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Abstract
Purpose The purpose of this paper is to investigate the relationship between total quality
management (TQM) practices and quality performance in Indian service companies.
Design/methodology/approach The empirical data was collected using a self-administered
instrument that was distributed to 600 Indian service companies. Of the 600 instrument e-mailed, 172
usable instrument were returned, yielding a response rate of 28.6 per cent. A stratified sampling
procedure was utilized to obtain the minimum sample size of 600 from the four chosen service industries
(i.e. Healthcare, Banking, Information and Communication Technology (ICT), and Hospitality).
The data was analyzed using factor, Pearsons correlation, and multiple regression analyses.
Findings The findings revealed that TQM practices were found to be partially correlated with
quality performance of the Indian service companies. It was also found that quality culture was
perceived as the dominant TQM practice in quality performance. The other practices such as quality
systems, training and education, teamwork, and benchmarking showed a positive relationship with
quality performance.
Research limitations/implications The research paper was limited by including only four
industries in the selection of service companies in India, making this a possibly biased selection and it
may not be adequate to generalize the results for the entire Indian service companies.
Originality/value The study has contributed to the TQM literature with a better understanding of
the 17 TQM practices and their association with a companys quality performance that will provide
valuable knowledge to top-management of service companies, to refine their current TQM practices
International Journal of Quality & and subsequently improve quality performance.
Reliability Management
Vol. 30 No. 3, 2013 Keywords Total quality management, Customer relations, Quality performance, Service companies,
pp. 280-318 Quality culture, India
q Emerald Group Publishing Limited
0265-671X Paper type Research paper
DOI 10.1108/02656711311299845
Introduction TQM and quality
In todays highly competitive market with escalating demands of consumers for getting performance
better products and services (Thiagaragan et al., 2001), survival of companies in the
ever-expanding marketplace (Zakuan et al., 2010), economic success of companies
(Curkovic et al., 2000), improvement in productivity, customer satisfaction, profitability,
and innovativeness (Sadikoglu and Zehir, 2010), changing organizational culture
(Prajogo and McDermott, 2005), and globalization of world trade (Fotopoulos and 281
Psomas, 2010), the emergence of quality plays a vital role and have become a top priority
for many companies worldwide in order to achieve the above stated objectives and gain
competitive edge. The importance of quality for companys performance in several
terms and success in marketplace is widely accepted in business literature and practice
(Kumar et al., 2009b). In an attempt to improve quality, numerous approaches to
management of quality and continuous improvement have been pursued, most notably
and a recommended approach is the concept of total quality management (TQM). Many
companies claimed substantial benefits of implementing TQM in terms of financial
results, operating performance, customer satisfaction, and employee satisfaction
(Brah et al., 2002; Yang, 2006; Kumar et al., 2009b; Fuentes et al., 2006; Sila, 2007). It is a
holistic management approach (Hafeez et al., 2006) that seeks managing quality, it
requires development of quality strategy (Kanji and Wallace, 2000) and a framework for
its implementation (Chin and Pun, 2002). It focuses on meeting customer needs and
companys objectives (Kumar et al., 2009a).
TQM principles and practices have been embraced by many quality managers and
practitioners from different sectors and have earned the attention of many researchers
from diverse areas. They come out with many success stories related to TQM practices
(Sila, 2007; Karia and Asaari, 2006; Lagrosen, 2003; Prajogo and McDermott, 2005;
Yoo et al., 2006). While many studies have shown that almost two-third of the TQM
implementation program failed to achieve any result (David and Strang, 2006; Miller et al.,
2009; Rich, 2008), and others find mixed results of TQM success (Kaynak, 2003; York and
Miree, 2004; Prajogo and Sohal, 2001; Nair, 2006). These findings poses the question as to
what factors contributes to TQM success? In particular, the importance of identification
of key TQM practices and their successful implementation is frequently referred to in the
literature (Brah et al., 2002; Karia and Asaari, 2006; Prajogo and Sohal, 2006), however,
many authors strongly argue that performance measurement is one of the most
important dimensions of TQMs success (Brah et al., 2002; Chang, 2006; Kaynak, 2003;
Taylor and Wright, 2006). An improper performance measurement can lead to TQM fad
and may act as barrier to TQM implementation (Chang, 2006).
Previous empirical research investigates the relationship between TQM and
performance. Some authors find positive results (Hendricks and Singhal, 2001;
Shenaway et al., 2007; Prajogo and Sohal, 2003; Arumugam et al., 2008), other
researchers fail to find any significant link (Powell, 1995), and some studies even
identify an inverse relationship (Kannan and Tan, 2005; Rahman and Bullock, 2005;
Yang et al., 2009; Prajogo and Sohal, 2004). In the light of these results, there is need for
a deeper investigation of the relationship between TQM practices and performance
from quality perspective. Therefore, the objectives of this study are:
(1) to investigate the relationships between TQM practices and quality
performance within Indian service companies; and
(2) to assess the extent of association of TQM practices with quality performance.
IJQRM The key TQM factors and quality performance measure were validated through
30,3 exploratory factor analysis (EFA), while the relationships between them were
examined through bivariate correlation and multiple regression analyses.
The study investigates Indian service companies that have either implemented or are
in the process of implementing TQM. Quality is crucially important for Indian service
companies, faced with increasing competitiveness on international market. The Indian
282 service sector represents about 57.3 percent of Indias gross domestic product (GDP) and
therefore, considered to be one of the vital components of its economy (Information
Infrastructure for Institutions, Centre for Monitoring Indian Economy Private Limited,
India (i3, CMIE, 2010)). As world markets are becoming increasingly integrated, Indian
service companies are coming under strong pressures to ensure that their quality
performance is up to date and matches with the leaders of quality like the USA,
Australia; the UK and other competitors. Increased globalization and tough business
conditions have brought challenges and opportunities for Indian service companies
and made them to promote quality in their products and services, and has become a
national imperative for Indian companies to stand and compete in the present market
condition.
The remainder of the research follows the next structure: the second section presents
the literature review on TQM practices and summarizes the results of previous studies
on relationships between TQM practices and quality performance measure; the third
section describes the research framework and questions. Fourth section discusses the
formulation of hypotheses. The fifth section presents the detailed research methodology
used followed by results and analysis section. Finally, the last section deals with
discussion on the findings and summarizes the main conclusions of the study.
Literature review
TQM practices
An extensive literature review of the previous studies on TQM have examined what
constitutes TQM and what are the key practices for the success of TQM (Fotopoulos
and Psomas, 2010; Sadikoglu and Zehir, 2010; Al-Marri et al., 2007; Yang, 2006; Sila,
2007; Sila and Ebrahimpour, 2005; Karia and Asaari, 2006; Ju et al., 2006; Prajogo and
McDermott, 2005; Antony et al., 2002; Hafeez et al., 2006; Zhang et al., 2000). These
studies have provided different sets of practices considered essential to the success of
TQM implementation but as such no study has identified a common set of practices for
successful implementation of TQM. This leads to inconsistencies in previous research
which made it difficult to reach a conclusion on which TQM practices to be adopted to
have desired outcomes (Ooi et al., 2008; Hoang et al., 2006). Though there are some
quality award models such as Malcolm Baldrige National Quality Award, European
Quality Award, The Deming Prize and Kanji Business Excellence Model, which
provide a useful benchmark framework for industries and help in implementing TQM
as well as evaluating their business performance results.
The study by Fotopoulos and Psomas (2010) identified leadership, strategic quality
planning, employee management and involvement, supplier management, customer
focus, process management, continuous improvement, information and analysis and
also knowledge and education as a set of TQM practices to form a structural relationship
with the organizational performance in ISO 9001:2000 certified Greek companies.
Kumar et al. (2011) identified management commitment, customer satisfaction,
continuous improvement, teamwork, employees empowerment, training, feedback, TQM and quality
and effective communication as few success factors for both manufacturing and service performance
industries. While the study by Bayraktar et al. (2008) presented the following critical
success factors (CSFs) of TQM: leadership, vision, measurement and evaluation, process
control and improvement, program design, quality system improvement, employee
involvement, recognition and award, education and training, student focus, and other
stake holders focus. Sadikoglu and Zehir (2010) after thoroughly reviewing the 283
literature developed a set of eight TQM practices. They are: leadership, training,
employee management, information and analysis, supplier management, process
management, customer focus, and continuous improvement. They investigated the
effects of innovation and employee performance on the relationship between these TQM
practices in Turkish firms. Talib and Rahman (2010) identified a set of nine TQM
practices for their proposed TQM model for service industries. They are:
top-management commitment, customers focus, training and education, continuous
improvement and innovation, supplier management, employee involvement, employee
encouragement, benchmarking, quality information and performance. Kanji and
Wallace (2000) go on to identify ten TQM practices: top-management commitment,
customer focus and satisfaction, quality information and performance measurement,
human resource management, employee involvement, teamwork, process management,
quality assurance, zero defects, and communication. Brah et al. (2000) in their study
identified 11 constructs of TQM: top management support, customer focus, employee
involvement, employee training, employee empowerment, supplier quality management
(QM), process improvement, service design, quality improvement rewards,
benchmarking, and cleanliness and organization. Similarly, Sila (2007) presented six
TQM practices: leadership, customer focus, information and analysis, human resource
management, process management, and supplier management. Through the
comprehensive review of the TQM literature, the present study utilizes 17 TQM
practices identified by Talib et al. (2011a, b) for service industries which are frequently
occurring in the TQM literature. They are: top-management commitment, customer
focus, training and education, continuous improvement and innovation, supplier
management, employee involvement, information and analysis, process management,
quality systems, benchmarking, quality culture, human resource management, strategic
planning, employee encouragement, teamwork, communication, and product and
service design.
The reasons for selecting these practices are:
.
Have been used frequently (highest frequency of occurrences) by different
researchers in the service industries.
.
Have been identified as the key practices in TQM implementation in both
manufacturing and service industries (Saraph et al., 1989; Antony et al., 2002;
Zhang et al., 2000).
.
Constitute practices that represent the hard and soft components of TQM.
.
Significantly associated in services and in the promotion of service quality (Ueno,
2008; Lakhal et al., 2006; Behara and Gundersen, 2001).
Hence, it is believed that these practices are suitable to be used in the Indian service
sector context.
IJQRM Relationship between TQM practices and quality performance
30,3 A considerable body of empirical evidence suggests that TQM implementation
improves quality performance of the company. It has been measured in various ways
and found that the QM model and specific practices, which best predict performance
varies across the world (Prajogo and Sohal, 2004; Arumugam et al., 2008).
The research framework for QM proposed by Flynn et al. (1994) suggested that the
284 inputs of this framework are the QM practices while quality performance represents
outcomes. Further, product design process, process flow management, and
top-management support have significant correlation with quality performance
(Flynn et al., 1995).
Parzinger and Nath (2000) examined the link between TQM and software quality and
found that TQM implementation improves the software quality and performance, and thus,
increases customer satisfaction. Hasan and Kerr (2003) studied the relationship between
TQM practices and organization performance in service organizations and discovered that
TQM practices like top-management commitment; employee involvement; training;
supplier quality; quality costs; service design; quality techniques, benchmarking; and
customer satisfaction leads to higher productivity and quality performance.
Yang (2006) reported that TQM practices including QM, process management,
employee empowerment and teamwork, customer satisfaction management, quality
goal setting and measurement, suppliers cooperation and quality tools training have
significant effects on customer satisfaction and that the adoption of TQM is an
effective means by which companies can gain competitive advantage.
Prajogo and Brown (2004) conducted an empirical study within Australian organizations
to investigate the relationship between TQM practices and quality performance, and the
results indicated a strong and positive linkage. Brah and Tee (2002) examined the
relationship between TQM constructs and organization performance by measuring quality
performance of Singapore companies. They found that implementation of TQM leads to
quality performance and have positive correlation. Another study based on the comparative
analysis of TQM practices and quality performance between Australian manufacturing and
service firms, Prajogo (2005) reported that there exist no significant differences in the level of
most of the TQM practices and quality performance between two sectors.
A study utilizing structural equation modeling (SEM) approach by
Sanchez-Rodriguez et al. (2006) provided the insights into the current information
technology (IT) and TQM theory and practice on operational and quality performance.
They found TQM initiatives generate significant positive gains in operational and
quality performance. In line to this, Prajogo and Sohal (2004) also employed SEM
approach to examine the multidimensionality of TQM in association with organization
performance. Using empirical data collected form 194 Australian firms the finding
support the proposition in pairing the mechanistic elements of TQM with quality
performance and the organic elements with innovation performance.
Sila and Ebrahimpour (2005) explored the relationships among TQM factors such as
leadership, strategic planning, customer focus, information and analysis, human
resource management, process management, supplier management and the results from
adopting such practices such as human resource results, customer results, organizational
effectiveness and financial and market results. They identified leadership and
information and analysis as the two factors that act as the foundations on achieving
favorable business results.
An empirical study conducted by Arumugam et al. (2008) explored the relationship TQM and quality
between TQM practices and quality performance on ISO9001:2000 certified performance
manufacturing organizations in Malaysia. Analyzing empirical data drawn from
122 Malaysian organizations through correlation and multiple regression analyses, the
finding revealed that TQM practices were found to be partially correlated with quality
performance. They further found that customer focus and continuous improvement
were perceived as dominant TQM practices in quality performance. Summary of 285
different studies using quality performance as a measure for evaluating company
performance is presented in Table I.
H12
Customer focus
H13
286 Training and education
H16
Employee involvement
H17
Information and analysis
H18
Process management
H19 Quality
Quality systems
Performance
H110
Benchmarking
H111
Quality culture
H112
Human resource management
H113
Strategic planning
H114
Employee encouragement
H115
Teamwork
Figure 1.
A conceptual framework H116
Communication
of the relationship
between TQM practices H117
and quality performance Product and service design
Top-management commitment
Previous research in TQM practices emphasizes the critical role of top-management
commitment in driving overall TQM implementation in the organizations (Zakuan et al.,
2010; Flynn et al., 1994; Teh et al., 2008). Teh et al. (2008) noted that senior leaders and
management guide the organization and assess the organizational performance. Kanji
(2001) asserted that top-management commitment is the fundamental driver of
business excellence. Further, studies showed that top-management commitment
significantly affects the quality performance (Arumugam et al., 2008; Prajogo and
Brown, 2004). Accordingly, it is proposed that:
H11. Top-management commitment for TQM practices is positively associated
with quality performance.
Customer focus
Organizations must be knowledgeable in customer requirements and responsive to
customer demands, and measure customer satisfaction through TQM implementation
(Zakuan et al., 2010; Zhang, 2000). According to the review results from Hackman and
Wageman (1995), obtaining information about customer is one of the most widely used
TQM implementation practices to improve quality performance of the organization.
Therefore, the next hypothesis relate to customer focus and quality performance:
H12. Customer focus for TQM practices is positively correlated with quality
performance.
Supplier management
According to Zakuan et al. (2010), effective supplier QM can be achieved by cooperation
and long term relationship with the suppliers. This argument is also supported by
Zineldin and Fonsson (2000), who found that developing supplier partnership and
long-term relationships can increase the organization competitiveness and thus,
improve performance. Therefore, a hypothesis to test this relationship is as follows:
H15. Supplier management for TQM practices is positively correlated with quality
performance.
Employee involvement
Deming claimed that involvement and participation of employees at all level is must to
improve the quality of the current and future product or service. Even non-managerial
employees can make significant contributions when they are involved in quality
improvement processes, decision making processes, and policy making issues (Sadikoglu
and Zehir, 2010; Ooi et al., 2007a). Organizations should utilize all employees skill and
abilities to gain business performance. Accordingly, the hypothesis is as follows:
H16. Employee involvement for TQM practices is positively correlated with
quality performance.
Process management
Process management is a systematic approach in which all the resources of an
organization are used in most efficient and effective manner to achieve desired
performance (Sit et al., 2009). Motwani (2001) commented that process management
stresses the value adding to a process, increasing the productivity of every employee TQM and quality
and improving the quality of the organization. In many empirical studies, Prajogo and performance
Sohal (2004), Flynn et al. (1995), and Cua et al. (2001) systematically investigated the
relationships between process management and quality performance. The results of
these studies showed positive correlation between them. Hence, the following
hypothesis is proposed:
H18. Process management for TQM practices is positively correlated with quality 289
performance.
Quality systems
Quality systems such as ISO 9000 standards, statistical process control (SPC) and other
supportive qualitative tools and techniques create an environment for quality
improvement and implementing TQM in an organization (Curry and Kadasah, 2002).
Lakhal et al. (2006) claimed that there is a significant relationship between use of statistical
quality techniques and organizational performance. Therefore, the next hypothesis
attempts to find a relationship between quality systems and quality performance:
H19. Quality system for TQM practices is positively correlated with quality
performance.
Benchmarking
Benchmarking is the process of comparing performance information, within the
organization as well as outside the organization. It also aims to measure organizations
operations or processes against the best-in-class performers from inside or outside its
industry (Sit et al., 2009). The study by Yusuf et al. (2007) highlighted the usefulness of
dynamic benchmarking for improving the performance of the organization and to
achieve competitive advantage. Accordingly, the next hypothesis relates to
benchmarking and quality performance:
H110. Benchmarking for TQM practices is positively correlated with quality
performance.
Quality culture
Gore (1999) emphasized that the quality culture of an organization is the strong basis
for enhancing organizations success. Generally, the culture of an organization could
impact individual behavior (Bose, 2004), knowledge sharing (Ooi et al., 2012), job
satisfaction (Ooi et al., 2007b). Beside this, quality culture significantly contributes in
improving the performance of the organization as well as influencing the thought,
feeling and interaction among members of the organization (Yusof and Ali, 2000).
Thus, quality culture is linked to the quality performance and a hypothesis is formed:
H111. Quality culture for TQM practices is positively correlated with quality
performance.
Strategic planning
Strategic planning incorporates the development and deployment of plans, improve
relationships with customers, suppliers, and business partners and helps in achieving
long and short term goals through participative planning (Teh et al., 2009). Particularly,
there is lack of empirical studies that examines the effects of strategic planning on
quality performance or any other performance measure. Indeed, a significant link is
found between strategic planning and quality performance (Prajogo and Brown, 2004),
knowledge management behavior (Ooi et al., 2008), role conflict (Teh et al., 2009), and
customer satisfaction (Sit et al., 2009). Therefore, the next hypothesis attempts to find a
relationship between strategic planning and quality performance:
H113. Strategic planning for TQM practices is positively correlated with quality
performance.
Employee encouragement
Employee encouragement such as rewards and recognition motivates employees to
perform which in turn influence customer satisfaction (Zhang et al., 2000; Tari, 2005). In
line with this, the findings of Yusuf et al. (2007) reported that employee encouragement is
positively related with organization performance and employee satisfaction. It has also
been found that employee encouragement gives the right direction to work force and is
an essential practice in customer/public dealing industries. Thus, the following
hypothesis is proposed:
H114. Employee encouragement for TQM practices is positively correlated with
quality performance.
Teamwork
Teamwork refers to an increase in employees control over their work and allows them
to work as a group (Ooi et al., 2007b). This practice provides an atmosphere of mutual
relationship, involvement, and participation through out the organization. According
to Ooi et al. (2007b), teamwork as a TQM practice is positively associated with
employees job satisfaction. They further found that, where teamwork was perceived
as a dominant TQM practice, improvements in job satisfaction levels were significant.
Yang (2006) commented that entire organization should work for improving quality
and support for quality improvement activities by implementing teamwork practice.
Formation of teams within an organization is critical to an organizations TQM
success. Thus, the following hypothesis is suggested:
H115. Teamwork for TQM practices is positively correlated with quality TQM and quality
performance. performance
Communication
Communication refers to information sharing process between individual/employees of
the organization (Ooi et al., 2007a). Managers and practitioners use effective
communication to enlist the support of other employees towards achieving 291
organizations objectives. Several studies noted that effective communication influence
the organization to move systematically towards employees involvement and customer
satisfaction and improves organization performance (Ooi et al., 2007a; Yusuf et al., 2007).
Based on the above literature review, the following hypothesis was proposed:
H116. Communication for TQM practices is positively correlated with quality
performance.
Research methodology
Research methodology is very important as it can guide researchers on what steps
needs to be taken in order to accomplish the objectives of the research (Tsang and
Antony, 2001; Antony et al., 2002). In order to accomplish the objective of this research
study, a questionnaire survey methodology was adopted and was carried out in select
Indian service companies. This section discusses research design, research instrument,
administration of instrument, sample, and data collection procedures used in the study.
Research design
The present research uses a descriptive cross-sectional study design. It is concerned with
analysis of phenomenon, situation, problem, opinions, and demographic information, or
issue. In fact, the majority of TQM and organization performance studies in service sector
have employed descriptive cross-sectional study design (Salaheldin, 2009; Miller et al.,
2009; Salaheldin and Mukhalalati, 2009; Duggirala et al., 2008; Wardhani et al., 2009). In
addition to this, the study also employed the survey method, which makes use of a
research instrument. This study utilizes electronic mail (e-mail) survey method as the
means of data collection which is commonly used in similar kind of research (Kureshi et al.,
2010; Zu, 2009; Sarvanan and Rao, 2007; Fotopoulos and Psomas, 2010).
IJQRM Sampling frame
30,3 The sampling frame used for this study is the list of select Indian service companies
published by the i-cube (i3, CMIE, 2010). The list provides the names of service
companies, complete addresses, pin code, persons to contact which in majority of cases
includes directors, CEO, managing directors, general managers, presidents, human
resource managers or technical managers. It also mentions telephone number(s), e-mail
292 addresses as well as the web site of the company.
The four service industries mainly included in this study are healthcare, banking,
hospitality (hotel and tourism), and information and communication technology (ICT)
which includes telecommunication services, information technology enabled services
(ITeS) and computer software services. The reasons for choosing these four industries
are their high GDP share in Indian economy (about 56 percent) (i3, CMIE, 2010); highly
labor intensive industries and provides substantial employment (MoL&E, GOI, 2010);
and there ever increasing net annual income to the Indian service sector (i3, CMIE,
2010). The list contains a total of 1,781 companies at the time of research period
covering all the four categories. These companies are frequently up-dated and
published by prominent and reliable source. The study was conducted between
February and May, 2011.
Sampling method
A stratified sampling method (a probability sampling technique) was used in this
study. This method was thought to be appropriate to collect sufficient information
from the total population to make statistical inferences. The major objective of
stratified sampling is to increase precision without increasing cost (Malhotra, 2007)
and above all many studies on TQM have deployed stratified sampling method for
data collection (Arumugam et al., 2009; Ooi et al., 2008; Lakhal et al., 2006; Sit et al.,
2009; Sila and Ebrahimpour, 2005). This study divides the target population (N) into
four strata. These four strata were: healthcare {120}, banking {200}, hospitality {350},
and ICT {1111}. Each stratum contains number of companies identified from the
source (i3, CMIE, 2010) as discussed above and are indicated in the brackets
corresponding to each industry or stratum.
Sample size
Based on the guidelines provided by Hair et al. (1998, 2006), Nunnally and Bernstein
(1994), the minimum sample size (n) was calculated according to the GDP contribution
of each service industry from the total contribution of GDP in the Indian service sector.
Assuming that the GDP of these four service industries constitutes 100 percent of
service industries, the minimum sample size based on GDP contribution was obtained
which is depicted in Table II.
The minimum sample size needed for this study comes out to be 591. This sample
was increased to 600 to reduce the probability of Type II error (Burgess et al., 2006).
The sample size of 600 is above the minimum requirement and is within the acceptable
range as per the guidelines proposed by the researchers. This minimum sample size
was stratified into four strata. The sample size drawn from each stratum, i.e. healthcare,
banking, hospitality, and ICT industries based on proportionate stratified sampling
technique were found to be 40, 67, 118, and 375, respectively. These samples were
drawn using a simple random sample approach.
Research instrument TQM and quality
A self-administered structured instrument was designed in this research based on the performance
service as well as manufacturing and service TQM literature specifically, the works of
Salaheldin (2009), Bayraktar et al. (2008), Brah et al. (2000), Sila and Ebrahimpour (2005),
Saravanan and Rao (2007), and Antony et al. (2002) were adopted and most of the items
were taken from these studies. The instrument was modified by consulting with
academicians and quality experts, and was initially validated through a pilot survey 293
before it was actually used for primary data collection. The instrument developed was
divided into three sections. The first section comprises the demographic information of
the respondents including profession, gender, years of experience as well as the general
background of the company. The second section consisting of 17 TQM practices with
110 items. Third section evaluates the performance of the company, i.e. the service
company performance result which was measured by using a performance indicator
quality performance through eight items (Arumugam et al., 2008; Brah et al., 2002;
Prajogo, 2005; Prajogo and Brown, 2004). The instrument comprises of a
non-comparative-itemized rating scale utilizing a five-point Likert scale, with 1 very
low, 3 moderate, and 5 very high, depending on the type of question. This is in line
with those suggested by Miller et al. (2009), Bayraktar et al. (2008) and Salaheldin (2009).
Variable measurement
.
Independent variables: TQM practices. A total of 110 items captured the 17 TQM
practices under investigation. These items were adopted form the scales
developed by Salaheldin (2009), Bayraktar et al. (2008), Brah et al. (2000), Sila and
Ebrahimpour (2005), Sarvanan and Rao (2007), and Antony et al. (2002). The
reasons for selecting these studies were that the scales of these studies have
shown good reliability and validity in all these studies and they are based on the
service as well as manufacturing and service industries.
.
Dependent variable: quality performance. Eight measurement items dealing with
product, process and service quality, employee service quality, employee
satisfaction, customer satisfaction, and supplier performance were adopted form
previous studies as discussed above to evaluate perceived quality performance.
The quality performance items of these studies also showed good validity and
reliability in assessing QM practices.
Profile of respondents
Table III depicts the profile of the respondents. The company variables consisted of
position of respondent, years of experience, gender, department/section, and type of 295
company. The ICT companies dominate the sample size (48.8 percent). While the
remaining three industries, i.e. healthcare, banking, and hospitality contributes 9.9, 21.5,
and 19.8 percent, respectively, in the sample. It was also observed that many of the
Indian service companies are male dominated companies (83.7 percent) in their quality
department. Further, in terms of years of experience, majority of the respondents were
having more than five years of experience (64.5 percent). This suggests that the majority
of participating companies is quite mature and has the knowledge of TQM in depth.
Finally, the responses received indicate the coverage of all the departments/sections of
the service companies by the present survey.
Frequency Percentage
Original Final
Original number alpha Items Final number alpha
Measure of items (reliability) deleted of items (reliability)
Independent variables
Top-management
commitment 9 0.865 2 7 0.932
Customer focus 9 0.876 1 8 0.902
Training and education 6 0.860 1 5 0.902
Continuous improvement
and innovation 7 0.793 1 6 0.882
Supplier management 8 0.910 None 8 0.910
Employee involvement 6 0.883 None 6 0.883
Information and analysis 5 0.874 None 5 0.874
Process management 6 0.775 1 5 0.833
Quality systems 5 0.667 1 4 0.784
Benchmarking 5 0.891 None 5 0.891
Quality culture 8 0.843 1 7 0.891
Human resource
management 7 0.902 None 7 0.902
Strategic planning 6 0.821 1 5 0.866
Employee encouragement 6 0.904 None 6 0.904
Teamwork 4 0.871 None 4 0.871
Product and service design 8 0.874 1 7 0.902
Communication 5 0.900 None 5 0.900
Table IV. Dependent variable
Internal consistency Quality performance 8 0.879 None 8 0.879
(scale reliabilities) for Total 118 10 108
17 TQM practices and
quality performance Note: n 172
refers to the degree to which the scale items represent the domain of the concept under TQM and quality
study. It is also a subjective measure of how appropriate the items seem to various performance
reviewers with some knowledge of the subject matter (Saraph et al., 1989). In this
research, it was argued that the 17 TQM practices for measuring TQM implementation
practices had face and content validity since the majority of scales/items used in this
study are borrowed from established scales that have already been subjected to tests of
face and content validity. Moreover, the content validity of the instrument was also 297
ensured through an extensive review of the literature and detailed evaluation by
academicians and practitioners. Items were deleted, added, or modified based on their
reviews prior to the analysis.
Construct validity
Construct validity is the extent to which a measure is related to other measures in a
manner consistent with theoretically based concepts (Bayraktar et al., 2008). In other
words, a measure has construct validity if it measures the theoretical construct or trait
that it was designed to measure. This was generally evaluated by FA. The primary
purpose of FA is to produce a parsimonious set of new composite dimensions from a
large number of variables with a minimum loss of information (Hair et al., 1998). Given
the nature and requirement of this study, EFA was employed to assess construct
validity. The EFA was performed and each scale was subjected to FA separately.
Factor analysis
FA is a statistical approach that can be used to analyze interrelationships among a
large number of variables and to explain these variables in terms of their common
underlying factors (Prasad et al., 2010). It is a multivariate data reduction technique,
consisting of selecting the method of extracting the components; the number of
components to be extracted; and the method of rotation for interpretation of the factors.
In this research study, principal component analysis method of FA followed by the
varimax orthogonal rotation was adopted on 17 TQM practices comparing of 100 items
by using SPSS 16.0 software. But before going for FA, one of the vital considerations in
FA is the sample size of the data (Hair et al., 1998). According to Hair et al. (1998),
a minimum of five subjects per variable is must for FA or a sample of 100 is acceptable to
achieve good results. The sample size of this study is 172. Accordingly, this means
that the sample size is adequate and further analysis can be done. In order to assess the
construct validity, factor loadings are obtained for each item. The loadings reflect
the strength of the relationship between an item and a particular factor or practice.
The higher the loading, the better the representation that particular item has on the
factor. In interpreting the factor, Comrey (1973) suggested that loading in excess of
0.45 could be considered fair, greater than 0.55 as good, 0.63 is very good, and 0.71 as
excellent. For this study, a loading of 0.50 or greater on the factor was considered
(Hair et al., 1998; Arumugam et al., 2008; Ooi et al., 2008). The results for the FA extracted
17 factors solution with Eigen value greater than one, and the total variance explained
was 72.0 percent. 20 items relating to these factors were deleted (i.e. customer focus
five items; training and education two items; employee involvement two items;
process management two items; quality systems two items; strategic planning
two items; employee encouragement one item; and product and service design four
items) due to low loadings. The Kaiser-Meyer-Olkin (KMO) measure of sampling
IJQRM adequacy was 0.870 which is greater than 0.60 indicate sufficient intercorrelations while
30,3 the Barletts test of sphericity was significant (x 2 17,325.27, p 0.000 , 0.01).
Further, the anti-image correlation matrix also revealed that all the measures of
sampling adequacy are well above the acceptable level of 0.50. Hence, a model with
17 factors or components might be adequate to represent the data. Further, it was found
that these 17 factors accounted for more than 70.0 percent of the variance of the
298 respective variable tests. This suggests that only a relatively small amount of the total
variance for each group of variables is associated with causes other than the factor itself.
Thus, results of the FA indicate a high level of construct validity of the measure. Finally,
a total of 80 items which are unidimensional and factorially distinct loaded on the
constructs were retained for further analysis. The results of FA are summarized in
Table V.
Similarly, another FA was undertaken to see the dimensionality of the dependent
variable (quality performance) representing eight items. A single factor solution
emerged with Eigen value 4.33 explaining 54.24 percent of variance in the data. The
KMO measure of sampling adequacy was 0.879 indicating sufficient intercorrelations,
while the Barletts test of sphericity was significant (x 2 584.00, p 0.000 , 0.01).
The results of FA for quality performance are summarized in Table VI.
The reliability of the instrument was tested again on each TQM practice
(independent variables) and quality performance (dependent variable). The Cronbachs
a values of the study variables are shown in Tables V and VI. The reliability
coefficient of the study variables exceeded the minimum acceptable level of 0.70, thus,
providing strong evidence that the scales developed are judged to be reliable
(Nunnally and Bernstein, 1994; Hair et al., 1998).
Criterion validity
Criterion-related validity is concerned with the extent to which a measuring
instrument is related to an independent measure of the relevant criterion (Badri et al.,
1995) and is sometimes also called as external validity or predictive validity. The
17 TQM practices have high criterion-related validity if these practices are highly and
positively correlated with quality performance of the Indian service companies. The
criterion-related validity of the combined set of 17 TQM practices was evaluated by
examining the Pearsons correlation coefficients (r) computed for the 17 TQM practices
and quality performance as a measure of outcome as well as multiple regression
analysis was employed to test the above hypotheses (H11-H117).
Cronbachs
Items Loadings a
There was a significant positive relationship between quality culture and quality
performance (r 0.699, p , 0.01). It was followed by top-management commitment
(r 0.637, p , 0.01); customer focus (r 0.657, p , 0.01); training and education
(r 0.686, p , 0.01); continuous improvement and innovation (r 0.659, p , 0.01);
employee involvement (r 0.431, p , 0.01); information and analysis
30,3
304
IJQRM
Table VII.
performance
analysis of TQM
Pearsons correlation
Quality
performance 1.000
Top-
management
commitment 0.637 * * 1.000
Customer focus 0.657 * * 0.709 * * 1.000
Training and
education 0.686 * * 0.661 * * 0.744 * * 1.000
Continuous
improvement
and innovation 0.659 * * 0.816 * * 0.738 * * 0.715 * * 1.000
Supplier
management 0.297 * * 0.247 * * 0.387 * * 0.377 * * 0.226 * * 1.000
Employee
involvement 0.431 * * 0.298 * * 0.417 * * 0.460 * * 0.295 * * 0.644 * * 1.000
Information and
analysis 0.466 * * 0.404 * * 0.523 * * 0.486 * * 0.431 * * 0.488 * * 0.605 * * 1.000
Process
management 0.491 * * 0.394 * * 0.551 * * 0.586 * * 0.464 * * 0.437 * * 0.454 * * 0.527 * * 1.000
Quality systems 0.658 * * 0.658 * * 0.615 * * 0.652 * * 0.707 * * 0.202 * * 0.294 * * 0.458 * * 0.435 * * 1.000
Benchmarking 0.409 * * 0.403 * * 0.523 * * 0.351 * * 0.371 * * 0.330 * * 0.289 * * 0.515 * * 0.389 * * 0.441 * * 1.000
Quality culture 0.699 * * 0.755 * * 0.693 * * 0.631 * * 0.797 * * 0.205 * * 0.331 * * 0.390 * * 0.401 * * 0.663 * * 0.510 * * 1.000
Human resource
management 0.311 * * 0.195 * 0.326 * * 0.384 * * 0.194 * 0.729 * * 0.623 * * 0.500 * * 0.410 * * 0.224 * * 0.344 * * 0.199 * * 1.000
Strategic
planning 0.524 * * 0.397 * * 0.615 * * 0.520 * * 0.415 * * 0.480 * * 0.555 * * 0.595 * * 0.514 * * 0.456 * * 0.586 * * 0.415 * * 0.397 * * 1.000
Employee
encouragement 0.436 * * 0.312 * * 0.462 * * 0.534 * * 0.387 * * 0.725 * * 0.639 * * 0.516 * * 0.494 * * 0.331 * * 0.337 * * 0.348 * * 0.680 * * 0.511 * * 1.000
Teamwork 0.608 * * 0.440 * * 0.599 * * 0.584 * * 0.499 * * 0.300 * * 0.485 * * 0.479 * * 0.481 * * 0.525 * * 0.451 * * 0.593 * * 0.287 * * 0.566 * * 0.501 * * 1.000
Communication 0.535 * * 0.424 * * 0.549 * * 0.481 * * 0.448 * * 0.365 * * 0.512 * * 0.540 * * 0.460 * * 0.454 * * 0.534 * * 0.480 * * 0.350 * * 0.669 * * 0.506 * * 0.729 * * 1.000
Product and
service design 0.598 * * 0.539 * * 0.602 * * 0.541 * * 0.537 * * 0.349 * * 0.501 * * 0.569 * * 0.466 * * 0.574 * * 0.590 * * 0.600 * * 0.356 * * 0.704 * * 0.459 * * 0.700 * * 0.746 * * 1.000
Notes: Correlation is significant at: *p , 0.05 and * *p , 0.01 levels (two-tailed); n 172
(r 0.466, p , 0.01); process management (r 0.491, p , 0.01); quality systems TQM and quality
(r 0.658, p , 0.01); benchmarking (r 0.409, p , 0.01); human resource performance
management (r 0.311, p , 0.01); strategic planning (r 0.524, p , 0.01);
employee encouragement (r 0.436, p , 0.01); teamwork (r 0.608, p , 0.01);
communication (r 0.535, p , 0.01); and product and service design (r 0.598,
p , 0.01). The weakest correlation was for supplier management and quality
performance (r 0.297, p , 0.01). It was found that all the TQM practices had 305
significant positive correlation ( p , 0.01) with quality performance. The results also
indicate that respondents had high levels of companys quality performance. Out of 153
correlations, all correlation coefficient are larger than 0.20. The highest coefficient of
correlation in this research however, is 0.816 which is below the cut-off of 0.90 for the
collinearity problem. Further, the correlation coefficient between the independent
variables and dependent variable were less than 0.90, indicating that the data was not
affected by a collinearity problem (Hair et al., 1998). Hence, collinearity and
multicollinearity do not represent data problems in this research study. The results
further indicated that the most important TQM practice affecting quality performance
was quality culture (i.e. with the highest score of correlation), which goes to prove that
where quality culture was perceived as a dominant TQM practice, improvements in
quality performance levels were significant. Similarly, training and education; customer
focus; continuous improvement and innovation; quality system; and teamwork were also
found affecting quality performance as their scores were also high.
0.6
306
0.4
0.2
Figure 2.
Normal P-P plot of
regression standardized 0.0
0.0 0.2 0.4 0.6 0.8 1.0
residual
Observed Cum Prob
Dependent Variable: QP
Regression Standardized Residual
4
Figure 3.
4 2 0 2
Scatter plot
Regression Standardized Predicted Value
Change statistics
Adjusted SE of the R2 F Significance Durbin-
Model R R2 R2 estimate change change df1 df2 F change Watson index
in the data (Durbin and Watson, 1951). Also, from Table IX, each of the variables had a
tolerance value of more than 0.10 and variation inflation factor (VIF) of less than 10.
The finding indicated that the model had no serious multicollinearity problem (Hair et al.,
1998) as also found in Pearsons correlation analysis in the previous section. This
indicated that there is a statistically significant relationship between TQM practices
and quality performance. From these analyses, it can be concluded that multiple
regression model of this study meets all the assumptions required to ensure validity of
its significance test (Ooi et al., 2007a, b, 2012).
TQM and quality
Unstandardized Standardized Quality Collinearity
Independent coefficients coefficients performance statistics performance
Model variable(s) B SE b t-value Sig. Tolerance VIF Results
In order to judge the magnitude of effects in this study, Cohens rules for effects sizes
can be used. According to Cohen (1988) as cited by Jitpaiboon and Rao (2007), R 2
between 1.0 and 5.9 percent is considered as small, between 5.9 and 13.8 percent
is medium, and above 13.8 percent is large. From Table VIII, it can be observed that
coefficient of determination (R 2) was 0.646, representing that 64.6 percent of quality
performance can be explained by the 17 independent variables. This expresses that
TQM can significantly account for 64.6 percent in quality performance. Thus, the effect
size for this study is large and H1 was partially supported. The proposed model was
IJQRM adequate as the F-statistics {F(17,154) 16.538} was significant at 1 percent level
30,3 ( p , 0.01). This indicated that the overall model was statistically significant and
positive relationship between TQM practices and quality performance (Table VIII).
The results of multiple regression analysis, include the standardized b coefficients
and t-value significant level, are tabulated and presented in Table IX. The results also
indicated that there are five practices of TQM, namely: training and education; quality
308 systems; benchmarking; quality culture; and teamwork which are positively associated
with quality performance. The individual model variable revealed that training and
education (b 0.172, p , 0.1); quality systems (b 0.177, p , 0.05); benchmarking
(b 2 0.192, p , 0.1); quality culture (b 0.306, p , 0.01); and teamwork (b 0.184,
p , 0.1) are all directly involved in the improvement of quality performance. Therefore,
H13, H19-H111, and H115 were supported. Meanwhile, top-management commitment;
customer focus; continuous improvement and innovation; supplier management;
employee involvement; information and analysis; process management; human resource
management; strategic process; employee encouragement; product and service design;
and communication had no significant effect on quality performance. Hence, H11, H12,
H14-H18, H112-H114, H116, and H117 were not supported. However, these practices
have provided long-term (strategic), operational, and tactical (supportive) as well as
infrastructural benefits necessary for the continuous improvement over time but with an
indirect relationship towards quality performance.
Discussion
The overall objective of this section was to examine the nature of TQM practices and
its relationship towards quality performance within Indian service sector. Overall, the
outcome of this study indicated that the TQM practices were found to be partially
correlated with quality performance of the Indian service companies.
The determinants of TQM practices in quality performance were training and
education; quality systems; benchmarking; quality culture; and teamwork. The study
further revealed that where quality culture was perceived as a dominant TQM practice,
there was strong association with quality performance. The result implies that TQM
recognizes and emphasizes the importance of quality culture to monitor organizational
culture and to evolve better TQM practices so that quality performance and other
quality-related outcomes are maintained at a high level. The result provide supporting
evidence from the views of Yusof and Ali (2000) which states that organizational
culture is not only able to change, guide, and display behavior of the individual but
also give significant contribution by influencing the thoughts, feelings, satisfaction,
interactions, and affective reactions within the company. Further, the study by Ooi et al.
(2007b) also provided the supporting evidence that there is a significant relationship
between quality culture and employees job satisfaction. According to Saravanan and
Rao (2007), deployment of quality culture within the organization is the major factor for
organization to be successful and to achieve quality products and services.
The next dominant TQM practice found in this study which has strong and positive
association with quality performance is quality systems. The result indicates that
TQM recognizes and emphasizes the importance of quality systems as a process
approach in deploying, implementing, and improving the effectiveness of companys
QM system. The study further revealed that the service companies must better utilize
processes in their QM system. The processes may be properly aligned and measured
against key objectives to identify opportunity for improvement. This finding was also TQM and quality
supported by Zhang (2000). Schevermann et al. (1997) further reported that use of performance
quality systems like quality tools and techniques in service organizations are beneficial
for its business performance. However, the results are in contrast with an earlier work
of Arumugam et al. (2008).
Training and education was discovered to be significant and positively related to
quality performance. However, this result is inconsistent with the outcomes of Zhang 309
(2000) and Ooi et al. (2008). Training and education is important and management should
understand that there activities lead to long-term commitment, as the outcome of TQM
implementation are not realized immediately. It was also discovered that training and
education has more positive effects on service industries workers rather than
manufacturing industries workers (Zhang, 2000). As per Cherrington (1995), in order to
minimize TQM barriers like employee absenteeism and high-turnover rate, and when
employees are not satisfied, top-management proposes a company-wide training
program. Study by Karia and Asaari (2006) also emphasized the use of training and
education practice within an organization to increase business performance.
Teamwork was found to be significant and positively related to quality performance.
The positive influence of teamwork on quality performance was concurred with prior
findings (Ooi et al., 2007b, 2008; Yang, 2006). Teamwork leads to facilitate employees
ability to work together as a team and with full participation (Karia and Asaari, 2006;
Yang, 2006). It was also found that working together as a unit improves employees
attitudes (Osland, 1997). According to Anschutz (1995), participation in teamwork was
the major factor for a successful organization to achieve collaboration between
employees and management.
Similarly, benchmarking was found significant and positively associated with
quality performance. In order to compete in the market, benchmarking helps in
improving the performance of the company (Yusuf et al., 2007). Benchmarking discovers
the best practices, sets target, and adopt them in the company to achieve competitive
advantages. Hence, benchmarking leads to meeting customers need (Yusuf et al., 2007).
Conversely, top-management commitment was found not significantly associated
with quality performance. It showed that the level of management involvement still not
intensive enough to influence quality performance. The finding supported the work of
Arumugam et al. (2008) and Sit et al. (2009).
Supplier management was found not significant enough to influence quality
performance. The finding suggested that the level of performance and relationship in
products, processes, and service development was relatively poor. As a result, supplier
management as a TQM practice does not affect quality performance. This finding was in
line with prior research (Zhang, 2000; Arumugam et al., 2008; Talib and Rahman, 2012).
It was also discovered that strategic planning is insignificant to quality
performance. This implies that strategic planning in the service companies of India
failed to induce it, which contradicts with the previous study of Terziovski (2006).
Further, the service industries must have clear mission and vision statement in order to
improve quality performance of the company. From the TQM perspective, a quality
policy is usually communicated via a quality vision statement (Sit et al., 2009).
Finally, process management was also found to be insignificant to quality
performance. This result is consistent with the findings of Sit et al. (2009).
Also, information and analysis; human resource management; and customer focus were
IJQRM also discovered to be insignificant to quality performance. The result of this study is
30,3 in contrast with Sit et al. (2009) and Ott and van Dijk (2005).
Furthermore, the results of bivariate and multiple regression analyses confirmed
that the quality performance variable was significantly related to perceptions of TQM
practices and thus, implementing TQM does payoff.
310 Conclusions
This research paper has accomplished the stated objectives of the study successfully
and analyzed the relationship between the TQM practices and quality performance in
the Indian service companies.
The study found 12 TQM practices (top-management commitment, customer focus,
continuous improvement and innovation, supplier management, employee involvement,
information and analysis, process management, human resource management, strategic
planning, employee encouragement, product and service design, and communication) to
be partially influencing the companys quality performance. In response to RQ1, the
findings presented empirical evidence that TQM have significant and positive
association with quality performance. In response to RQ2, the findings indicated that
where quality culture was perceived as a dominant TQM practice, it has strong
association with companys quality performance. However, the findings also indicated
the importance of quality systems, training and education, teamwork and
benchmarking for predicting companys quality performance. Thus, the results of the
study reported five practices of TQM that are more significantly associated with
the improvement in companys quality performance and provides evidence of the
positive impact of TQM on companys quality performance.
Furthermore, the study provided a useful framework for evaluation of TQM
implementation in Indian service companies as measured by the survey instrument
and identified 17 TQM practices for its successful implementation. These practices
relate to perception of quality performance. All the 17 TQM practices were found to
correlate with quality performance, regardless of the nature and type of the company.
This study provided the impact of TQM on company performance in both qualitative
and quantitative terms.
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