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Quality
Quality management practices management
and their impact on performance practices
Lassâad Lakhal
Faculté de Droit et des Sciences Economiques et Politiques de Sousse-Tunisia, 625
Sousse, Tunisia
Federico Pasin Received September 2004
Revised April 2005
HEC Montreal, Canada, and
Mohamed Limam
ISG Tunis, Tunisia
Abstract
Purpose – This paper aims to explore the relationship between quality management practices and
their impact on performance.
Design/methodology/approach – First, critical quality management practices are identified and
classified in three main categories: management, infrastructure, and core practices. Then, a model
linking these practices and performance is proposed and empirically tested. The empirical data were
obtained from a survey of 133 Tunisian companies from the plastic transforming sector.
Findings – The results reveal a positive relationship between quality management practices and
organizational performance. Moreover, the findings show a significant relationship between
management and infrastructure practices. In addition, the results illustrate a direct effect of
infrastructure practices on operational performance and of core practices on product quality.
Research limitations/implications – The conceptual model proposed and tested in this study can
be used by researchers for developing quality management theory. In addition, this model may offer a
flow chart to practitioners for effective quality management implementation.
Originality/value – The proposed model is the first one to distinguish the direct effects of
infrastructure practices on performance from the indirect effects of these practices through the core
practices. Besides, the use of path analysis method to study the direct and indirect relationships
between quality management practices and their effect on performance dimensions.
Keywords Quality management, Performance measurement (quality), Modelling
Paper type Research paper
1. Introduction
Quality gurus have put forth several approaches to improve company performance.
These approaches are embodied in a set of quality management practices, known as
total quality management (TQM). Several authors have attempted to clarify the
concept of TQM (Dean and Bowen, 1994; Dean and Evans, 1994; Hackman and
Wageman, 1995). TQM is generally described as a collective, interlinked system of
quality management practices that is associated with organizational performance
(GAO, 1991; Tornow and Wiley, 1991; Waldman, 1994; Madu et al., 1995).
In this respect, several studies have attempted to identify the key quality management International Journal of Quality &
practices on which the success of a TQM process is based (Saraph et al., 1989; Flynn et al., Reliability Management
Vol. 23 No. 6, 2006
1994; Ahire et al., 1996). However, these studies have not considered possible pp. 625-646
q Emerald Group Publishing Limited
interaction between practices. Recent studies, especially those of Cua et al. (2001), 0265-671X
Sousa and Voss (2002) and Kaynak (2003), underline the importance of causal relations DOI 10.1108/02656710610672461
IJQRM between quality management practices. Furthermore, many authors (Anderson et al.,
1995; Flynn et al., 1995a; Mohrman et al., 1995; Choi and Eboch, 1998; Terziovski and
23,6 Samson, 1999; Cua et al., 2001; Douglas and Judge, 2001; Kaynak, 2003) suggested a
positive association between TQM practices and organizational performance. However,
conflicting reports have been published regarding the effectiveness of TQM programs.
For instance, Rategan (1992) reported a 90 percent improvement rate in employee
626 relations, operating procedures, customer satisfaction, and financial performance,
whereas Burrows (1992) reported a 95 percent failure rate for initiated TQM programs.
Authors diverge in the way they perceive the links between quality management practices
and performance. Some authors think that there is a hierarchy in the quality management
practices and that infrastructure practices may only have a positive effect on performance
if core practices have also been established (Flynn et al., 1995a; Anderson et al., 1995). In
opposition, other authors (Powell, 1995; Dow et al., 1999; Samson and Terziovski, 1999)
have suggested that each practice can improve performance even without the core
practices.
As we just seen, many important questions have recently been raised in the field of
quality management theory. In our study, we have focused on the three following
research questions:
(1) Which quality management practices are critical?
(2) How different quality management practices are related?
(3) What is the nature of the relationship between quality management practices
and performance?
In this paper, we propose and empirically test a conceptual model that links different
quality management practices and performance. The definitions of TQM and
performance retained in this study are consistent with those adopted by Hendricks and
Singhal (1996, 1997), Easton and Jarrell (1998) and Douglas and Judge (2001). Note that
we operationalisze TQM as a multidimensional construct, in contrast to the studies
mentioned above, which all use a single construct. Performance will here be defined in
relation to the quality of the organization’s results. Moreover, performance will be
considered as a multidimensional construct.
2. Theoretical background
2.1 Quality management practices
Quality management practices have been investigated extensively (Saraph et al., 1989;
Flynn et al., 1994; Waldman, 1994; Powell, 1995; Ahire et al., 1996; Anderson and Sohal,
1999; Najmi and Kehoe, 2000; Zhang et al., 2000; Sun, 2001; Sila and Ebrahimpour,
2002; Kaynak, 2003). Although a plethora of practices have been described, similarities
among practices can be discerned. To generate distinct generic practices, we first
defined a list of all the practices proposed in a large set of articles. We then took each
practice, one at the time, analyzing it and questioning ourselves whether it was
different or similar to the practices previously analyzed. This process resulted with the
ten following distinct generic practices: top management commitment and support,
organization for quality, employee training, employee participation, supplier quality
management, customer focus, continuous support, improvement of quality system,
information and analysis, and statistical quality techniques use. Table I presents, for
each generic practice, a list of similar practices proposed by other authors. This list
Quality
Practice Related practices
management
Top management commitment Top management commitment (Ahire et al., 1996; Powell, 1995; practices
and support Tamimi, 1998), top management team involvement (Douglas and
Judge, 2001), leadership (Anderson and Sohal, 1999; Sun, 2001;
Zhang et al., 2000)
Organization for quality Quality management design (Ahire et al., 1996), open organization 627
(Powell, 1995), cross-functional teams (LaHay and Noble, 1998),
control and improvement of processes (Zhang et al., 2000)
Employee training Training (Saraph et al., 1989), education and/or training
(Ahire et al., 1996; Kannan et al., 1999; Powell, 1995; Tamimi, 1998;
Zhang et al., 2000), emphasis on TQM-oriented training
(Douglas and Judge, 2001)
Employee participation Participation (Zhang et al., 2000), delegation (Ahire et al., 1996;
Powell, 1995), employee involvement (Ahire et al., 1996), employee
relations (Saraph et al., 1989)
Supplier quality management Supplier quality management (Ahire et al., 1996; Saraph et al., 1989;
Zhang et al., 2000), supplier management (Tamimi, 1998),
suppliers (Najmi and Kehoe, 2000; Sun, 2001), supplier relations
(Forza and Filippini, 1998; Powell 1995)
Customer focus Customer focus (Ahire et al., 1996; Anderson and Sohal, 1999;
LaHay and Noble, 1998; Zhang et al., 2000), strong relations with
customers (Powell, 1995), customer satisfaction (Forza and
Filippini, 1998), customer driven (Douglas and Judge, 2001)
Continuous support Continuous improvement (Douglas and Judge, 2001), recognition
and rewards (Zhang et al., 2000)
Quality system improvement Quality system improvement (Zhang et al., 2000)
Information and analysis Information and analysis (Anderson and Sohal, 1999; Choi and
Eboch, 1998), information (Sun, 2001), information flow (Kannan
et al., 1999), quality information system (Najmi and Kehoe, 2000),
process measurement (LaHay and Noble, 1998), use of internal
information on quality (Ahire et al., 1996), Quality data
(Saraph et al., 1989), measurement of quality (Powell, 1995),
benchmarking (Ahire et al., 1996; Powell, 1995) Table I.
Statistical quality techniques Use of statistical procedure (Ahire et al., 1996), total quality Links between practices
use methods (Douglas and Judge, 2001) retained and literature
illustrates the foundations of our generic practices, and has strongly inspired the
definition of items that will operationalize each practice. Table I also establishes links
between practices examined in our research and those described in other studies.
Appendix 1 displays the specific scales and the 43 items used in our study to measure
the quality management practices.
After selecting ten generic practices, we grouped them into three main categories
following the classification of Flynn et al. (1995a), Pannirselvam and Ferguson (2001)
and Sousa and Voss (2002), namely:
(1) management practice: issued from the top management;
(2) infrastructure practices: intended to support core practices; and
(3) core practices: based on tools and techniques specifically related to quality.
IJQRM This classification constitutes the basis of our model, and highlights the links between
23,6 quality management practices and firm performance. Table II presents the
classification of practices into each of the three categories.
3.2 Hypotheses
The selected hypotheses stem directly from the model. More precisely, we have defined
a hypothesis for each link that appears in the model. These links symbolize a direct
relation between two elements of the model.
H1. Management practice is directly related to infrastructure practices.
The effect of management practice on the various components of infrastructure
practices were highlighted in the management literature. For instance, Adam et al. (1997)
show through their research that leadership has a significant impact on training.
629
Figure 1.
Relations between
management practice,
infrastructure practices,
core practices and
performance
4. Research methodology
In this section we explain the methodology used to collect the data. We also draw the
statistical techniques used to test the research framework, the identification of critical
quality management practices and the construct validity of the measurement instrument.
Feedback from the pilot study was used to clarify some questions. Based on the
feedback, some items in a few scales were dropped or added. In addition, to confirm
that the main aspects of quality management practices were covered, the draft
High 28
Medium 64
Low 41 Table III.
Total 133 Company classification
IJQRM questionnaire was reviewed by academicians and practitioners experts. Finally,
23,6 because of their familiarity with both quality management practices and performance,
general managers were considered as the most appropriate respondents.
Face-to-face interview was the method used to collect the data from each company’s
respondent. The availability of the research team helped clarify any ambiguity
concerning definitions or issues related to the survey instrument.
632
4.2 Statistical techniques
The causal relations shown in Figure 1 will be tested by means of the path analysis
method. Path analysis is a multivariate analytical methodology for empirically
examining sets of relationships represented in the form of a linear causal model
(Duncan, 1966; Li, 1975). Mathematically, path analysis decomposes empirical
correlations or covariances among measured variables to estimate the path coefficients
in a path diagram (Neumann, 1978). Path analysis use simple bivariate correlations to
estimate causal relations in a structural equation system (Hair et al., 1998).
One advantage of path analysis over conventional regression analyses is the ability
to extend the single-multiple-regression-equation treatment to a network of equations
involving more than one equation (Li, 1975). In addition, this method can differentiate
direct and indirect effects (Duncan, 1966; Pannirselvam and Ferguson, 2001).
Unlike the studies carried on by Fynes and Voss (2002) and Kaynak (2003), the
unidimensionality analysis was performed on the basis of a principal component
analysis of each of the seven practices. The results of this analysis reveal that the
items, for each practice, allow the extraction of a single factor. The unidimensionality
of the measurement scale is therefore confirmed.
The reliability analysis was performed based on Joreskog’s r of internal
consistency (Jöreskog et al., 1999). The convergent validity analysis was verified
according to Fornell and Larcker (1981) approach. Table V illustrates the results of
these analyses.
The results confirm the reliability of the quality management practices retained.
Specifically, Jöreskog’s r are all higher than the threshold of (0,8), with the exception of
the r representing the “employee training” practice, which is nonetheless very close to
that level (0, 78). Moreover, Table V illustrates good convergent validity. All factor
loadings are greater than the threshold of (0, 6). Moreover, the r of convergent validity
exceeds the threshold of 50 percent for all measurement scales, except “employee
training”.
To examine the discriminant validity, the Chi-squares of the constrained and
unconstrained models were compared (Anderson and Gerbing, 1988). Significantly
lower Chi-squares for the unconstrained model would indicate that each correlation
between pairs is less than 1.0 (Bagozzi et al., 1991), and that the constructs are
empirically distinct, rendering support for the discriminant validity of the constructs.
In our case, the Chi-squares (x 2) of the unconstrained model (x 2 ¼ 410.15; df ¼ 231)
was significantly lower than the Chi-squares of the constrained model (x 2 ¼ 963.85;
df ¼ 252). Given the differential of 21 degrees of freedom (Ddf ¼ 252 2 231 ¼ 21) and
a type 1 risk of 1 percent, the tabulated value of the Chi-squares is 39.932. As the
difference in Chi-squares (Dx 2 ¼ 963.85 2 410.15 ¼ 553.7) largely exceeds the
tabulated value, the discriminant validity is confirmed.
636
IJQRM
Table VI.
Structural model analysis
Independent Variable Dependent variable Direct effect Indirect effect Total effect
Top management commitment and support Organization for quality 0.52 * * 0.00 0.52 * *
Top management commitment and support Employee training 0.43 * * 0.00 0.43 * *
Top management commitment and support Employee participation 0.74 * * 0.00 0.74 * *
Top management commitment and support Customer focus 0.31 * * 0.00 0.31 * *
Top management commitment and support Information and analysis 0.00 0.57 * * 0.57 * *
Top management commitment and support Quality system improvement 0.00 0.59 * * 0.59 * *
Top management commitment and support Financial performance 0.00 0.30 * * 0.30 * *
Top management commitment and support Product quality 0.00 0.40 * * 0.40 * *
Top management commitment and support Operational performance 0.00 0.42 * * 0.42 * *
Organization for quality Information and analysis 0.46 * * 0.00 0.46 * *
Employee training Information and analysis 0.36 * * 0.00 0.36 * *
Employee participation Information and analysis 0.27 * * 0.00 0.27 * *
Customer focus Information and analysis 2 0.06ns 0.00 2 0.06ns
Organization for quality Quality system improvement 2 0.007ns 0.00 2 0.007ns
Employee training Quality system improvement 0.41 * * 0.00 0.41 * *
Employee participation Quality system improvement 0.44 * * 0.00 0.44 * *
Customer focus Quality system improvement 0.31 * * 0.00 0.31 * *
Organization for quality Financial performance 0.19 * 0.22 * 0.41 * *
Organization for quality Product quality 0.00 0.15 * 0.15 *
Organization for quality Operational performance 0.68 * * 0.26 * * 0.94 * *
(continued)
Independent Variable Dependent variable Direct effect Indirect effect Total effect
637
Table VI.
IJQRM financial performance. “Employee training” and “employee participation” practices are
23,6 not significantly linked to financial performance. In this sense, the fourth hypothesis is
partly confirmed.
Moreover, the practices: “organization for quality” “employee training” and
“employee participation” have a significant indirect effect ( p-value , 0.05) on
financial performance via core practices. Overall, we can assert that the infrastructure
638 practices have a notable indirect effect on financial performance.
“Information and analysis” practice have a statistically significant direct effect
( p-value , 0.01) on both operational and financial performance. In contrast, the
“quality system improvement” practice does not have a significant direct effect neither
on operational nor on financial performance. This implies that the fifth and sixth
hypotheses are partly confirmed.
The “information and analysis” and the “quality system improvement” practices
have a statistically significant direct effect ( p-value , 0.01) on product quality. This
implies that the seventh hypothesis is confirmed.
Lastly, note that some relations, which were not covered by the hypotheses, were
highlighted during the analysis. This is the case of the indirect effects of the practice
“top management commitment and support” on the practices “information and
analysis” “quality system improvement” and “product quality” and on operational and
financial performance. It is also the case of indirect effect between the infrastructure
practices (except for the “customer focus” practice) and product quality.
6. Discussion
6.1 Discussion of results
In this study we have provided empirical evidence that quality management practices
have a positive impact on organizational performance. This result corroborates the studies
of Douglas and Judge (2001), Easton and Jarrell (1998) and Hendricks and Singhal (1996,
1997). Note that all of these studies operationalize TQM as a single construct, in contrast
with our study, which operationalizes it as a multiple construct. Our approach is therefore
inspired by Palich et al. (2000), who underscored the importance of obtaining consistent
results among multiple studies that use different methodologies.
Besides, the results highlight the crucial role played by top management
commitment and support. Specifically, the management practice has a statistically
significant direct and indirect link with all the other practices of our model. These
conclusions corroborate previous studies by Adam et al. (1997), Ahire et al. (1996),
Ahire and O’Shaughnessy (1998), Flynn et al. (1995a) Pannirselvam and Ferguson
(2001) and Wilson and Collier (2000).
Moreover, the results of our empirical study clarify the relative importance and the
interplay between infrastructure, core practices and organizational performance. These
findings notably show that infrastructure practices have a statistically significant
direct effect on operational performance. These results support the ones of Powell
(1995), Dow et al. (1999) and Samson and Terziovski (1999).
The findings also illustrate that infrastructure practices act on product quality and on
operational and financial performance by means of core practices, in that the indirect
effect of infrastructure practices on performance dimensions is statistically significant.
These results are consistent with the empirical studies of Flynn et al. (1995a), Anderson
et al. (1995), Pannirselvam and Ferguson (2001) and Kaynak (2003). In addition, the
results clarify the direct and significant effect of core practices on product quality. They
also reveal that the core practice “information and analysis” is the only one that has a Quality
direct and significant effect on both operational and financial performance.
Besides, the results also support the interdependence between quality management
management
practices. This finding is in line with the studies of Flynn et al. (1995a), Anderson et al. practices
(1995), Pannirselvam and Ferguson (2001) and Kaynak (2003).
From a manager’s point of view, the empirically validated positive effects of quality
management practices on organizational performance is encouraging for those who 639
take the initiative to implement TQM. Besides, the measurement instrument developed
and validated empirically in this paper can be used by managers to evaluate their TQM
implementation and to target improvement areas.
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Further reading
Nunnally, J.C. (1978), Psychometric Theory, McGraw-Hill, New York, NY.
with, TMCS: Top management commitment and support, OFQ: Organization for quality, ET:
Employee training, EP: Employee participation, CF: Customer focus, IA: Information and
analysis, QSI: Quality system improvement, FP: Financial performance, PQ: Product quality, OP:
Operational performance, pij ¼ Path coefficient, ei ¼ Errors outside the model
Several points of the model are worth noting:
All paths are included in the figure. There is no return path. Our model is thus recursive.
The only exogenous variable is top management commitment and support.
The conceptual model is made up of nine endogenous variables. Each endogenous
variable is explained by one or more variables plus an error term. One endogenous
variable can influence another endogenous variable.
The first variable is not explained by any other variable in the model.
In the path analysis approach “e” refers to “lost causes” or “causes outside the model.”
Linear relations between the variables are additive.
Each variable is taken to be in standard form; that is, if Vi is the ith variable as measured,
svi : The same convention holds for the residuals.
then X i ¼ ðV i 2 VÞ=
Corresponding author
Lassâad Lakhal can be contacted at: lassaad_lakhal@yahoo.com