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International Journal of Quality & Reliability Management

Quality management practices and their impact on performance
Lassâad Lakhal Federico Pasin Mohamed Limam

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Lassâad Lakhal Federico Pasin Mohamed Limam, (2006),"Quality management practices and their impact
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(2008),"The impacts of quality management practices on business performance: An empirical investigation
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Quality management practices
and their impact on performance

Quality
management
practices

Lassaˆad Lakhal
Faculte´ de Droit et des Sciences Economiques et Politiques de Sousse-Tunisia,
Sousse, Tunisia

Federico Pasin
Downloaded by Universiti Teknologi MARA At 11:25 16 September 2016 (PT)

HEC Montreal, Canada, and

625
Received September 2004
Revised April 2005

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
practices on which the success of a TQM process is based (Saraph et al., 1989; Flynn et al.,
1994; Ahire et al., 1996). However, these studies have not considered possible
interaction between practices. Recent studies, especially those of Cua et al. (2001),
Sousa and Voss (2002) and Kaynak (2003), underline the importance of causal relations

International Journal of Quality &
Reliability Management
Vol. 23 No. 6, 2006
pp. 625-646
q Emerald Group Publishing Limited
0265-671X
DOI 10.1108/02656710610672461

performance will be considered as a multidimensional construct.. 1995a.. Choi and Eboch. Flynn et al. 1998. Table I presents. whereas Burrows (1992) reported a 95 percent failure rate for initiated TQM programs. conflicting reports have been published regarding the effectiveness of TQM programs. 1995a. 2001. information and analysis. Rategan (1992) reported a 90 percent improvement rate in employee relations. For instance. analyzing it and questioning ourselves whether it was different or similar to the practices previously analyzed. similarities among practices can be discerned. Dow et al. 2003) suggested a positive association between TQM practices and organizational performance. 1996. which all use a single construct. Mohrman et al. Theoretical background 2. Moreover. In opposition. The definitions of TQM and performance retained in this study are consistent with those adopted by Hendricks and Singhal (1996. 2001. organization for quality..1 Quality management practices Quality management practices have been investigated extensively (Saraph et al. Powell. However.. Anderson and Sohal. customer satisfaction. 2000. Easton and Jarrell (1998) and Douglas and Judge (2001). 1999. Although a plethora of practices have been described.. supplier quality management. we first defined a list of all the practices proposed in a large set of articles. 1999.. 1995). To generate distinct generic practices. 1994. 1997). many important questions have recently been raised in the field of quality management theory. a list of similar practices proposed by other authors. Sun. and financial performance. 2002. Zhang et al. Kaynak. Performance will here be defined in relation to the quality of the organization’s results. 1999) have suggested that each practice can improve performance even without the core practices.. 1995.. Authors diverge in the way they perceive the links between quality management practices and performance. Douglas and Judge. in contrast to the studies mentioned above. and statistical quality techniques use. This process resulted with the ten following distinct generic practices: top management commitment and support. We then took each practice. This list .. 2000. improvement of quality system. many authors (Anderson et al. 1995. 2001. 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. In our study. 1995. Cua et al.IJQRM 23. other authors (Powell.. customer focus. Sila and Ebrahimpour.6 Downloaded by Universiti Teknologi MARA At 11:25 16 September 2016 (PT) 626 between quality management practices. Flynn et al. 2. 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. employee training. 1989. Samson and Terziovski. employee participation. Note that we operationalisze TQM as a multidimensional construct. Waldman. As we just seen. Anderson et al. continuous support.. Najmi and Kehoe. 1994. one at the time. Ahire et al. 2003). 1999. Furthermore. for each generic practice. Kaynak. 1995. Terziovski and Samson. operating procedures.

. 2000). 1999. 2000). 2001. 1998.... 2001) Participation (Zhang et al.. supplier relations (Forza and Filippini. 1996.. Table I also establishes links between practices examined in our research and those described in other studies. Pannirselvam and Ferguson (2001) and Sousa and Voss (2002). and has strongly inspired the definition of items that will operationalize each practice. Powell.. education and/or training (Ahire et al.. top management team involvement (Douglas and Judge. 2000. Powell. total quality methods (Douglas and Judge. 2001) Organization for quality Downloaded by Universiti Teknologi MARA At 11:25 16 September 2016 (PT) Employee training Employee participation Supplier quality management Customer focus Continuous support Quality system improvement Information and analysis Statistical quality techniques use illustrates the foundations of our generic practices.. 1998). Tamimi. Sun.. 1996. 1998). Kannan et al. 1989). 1995). process measurement (LaHay and Noble. 2000) Information and analysis (Anderson and Sohal. 1995). Quality data (Saraph et al. leadership (Anderson and Sohal.. 2000). Quality management practices 627 Table I. strong relations with customers (Powell. 2001). 1998. recognition and rewards (Zhang et al. 1996. Powell. 1989. suppliers (Najmi and Kehoe. 2001). Saraph et al. Tamimi. delegation (Ahire et al. 1995. use of internal information on quality (Ahire et al. Appendix 1 displays the specific scales and the 43 items used in our study to measure the quality management practices. 1996). Zhang et al. 2000) Training (Saraph et al.... 1996. 2001). 1995). information flow (Kannan et al. cross-functional teams (LaHay and Noble.. 1989). 1999.. and (3) core practices: based on tools and techniques specifically related to quality. information (Sun. 1996.Practice Related practices Top management commitment and support Top management commitment (Ahire et al. 1995). customer satisfaction (Forza and Filippini. After selecting ten generic practices. 1996). 2000) Quality system improvement (Zhang et al. 2001) Continuous improvement (Douglas and Judge. 1995) Use of statistical procedure (Ahire et al... 1996. namely: (1) management practice: issued from the top management. Links between practices retained and literature . (2) infrastructure practices: intended to support core practices. control and improvement of processes (Zhang et al. Zhang et al. employee involvement (Ahire et al. 2000) Quality management design (Ahire et al. 1998). Powell 1995) Customer focus (Ahire et al. 1996). supplier management (Tamimi. customer driven (Douglas and Judge. measurement of quality (Powell. 1998). 1999. 1989) Supplier quality management (Ahire et al.. Anderson and Sohal. LaHay and Noble. 1999). benchmarking (Ahire et al. quality information system (Najmi and Kehoe. Powell. 2001). 1998). Choi and Eboch. 1998.. open organization (Powell. we grouped them into three main categories following the classification of Flynn et al. Zhang et al.. 1996). 1998).. 2000). (1995a). Sun.. Zhang et al.. employee relations (Saraph et al. 1995. 2000). emphasis on TQM-oriented training (Douglas and Judge. 1999.

More importantly. 2. infrastructure and core practices. and highlights the links between quality management practices and firm performance. These models can be divided in two groups. (1997) show through their research that leadership has a significant impact on training. Conceptual model and hypotheses 3. H1. Classification of quality management practices Management practice Infrastructure practices Core practices Top management commitment and support Organization for quality Employee training Employee participation Supplier quality management Customer focus Continuous support Quality system improvement Information and analysis Statistical quality techniques use . Appendix 1 shows a detailed list of the retained indicators. product quality. 1999. In the first group (Flynn et al. Table II. 1999).IJQRM 23. Some other similar models have already been proposed in the quality management literature. Curkovic et al. marketing and operations management. the operational performance indicators are inspired from Grandzol and Gershon (1998). infrastructure practices act indirectly on performance through core practices. Adam et al. our 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. 2003).2 Organizational performance Following a literature review on strategic management. (1999) and Kelada (1996). Samson and Terziovski. 1995..2 Hypotheses The selected hypotheses stem directly from the model. 3. Forker et al. Kaynak. The choice of key indicators of financial performance is based on the research of Kaplan and Norton (1992). 2001. The effect of management practice on the various components of infrastructure practices were highlighted in the management literature. In the second group (Powell. operational performance and product quality. These links symbolize a direct relation between two elements of the model. 1995. Dow et al.. Anderson et al. 1995a. Management practice is directly related to infrastructure practices. infrastructure practices can improve performance even without core practices. Our model can be viewed as a combination of the two groups of models. we have defined a hypothesis for each link that appears in the model. we have chosen three performance related dimensions: financial performance. Table II presents the classification of practices into each of the three categories.6 Downloaded by Universiti Teknologi MARA At 11:25 16 September 2016 (PT) 628 This classification constitutes the basis of our model.. For instance. Moreover. while the product quality indicators are based on studies carried out by Garvin (1987). (1996). 3. More precisely. Pannirselvam and Ferguson. operational and financial performance.1 Conceptual model Figure 1 shows a model of relations between top management practice.

other studies have shown the existence of statistically significant correlations between specific infrastructure practices and some core practices (Ahire et al. in a US defense contractors survey. 1995a. This hypothesis is consistent with the study of Samson and Terziovski (1999) which reveals that several infrastructure practices: workforce commitment. (2001) and Rahman and Bullock (2002). Zhang et al. and customer focus.Quality management practices Downloaded by Universiti Teknologi MARA At 11:25 16 September 2016 (PT) 629 Figure 1. Madu et al. Grandzol and Gershon (1997) found that employee fulfillment. Flynn et al. Forza (1995). (1996). Zhang et al. Terziovski and Samson (1999). Many studies have found statistically significant causal relations between infrastructure practices and core practices (Anderson et al. Similarly.. Pannirselvam and Ferguson. (1999). Flynn et al. 2001. 2000). and customer focus were significantly related to perceived customer satisfaction: .. 1998. 1996. which all show a statistically significant link between infrastructure practices and operational performance components. This hypothesis also corroborates the findings of Adam (1994).. core practices and performance In addition. 2001. Cua et al. 1995.. 2002). Rahman and Bullock. c). Dow et al. Kaynak. Adam et al. some studies found statistically significant causal relations between management practice and infrastructure practices (Flynn et al.. Ho et al. 2003): H2. (1995a. Handfield et al. infrastructure practices. shared vision. 1996. 1995a.. Pannirselvam and Ferguson. Relations between management practice. Infrastructure practices is directly related to core practices.. Moreover. cooperation. several studies confirm a statistically significant correlation between management practice and infrastructure practices (Ahire et al. b. 2001.. Infrastructure practices is directly related to operational performance. 2000): H3. (1997) Anderson and Sohal (1999). Recently. are significantly related to operational performance..

(1995a). In addition. empowering employees. compensation and customers with financial profitability. In addition. Moreover. Easton and Jarrell. Najmi and Kehoe (2000). This hypothesis is consistent with Anderson et al. Barker and Cagwin (2000) revealed a positive relationship between core practices: “continuous improvement tools” “design and improvement of processes” and the ROA indicator of financial performance. Core practices is directly related to operational performance. Terziovski and Samson (1999). employee involvement. Anderson and Sohal. (1995b) Ittner and Larcker (1996) Anderson and Sohal (1999) Terziovski and Samson (1999) and Rahman and Bullock (2002). employee satisfaction. the maturity of the TQM implementation and the timing of the TQM implementation: H5. Najmi and Kehoe. Sun (2000) and Nilsson et al. namely: top management implication. This hypothesis has also been tested by Ittner and Larcker (1996). employee participation. Powell (1995) found that having a zero-defect mentality.6 Downloaded by Universiti Teknologi MARA At 11:25 16 September 2016 (PT) 630 H4. Anderson and Sohal (1999). Adam et al. employee selection and development. Barker and Cagwin (2000) confirm the positive effect on financial performance of specific infrastructure practices. 1999. Terziovski and Samson. 1999. Infrastructure practices is directly related to financial performance. namely: general management commitment. (1997) have shown a positive impact of certain core practices on different aspects of operational performance. who report a statistically significant causal relation between core practices and operational performance. supplier relations. top management commitment to quality. Several empirical studies have measured the relationship between infrastructure practices and financial performance. 2000. notably the firm size. Core practices is directly related to financial performance. 1998. This hypothesis is also consistent with several studies which found a link between core practices and financial performance indicators (Adam. Adam (1994) found a statistically significant relationship between human resources management practices and the previous year’s return on assets (ROA). and working more closely with suppliers to accomplish quality management objectives were statistically related to perceived financial performance. employee training. who found a link between core practices and operational performance: H6. the degree of firm diversification. Adam et al. This hypothesis also relies on studies conducted by Adam (1994). Many factors were taken into account in this research. (1997) demonstrate a weak but statistically significant relationship between infrastructure practices. Adam et al. 1994. customer focus. (1995) and Flynn et al. (2001). using cross-functional teams. 2000.IJQRM 23. Pannirselvam and Ferguson (2001) identified statistically significant direct link between core practice: “product and process management” and financial results. Sun.. who reported a link between infrastructure practices and financial performance indicators.. Choi and Eboch (1998) found a significant direct link between core practices: “process quality and information” and “customer satisfaction”. Nilsson et al. For instance. and open organization. 2001): . The work of Hendricks and Singhal (1997) has provided evidence of a relation between the financial performance and the effectiveness of the implementation of TQM. 1997. internal cooperation. the degree of capital intensity. Flynn et al.

which includes all the manufacturing industries. to confirm that the main aspects of quality management practices were covered. Research methodology In this section we explain the methodology used to collect the data. several supervisors and workers. which confirm the relationship between quality management practices and product quality. it is a manageable sector in terms of size of the study. whether the questions were easy to understand. medium and weak performance) based on ROI. Company classification . As Madu (1998) and Bavagnoli and Perona (2000) assert. Core practices is directly related to product quality. This sector was chosen because it reflects that of the Tunisian manufacturing sector.H7. Based on the feedback. The final sample includes 92 companies with high and medium financial performance. The data collection instrument was pre-tested in ten companies. whether there were any other questions that needed to be included. 4. who was the right person to contact for the “real” study. Quality management practices 631 4. human resources manager. a list of 133 Tunisian companies was defined on the basis of the industrial and commercial guide of Tunisia. mainly by its wide variability of quality management implementation levels. Feedback from the pilot study was used to clarify some questions. ROA and growth of sales indicators. We also draw the statistical techniques used to test the research framework. This hypothesis is also consistent with Ahire et al. and following the methodology proposed by Kotter (1992). process engineer. All of them were asked: . (1996).1 Data collection The data used in this study was obtained using a survey questionnaire filled by Tunisian managers from the plastic transforming sector. Then. who show that product quality has a statistically significant correlation with the following core practices: “statistical quality techniques use” and “internal quality information”. the questionnaire is a popular data collection method in studies of quality management. . the draft Performance High Medium Low Total Number of companies 28 64 41 133 Table III. the identification of critical quality management practices and the construct validity of the measurement instrument. quality manager. First. and . The pre-tests included structured interviews with the general manager. Also. To collect the data we have used a questionnaire. Downloaded by Universiti Teknologi MARA At 11:25 16 September 2016 (PT) This hypothesis is consistent with the empirical studies conducted by Forza (1995) and Choi and Eboch (1998). In addition. these 133 companies were classified into three categories (strong. some items in a few scales were dropped or added. Table III presents the classification of studied companies into three categories.

Besides. continuous support.6 (Hatcher. (2) reliability analysis. and (3) validity analysis.4 Construct validity of the measurement instrument To empirically test the construct validity of the measurement instrument based on the seven quality management practices that emerged from the previous analysis. 1975). 1998). The availability of the research team helped clarify any ambiguity concerning definitions or issues related to the survey instrument. Li. Grandzol and Gershon. Pannirselvam and Ferguson. Therefore. 1966. this method can differentiate direct and indirect effects (Duncan. 1998). the final measurement instrument consists of seven quality management practices and 24 items. path analysis decomposes empirical correlations or covariances among measured variables to estimate the path coefficients in a path diagram (Neumann. More precisely. Path analysis use simple bivariate correlations to estimate causal relations in a structural equation system (Hair et al.3 Identification of critical quality management practices The critical quality management practices are determined according to the following two analyses: principal factor analysis. and confirmatory factor analysis (Goodhue. In addition. In fact. we have applied the three steps proposed by O’Leary-Kelly and Vokurka (1998): (1) unidimensionality analysis. 4. Given all these considerations. items with factor loadings below the suggested cut-off of 0. several items were deleted from the analysis (Table IV) and three practices (supplier quality management.2 Statistical techniques The causal relations shown in Figure 1 will be tested by means of the path analysis method. Principal factor analysis is used in order to bring to the foreground a factorial structure. and statistical quality techniques use) were eliminated from the analysis. Mathematically. 1966. Downloaded by Universiti Teknologi MARA At 11:25 16 September 2016 (PT) 632 4. Face-to-face interview was the method used to collect the data from each company’s respondent. 4. . general managers were considered as the most appropriate respondents. 1998. Principal factor analysis show that some items should be deleted from the analysis. 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. 2001).IJQRM 23. Confirmatory factor analysis is applied in order to confirm the factorial structure. 1994) were considered problematic.6 questionnaire was reviewed by academicians and practitioners experts. confirmatory factor analysis confirms these results. because of their familiarity with both quality management practices and performance. Table IV displays the results of the principal component analysis (factors 1 and 2) and the confirmatory factor analysis (factor loadings). either because of very low factor loadings or because of multiple factor loadings too high to ignore (Grandzol and Gershon. 1998). 1978). items indicated as potentially problematic according to the principal factor analysis surfaced again in the confirmatory factor analysis. Finally.. Path analysis is a multivariate analytical methodology for empirically examining sets of relationships represented in the form of a linear causal model (Duncan. 1975).

996 0. Selection criteria for critical practices .378 0.44 0.605 0.42 0.66 0.744 0.778 0.23 0.903 0.716 0.39 0.972 0.71 0.742 0.779 0.654 0.818 0.36 0.735 0.75 0.801 0.822 0.14 0.096 0.45 0.801 Customer focus (CF) CF CF CF CF 1 2 3 4 0.853 0.12 0.07 Organization for quality (OFQ) OFQ 1 OFQ 2 OFQ 3 OFQ 4 OFQ5 0.44 0.186 0.897 0.64 0.861 0.88 Statistical quality technique use (SQTU) SQTU SQTU SQTU SQTU SQTU a Note: Items in italics are deleted from the analysis 1 2 3 4 5 0.85 0.221 0.42 0.019 0.657 0.68 0.821 0.63 0.711 0.673 0.006 0.652 0.36 0.109 0.778 0.75 Information and analysis (IAA) IAA 1 IAA 2 IAA 3 IAA 4 0.195 0.608 Quality management practices 633 0.78 0.73 0.868 0.893 0.358 0.745 0.735 0.32 0.773 0.37 0.82 0.17 0.Downloaded by Universiti Teknologi MARA At 11:25 16 September 2016 (PT) Quality management practices Itemsa Factor 1 Factor 2 Factor loadings Top management commitment and support (TMCS) TMCS 1 TMCS 2 TMCS 3 TMCS 4 TMCS 5 0.244 0.802 0.709 Continuous support (CS) CS CS CS CS 1 2 3 4 0.184 0.82 0.848 0.7 0.811 0.779 0.7 0.836 0.164 Quality system improvement (QSI) QSI 1 QSI 2 QSI 3 QSI 4 0.681 0.855 0.75 0.659 0.751 0.39 0.61 0.793 0.41 Table IV.91 Suppliers quality management (SQM) SQM 1 SQM 2 SQM 3 SQM 4 0.003 0.343 0.38 0.745 0.88 0.707 0.68 0.61 Employee participation (EP) EP 1 EP 2 EP 3 0.76 0.902 0.703 0.853 0.66 0.43 0.9 Employee training (ET) ET 1 ET 2 ET 3 ET 4 ET 5 0.099 0.196 0.201 0.08 0.799 0.736 0.

1999).81 0. 1988). which is nonetheless very close to that level (0.8). the r of convergent validity exceeds the threshold of 50 percent for all measurement scales.57 . Reliability and convergent validity analyses Top management commitment and support Organization for quality Employee training Employee participation Customer focus Information and analysis Quality system improvement Jo¨reskog’s r r of convergent validity 0.54 0.90 0. for each practice. df ¼ 252). Moreover.6 634 Unidimensionality implies satisfaction of two implicit conditions (O’Leary-Kelly and Vokurka. and (2) an empirical indicator must be associated with one and only one latent variable. Given the differential of 21 degrees of freedom (Ddf ¼ 252 2 231 ¼ 21) and a type 1 risk of 1 percent. 78). df ¼ 231) was significantly lower than the Chi-squares of the constrained model (x 2 ¼ 963. The results confirm the reliability of the quality management practices retained.0 (Bagozzi et al.932.83 0. namely: (1) an empirical indicator must be significantly associated with a latent variable. rendering support for the discriminant validity of the constructs. The unidimensionality of the measurement scale is therefore confirmed. Latent variables Table V.85 2 410. 6)..7) largely exceeds the tabulated value. The reliability analysis was performed based on Joreskog’s r of internal consistency (Jo¨reskog et al. Specifically.80 0. the discriminant validity is confirmed. 1991). the tabulated value of the Chi-squares is 39.56 0.60 0. The results of this analysis reveal that the items. except “employee training”.81 0. In our case. Significantly lower Chi-squares for the unconstrained model would indicate that each correlation between pairs is less than 1. Table V illustrates the results of these analyses. and that the constructs are empirically distinct..82 0. The convergent validity analysis was verified according to Fornell and Larcker (1981) approach. Downloaded by Universiti Teknologi MARA At 11:25 16 September 2016 (PT) Unlike the studies carried on by Fynes and Voss (2002) and Kaynak (2003). 1998).15.78 0. As the difference in Chi-squares (Dx 2 ¼ 963.IJQRM 23.53 0.49 0.15 ¼ 553.85. with the exception of the r representing the “employee training” practice.81 0. Jo¨reskog’s r are all higher than the threshold of (0. To examine the discriminant validity. Moreover. allow the extraction of a single factor. the Chi-squares of the constrained and unconstrained models were compared (Anderson and Gerbing. the Chi-squares (x 2) of the unconstrained model (x 2 ¼ 410. All factor loadings are greater than the threshold of (0. the unidimensionality analysis was performed on the basis of a principal component analysis of each of the seven practices. Table V illustrates good convergent validity.

we will validate for the absence of the multicolinearity problem. The results are presented in Table VI. 0. consistently with Swamidass and Newell (1987). This confirms the third hypothesis. The results show that all infrastructure practices have a statistically significant direct effect on operational performance. yet overall. This partly confirms the second hypothesis. Despite that. (1990) assert that the VIF values must not exceed the recommended threshold of ten. The model does not deny the existence of variables such as organizational context.01) on the “information and analysis” practice. (1995). all the coefficients (VIF) are situated between 1. The practices “organization for quality” “employee training” and “employee participation” have a statistically significant direct effect ( p-value . Their effects will be considered by the nine error terms specified in the model. Thus. This finding confirms the first hypothesis. industry. To calculate the path coefficient. “Customer focus” practice does not have a significant effect on the “information and analysis” practice. these variables are not included in our model explicitly.70. The results also illustrate that the practices: “organization for quality” and “customer focus” have a statistically significant direct effect ( p-value . which consists in studying the diagonal of the inverse of the correlation matrix. in order to indicate the explanatory power of each antecedent variable on the dependent variable. the practices “employee training” “employee participation” and “customer focus” have a statistically significant direct effect ( p-value . Empirical findings After testing construct validity.01) on the following practices: “organization for quality” “employee training” “employee participation” and “customer focus”. 0. (1995) and Flynn et al. 0. we used LISREL software. structure and technology. Of the 26 relations tested. which may play an important role in the explanation of organizational performance. we then tested the causal relations between the latent variables in order to confirm or refute the hypothesis presented earlier. (1995a). Before testing the hypothesis. Anderson et al. “organization for quality” and “employee training” practices also have a significant indirect effect on operational performance via core practices. Table VI shows that “top management commitment and support” practice has a statistically significant direct effect ( p-value . 18 were found to be significantly different from zero with an error risk below 1 percent.05) on Quality management practices 635 . and we applied the methodology used by Anderson et al. Moreover.11 and 3. The conceptual model can also be represented by equations (see Appendix 2). 2 are different from zero with a risk below 5 percent. Neter et al. Since. the infrastructure practices do not all have a significant effect on the core practices. we tested our conceptual model by means of the path analysis approach. 0. where R 2 measures the portion of variance of each variable explained by the other variables. (1995a). To summarize. and 6 relations were not statistically significant. “Organization for quality” practice does not have a significant direct effect on “quality system improvement” practice. we applied the methodology proposed by Flynn et al. with the correlation matrix as the input. Note that in addition to having a direct effect on operational performance. their effect is significant.Downloaded by Universiti Teknologi MARA At 11:25 16 September 2016 (PT) 5. This diagonal includes elements called variance inflation factors (VIF) equal to 1/(1-R 2).01) on the “quality system improvement” practice. To do so. the multicolinearity is not a problem in this case.

68 * * 636 Direct effect Downloaded by Universiti Teknologi MARA At 11:25 16 September 2016 (PT) 0.27 * * 2 0.43 * * 0.41 * * 0.57 * * 0.06ns 2 0.31 * * 0.00 0.52 * * 0.00 0.30 * * 0.22 * 0.00 0.31 * * 0.26 * * 0.00 0.15 * 0.15 * 0.00 0.00 0.06ns 2 0.19 * 0.007ns 0. Structural model analysis Independent Variable Indirect effect 0.00 0.41 * * 0.40 * * 0.36 * * 0.00 0.40 * * 0.00 0.00 0.46 * * 0.43 * * 0.00 0.74 * * 0.46 * * 0.Organization for quality Employee training Employee participation Customer focus Information and analysis Quality system improvement Financial performance Product quality Operational performance Information and analysis Information and analysis Information and analysis Information and analysis Quality system improvement Quality system improvement Quality system improvement Quality system improvement Financial performance Product quality Operational performance support support support support support support support support support Top management commitment Top management commitment Top management commitment Top management commitment Top management commitment Top management commitment Top management commitment Top management commitment Top management commitment Organization for quality Employee training Employee participation Customer focus Organization for quality Employee training Employee participation Customer focus Organization for quality Organization for quality Organization for quality and and and and and and and and and Dependent variable Table VI.00 0.36 * * 0.00 0.44 * * 0.42 * * 0.59 * * 0.57 * * 0.42 * * 0.52 * * 0.00 0.6 .30 * * 0.007ns 0.00 0.00 0.74 * * 0.00 0.44 * * 0.27 * * 2 0.00 0.94 * * (continued) Total effect IJQRM 23.59 * * 0.31 * * 0.31 * * 0.41 * * 0.

20 * 0.00 0.02ns 0.44 * * 0.26 * * 0.24 * 0.80 * * 2 0.34 * * 0.01.18 * 0.09ns 20.12ns 0.26 * * 0.09ns 0.82 * * 0.50 * * 0.03ns 0.05. the symbol ns means not significant Dependent variable Independent Variable 2 0.00 Indirect effect 0.20 * 0.34 * * 2 0.00 0.00 0.13ns Total effect Quality management practices 637 Table VI.13ns Direct effect Downloaded by Universiti Teknologi MARA At 11:25 16 September 2016 (PT) 0.50 * * 0.09ns 20.57 * * 0.91 * * 0. 0.57 * * 0.035ns 0.34 * * 2 0. .00 0.51 * * 0.00 0. 0.19 * 0.Financial performance Product quality Operational performance Financial performance Product quality Operational performance Financial performance Product quality Operational performance Financial performance Product quality Operational performance Financial performance Product quality Operational performance Employee training Employee training Employee training Employee participation Employee participation Employee participation Customer focus Customer focus Customer focus Information and analysis Information and analysis Information and analysis Quality system improvement Quality system improvement Quality system improvement Notes: *p .13ns 0.24 * 0.06ns 0.07ns 0.035ns 0.00 0.00 0.60 * * 2 0. * *p .34 * * 0.15 * 0.00 0.

The findings also illustrate that infrastructure practices act on product quality and on operational and financial performance by means of core practices. Specifically. This implies that the seventh hypothesis is confirmed.01) on both operational and financial performance. This implies that the fifth and sixth hypotheses are partly confirmed. Moreover. Lastly. Flynn et al. we can assert that the infrastructure practices have a notable indirect effect on financial performance. It is also the case of indirect effect between the infrastructure practices (except for the “customer focus” practice) and product quality. 6.1 Discussion of results In this study we have provided empirical evidence that quality management practices have a positive impact on organizational performance. the “quality system improvement” practice does not have a significant direct effect neither on operational nor on financial performance. In contrast. the results clarify the direct and significant effect of core practices on product quality. the management practice has a statistically significant direct and indirect link with all the other practices of our model. core practices and organizational performance. They . Discussion 6. 0. the fourth hypothesis is partly confirmed. the results highlight the crucial role played by top management commitment and support.05) on financial performance via core practices. “Information and analysis” practice have a statistically significant direct effect ( p-value . Note that all of these studies operationalize TQM as a single construct.6 Downloaded by Universiti Teknologi MARA At 11:25 16 September 2016 (PT) 638 financial performance. Easton and Jarrell (1998) and Hendricks and Singhal (1996. Anderson et al. Moreover. (1999) and Samson and Terziovski (1999). This result corroborates the studies of Douglas and Judge (2001). The “information and analysis” and the “quality system improvement” practices have a statistically significant direct effect ( p-value . These results are consistent with the empirical studies of Flynn et al. the results of our empirical study clarify the relative importance and the interplay between infrastructure. in contrast with our study. (2000). In addition. which were not covered by the hypotheses. (1995a). Ahire and O’Shaughnessy (1998). (1997). These results support the ones of Powell (1995).01) on product quality. 0.IJQRM 23. 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. In this sense. Ahire et al. note that some relations. (1995a) Pannirselvam and Ferguson (2001) and Wilson and Collier (2000). were highlighted during the analysis. (1996). “Employee training” and “employee participation” practices are not significantly linked to financial performance. (1995). Dow et al. These findings notably show that infrastructure practices have a statistically significant direct effect on operational performance. who underscored the importance of obtaining consistent results among multiple studies that use different methodologies. 0. 1997). the practices: “organization for quality” “employee training” and “employee participation” have a significant indirect effect ( p-value . These conclusions corroborate previous studies by Adam et al. which operationalizes it as a multiple construct. Overall. in that the indirect effect of infrastructure practices on performance dimensions is statistically significant. Pannirselvam and Ferguson (2001) and Kaynak (2003). Our approach is therefore inspired by Palich et al. Besides.

The results highlight the crucial role played by top management Quality management practices 639 . In addition to the limitations already mentioned.Downloaded by Universiti Teknologi MARA At 11:25 16 September 2016 (PT) also reveal that the core practice “information and analysis” is the only one that has a direct and significant effect on both operational and financial performance. we used this set to formulate our conceptual model that links management practice. the data collection method was based on managers’ perceptions. business process reengineering and JIT) on firm performance (Flynn et al. From a manager’s point of view. More detailed longitudinal studies may be appropriate for assessing causality.g. First. Besides. Seven hypotheses regarding the relations between the elements of the model were specified. An empirical study then enabled us to select. infrastructure and core practices. 1995b). we started by identifying a set of practices and items of quality management presented in the literature. employee participation. which may or may not reflect what is going on in the organization as a whole. the results also support the interdependence between quality management practices. (1995a). among all the practices and items proposed in the literature. 1998). based on the type of data used in the analysis. 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. we should exercise caution in drawing causal inferences from the findings of this study. product quality. (1995).. This finding is in line with the studies of Flynn et al. As reported by Dearborn and Simon (1958). The results of this study should not be generalized beyond what is reasonable. the use of manager’s perceptions is frequently used in quality management research (Madu. 7. infrastructure and core practices. Conclusion and future directions The primary objective of this paper is to study the relationship between quality management practices and their impact on performance. and quality system improvement.2 Limitations of findings Several limitations of this study should be discussed in this section. and performance. To carry out this research. Nevertheless. managers respond to questionnaires from their own local environment. it is rather dangerous to readily assume that an individual response is a reliable and valid indicator of an organization-level construct (Venkatraman and Grant. we acknowledge the fact that the sample size is relatively small. Anderson et al. 24 items that made up the following seven practices: top management commitment and support. The hypotheses regarding the relationships in the model were then empirically tested on a sample of 92 companies in the plastics transformation industry using the path analysis method. This research attempts to contribute to the development of a quality management theory. Given the cross-sectional nature of the data. our study was not able to capture the effects of other mutually supportive process management techniques (e. Despite this caveat. we observe an association between management practice. 1986). operational and financial performance. information and analysis. given the nature of the sample. the empirically validated positive effects of quality management practices on organizational performance is encouraging for those who take the initiative to implement TQM. customer focus. Then. Besides. 6. Second. employee training. organization for quality. Pannirselvam and Ferguson (2001) and Kaynak (2003). Future studies should consider substantially larger samples including greater representation of industries and countries. Consequently.

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J. International Journal of Quality & Reliability Management.H. pp. (2) Organization for quality: The organization has a process management method. Items in italic type were eliminated from the analysis: (1) Top management commitment and support: General management is actively involved in quality improvement. “An empirical investigation of the Malcolm Baldrige national quality award causal model”. (3) Employee training: The company provides continuous training for its managerial personnel. pp. (1999). Training needs are always evaluated. General management encourages employees to consider customers’ needs and expectations. Wilson. Appendix 1.6 Downloaded by Universiti Teknologi MARA At 11:25 16 September 2016 (PT) 644 Tamimi. International Journal of Quality Science. and bottom-line consequences”. 31 No. Terziovski. and Collier. “A second-order factor analysis of critical TQM factors”. Vol. The organization uses quality circles. Waszink. N. pp.. “Service quality and management practices: a look at employee attitudes. D. The company provides continuous training for its non-managerial personnel. 3 No.C. 3. 11 No. “An instrument for measuring TQM implementation for Chinese manufacturing companies”. 17 No. Academy of Management Review. D. 71-87. 71-9.A. and Wiley. and Grant. Venkatraman. Vol. W. (1994). Further reading Nunnally. (2000). respondents indicated the extent to which the items represented practices in their organizations (1 ¼ “very low” to 5 ¼ “very high”). and Samson. Tornow. J. Waldman. J. 3. J. A. and Wijngaard. D. Vol. (1986). 105-15. . (1991). Top management pursues long-term objectives. 7. 16 No.IJQRM 23. Vol. “Construct measurement in organizational strategy research: a critique and proposal”. Psychometric Theory. (2000). NY. Zhang. Z. Vol. N.A. 1. TQM practices For the seven TQM practices. New York. pp. (1998). Vol. “The contribution of TQM to a theory of work performance”. Management provides the necessary resources to carry out activities efficiently. procedures and detailed rules) in the organization.W. Management quality objectives are disseminated to all employees. Academy of Management Review. D. There is a little bureaucracy (formal hierarchy. “The link between total quality management practice and organizational performance”. McGraw-Hill. 19 No. Decision Sciences. Interdepartmental groups are common. Processes are continuously improved.D. International Journal of Quality & Reliability Management. 2. 14. Vol. M. 1. (1978). customer satisfaction. Human Resource Planning. 361-90.W.

(8) Quality system improvement: Company has a clear quality manual. General management has appointed a coordinator who is in charge of operationalizing the quality program within the company. Downloaded by Universiti Teknologi MARA At 11:25 16 September 2016 (PT) The company works in close collaboration with suppliers to improve processes. Company has a clear set of work instructions. (5) Suppliers quality management: The company purchases raw materials only from suppliers with ISO 9. Employees are responsible for the tasks they perform.000 certification. and inspect their own work. (10) Statistical quality techniques use: Cards and graphs are used to measure and control quality. The company supplies technical assistance to suppliers. products and services. (9) Information and analysis: Important information is presented and transmitted to employees. (4) Employee participation: Quality management practices Employees are encouraged to be totally involved. Quality system in our company is improved continuously. Statistical techniques are used intensively in the company. The company is partnering with its suppliers. Company collects and analyzes data related to its activities.Employees can take training leave. Management lets employees participate in achieving organizational objectives. Company has a clear documentation procedure. Company has precise data about the competition used to identify areas of improvement. (6) Customer focus: Client is integrated in the product development process. Organization insists on continuous improvement of its products and services. 645 . (7) Continuous support: Company has put in place a reward system to encourage new ideas. The company measures employee satisfaction with training received. General management encourages the use of statistical methods. Statistical techniques are effective at improving product quality. Company carries out studies to evaluate customer satisfaction. Company has a system to collect customers’ complaints. Company carries out market studies to determine its customers’ needs and wants. Company harnesses information to improve its key processes. General management actively displays an ongoing commitment to quality improvement. Employees participate in training programs related to statistical techniques for quality.

There is no return path. Financial performance Operational performance Product quality Return on investments Wastelevel Reliability Return on assets Productivity Durability Sales growth Cycle time Tenacity 646 Regularity Downloaded by Universiti Teknologi MARA At 11:25 16 September 2016 (PT) Appendix 2 OFQ ¼ p21 TMCS þ e1 ET ¼ p31 TMCS þ e2 EP ¼ p41 TMCS þ e3 CF ¼ p51 TMCS þ e4 IA ¼ p62 OFQ þ p63 ET þ p64 EP þ p65 CF þ e5 QSI ¼ p72 OFQ þ p73 ETþ p74 EP þ p75 CF þ e6 FP ¼ p82 OFQ þ p83 ET þ p84 EP þ p85 CF þ p86 IA þ p87 QSI þ e7 PQ ¼ p96 IAþ p97 QSI þ e8 OP ¼ p102 OFQ þ p103 ET þ p104 EP þ p105 CF þ p106 IA þ p107 QSI þ e9 with. One endogenous variable can influence another endogenous variable. OFQ: Organization for quality. OP: Operational performance. The only exogenous variable is top management commitment and support.6 Organizational performance The scale represents the organization’s relative performance (1 ¼ “much worse than the competitors” to 5 ¼ “much better than the competitors”).  svi : The same convention holds for the residuals.com/reprints . IA: Information and analysis. ET: Employee training. Each endogenous variable is explained by one or more variables plus an error term. FP: Financial performance. that is. The first variable is not explained by any other variable in the model. Each variable is taken to be in standard form. Our model is thus recursive. ei ¼ Errors outside the model Several points of the model are worth noting: All paths are included in the figure. TMCS: Top management commitment and support. pij ¼ Path coefficient. then X i ¼ ðV i 2 VÞ= Corresponding author Lassaˆad Lakhal can be contacted at: lassaad_lakhal@yahoo.com Or visit our web site for further details: www. if Vi is the ith variable as measured.com To purchase reprints of this article please e-mail: reprints@emeraldinsight. CF: Customer focus.” Linear relations between the variables are additive. The conceptual model is made up of nine endogenous variables. In the path analysis approach “e” refers to “lost causes” or “causes outside the model. QSI: Quality system improvement. PQ: Product quality.emeraldinsight.IJQRM 23. EP: Employee participation.

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