Milé Terziovski

The relationship between total quality management practices and operational performance

Abstract Total quality management (TQM) has been a widely applied process for improving competitiveness around the world, but with mixed success. A review of the literature revealed gaps in research in this area of quality/operations management, particularly in the area of empirical testing of the effectiveness of TQM implementation. The aim of this study was to examine the total quality management practices and operational performance of a large number of manufacturing companies in order to determine the relationships between these practices, individually and collectively, and firm performance. We used a large data base of 1200 Australian and New Zealand manufacturing organisations. The reliability and validity (construct, content, criterion) of the practice and performance measures were evaluated. Our study showed that the relationship between TQM practice and organisational performance is significant in a cross-sectional sense, in that TQM practice intensity explains a significant proportion of variance in performance. Some but not all of the categories of TQM practice were particularly strong predictors of performance. The categories of leadership, management of people and customer focus were the strongest significant predictors of operational performance. This is consistent with literature findings that behavioural factors such as executive commitment, employee empowerment and an open culture can produce competitive advantage more strongly than TQM tools and techniques such as process improvement, benchmarking, and information and analysis.

The link between total quality management practice and organisational performance

Tests the strength of the relationship between TQM practice and organisational performance with and without the covariates, company size, industry type, and ISO 9000 certification status. Analysis is primarily of a large random sample of manufacturing companies in Australia and New Zealand. The central finding of the study is that TQM tends to have mixed results when covaried for company size and industry type. The relationship between TQM and organisational performance is not affected when covaried for ISO 9000 certification status. Concludes that there are significant differences in the relationship between TQM and organisational performance across industry sectors and different size companies, particularly on the effect of defect rates, warranty costs and innovation of new products. The main implication of the findings for managers is that a typical manufacturing organisation is more likely to achieve better performance in employee relations, customer satisfaction, operational performance and business performance, with TQM than without TQM.

TQM in Australian manufacturing: factors critical to success

Discusses the trends in the adoption of quality management practices in the Australian manufacturing industry and highlights some of the barriers to the adoption of such practices. Furthermore, the paper discusses the factors that are considered to be critical to the adoption of TQM in Australian manufacturing. The longitudinal quantitative and qualitative results show that TQM is largely implemented in the manufacturing/operations function with little progress in other functional areas. Overall, the popularity of TQM, ISO 9000 certification, statistical process control and quality circles has diminished. The obstacles to the adoption of quality management practices point to the short‐term vision of Australian managers and the misconception concerning the costs and benefits associated with a TQM programme. Based on the results of surveys and the case study research, numerous factors critical to success are identified. Concludes that there is no single best approach to implementing the TQM philosophy. An approach unique to the needs and culture of the organization must be developed.

The adoption of continuous improvement and innovation strategies in Australian manufacturing firms

Abstract The purpose of this study was to investigate the adoption of Continuous Improvement (CI) strategies of a large random sample of Australian manufacturing firms. The study was undertaken as part of a wider international survey investigating continuous improvement practices in Australia, Denmark, Finland, Sweden, the Netherlands, and the UK. The survey was mailed to 1200 managers responsible for manufacturing organisations in Australia. A response rate of 32 per cent was obtained. The quantitative data was analysed using a Statistical Package for Social Sciences (SPSS). The data analysis revealed that the motivation to adopt CI was related to improved quality conformance, increased productivity, reduced costs, and improvement in delivery reliability. Past experiences of CI were positively correlated with the length of time the process had been in use; the breadth of its application; the percentage of employees actively involved in the program (for operators and non-operators) and training in problem solving. Therefore, the critical implication for managers is that future management development initiatives need to include strategies to assist managers with their understanding of the potential benefits of the CI process, based on “soft” management practices.

The effect of company size on the relationship between TQM strategy and organisational performance

The purpose of this study was to test the effects of company size on the strength of the relationship between TQM and organisational performance. Based on a cross‐sectional study of manufacturing firms in Australia and New Zealand, the paper tests two hypotheses involving TQM and organisational performance. The central finding of the study is that TQM has a significant and positive relationship with most of the dimensions of organisational performance. The relationship weakened for defect rates and warranty costs when it was co‐varied for company size. We conclude that company size impedes the implementation of TQM. Larger companies tend to gain greater benefits from TQM than smaller firms. These findings are consistent with some of the literature. Overall, the findings show that a typical manufacturing organisation is more likely to achieve high organisational performance with TQM than without TQM. The findings have implications for managers wishing to formulate a business strategy based on TQM.

Longitudinal analysis of quality management practices in Australian organizations

Higher requirements for improved quality of products and services have led to three important changes in international business over the last decade: (i) the growing recognition of the strategic importance of total quality management (TQM) philosophy and methods; (ii) a major push by organizations world-wide to seek certification to the ISO 9000 quality standards; and (iii) the growing recognition and application of the Malcolm Baldrige National Quality Award, the Australian Quality Award and the European Quality Award. Despite these developments, there is still considerable confusion and frustration surrounding the applied role and business value of quality management practices in Australian industry. A review of the literature revealed a major gap in research in this area of operations/quality management. The purpose of the paper is to evaluate the results of three empirical studies conducted in 1991, 1993 and 1996 on the adoption of quality management practices in Australian manufacturing organizations...

Establishing mutual dependence between TQM and the learning organization: a multiple case study analysis

Reports on a theoretical framework based on Senge’s principles and the Malcolm Baldrige National Quality Award (MBNQA) criteria. Qualitative data were gathered from five Australian companies that had established practices in the TQM field. Multiple cross‐case content analysis was undertaken to evaluate the proposition that “TQM and the Learning Organization are mutually dependent”. Our major finding is that TQM principles and concepts underpin the evolution of the learning organization. The implication is that managers that are involved in TQM do not need a new mindset or paradigm called “learning organization”. Organizations need to recognise that their continuous improvement activities as part of the TQM philosophy have created their “learning organization”.

Comparing quality management practices in the Australian service and manufacturing industries

Presents a comparative analysis of the attitudes to and the use of quality management practices (QMP) in Australia’s manufacturing and service industries. Outlines the survey methodologies, lists questions asked and summarizes responses to them. Identifies and comments on statistically significant differences in the use of quality management practices between the two sectors. Discusses the attitudes towards the use of and factors which encourage or discourage the implementation of QM practices in Australia’s manufacturing and service industries. Finds that the manufacturing sector uses quality management practices more than the service sector. Attempts to explain these differences and suggests further research.

Best practice implementation of total quality management: Multiple cross-case analysis of manufacturing and service organizations

This paper examines best practice implementation of total quality management (TQM) in eight Australian manufacturing and service organizations. Multiple cross-case analysis is used to synthesize the information obtained from the case studies. The insights gained from the case studies are used to discuss the critical success factors (CSFs) that characterize Australian quality organizations and the essential steps in implementing TQM. Leadership and quality-based vision of world-class performance has emerged as major factors that underpin best practice in TQM implementation. Participation by employees and unions in the development of an organizations vision was seen as critical in gaining high-level commitment to the organizations goals. Other CSFs include: the identification of customer expectations and measurement of perceptions; clearly defined, and agreed by all, strategy for implementation; establishment of a formal structure for controlling, monitoring and reporting improvement initiatives; implem...

Building Innovation Capability in Organizations:An International Cross-Case Perspective

Global competition, shorter product lifecycles and increasingly demanding customers are creating significant pressures for the creation of innovative organizations. By examining eight case studies in various industry sectors in Europe, Australia, Japan and Thailand, this book provides a qualitative explanation of the complex relationships between innovation capability, e-commerce, sustainable development and new product development. The book explores how organizations develop innovation capability through the application of e-commerce, sustainable development-orientation, and new product development in order to gain competitive advantage. This knowledge will help managers, academics and policy-makers understand “what works, and why and how it works” in creating innovation-driven organizations from an international perspective, thereby providing an integrated approach to innovation management.