Arawati Agus

The structural impact of total quality management on financial performance relative to competitors through customer satisfaction: A study of Malaysian manufacturing companies

Total quality management (TQM) is a management philosophy under which an organization operates which seeks to improve quality and increase customer satisfaction. The philosophy is holistic, applying to everything (total). Its aim is to satisfy all customers, internal and external, speci® cally users of the customers’ products and services (quality), and it follows the example set and reinforced in the organization (management). TQM is not only a management process, but also a corporate philosophy which recognizes that customer needs and business goals are inseparable. To be successful, it must be top management-driven and focus on maximizing eYciency and eVectiveness, and promoting market dominance through improving systems and processes, error prevention, and aligning business objectives and customer needs. The main objective of TQM is to establish a management system and corporate culture to ensure that customer satisfaction is enhanced. The organization’s culture is de® ned by and supports the constant attainment of customer satisfaction through an integrated system of tools, techniques and training. This involves a systematic method for continuous improvement of organizational processes, resulting in high-quality products and services (Sashkin & Kiser, 1991; Waldman, 1994). The growing interest in TQM implementation has led to the emergence of a distinct stream of quality research. However, despite the attention given to TQM in real-world organizations, not many researchers have addressed the topic from the ® nancial perspective. Some have stated that, while hard to establish, the link between quality and ® nancial performance is strong. Most of the studies conducted have focused on the aspect of quality system or issues pertaining to improvements of product or technical elements. Mostly, past research on `quality’ has been conducted in organizations from developed countries in the

An exploratory study of service quality in the Malaysian public service sector

Purpose – The paper seeks to obtain a better understanding of the extent to which service quality permeates within the Malaysian public service sector by drawing on management and customer perceptions of service quality.Design/methodology/approach – Two separate surveys were distributed to managers and customers across 86 branches of a public sector department within the Malaysian Ministry. The manager survey comprised instruments relating to organisational service performance, while the customer survey contained instruments relating to service quality and customer satisfaction. A total of 430 manager and customer surveys were completed, representing a 95 percent response rate.Findings – The results support the conceptual model in demonstrating a strong correlation between service quality dimensions, service performance and customer satisfaction. In particular, service providers classified as “excellent” were rated most favourably in terms of responsiveness, access and credibility.Research limitations/imp...

TQM as a Focus for Improving Overall Service Performance and Customer Satisfaction: an Empirical Study on a Public Service Sector in Malaysia

This paper is based on the result of a TQM study aimed at identifying the relationship between TQM and overall performance as well as the strength of their manifest indicators. Several studies have proven that TQM practices have a significantly positive impact on organizational performances. This study sought to enhance the understandings of relationships between TQM practices and the overall performance of a public service sector in Malaysia. Statistical methods include reliability analysis, correlation analysis, and a structural equation modelling. The results of this study highlight strong and positive association between TQM, overall service performance and customer satisfaction and suggest that an emphasis on quality would result in organizational gains. The findings suggest that employee focus is a very important factor in TQM implementations followed by training, customer focus, benchmarking and top management commitment. The results also exhibit the unique contribution of TQM towards service performance and customer satisfaction.

Cost of quality: The hidden costs

The concept of the economics of quality can be traced back to the early 1950s. Dr Juran’s ® rst `Quality Control Handbook’ , published in 1951, was called The Economics of Quality and contained discussions of the `cost of quality’ (COQ). Measuring and reporting the COQ is the ® rst step in a quality management programme (Tsai Wen-Hsien, 1998). We must remember, if there is a need to control anything, the ® rst thing to do is to measure. As it is, without measuring we cannot control. Therefore, the measurement for quality can become consistent with the language of all important business measurementÐ money.

The structural relationships between total quality management, competitive advantage and bottom line financial performance: An empirical study of Malaysian manufacturing companies

This paper attempts to enhance the understanding of relationship between total quality management (TQM), competitive advantage and bottom line financial performance. In addition, it tries to provide evidence for the notion that TQM has an influence on financial performance. A structural model is tested on data gathered on a stratified random sample of Malaysian manufacturing companies through the application of reliable measures. Results highlight the unique contributions of TQM practices and the significant role of competitive advantage as an intervening variable in the relationship between TQM and financial performance.

A linear structural modelling of Total Quality Management practices in manufacturing companies in Malaysia

This paper discusses and reviews total quality management (TQM) practices in the public listed manufacturing companies in Malaysia. It also investigates the relationship between TQM practices, customer satisfaction, competitive advantage and the bottom line financial performance using a linear structural equation modelling. The findings indicate that training and top management commitment play very important roles in TQM implementations. In addition, rivalry (competition) is a significant element in gaining and sustaining competitive advantage of the manufacturing companies in Malaysia. The results also show that product quality, product features and timely delivery are very crucial in promoting customer satisfaction.

On service improvement capacity index: A case study of the public service sector in Malaysia

The ultimate goal of the total quality management (TQM) eVort in service industries is customer satisfaction. Measuring service quality of an organization that focuses on customers and satisfying customers’ requirements is thus very vital. Service features that conform to the needs of the customers should be designed and concentrated upon. Through customer surveys, information was obtained that was able to indicate to a certain extent whether ® xed quality standards are actually adequate. The public service sector, being a service provider to the public, should not be immune from pressure that drives an organization to be successful with quality services that satisfy their customers. According to Randall and Senior (1994), public sector services are experiencing pressures as a result of ® nancial constraints, legislative changes, criticism of standards and political tension. Together with internal pressure, the desire for improved quality of service has increased. Thus, service quality initiatives in the public service, although funded through budget allocation resources, need to focus and contribute to social good. There are two types of customers to the public services according to Donnelly et al. (1995): the recipients or users of services which make either little or no ® nancial contribution towards their provision; or those who have to pay for a particular public service but do not experience its bene® t through direct use. To improve the service of the public sector, methods for evaluating customer services need to be adapted suitably. An approach for assessing the quality of service is through customer satisfaction surveys, which articulate customers’ perceptions of the service delivery and expectation of service quality. This is particularly important since customers’ feedback is very useful to determine which feature in the service needs to be improved. According to Curry and Herbert (1998), Ovretveit (1991) took into account the three quality categories in public service organizations, which consist of

Computerised materials requirement planning in manufacturing companies in Malaysia

Abstract This paper reports results of a sample survey on usage of computerised Materials Requirement Planning (MRP) system in Malaysian manufacturing companies. Although the system has been widely used in more advance countries, the degree of usage among Malaysian manufacturers is minimal. The benefits derived as reported by the users in Malaysia are similar to those indicated by the users in other countries. Among the non-users, it is found that their operating activities are suitable for the implementation of computerised MRP system and significant benefits can be derived from it, provided the financial and know-how limitations can be overcome.