Quality management in TQM versus non-TQM firms: an empirical investigation. (total quality management)

Introduction

The total quality management (TQM) revolution of the 1980s is rooted in the challenges faced by US firms from overseas competitors, notably the Japanese. The Japanese firms have proven that, in today's volatile markets, producing a superior quality product at a lower price is an effective competitive strategy. Analysis of quality management practices of the Japanese firms[1-4], early success of major US corporations such as Motorola and Ford with TQM implementation and inception of the Malcolm Baldrige National Quality Award (MBNQA) have led to a formal recognition of this philosophy. As a result, over the past few years, the number of firms embarking on formal TQM implementation has grown significantly[5].

However, many firms embracing TQM are failing in their efforts[6]. Peter Senge[7], in his 1993 ASQC annual conference keynote address, summarized surveys by Arthur D. Little and MacKensie, and presented the following conclusions:

* of 500 TQM firms surveyed, less than a third were accomplishing anything; and

* two-thirds of the TQM programmes had ground to a halt.

Major reasons cited for the failure of TQM efforts are: lack of top management commitment, unrealistic expectations about time-frame and cost of TQM implementation, over- or under-reliance on statistical methods, and failure to develop and sustain a quality-oriented culture[8-10]. Several organizations are viewing a TQM campaign as a panacea and a cure-all for every problem. They embrace this approach without understanding its impact on the long-term management practices of their organizations[11] and fail to achieve lasting improvements. Hence, it is essential for these organizations to understand the short- and long-term implications of embarking on a TQM initiative.

The MBNQA has formalized assessment of various elements of TQM implementation[12] into seven categories. However, these categories do not provide specific guidelines on "how to" implement TQM. For a successful TQM implementation, firms need to know how to implement its various elements and how these elements impact the final product quality. If quality management efforts are not reflected in better products, a firm may lose its customers[13,14]. Hence, improving product quality should be the prime objective of a firm's quality management efforts and product quality should be used as a primary indicator of the firm's quality efforts.

From a research perspective, TQM literature has been dominated by conceptual papers and case studies highlighting success stories[15]. Conceptual and case studies, while providing insights into key elements of TQM strategies, cannot generalize the prescriptions. A few empirical studies have also focused on the relationship between various quality management elements and performance. For example, Benson et al.[16] report one of the first empirical efforts to analyse the effect of an organization's quality background on its actual quality performance. Zeithaml[14] discusses the impact of product quality on a firm's market share. Roth and Miller[17] discuss the effect of key manufacturing and operational factors (including quality) on a firm's overall performance. A few comparative studies of firms implementing TQM versus non-TQM firms have been reported[18-21]. These studies assess only specific, limited aspects of quality management strategies such as shopfloor employee involvement or the use of SPC tools. Thus, the existing TQM literature does not provide a detailed comparison of the various elements of quality strategies implemented in TQM and non-TQM firms. Second, the empirical research does not focus on the specific strategies used by TQM firms which successfully achieve high product quality vis-a-vis less successful TQM firms. Third, the issue of whether a firm can use TQM philosophy without formally announcing a TQM campaign has not been addressed at all. This is certainly a critical issue for organizations contemplating an investment of capital and efforts in a formal TQM campaign. In particular, a perception among practitioners that a TQM campaign will solve all problems without any delays and costs may be suicidal. Finally, researchers and practitioners use the term TQM firm to denote a firm which has formally undertaken a TQM campaign. Based on their proclamation of a TQM campaign, firms are classified as TQM firms or non-TQM firms. An analysis based on the naive classification scheme may lead to erroneous findings, especially if an empirical evidence suggests that a non-TOM firm may surpass a formal TQM firm in executing the various elements of the TQM philosophy. In summary, it is essential that empirical research addresses whether TQM firms manage quality better, and also if a non-TQM firm can produce a quality product without a half-hearted formal TQM campaign. In order to test the validity of such a conventional dichotomy, the subsequent analysis in this paper will use the term TQM firm to mean a firm which has formally implemented a TQM campaign.

Accordingly, the major objectives of this research are to:

* test if TQM firms execute various TQM elements significantly differently from non-TQM firms;

* test if TQM firms provide a better product quality than non-TQM firms;

* identify differences in quality strategies implemented by highly successful TQM firms (with a superior product quality) and the less successful TQM firms;

* test if it is possible for non-TQM firms to incorporate TQM elements in their quality strategy and; thereby, produce better quality products than less successful TQM firms;

* identify differences in quality strategies implemented by highly successful non-TQM firms (with a superior product quality) versus less successful non-TQM firms.

Answering these questions will help firms decide on whether to embark on a long-term investment in formal TQM efforts. It will also benefit researchers to better understand the differences between formal TQM implementation and real adoption of the TQM philosophy. When comparing TQM practices of firms, this could shift the focus of analysis from the use of formal pronouncements as a measure of classifying firms as TQM versus non-TQM firms to a more detailed analysis of firms' quality strategies.

The remainder of this paper is organized as follows. To test differences between TQM and non-TQM firms, hypotheses are developed in the following section. The research methodology for the survey and statistical analysis are discussed in the next section followed by the results of the survey. Finally, the paper concludes with a summary of major results and implications for TQM theory and practice.

Hypotheses

A comprehensive review of the TQM literature identified and developed scales for the following ten constructs of TQM implementation[22]:

(1) Top management commitment. (2) Customer focus. (3) Supplier quality management. (4) Design quality management. (5) Benchmarking. (6) Statistical process control (SPC) usage. (7) Internal quality information usage. (8) Employee involvement. (9) Employee …