involvement and TQM and
leadership of senior executives in setting strategic directions and Singapore
building and maintaining a leadership system are instrumental in companies
facilitating high organizational performance, individual development,
and organizational learning.
(3) Customer focus. An organization's effectiveness in recognizing its
customer needs and expectations, disseminating this information
359
throughout the organization, managing customer relations, and
measuring and improving customer satisfaction are the key to its long-
term success.
(4) Human resource focus. This represents the consistency of an
organization's human resource practices with its strategic directions.
This is judged based on employee training, involvement and
empowerment practices of the organization and the effectiveness of its
internal communication.
(5) Process focus. This construct deals with how an organization designs
and introduces products and services, integrates production and
delivery requirements and manages performance of suppliers. This is
judged based on the information on supplier quality management,
process flow management, product/service design, and benchmarking.
(6) Quality focus. The effectiveness of an organization's quality department
and the amount of quality efforts directed towards the development of
plans as well as the improvement of products/services are considered in
this construct.
(7) Information and analysis. This examines how the organization provides
effective measurement systems for understanding and improving
performance at all levels and in all parts of the organization. It also
includes how the organization analyzes performance data and
information to assess and understand overall organizational performance.
Effective execution of these seven constructs leads to improvement in the
performance of an organization. This study measures this improvement in
performance through quality performance. The following six performance
measures are identified based on the literature review.
(1) Supplier performance examines supplier performance in terms of
reliability, competence, and cooperation and will be based on
information on the performance of supplied components, supplier
relationships, and delivery accuracy. Many companies do not recognize
the role played by supplier performance in an organization's quality
performance and its contribution to customer satisfaction (Wong, 2000).
Poor quality of incoming parts add significantly to buyer's cost in terms
of inspection, reworks and returns, purchasing, and overproduction
(Newman, 1988).
IJQRM (2) Employee service quality examines the quality of employee service to
19,4 customers in terms of availability, responsiveness, timeliness,
completeness, and pleasantness.
(3) Product/service process quality examines an organization's quality of
output and delivery performance in terms of defects and timeliness,
warranty claims cost, and cost of quality. The indicators of
360 manufacturing/service process quality are derived from Terziovski and
Samson (1999).
(4) Product/service quality measures the product/service quality of an
organization with respect to the industry average.
(5) Customer satisfaction, the first of the two secondary measures in the
study, is based on the single most important principle of TQM
philosophy, the customer orientation. Successful implementation of
TQM requires the creation of a quality culture of achieving business
excellence through customer satisfaction (Kanji and Wallace, 2000). The
goal of satisfying the customer is fundamental to TQM and is expressed
by the organization's attempt to design and deliver products and
services that fulfill the customer needs. The rationale for this principle is
the belief that customer satisfaction is the most important requirement
for long-term organizational success and that it requires the entire
organization to be focused on the customer's needs. In a study of
Malaysian manufacturing companies, Agus and Abdullah (2000) offer
empirical evidence of the contributing attribute of customer satisfaction
resulting from TQM implementations towards financial performance.
This is measured in terms of the number of repeat customers and
customer complaints.
(6) Employee satisfaction, the second of the secondary measures, is based on
the principle that success is achieved through people and not through
the use of systems no matter how good they are. It is providing the
people with the right environment training and tools and empowering
them to produce better results. Employee empowerment includes the
practice of companies implementing policies that distribute power,
knowledge, information and rewards throughout the organization. In
such organizations all employees (not just managers) are encouraged to
think strategically about their jobs and business and assume personal
responsibility for the quality of their work. Studies have indicated that
such empowerment improves worker satisfaction and quality of work
life, which improves the worker productivity. This is measured in terms
of absenteeism and turnover rates of employees in an organization and
is derived from Madu and Kuei (1995).
Figure 1 summarizes a quality framework based on the above discussion. The
framework links external goals and measures with the corporate strategic
planning and internal system of an organization. Corporate planning has an
TQM and
Singapore
companies
361
Figure 1.
A macro view of quality
performance framework
effect on the role of top management leadership by defining the mission,

policies, and strategies in an organization. The role of top management
leadership would, in turn, affect the level of customer focus, human resource
focus, process focus, information and analysis, and quality focus in the
organization. In terms of customer focus, top management can encourage the
development of strong customer relationships by providing resources for
customer plant visits, inviting customers to visit the plant, requiring the
solicitation of detailed information about customers' needs and specifications,
and including customer representatives on product design teams. In terms of
human resource focus, top management can support workforce management
by providing resources to support training efforts, encouraging a thorough
selection process, and developing compensation schemes related to quality
goals. In terms of process focus, top management can nurture strong
relationships with suppliers by reducing the emphasis on price in evaluating
supplier selection and retention, encouraging long-term contracts with
suppliers, and requiring suppliers to certify for quality. In terms of information
and analysis, top management can encourage statistical control/feedback by
insisting on recording key information about the process and immediately
acting on the feedback. In terms of quality focus, top management can provide
strong, visible leadership in a well-developed, focused strategy for quality.
Proper implementation of the seven quality constructs affects the level of
quality performance. As shown in Figure 2, the level of quality performance
provides feedback about the progress of quality management practices in the
organization. This feedback, represented by the dotted lines, is useful to keep
the changes on path and during the next round of corporate strategic planning.
This feedback may require changes in policies and strategies to achieve the
desirable level of quality performance while the whole cycle starts again.
Hypotheses formulation
A complete listing of the proposed hypotheses and results of the test in this
study are available in Table XIV. The rationale for the various hypotheses
along with related discussion is presented below.
IJQRM
19,4
362 3
Figure 2.
Proposed quality
framework for internal
environment
Hypotheses 1 through 6 are based on the proposed quality framework of Figure

2. The positive association between quality performance and the attributes of
quality management reported in literature suggests hypothesis 1. The first three
boxes of Figure 2 suggest hypotheses 2 and 3. The last three boxes in Figure 2
suggest hypotheses 4 and 5 that improvement in quality performance (primary
measure), as a result of effective TQM implementation, will result in improved
customer satisfaction and employee satisfaction (secondary measures).
It is generally believed that customer retention results from customer
satisfaction, which in turn drives employee satisfaction (Schlesinger and
Heskett, 1991). It is also possible that customer satisfaction and employee
satisfaction drive or complement each other. This suggests hypothesis 6.
Hypothesis 7 is intended to test the general belief that quality management
practices differ significantly between manufacturing and service organizations.
This is based on the rationale that implementation of TQM in the service sector
is relatively recent. Because of a long history of quality management in the
manufacturing sector, their suppliers as well as customers are very aware of
quality issues. As a result, the quality management practices in manufacturing
organizations are likely to be affected by different contextual factors than
service organizations as confirmed by some studies (Benson et al., 1991; Huq
and Stolen, 1998).
Hypotheses 8 and 9 are designed to test the role of the size (large or small) of TQM and
a firm in TQM implementations. Large firms are defined to be those with more Singapore
than 100 employees for the purpose of this study. Relative to large firms, small companies
firms suffer from many disadvantages such as lack of market clout and the
consequent difficulty in getting supplier involvement (Ahire and Golhar, 1996),
lack of an information infrastructure, lack of professional expertise at the top
management level, lack of resources for efforts such as benchmarking and 363
statistical process control (SPC) which can lead to ineffective TQM
implementations.
Studies dealing with the issue of the role of size have come to conflicting
conclusions. Benson et al.'s (1991) study fails to find any relationship between
company size and TQM implementation. Ahire and Golhar (1996) observe that
there are no operational differences in TQM implementation owing to company
size, with the exception of customer focus and SPC usage. In contrast, Powell
(1995) finds that company size does have an impact on relationship between
TQM and organizational performance.
Implementation of TQM requires major investments in time, capital, and
managerial resources and firms that are willing to commit the resources to
implement TQM will have better quality performance than firms without TQM
programs referred to as non-TQM firms in this study. Hypotheses 10 through
13 are used to validate such an assertion and to examine the effect of the size of
the firm on this factor.
Ahire and Golhar (1996) state that large firms that implement any form of
TQM programs execute the TQM constructs more rigorously and have better
product quality than those that do not. A similar relationship holds between
small TQM and small non-TQM firms.
As stated earlier, a TQM campaign may prove too much for small firms with
limited access to funds as compared to large firms. Therefore, it is interesting to
examine whether large firms with high quality performance implement TQM
constructs differently from small firms with high quality performance. This
leads to hypothesis 14. Here, six measures of quality performance are averaged
to form a single score for quality performance. Firms with an average score of 4
or 5 (on a five-point Likert scale) are considered to have achieved high quality
performance.
It is generally believed that TQM must be a long-term commitment rather
than as a quick fix and that a short-term focus may lead to the conclusion that
TQM programs are ineffective or detrimental to business performance.
Following this argument, firms with longer TQM implementation period would
have all the infrastructure for TQM in place and would have advantage over
the firms that are relatively inexperienced in TQM due to the learning curve
effects. Thus one can expect that the TQM constructs would be more
intensively implemented with a resulting higher quality performance in these
experienced firms as compared to the less experienced TQM firms. Ahire
(1996), however, finds no differences between experienced TQM firms and less
experienced TQM firms in the rigor of TQM implementation, with the
IJQRM exception of employee involvement and concludes that it is possible for a firm
19,4 to achieve a high operational performance within a shorter TQM time frame
compared to firms that had longer TQM experience. The relevance of these
arguments to firms in Singapore is tested using hypotheses 15 and 16. A cut-off
of three years of TQM implementation differentiates experienced firms and less
experienced firms.
364
Questionnaire
The questionnaire was divided into three sections. Section A consisted of 35
questions on the general overview of the company in terms of quality
management practices. Section B consisted of 16 questions on the current
quality performance level of the company. Finally, Section C obtains the
company background.
A five-point Likert scale was used for most of the questions except for some
that use simple attitude scaling and category scales. This helps to ensure
consistency and allows for easy completion and data coding. In addition, some
questions were reverse coded to reduce bias in the response.
The sampling frame in this study was the list of certified companies
published on the Web site of Productivity and Standards Board. All of these
companies are either ISO certified, or have achieved the Singapore Quality
Award, or both. Quality directors or operations directors were the target
respondents of the survey, as answering the questions requires in-depth
knowledge of the quality management practices, and quality performance of
the company and industry. The self-administered questionnaire was mailed to
the respondents from 700 randomly selected manufacturing and service
companies. Twelve companies declined participation quoting confidentiality of
data in the questionnaire as a reason. Of the 188 responses, three were
discarded because of incomplete questionnaires.
The collected data was coded to perform factor analysis to determine
whether the individual items tend to group in the proposed manner. The factors
were extracted using principal component factor analysis with orthogonal,
varimax rotation. Internal consistency method was used to assess the
reliability of empirical measurements by computing Cronbach's alpha for the
scale based on the given set of items or any subset of items. The analysis uses a
cut-off point of 0.7 or more to ensure reliability of the measures.
Nunnally's (1978) method was used to establish the appropriateness of each
item in each measure. This method considers the item-score to scale-score
correlation to determine if the item belongs to the scale assigned, belongs to
some other scale, or should be eliminated. A cut-off point of 0.5 or more was
used for Cronbach's alpha. Each factor is subject to an individual component
analysis for construct validity. If each factor were valid as a construct, then its
set of variables would form a single factor once again. The Kaiser-Meyer-Olkin
(KMO) measure of sampling adequacy assesses the suitability of the sample for
each unifactorial determination. Pearson's correlation coefficient was used to
test the correlations between the quality constructs and quality performance. In
addition, partial and zero order correlations test the relationship between each TQM and
of the quality constructs as well as between each of the quality performance Singapore
measures. companies
Independent sample t-tests were used to compare the means of each quality
management practices between different company nature, size, type, and years
of TQM adoption. Quality performance between different categories of firms
was compared to test whether different organizational contextual variables 365
would affect TQM implementation and quality performance of a firm.
Analysis and findings

Table I presents the demographic profile of respondents. The response rate was
26.4 per cent, with 67 per cent (124 out of 185) companies claiming to have
implemented some form of TQM programs. This speaks well of TQM
acceptance in both service and manufacturing companies in Singapore.
The validity and reliability of the questionnaire was evaluated first.
Criterion-related validity evaluates the extent to which a measuring instrument
relates to an independent measure of the relevant criterion. For the combined
set of seven measures of quality management criterion related validity was
evaluated by examining the multiple correlation coefficients computed for the
seven measures and a measure of quality performance. The average of six
measures of quality performance forms a single composite measure of quality
Number of Percent of
respondents respondents
Nature of company
Services 74 40.0
Manufacturing 111 60.0
Number of employees
Less than or equal to 20 11 6.0
21-50 29 15.7
51-100 38 20.5
101-500 74 40.0
More than 500 33 17.8
TQM programs
With TQM 124 67.0
(large firms = 75, small firms = 49)
(manufacturing = 73, service = 51)
Without TQM 61 33.0
(manufacturing = 38, service = 23)
Years of implementing TQM
Less than 3 years 46 37.1
(manufacturing = 20, service = 26) Table I.
More than 3 years 78 62.9 Demographics of
(large firms = 52, small firms = 26) respondents of the
(manufacturing = 53, service = 25) survey
IJQRM performance. The multiple correlation coefficient of the quality performance
19,4 measure and the seven measures of quality management is 0.941. Hence, it can
be concluded that the seven measures of quality management have a high
degree of criterion-related validity when taken together.
Factor analysis was used to test construct validity. Treating each measure
as a separate construct, each factor was subjected to individual principal
366 components analysis. If each factor were valid as a construct, then its set of
variables would form a single factor once again. All seven factors of quality
management and five factors of quality performance were demonstrated to be
unifactorial. For product quality factor unifactorial test is not relevant because
it contains only a single variable. The single factors in each unifactorial test
accounts for more than 70 per cent of the variance of the respective variable
sets. This unifactorial nature of each factor is therefore a tentative measure of
construct validity. All but three KMO values are above meritorious 0.80
figures. Supplier performance has a middling value of 0.76, while KMO values
of 0.50 for customer satisfaction and employee satisfaction are rather poor, but
are still acceptable. Cronbach's alpha was used as a measure to test for
reliability for items of each factor, separately. All coefficient values are above
0.90, indicating very high reliability of scales.
Constructs of quality management

In order to identify the underlying structure in the 35 quality items, all the
items were forced into a seven-factor structure analysis using varimax rotation.
Nunnally recommends a factor loading of at least 0.30 as a guideline to
determine whether a variable is part of a factor. None of the factors were
discarded in the analysis because all factor loadings exceed 0.5. Next,
Nunnally's method is applied to evaluate the assignment of items to scales, by
considering the correlation of each item with each scale. All 35 items are
evaluated and they show high correlations with the original scales thus
justifying the appropriateness of the assignment to the scales. Table II presents
the factor loadings of the seven quality constructs.
Constructs of quality performance

The 16 items of quality performance were forced into a six-factor structure.
Once again, all factor loadings exceeded the cut-off point of 0.5. All 16 items
were then evaluated using Nunnally's method and they showed higher
correlations with scales of original assignment relative to all other scales.
Hence, it can be concluded that all items are appropriately assigned to scales.
Table III presents the factor loadings of the six quality performance constructs.
Results of hypotheses testing

H1 proposes a positive association between each quality construct and quality
performance. Table IV presents results of the tests of these hypotheses. The
partial correlations were derived by partialling out the effects of company size,
nature, and type. Table IV shows that corporate planning, process focus,
Factors Loadings TQM and
Singapore
Corporate planning
Our formulation of mission statement, policy, and strategy reflects total quality commitment 0.935
companies
When we develop our plans, policies, and objectives, we always incorporate customers'
requirements, suppliers' capabilities, and needs of other stakeholders, including the community 0.927
Our mission statement has been communicated throughout the company and is supported by
our employees 0.927 367
In our company, the responsibility of quality lies heavily on both top management and lower
level management 0.869
We are actively engaged in community services and environmental ``green'' protection 0.851
Role of top management leadership
Senior management actively encourages change and implements a culture of trust,
involvement, and commitment in moving towards ``Best Practice'' 0.928
Ideas from work teams are actively used in assisting management 0.915
Senior managers clearly identify quality goals for employees to achieve 0.910
People in our company are consistently rewarded for good suggestion and quality improvement 0.898
Senior management views quality as more important than cost and schedules objectives 0.878
Customer focus
We make commitments to customers through ongoing strengthening of policies, promises,
guarantees and/or warrantees 0.926
Customers' requirements are effectively disseminated and understood throughout our workforce 0.910
We compare customer satisfaction with both competitors and internal indicators 0.909
We use requirements of our external and internal customers in designing new products and services 0.903
Many of our changes were initiated because of customers' feedback/complaints 0.896
Human resource focus
Our company has effective ``top-down'' and ``bottom-up'' communication process 0.920
We provide training in quality principles, such as team building, problem solving, data
analysis, and statistical techniques 0.919
We use specific organizational structures like quality circles and cross-functional teams to
support quality improvement 0.918
Employees' suggestions are formally and regularly evaluated 0.908
Our line workers inspect their own work and are given the resources necessary to correct
quality problems they find 0.885
Process focus
We use a formal supplier rating system based upon their capabilities 0.914
We have a program to find wasted time and costs in all internal processes 0.905
We systematically conduct extensive benchmarking of other companies' business processes 0.893
We develop long-term relationships with few dependable suppliers 0.885
Our design teams involve other functional staff, customers, and suppliers 0.880
Quality focus
Our quality department is effective in training and solving advanced quality problems 0.911
Legal and regulatory requirements and risk factors are an integral part of performance
management and improvement of our products, services, and operations 0.905
Our plans focus on achievement of ``Best Practice'' 0.887
There is on-going coordination between our quality department and other departments 0.879
We view quality of new service/product as more important than reducing its costs 0.858
Information and analysis
We have formal procedures to ensure reliability, consistency, and improvement of quality data
gathering cycle 0.926
We frequently measure the product and process quality 0.925
Our decisions regarding quality improvement are always based on objective data 0.922
Various charts that portray SPC information, defect and breakdown rates, schedule compliance,
and plant productivity are posted on the shop floor as feedback for decision making and Table II.
problem solving 0.901 Factor loadings of
Employee satisfaction is formally and regularly measured 0.891 quality constructs
IJQRM Factors Loadings
19,4
Supplier performance
There is cooperation from our suppliers in resolving quality problems 0.964
The number of on time deliveries has increased 0.948
Performance of supplied parts has improved 0.937
368 Employee service quality
Our employees are able to meet changing customers' needs 0.945
Our employees are always there when customers needed them 0.939
Our employees perform the service right the first time 0.919
All of our employees are able to leave a good impression on customers 0.871
Product quality
The quality of our product in comparison to other products in the industry has
improved significantly 0.897
Employee satisfaction
There is less absenteeism among staff 0.961
There is lower staff turnover rate 0.961
Customer satisfaction
The number of customer complaints is lesser 0.951
The number of repeat customers has increased 0.951
Manufacturing/service process quality
Table III. Cost of quality (error, scrap, rework, and inspection) as a percent of total sales 0.943
Factor loadings of Delivery in full on time to customers 0.933
quality performance Defects as a percent of production/service volume 0.920
constructs Warranty claims cost as a percent of total sales 0.904
Quality performance
Quality constructs Zero-order r Partial r
Corporate planning 0.8198 0.4886

Role of top management leadership 0.8178 0.4829
Customer focus 0.8781 0.6319
Human resource focus 0.8494 0.6030
Process focus 0.8577 0.6022
Table IV. Quality focus 0.8637 0.6221
Relationship between Information and analysis 0.8896 0.6820
quality constructs and
quality performance Note: All correlations are significant at the 0.001 level
quality focus, and information and analysis are significantly correlated with
quality performance.
Many studies claim top management dedication to be crucial to success of
quality programs. The significant partial correlation between the role of top
management leadership and quality performance in Table IV provides
statistical evidence for this claim. There is an indication of significant partial
correlation in Table IV between customer focus and quality performance. Also,
the table shows significant partial correlations between human resource focus TQM and
and quality performance. From Table IV it is clear that behavioral factors (role Singapore
of top management leadership, human resource focus, customer focus, and companies
quality focus) as well as quality management tools and techniques (corporate
planning, process focus, and information and analysis) are essential to the
success of any quality program. This suggests that quality management relies
both on the ``softer'' concepts and quality management tools and techniques. 369
H2 proposes a direct relationship between corporate planning and the role of
top management leadership. This hypothesis was tested using the bivariate
correlations for the seven independent variables. Table V shows a significant
correlation coefficient at 0.01 levels indicating a significant link between
corporate planning and role of top management leadership.
H3 proposes a relationship between role of top management leadership and
the rest of the five quality attributes. The correlation coefficients were
statistically significant at the 0.01 level, indicating a definite relationship
between role of top management leadership and customer focus, human
resource focus, process focus, information and analysis, and quality focus.
Table V clearly shows a significant multicollinearity suggesting firms
advanced in the practice of some factors generally tend to be advanced on
others.
H4 proposes a positive relationship between quality performance and
customer satisfaction. Table VI presents the results of the test of the hypothesis
using Pearson's Correlation. The correlation coefficients are close to 1,
indicating a strong positive relationship between quality performance and
customer satisfaction. Similarly, H5 hypothesizes a positive relationship
between quality performance and employee satisfaction, which is confirmed by
the strong positive relationship as shown in Table VI.
a b c d e f g
a 1.000
b 0.864 1.000
c 0.840 0.818 1.000
d 0.824 0.853 0.818 1.000
e 0.802 0.785 0.814 0.841 1.000
f 0.804 0.828 0.819 0.855 0.847 1.000 Table V.
g 0.828 0.821 0.857 0.849 0.863 0.908 1.000 Correlation matrix of
the quality construct
Note: All correlations are significant at the 0.01 level factor scores
Quality performance Table VI.

Pearson's correlation p-value Customer satisfaction,
employee satisfaction
Customer satisfaction 0.822 0.000 and quality
Employee satisfaction 0.823 0.000 performance
IJQRM H6 proposes an association between employee satisfaction and customer
19,4 satisfaction. Table VII presents the results of hypothesis testing using partial
correlations. The zero order partials and the partial correlations reveal a
significant correlation coefficient at 0.001 levels. The p-value indicates a
significant relationship between employee satisfaction and customer
satisfaction, while controlling for the effects of other quality performance
370 constructs.
H7 hypothesizes that manufacturing firms have a different focus in quality
management than service firms. For each of the constructs, the mean score,
standard deviation, and the p-value for the hypothesis test using a t-test are
summarized in Table VIII. The p-values indicate that there is no statistically
significant difference on the focus in quality management between
manufacturing and service sectors. It appears that both sectors are implementing
quality management with the same rigor even though quality management had
an early influence on the manufacturing sector. This finding is in contrast to that
of Benson et al. (1991). Table VIII also shows there is no statistical difference in
the quality performance of manufacturing and service firms.
Employee satisfaction
Zero order Partial
partials p-value correlations p-value
Table VII. Customer satisfaction 0.7978 0.000 0.2385 0.001

Relationship between Employee service quality 0.8062 0.000
employee satisfaction Manufacturing/service process quality 0.7843 0.000
and customer Supplier performance 0.8148 0.000
satisfaction Product quality 0.7992 0.000
Services Manufacturing
Factors Mean SD Mean SD p-value
Quality constructs
Corporate planning 4.0946 0.6858 4.1532 0.7160 0.580
Role of top management leadership 4.0000 0.7215 4.0360 0.7377 0.743
Customer focus 4.0405 0.6504 4.1171 0.6707 0.442
Human resource focus 4.0000 0.7022 3.9910 0.7567 0.935
Process focus 3.8919 0.6938 4.0000 0.7261 0.314
Quality focus 3.9595 0.7108 4.0360 0.7126 0.474
Information and analysis 3.9324 0.7087 4.0631 0.7043 0.219
Performance constructs
Supplier performance 3.9730 0.6819 4.0811 0.7152 0.306
Employee service quality 4.0541 0.7001 4.1351 0.6940 0.439
Table VIII. Product quality 3.9700 0.7400 4.1200 0.7100 0.185
Differences between Employee satisfaction 3.9459 0.7001 4.1081 0.7429 0.138
services and Customer satisfaction 4.0676 0.6689 4.1171 0.6973 0.631
manufacturing firms Manufacturing/service process quality 4.1622 0.7768 4.2252 0.7590 0.584
H8 proposes that large firms execute each of the seven quality constructs more TQM and
rigorously than small firms because of resources availability and other Singapore
advantages that came with the sheer size of a large firm. For each attribute, the companies
mean score, standard deviation, and the p-value for the hypothesis test using a
t-test are summarized in Table IX. The p-values indicate significant statistical
differences in the implementation of all the quality constructs between large
and small firms. Large firms have higher mean scores than small firms, 371
suggesting that large firms have a more positive attitude towards quality
management.
H9 predicts that, as a result of better implementation of the quality
constructs, large firms achieve higher level of quality performance compared to
small firms. This hypothesis is supported by the study as shown in Table IX.
The p-values indicate significant statistical differences in the quality
performance between large and small firms. These results are in contrast with
that of Ahire and Golhar (1996), who find that small firms could also utilize
their relative strengths to implement quality constructs as effectively as large
firms and benefit from a resultant high product quality. This contrast may be
due to the lower cut-off point for the size of small firms in the present study.
H10 proposes that large TQM firms execute each of the seven quality
constructs more rigorously than large non-TQM firms. Table X presents
results of these hypotheses using t-tests. The p-values in Table X indicate
significant statistical differences in the implementation of quality management
strategies between large TQM and large non-TQM firms suggesting that large
TQM firms implement the quality constructs more rigorously than large non-
TQM firms. The higher mean scores also show that large TQM firms embrace
a more positive attitude towards adopting quality practices.
Small Large
Quality constructs
Customer focus 3.6234 0.5390 4.4167 0.5317 0.000
Process focus 3.4935 0.5531 4.2870 0.6273 0.000
Quality focus 3.5455 0.5512 4.3333 0.6265 0.000
Product quality 3.6600 0.6800 4.3400 0.6100 0.000 Table IX.
Employee satisfaction 3.7013 0.7267 4.2870 0.6273 0.000 Quality management
Customer satisfaction 3.7143 0.6660 4.3704 0.5569 0.000 differences between
Manufacturing/service process quality 3.8052 0.8435 4.4815 0.5550 0.000 small and large firms
IJQRM TQM firms Non-TQM firms
19,4 Factors Mean SD Mean SD p-value
Quality constructs
Customer focus 4.6053 0.5184 3.9688 0.1768 0.000
372 Human resource focus 4.5658 0.4989 3.7188 0.4568 0.000
Process focus 4.5395 0.5018 3.6875 0.4709 0.000
Quality focus 4.5921 0.4947 3.7188 0.4568 0.000
Table X. Product quality 4.5700 0.5500 3.8100 0.4000 0.000
large TQM and Customer satisfaction 4.5789 0.4970 3.8750 0.3360 0.000
non-TQM firms Manufacturing/service process quality 4.7237 0.4501 3.9063 0.2961 0.000
H11 predicts that, as a result of better implementation of quality constructs,

large TQM firms achieve higher level of quality performance compared to large
non-TQM firms. Given that large TQM firms implement the quality constructs
more rigorously than large non-TQM firms, as verified earlier, it can be
expected that they will also achieve higher quality performances. The p-values
in Table X show this to be significant at 0.005 levels.
H12 proposes that small TQM firms execute each of the seven quality
constructs more rigorously than small non-TQM firms. Table XI presents
results of these hypotheses using t-tests. The p-values in the Table indicate
TQM firms Non-TQM firms

Quality constructs
Customer focus 4.0000 0.2917 3.0000 0.0000 0.000
Process focus 3.8125 0.4451 2.9655 0.1857 0.000
Quality focus 3.8542 0.4608 3.0345 0.1857 0.000
Table XI. Product quality 4.0400 0.5800 3.0300 0.1900 0.000
small TQM and Customer satisfaction 4.1042 0.5153 3.0690 0.2579 0.000
non-TQM firms Manufacturing/service process quality 4.2917 0.6829 3.0000 0.2673 0.000
significant statistical differences between how small TQM and small non-TQM TQM and
firms implement quality management strategies. The results suggest that Singapore
small TQM firms implement the quality constructs more rigorously than small companies
non-TQM firms. The mean scores are higher for small TQM firms, suggesting
that they are more receptive towards embracing quality practices.
H13 predicts that, as a result of better implementation of quality constructs,
small TQM firms achieve a higher level of quality performance compared to 373
small non-TQM firms. The p-values indicate significant statistical differences
in the quality performance between small TQM and non-TQM firms. This
finding contrasts with that of Newman (1988), who argues that small firms lack
clout with suppliers resulting in reduced ability to dictate the quality of
incoming materials, regardless of their adoption of TQM.
H14 proposes that large firms with high quality performance execute the
quality constructs differently compared to small firms with high quality
performance. Firms with high quality performance are defined as those with a
score of 4 or 5 (on a five-point Likert scale) for quality performance. Table XII
presents verification of this hypothesis through t-test. The p-values indicate
statistically significant differences in quality management between large and
small firms, both with high quality performances. This is in contrast with
Ahire and Golhar (1996), who only observed statistically significant differences
in areas of design quality management, SPC usage, and employee involvement.
H15 hypothesizes that experienced TQM firms implement each element of
TQM more rigorously than the less experienced TQM firms. Firms with more
than three years TQM experience are considered to be experienced. Table XIII
presents the results of hypotheses testing using t-test. The table highlights the
mean score, standard deviation, and the p-value for each attribute. The
p-values indicate statistically significant differences between experienced
firms and less experienced firms. The findings suggest that experienced TQM
firms implement the quality constructs more rigorously than firms
implementing TQM for a shorter time period. This result is in contrast to
Ahire (1996).
H16 predicts experienced TQM firms to have higher quality performance
than less experienced TQM firms. Table XIII shows the mean scores, standard
Large firms Small firms

Quality constructs
Customer focus 4.4286 0.5345 4.0476 0.2155 0.000 Table XII.
Human resource focus 4.3333 0.6150 4.0000 0.4417 0.002 Differences between
Process focus 4.3143 0.6094 3.8810 0.3952 0.000 large and small firms,
Quality focus 4.3714 0.5925 3.9286 0.4068 0.000 both with high quality
Information and analysis 4.3905 0.5632 3.9286 0.4068 0.000 performances
IJQRM Experienced TQM Less experienced
19,4 firms TQM firms
Quality constructs
374 Customer focus 4.6154 0.4897 3.9565 0.2949 0.000
Process focus 4.5385 0.5017 3.7826 0.4170 0.000
Quality focus 4.5897 0.4951 3.8261 0.4374 0.000
Table XIII. Employee service quality 4.6923 0.4645 3.9348 0.3267 0.000
Differences in quality Product quality 4.6500 0.4800 3.8700 0.5000 0.000
management between Employee satisfaction 4.6538 0.4788 3.9130 0.2849 0.000
experienced and less Customer satisfaction 4.6410 0.4828 3.9783 0.3938 0.000
experienced TQM firms Manufacturing/service process quality 4.8846 0.3216 4.0000 0.5164 0.000
deviations, and p-values of the t-test. The p-values indicate statistically

significant differences between experienced and less experienced TQM firms in
terms of quality performance measures. This implies that the length of TQM
adoption is an important factor affecting quality performance.
Limitations of study
The available data of 185 samples of all firms and 124 samples of all TQM
firms may not be sufficiently large. Even though the data are adequate for
statistical analysis and the sample statistics strongly support the integrity of
the sample, caution must be exercised in generalizing the findings from the
associated hypothesis tests.
Another limitation of this study is potential for self-reporting bias. This is a
common problem when collecting data from managers about their
organizations, and specifically about managerial issues closely concerning
them. Multiple responses from each firm will help reduce this bias. However, it
is difficult to identify respondents with the appropriate functional background
and management level with knowledge about both the quality practices and
quality performance of the company.
As with any statistical analysis, the existence of a significant correlation
between quality constructs and quality performance does not establish that
TQM causes an improvement in quality performance. High performance may
give rise to quality programs, or both TQM and quality performance may be
the result of a third factor. Use of other known explanatory variables of quality
performance from past literature such as company nature, company size,
company type, and length of TQM adoption add additional support for the
empirical conclusions.
Directions for future research TQM and
We propose two further streams of research for a more rigorous test of causal Singapore
relationship between the quality constructs and quality performance. companies
The first stream of research consisting of a set of structured longitudinal
studies, using statistically credible samples and multi-variate methods, may
measure changes in quality performance before and after the implementation of
a quality program in a company across a three- to five-year period, examining 375
the relationships and their development through time. This may reveal the
short-term and long-term effects of a TQM program and prepare managers for
what to expect from their TQM programs.
The second stream of research can consist of in-depth case studies to
document the impact of TQM constructs and improvement initiatives on these
factors, in order to determine how these initiatives lead to performance
changes. Also, structured interview processes can assist in investigating how
other systematic factors relate to performance changes apart from those
presently measured by the seven quality constructs, which might lead to
improvement in the definition of the quality measures.
In addition, we can use other methodologies and measures of performance to
estimate the economic impact of implementing effective TQM programs. For
example, we can test the long-term stock price performance of quality-award
winners to see whether the results of stock price performance are consistent
with the results of quality performance based on accounting numbers.
Focusing on quality-award winners can help identify best or effective quality
management practices.
Summary of findings
This study finds support for the proposed quality framework of Figure 1.
Table XIV presents a summary of the findings. The study provides a useful
starting point for organizational self-assessment and evaluation of TQM
implementation. The proposed quality framework, as measured by the survey
instruments, identifies seven dimensions of successful quality management
implementation, namely, corporate planning, role of top management
leadership, customer focus, human resource focus, process focus, quality focus,
and information and analysis. These factors relate to perceptions of quality
performance, employee satisfaction and customer satisfaction. All seven
quality constructs are found to correlate with quality performance, regardless
of the nature, size, and type of the company. The key to successful quality
management appears to lie in the behavioral factors of the role of top
management leadership, customer focus, human resource focus, and quality
focus, as well as the tangible quality management tools and techniques of
corporate planning, process focus, and information and analysis.
The study finds that the nature of the company, whether manufacturing or
services, does not affect the rigor of quality management implementation and
the resulting level of quality performance. It shows that the TQM paradigm
applies to all enterprises, as quality management addresses the needs of both
IJQRM Support at
19,4 Study objectives Hypotheses p < 0.01
Developing a quality H1 Quality performance is positively associated with

framework each of the seven quality constructs oÆ
H2 Corporate planning is directly related to the role of
top management leadership oÆ
376 H3 The role of top management leadership is directly
related to customer focus, human resource focus,
process focus, quality focus, and information and
analysis oÆ
H4 Quality performance is positively related to
customer satisfaction oÆ
H5 Quality performance is positively related to
employee satisfaction oÆ
H6 Employee satisfaction is associated with customer
satisfaction oÆ
TQM and company H7 The focus on quality management by
nature manufacturing firms is different from that of
service firms oÆ
TQM and company H8 Large firms execute each of the seven quality
size constructs more rigorously than small firms oÆ
H9 Large firms perform better in each of the six
measures of quality performance than small firms oÆ
TQM versus H10 Large TQM firms execute each of the seven
non-TQM quality constructs more rigorously than large
non-TQM firms oÆ
H11 Large TQM firms perform better in each of the six
measures of quality performance than large
non-TQM firms oÆ
H12 Small TQM firms execute each of the seven
quality constructs more rigorously than small
non-TQM firms oÆ
H13 Small TQM firms perform better in each of the six oÆ
measures of quality performance than small non-
TQM firms
H14 Large firms with high quality performance execute
each of the seven quality constructs differently
than do small firms with high quality performance oÆ
Years of TQM H15 Experienced TQM firms execute each of the seven
adoption and quality constructs more rigorously than less
quality performance experienced TQM firms oÆ
Table XIV. H16 Experienced TQM firms perform better in each of
Summary of results of the six measures of quality performance than less
hypotheses experienced TQM firms oÆ
manufacturing and services. Perhaps, it seems logical to assume that if

manufacturing companies can make substantial improvements, services
should be able to enjoy success by utilizing similar techniques. Basically, the
factor sparking the quality revolution in manufacturing ± an increase in
international competition ± is becoming increasingly prevalent to services.
However, while we can borrow many concepts and techniques from TQM and
manufacturing, the unique characteristics of services ± intangibility, Singapore
heterogeneity, and inseparability ± present special challenges to quality companies
improvement and therefore, require special attention.
Customer focus is clearly important to both manufacturing and service
sectors. However, defining customer needs is more complex in services than
manufacturing because of the involvement of customers in the production 377
process. Many dimensions of service quality, such as the impact of physical
facilities and interactions with personnel, might be irrelevant in manufacturing.
The study finds that the size of the company and the adoption of TQM are
two factors that correlate significantly with a more rigorous quality
management implementation and a higher level of quality performance.
Analysis shows that the length of implementation of TQM program affects
quality performance. Perhaps this may be because of significant differences
between experienced TQM and less experienced TQM firms in terms of the
rigor of their quality management implementation.
Another finding of this study is that the concepts of quality management are
generally applied more in large companies than in small companies. As a
result, larger firms achieve better quality performance compared to smaller
firms. Therefore, it is important that management of small firms make an effort
to learn about TQM in order to apply it in their businesses through
benchmarking, self-assessment, networking, and the like. It may be easier for
small firms to implement certain quality initiatives, such as effective
communication between departments, than their large company counterparts.
This is because personalities, organizational culture, and business systems are
more often than not closely integrated and small firms tend to be more flexible
in their operating and informal structures. As such, TQM should not be
branded as a competitive strategy only for large firms. To implement the
quality constructs at least as effectively as their large counterparts, small firms
should capitalize on their relative strengths in employee involvement and
participation.
This study shows that TQM firms do implement quality management better
than their non-TQM counterparts. As a result, they are able to achieve a higher
level of quality performance. This leads to the conclusion that TQM
implementation in either large or small firms represents a good strategy to
execute quality management practices in an integrated manner. Hence, by
launching a TQM campaign, it appears that a firm can achieve high quality
performance by executing the seven quality constructs to their fullest extent.
These findings have many important implications for TQM research and
practice. It further supports the argument that TQM is a long-term campaign
requiring a significant input of financial, technical, and human resource
investments over several years before payoffs from TQM can be realized. The
success of TQM depends on many variables, controllable and uncontrollable,
many of which are specific to the company's culture, customers, capabilities,
and infrastructure. Therefore, a firm should tailor the generic quality
IJQRM management methodology to exploit its unique strengths and focus on its
19,4 particular weaknesses.
The key to successful quality management lies in the intangible factors and
the TQM tools and techniques. It is necessary to have a suitable culture in place
to promote the role of top management leadership, customer focus, human
resource focus, and quality focus. Indeed, a successful implementation of TQM
378 is a major organizational change and a long-term paradigm shift, which in turn,
changes how people work together in an organization.
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effect on the role of top management leadership by defining the mission,

Hypotheses 1 through 6 are based on the proposed quality framework of Figure

Analysis and findings

Constructs of quality management

Constructs of quality performance

Results of hypotheses testing

Corporate planning 0.8198 0.4886

Quality performance Table VI.

Table VII. Customer satisfaction 0.7978 0.000 0.2385 0.001

H11 predicts that, as a result of better implementation of quality constructs,

TQM firms Non-TQM firms

Large firms Small firms

deviations, and p-values of the t-test. The p-values indicate statistically

Developing a quality H1 Quality performance is positively associated with

manufacturing and services. Perhaps, it seems logical to assume that if

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