International Journal of Quality & Reliability Management

The impact of total quality management and entrepreneurial orientation on

organizational performance
Hassan Saleh Al-Dhaafri Abdullah Al-Swidi

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Hassan Saleh Al-Dhaafri Abdullah Al-Swidi , (2016),"The impact of total quality management and
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Reliability Management, Vol. 33 Iss 5 pp. 597 - 614
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QUALITY PAPER

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The impact of total

quality management and
entrepreneurial orientation on
organizational performance
Hassan Saleh Al-Dhaafri

The impact of
TQM and EO
on OP
597
Received 16 April 2014
Revised 16 January 2015
Accepted 24 January 2015

Dubai Police, Dubai, United Arab Emirates and

College of Business Administration (COBA),
American University in the Emirates (AUE),
Dubai, United Arab Emirates, and

Abdullah Al-Swidi
College of Business and Economics, Qatar University, Doha, Qatar
Abstract
Purpose The purpose of this paper is to examine the joint effect of entrepreneurial orientation (EO)
and total quality management (TQM) on the organizational performance (OP).
Design/methodology/approach To examine the hypothesized model of the study, the survey
questionnaire research design was employed. The data were collected from Dubai police departments.
The total number of questionnaires distributed was 320 out of which only 111 usable questionnaires
were returned. The structural equation modeling partial least squares approach was used.
Findings The statistical results confirmed the effect of EO and TQM on the OP.
Practical implications Further details and valuable implications of this study were discussed
throughout the study. The results of this study have many practical implications. The results will help
managers to take the proper decision when deciding to implement TQM in their organizations.
The TQM can help managers with strong EO to achieve the maximum performance in organizations
and to remain competitive in the market.
Originality/value This study is considered one of the very few empirical studies that examine the
effect of EO and TQM the OP.
Keywords Total quality management, Organizational performance, Entrepreneurial orientation,
Dubai police
Paper type Research paper

1. Introduction
Nowadays, the role of quality and its importance have been realized from many
organizations around the world. Smart demands from customers to have better quality
enforce the organizations to provide products and services with high quality for the
purpose of meeting the expectations of their customers and gaining successfulness in the
marketplace (Demirbag et al., 2006). To do so, organizations should have and implement
an innovative management philosophies that can help them to achieve competitive
advantages over competitors (Douglas and Judge, 2001; Powel, 1995). Total quality
management (TQM) is one of these management philosophies that can helps organizations
to achieve the desired performance. TQM is defined as the holistic approach for continuous
improvement in the operations of the organization in order to produce and deliver highquality products and services and satisfy customers needs (Demirbag et al., 2006).

International Journal of Quality &

Reliability Management
Vol. 33 No. 5, 2016
pp. 597-614
Emerald Group Publishing Limited
0265-671X
DOI 10.1108/IJQRM-03-2014-0034

IJQRM
33,5

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598

In the current literature, many researchers of entrepreneurship glorified the

entrepreneurial traits and activities, and their significant and positive impact on
performance results (Lumpkin and Dess, 2001). As a process, entrepreneurial explains
the content of entrepreneurship, and the demonstration of the organizations
innovativeness, risk-taking, and proactiveness (Covin and Slevin, 1989; Miller, 1983).
Many researchers studied the relationship between entrepreneurial orientation (EO) and
organizational performance (OP) where many of them found positive and significant effect
( Jogaratnam and Tse, 2006; Lee et al., 2011). However on the other hand, others
researchers did not find this kind of relationship (Li et al., 2005; Smart and Conant, 1994).
The inconsistent results of this relationship in the previous literature call for more
research to examine new variables that may collaborate with TQM to have better results
on performance specifically in new context such as in the Middle East.
To achieve the objectives of this study, it was appropriate to examine the joint effect
of TQM and EO on the overall OP. Therefore, The relationships between variables were
examined through collecting data from UAE as an emerging economy.
2. Related literature and research hypotheses
The relationships between TQM, EO, and OP have been examined either separately
or collectively. TQM and EO are considered as the most important internal resources that
help organizations to achieve competitive advantages. According to the resource-based
view theory of the firm, the resources of the firm either tangible or intangible can lead the
organizations to enhance their performance and achieve competitive advantages over
their rivals (Collis, 1994; Wernerfelt, 1984). Therefore, through this study, the role of TQM
and EO as unique resources and their impact on OP was investigated. But before
examining statistically the effect of TQM and EO on OP, the previous literature was
reviewed to have more insight, and the hypotheses were proposed.
2.1 Total quality management
According to Demirbag et al. (2006) quality has been considered as one of the most
important driver in the eon of global competition. The main role of ensuring quality of
products and services is to meet the customers demands through improving the
current or inventing new that can satisfy their expectations. Quality as a desired
destination can be achieved through different management tools and philosophies.
TQM is considered one of the most important management strategy that participates in
gaining the quality of products and services. TQM has been defined as a holistic
approach and a management philosophy that seeking at continuous improvement in all
organizations functions and operations to produce and deliver services and products
that meet the customers requirements and needs by cheaper, safer, better, faster, and
easier processing than rivals with the involvement of all employees with their
leadership (Demirbag et al., 2006; Kaur et al., 2012).
In todays business environment, TQMs role in improving performance and
productivity of organizations is very important. It has been acknowledged by many
writers that TQM is a source of competitive advantages (Douglas and Judge, 2001;
Powel, 1995). There are many definitions in the literature for TQM such as the
definitions of the TQM gurus like Juran, Deming, Crosby, Feigenbaum, and Ishikawa.
Juran defined quality as a fitness for use and focus on quality control, quality
improvement, and quality planning (Mitra, 1987). Crosby (1996) defined quality as
conformance to specifications and requirements that satisfy the customers needs.

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For the sake of identifying quality management principles, Deming identified 14 steps
that help to achieve a zero defect and enhance performance ( Deming, 1986).
As a management philosophy, TQMs critical success factors were identified and
explained in many studies differ according to their study context and environment.
For example, Black and Porter (1996) identified different factors such as strategic
quality management, people and customer management, external interface
management, teamwork structure, communication of improvement information,
corporate quality culture, quality improvement measurement, operation quality
planning, supplier partnerships, and customer satisfaction orientation. In addition to
that, Yusof and Aspinwall (2000) identified other factors in SMEs such as leadership,
continuous improvement system, system and processes, education and training,
measurement and feedback, improvement tools and techniques, human resource
development, supplier quality assurance, and work team and culture.
2.1.1 Total quality management (TQM) and organizational performance (OP). In
quality management literature, there is a bulk of researches that conducted TQM
practices and its effect on OP either financial or non financial (Corredor and Goi, 2011).
Demirbag et al. (2006) found that TQM has a strong effect on non-financial performance
of SMEs and only a weak effect on financial performance. In addition, Easton and
Jarrell (1998) pointed out that there is a significant relationship between TQM
implementation and stock price performance. Moreover, Samson and Terziovski (1999)
found a relationship between TQM and some non-financial measure such as market
share growth, cost of quality, export growth, and growth of innovation.
Furthermore, the relationship between TQM and OP has been examined by Hasan
and Kerr (2003). They found that top management support, commitment, and customer
support focus are among the most significant factors that impact performance. In their
contribution to the same field, Chong and Rundus (2004) investigated the effects of
TQM and market competition on OP based on data collected from 89 production and
operation managers in manufacturing Australian firms. They found TQM has a
positive relationship with OP due to the high competition in the market. However, the
majority of the literature supports the positive and significant relationship between
TQM and OP, other studies found adverse results (Dooyoung et al., 1998; Hendricks
and Singhal, 1996; Kannan and Tan, 2005; Kober et al., 2012; Prajogo and Sohal, 2004).
Due to this inconclusiveness in the literature, this study will attempt to examine this
relationship through different context and sampling. For fulfilling this purpose, the
following hypothesis was placed to be examined:
H1. TQM has a positive and significant effect on OP.
2.2 Entrepreneurial orientation
Entrepreneurship and entrepreneurial activities are important for organizations
because of their positive effect on OP that in turn sustains ;competitive advantages
(Wiklund and Shepherd, 2003). As a process that place entrepreneurship into
practice, EO has been examined through a large stream of research in the literature
(Rauch et al., 2009). According to Wiklund and Shepherd (2003) EO is the processes
of strategy-making that support the entrepreneurial actions and decisions of
the organization.
Many writers produced different definitions for EO. For example, Zahra and Covin
(1995) defined EO as the potential instruments for reviving established organizations,

The impact of
TQM and EO
on OP
599

IJQRM
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600

where can be attained through risk-taking, innovation, and proacativeness. According

to Frank et al. (2010) EO is an organizations strategic orientation of capturing the
specific entrepreneurial aspects of methods, decision making, and practices.
Miller (1983) defined EO as a set of related process and activities that can be
consisted of three dimensions risk-taking, innovativeness, and proactiveness.
However Lumpkin and Dess (1996) suggested two more dimensions, they are
autonomy and competitive aggressiveness.
Schumpeter (1942) was the first writer who pointed out the importance of
innovativeness in the entrepreneurial process. Innovativeness represents the willing
and tendency of the organization to achieve innovation in terms of strategies,
processes, behaviors, and activities (Entebang et al., 2010). Innovativeness increases
profitability that achieves the advantages of the first mover (Wiklund, 1999).
Proactiveness refers to the organizations willingness and ability to anticipate the
new development as early as possible to be the first mover against competitors, rather
than waiting for emerging new development and then react to them (Frank et al., 2010).
Proactivness is related to the first mover advantage of getting the best opportunity,
shaping environment and creating change, and acting in expectation of the future
demand (Lumpkin and Dess, 2001). According to Lumpkin and Dess (2001)
proactiveness is a forward looking, approach for opportunity seeking of new
products and services, and responding in anticipating for future customers demand to
create shape and change in the environment of business.
In the past, It was argued in the that innovation cannot be without risk-taking.
Risk-taking is the organizations tendency to take an action which may lead to
ambiguous results that contains high risk of failure or unbelievable successfulness.
It can be critical step that can be done by organization, but it might be a chance to have
a jump into success. In addition, risk-taking is an important factor of EO and usually
used to explain entrepreneurship (Osman et al., 2011).
2.2.1 Entrepreneurial orientation (EO) and organizational performance (OP). In the
literature of entrepreneurship, there are many studies that focussed on the relationship
between EO and OP. As discussed earlier, most of researchers examined the effect of only
three dimensions of EO, innovativeness, risk-taking, and proactiveness. Other researchers
such as Lumpkin and Dess (1996) added more two dimensions, autonomy and competitive
aggressiveness. The relationship between EO and OP has been examined through
different types of research such as meta-analysis approach, empirical, conceptual, or
literature review. The results of some of these researches, specifically empirical studies,
were positive and significant (Abebe, 2014; Dada and Watson, 2013; Jogaratnam and Tse,
2006; Zhang and Zhang, 2012). However, on the other hand, other studies did not find
significant effect of EO on OP (George et al., 2001; Walter et al., 2006). Because of these
inconsistent results in the literature, more studies about the relationship between EO and
OP are needed. Therefore, the following hypothesis is proposed to be tested:
H2. EO has a positive and significant effect on the OP.
3. Methodology
For the purpose of examining the relationships between the different variables of this
study, the quantitative methodology approach was employed. Therefore, questionnaire
survey has been used to gather the primary data from respondents. Dubai police
departments were selected as the source of the data. Section of Dubai police whether in
departments and police stations have been targeted as a unit of analysis. In total,

Downloaded by UNIVERSITY OF PORTSMOUTH At 16:32 20 September 2016 (PT)

320 questionnaires were distributed and 107 were returned completely which represent
35 percent response rate. Random sampling approach was employed to sample the
proposed respondents. Measurements of variables have been employed from
the previous literature. OP measurements have been adopted from Kaplan and
Norton (1992, 2000) based on balanced scorecard with five-point Likert scale.
EO measurements have been adapted from Covin and Slevin (1989) that contains three
dimensions: innovativeness, proactiveness, and risk-taking. TQM measurements have
been adapted from different sources such as Brah et al. (2000), Samson and Terziovski
(1999), Anderson and Sohal (1999), and Rao (2006). Likert-Scale with seven-point scale
was used to measure the responses. Structural equation modeling (SEM) has been
used to analyze the data and test the postulated hypothesis through SmartPLS
statistical package.

The impact of
TQM and EO
on OP
601

4. Statistical analysis and results

The partial least square structural equation modeling (PLS-SEM) has been used to
confirm the reliability and validity of the outer model through using SmartPLS
2.0. Therefore, testing of validity and reliability are the essential step before examining
the hypotheses and models.
The purpose of this study was to examine the proposed model that hypothesizes the
joint effect of EO and TQM on the OP. Therefore, the two-step approach suggested by
Chain was followed (Figure 1).
4.1 The measurement, outer model
The following sections discussed the construct validity and reliability. Specifically, the
construct validity and reliability were examined through the content validity,
convergent validity, and discriminant validity as illustrated in the following sections.
4.1.1 The content validity. In the multivariate analysis literature, the content validity
is the case when the constructs items used to measure have high loadings on their
construct more than other constructs in the model (Chin, 1998; Hair et al., 2010). When
items loaded higher on other constructs more than their loadings, they will be omitted.
The result confirmed the content validity of the measurement model, as illustrated in
Tables I and II, where all constructs were significantly loaded on their respective
constructs more than other constructs.
4.1.2 The convergent validity. The convergent validity is the degree to which a
group of items converges to measure a specific construct (Hair et al., 2010). It can be
examined by factor loadings, the composite reliability, and the average variance
extracted (AVE). In other words, the loading should be highly loaded and statistically

Total Quality
Management
Organizational
Performance
Entrepreneurial
Orientation

Figure 1.
The research
framework

Management leadership

Information and analysis

HRM

Risk-taking

Proactiveness

Innovativeness

Continuous improvement

B1
B2
B3
CI1
CI2
CI3
CI4
EOI1
EOI2
EOI3
EOP2
EOP3
EOR1
EOR2
EOR3
HRE1
HRE2
HRE3
HRI1
HRI2
HRI3
HRT2
HRT3
HRTI
IA1
IA2
IA3
IA4
IA5
ML1
ML2

Benchmarking

Table I.
Factor analysis
results

Items
0.88
0.92
0.91
0.74
0.77
0.68
0.80
0.47
0.39
0.54
0.32
0.21
0.28
0.42
0.41
0.65
0.67
0.61
0.67
0.71
0.79
0.56
0.66
0.70
0.57
0.76
0.74
0.71
0.68
0.53
0.48

B
0.80
0.74
0.73
0.90
0.93
0.87
0.88
0.57
0.56
0.54
0.38
0.25
0.28
0.46
0.38
0.71
0.78
0.74
0.67
0.73
0.76
0.64
0.71
0.74
0.68
0.78
0.75
0.81
0.83
0.68
0.53

CI
0.51
0.49
0.47
0.61
0.59
0.63
0.50
0.88
0.90
0.78
0.38
0.31
0.25
0.48
0.39
0.45
0.52
0.47
0.39
0.41
0.48
0.39
0.39
0.47
0.57
0.54
0.52
0.51
0.58
0.37
0.33

EOI
0.34
0.22
0.26
0.36
0.33
0.40
0.18
0.32
0.35
0.33
0.87
0.89
0.68
0.47
0.29
0.31
0.21
0.29
0.48
0.29
0.25
0.42
0.28
0.24
0.45
0.33
0.35
0.22
0.30
0.28
0.21

EOP
0.46
0.35
0.37
0.45
0.43
0.39
0.32
0.48
0.32
0.33
0.43
0.59
0.81
0.91
0.80
0.35
0.46
0.30
0.50
0.36
0.40
0.31
0.41
0.39
0.44
0.37
0.38
0.24
0.38
0.28
0.20

EOR
0.75
0.76
0.67
0.77
0.78
0.79
0.76
0.50
0.39
0.47
0.36
0.29
0.27
0.46
0.45
0.86
0.78
0.79
0.79
0.84
0.89
0.78
0.91
0.86
0.68
0.75
0.73
0.75
0.77
0.53
0.41

HRI
0.71
0.73
0.71
0.86
0.81
0.75
0.73
0.55
0.56
0.49
0.37
0.30
0.29
0.38
0.37
0.71
0.72
0.81
0.61
0.68
0.75
0.66
0.69
0.70
0.80
0.91
0.85
0.89
0.90
0.59
0.46

IA
0.47
0.46
0.52
0.55
0.67
0.58
0.52
0.39
0.41
0.24
0.25
0.22
0.19
0.38
0.25
0.31
0.57
0.46
0.52
0.45
0.48
0.28
0.37
0.34
0.46
0.52
0.49
0.49
0.53
0.92
0.89

ML
0.35
0.26
0.25
0.41
0.33
0.31
0.22
0.36
0.37
0.24
0.37
0.50
0.48
0.54
0.56
0.15
0.34
0.28
0.34
0.30
0.35
0.25
0.32
0.25
0.39
0.32
0.31
0.21
0.40
0.34
0.30

OPC
0.17
0.17
0.16
0.39
0.37
0.37
0.20
0.21
0.39
0.19
0.42
0.23
0.19
0.14
0.12
0.13
0.29
0.34
0.25
0.23
0.22
0.26
0.20
0.15
0.35
0.30
0.27
0.36
0.43
0.47
0.53

OPF
0.32
0.29
0.30
0.48
0.45
0.45
0.38
0.25
0.27
0.31
0.39
0.51
0.37
0.43
0.23
0.44
0.35
0.43
0.55
0.48
0.51
0.50
0.47
0.44
0.56
0.37
0.35
0.35
0.48
0.36
0.32

OPI
0.36
0.35
0.38
0.52
0.49
0.34
0.36
0.40
0.48
0.39
0.43
0.54
0.47
0.49
0.32
0.28
0.34
0.40
0.36
0.35
0.37
0.32
0.32
0.24
0.53
0.33
0.36
0.41
0.51
0.48
0.41

OPL

602

Construct

Downloaded by UNIVERSITY OF PORTSMOUTH At 16:32 20 September 2016 (PT)

0.61
0.53
0.58
0.66
0.69
0.56
0.59
0.42
0.38
0.41
0.31
0.26
0.27
0.48
0.39
0.38
0.56
0.52
0.58
0.51
0.55
0.41
0.42
0.46
0.54
0.61
0.55
0.52
0.63
0.73
0.72

SP

(continued )

0.72
0.71
0.68
0.82
0.80
0.64
0.71
0.49
0.46
0.46
0.33
0.26
0.26
0.34
0.38
0.66
0.65
0.74
0.61
0.69
0.70
0.63
0.65
0.64
0.67
0.76
0.78
0.79
0.81
0.62
0.49

SD

IJQRM
33,5

Strategic planning

Service design

Learning and growth

Internal process

Financial

Customer

Construct

B
0.49
0.46
0.17
0.10
0.36
0.35
0.14
0.06
0.22
0.23
0.35
0.23
0.26
0.30
0.19
0.51
0.32
0.71
0.69
0.72
0.48
0.52
0.60
0.60

Items

ML3
ML4
OPC4
OPC5
OPC6
OPC7
OPF1
OPF2
OPF3
OPI10
OPI11
OPI8
OPI9
OPL12
OPL13
OPL14
OPL15
SD1
SD2
SD3
SP1
SP2
SP3
SP4

0.58
0.60
0.25
0.14
0.33
0.40
0.34
0.22
0.31
0.34
0.46
0.34
0.44
0.41
0.27
0.47
0.41
0.73
0.77
0.78
0.52
0.62
0.65
0.63

CI
0.38
0.43
0.29
0.20
0.33
0.38
0.31
0.12
0.27
0.25
0.23
0.24
0.30
0.49
0.32
0.38
0.41
0.50
0.56
0.44
0.28
0.31
0.52
0.52

EOI
0.24
0.23
0.30
0.35
0.35
0.56
0.42
0.10
0.26
0.38
0.39
0.45
0.40
0.43
0.45
0.35
0.50
0.30
0.32
0.30
0.18
0.21
0.32
0.40

EOP
0.35
0.36
0.47
0.46
0.49
0.57
0.27
-0.01
0.07
0.28
0.42
0.35
0.27
0.54
0.27
0.40
0.43
0.35
0.36
0.34
0.32
0.27
0.52
0.45

EOR
0.44
0.48
0.18
0.18
0.29
0.43
0.23
0.18
0.25
0.41
0.50
0.40
0.45
0.31
0.27
0.42
0.29
0.70
0.71
0.77
0.43
0.49
0.56
0.55

HRI
0.51
0.53
0.28
0.17
0.30
0.42
0.36
0.23
0.33
0.38
0.43
0.35
0.36
0.40
0.33
0.46
0.40
0.82
0.79
0.78
0.50
0.57
0.58
0.63

IA
0.94
0.92
0.43
0.33
0.26
0.35
0.52
0.30
0.39
0.17
0.36
0.21
0.29
0.38
0.34
0.33
0.45
0.51
0.49
0.57
0.66
0.75
0.70
0.64

ML
0.46
0.44
0.80
0.82
0.83
0.78
0.57
0.20
0.29
0.44
0.43
0.35
0.33
0.59
0.59
0.46
0.59
0.27
0.36
0.30
0.36
0.41
0.55
0.39

OPC
0.47
0.49
0.41
0.31
0.34
0.51
0.86
0.74
0.77
0.37
0.30
0.39
0.48
0.48
0.49
0.17
0.50
0.28
0.32
0.38
0.35
0.43
0.32
0.44

OPF

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0.27
0.24
0.23
0.39
0.44
0.49
0.53
0.28
0.27
0.82
0.82
0.80
0.72
0.51
0.54
0.45
0.58
0.39
0.42
0.49
0.36
0.42
0.45
0.43

OPI

SD
0.51
0.49
0.21
0.17
0.33
0.37
0.32
0.23
0.29
0.40
0.41
0.35
0.35
0.43
0.36
0.48
0.44
0.89
0.94
0.89
0.53
0.59
0.62
0.59

OPL
0.44
0.39
0.46
0.52
0.62
0.63
0.57
0.24
0.35
0.56
0.47
0.48
0.56
0.77
0.80
0.76
0.87
0.43
0.52
0.49
0.38
0.45
0.53
0.41

0.75
0.72
0.41
0.37
0.41
0.40
0.45
0.23
0.32
0.29
0.50
0.40
0.32
0.44
0.32
0.44
0.45
0.63
0.60
0.61
0.84
0.88
0.89
0.85

SP

The impact of
TQM and EO
on OP
603

Table I.

IJQRM
33,5

Construct

Items

Loadings

SE

t-value

p-value

Benchmarking

B1
B2
B3
CI1
CI2
CI3
CI4
EOI1
EOI2
EOI3
EOP2
EOP3
EOR1
EOR2
EOR3
HRE1
HRE2
HRE3
HRI1
HRI2
HRI3
HRT2
HRT3
HRTI
IA1
IA2
IA3
IA4
IA5
ML1
ML2
ML3
ML4
OPC4
OPC5
OPC6
OPC7
OPF1
OPF2
OPF3
OPI10
OPI11
OPI8
OPI9
OPL12
OPL13
OPL14
OPL15
SD1
SD2
SD3
SP1
SP2
SP3
SP4

0.876
0.921
0.913
0.900
0.925
0.867
0.877
0.875
0.895
0.782
0.871
0.892
0.807
0.906
0.804
0.862
0.784
0.785
0.793
0.843
0.889
0.777
0.905
0.860
0.798
0.911
0.851
0.889
0.900
0.925
0.894
0.937
0.919
0.799
0.819
0.827
0.784
0.863
0.737
0.768
0.818
0.824
0.795
0.721
0.775
0.798
0.756
0.870
0.892
0.943
0.891
0.843
0.884
0.892
0.846

0.016
0.010
0.012
0.013
0.007
0.021
0.015
0.017
0.012
0.027
0.017
0.012
0.030
0.018
0.034
0.014
0.018
0.020
0.027
0.018
0.011
0.025
0.012
0.014
0.023
0.010
0.022
0.014
0.010
0.009
0.015
0.009
0.012
0.011
0.022
0.032
0.027
0.021
0.027
0.013
0.046
0.046
0.030
0.020
0.027
0.021
0.018
0.020
0.015
0.007
0.010
0.019
0.015
0.011
0.016

55.910
94.877
73.670
67.983
127.303
40.968
59.175
50.600
74.288
29.255
51.418
73.848
27.072
49.432
23.414
60.880
43.545
39.454
29.246
47.237
82.305
30.923
77.603
62.248
34.651
91.161
38.574
63.860
90.499
100.692
58.750
107.717
78.143
75.710
36.444
22.382
28.216
37.674
28.478
67.300
16.059
16.680
26.496
41.340
31.159
37.449
46.669
42.255
61.370
132.786
93.448
43.386
60.976
80.897
52.558

0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000

Continuous improvement

604

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Innovativeness
Proactiveness
Risk-taking
HRM

Information and analysis

Management leadership

Customer

Financial
Internal process

Learning and growth

Service design
Strategic planning
Table II.
Factor loadings
significant

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significant in measuring variables with at least 0.7 of factor loadings. For AVE
the values should be at least 0.5 for each construct, and at least 0.7 of the composite
reliability. In Table III, the results show above the recommended valued
mentioned before, and thus confirm the convergent validity of the model (Bagozzi
and Yi, 1988).
4.1.3 The discriminant validity. In the literature of SEM, the discriminant validity is
defined as the degree of set of items can differentiate a variable from other variable in
the model. In other words, the constructs items should have variances between them
more than the variance shared with other constructs. Test of discriminant validity
criterion was suggested by Fornell and Larcker (1981). The below Table IV has a
diagonal line of elements represent the square roots of AVE with the correlation of the
constructs below that. Therefore, the comparison can be taken place between that
diagonal and off diagonal lines. The diagonal line values are greater the other in the
rows and columns values and the discriminant validity can be confirmed.
4.2 The structural model (inner model) and hypotheses testing
When the construct validity and reliability have been tested and established, the next
stage was to examine the proposed hypotheses by running SmartPLSs Algorithm and
Bootstrapping. Below in Table V, Figures 2 and 3 the results have been reported.
As illustrated in Figure 3 and Table V, TQM has a positive and significant effect on
OP at the 0.001 level of significance ( 0.322, t 5.676, p o 0.001). EO has a positive
and significant effect on OP at the 0.001 level of significance ( 0.498, t 12.522,
p o 0.001). Therefore, the results supported the proposed hypotheses H1 and H2 as
proposed earlier in this study.
4.3 Predictive relevance of the model
The predictive power of the model was examined by utilizing cross-validated
redundancy, cross-validated communality, and R2. In the Table VI below, the results
shows that 55 percent of OP was explained by the TQM and EO. Cohen (1988) has
considered value of R2 0.26 substantial, 0.13 moderate, and 0.02 weak. R2 of this study
is considered substantial and as a result of that the power of the constructs contained in
this model in explaining the OP.
In addition, the values of cross-validated communality and cross-validated
redundancy were employed to assess the quality of the model. By running the
Blindfolding method in SmartPLS, their values have been generated. The Blindfolding
technique is based on removing some data values and later estimates them as missing
values. To assess the predictive quality of the model in this study, cross-redundancy
values is assessed to be more than zero. Table VI shows that the cross-validated
redundancy values were 0.223 for OP. Therefore, the value confirmed that the model
has an adequate prediction quality.
4.4 Goodness of fit (GoF) of the model
The GoF has only one measure in PLS-SEM (Tenenhaus and Esposito Vinzi, 2005). It is
measured by calculating the average R2 and the geometric mean of AVE for the
endogenous constructs in the following formula:

r

Gof

R2  AV E

The impact of
TQM and EO
on OP
605

IJQRM
33,5

Construct

Items

Loadings

Cronbachs

CRa

AVEb

Benchmarking

B1
B2
B3
CI1
CI2
CI3
CI4
EOI1
EOI2
EOI3
EOP2
EOP3
EOR1
EOR2
EOR3
HRE1
HRE2
HRE3
HRI1
HRI2
HRI3
HRT2
HRT3
HRTI
IA1
IA2
IA3
IA4
IA5
ML1
ML2
ML3
ML4
OPC4
OPC5
OPC6
OPC7
OPF1
OPF2
OPF3
OPI10
OPI11
OPI8
OPI9
OPL12
OPL13
OPL14
OPL15

0.876
0.921
0.913
0.900
0.925
0.867
0.877
0.875
0.895
0.782
0.871
0.892
0.807
0.906
0.804
0.862
0.784
0.785
0.793
0.843
0.889
0.777
0.905
0.860
0.798
0.911
0.851
0.889
0.900
0.925
0.894
0.937
0.919
0.799
0.819
0.827
0.784
0.863
0.737
0.768
0.818
0.824
0.795
0.721
0.775
0.798
0.756
0.870

0.887

0.930

0.816

0.915

0.940

0.797

0.810

0.888

0.726

0.715

0.875

0.778

0.790

0.878

0.706

0.945

0.954

0.697

0.920

0.940

0.758

0.938

0.956

0.844

0.823

0.882

0.652

0.715

0.833

0.626

0.799

0.869

0.625

0.813

0.877

0.641

Continuous improvement

606

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Innovativeness

Proactiveness
Risk-taking

HRM

Information and analysis

Management leadership

Customer

Financial
Internal process

Learning and growth

Table III.
The convergent
validity analysis

(continued )

Construct

Items

Cronbachs

Loadings

CRa

AVEb

SD1
0.892
0.894
0.934
0.826
SD2
0.943
SD3
0.891
Strategic planning
SP1
0.843
0.889
0.923
0.751
SP2
0.884
SP3
0.892
SP4
0.846
a
Notes: CR ( factor loading) 2/{( factor loading) 2)+ (variance of error)}; bAVE (factor
loading) 2/( (factor loading) 2+ (variance of error)}
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Service design

Construct
B
CI
EOI
EOP
EOR
HRI
IA
ML
OPC
OPF
OPI
OPL
SD
SP

No

CI

EOI

EOP

EOR

HRI

IA

ML

OPC

OPF

0.903
0.837
0.546
0.303
0.436
0.805
0.796
0.534
0.317
0.183
0.337
0.400
0.778
0.635

0.893
0.654
0.356
0.446
0.817
0.886
0.649
0.359
0.376
0.498
0.483
0.835
0.701

0.852
0.389
0.444
0.531
0.626
0.411
0.382
0.312
0.323
0.496
0.551
0.474

0.882
0.580
0.368
0.377
0.262
0.495
0.366
0.512
0.549
0.337
0.324

0.840
0.464
0.413
0.325
0.622
0.178
0.416
0.513
0.387
0.454

0.835
0.816
0.508
0.346
0.277
0.554
0.396
0.797
0.589

0.871
0.571
0.374
0.394
0.482
0.492
0.878
0.657

0.919
0.421
0.531
0.328
0.470
0.577
0.793

0.807
0.493
0.492
0.704
0.344
0.496

0.791
0.488
0.527
0.360
0.444

Hypothesis

Path coefficient

1
TQMPerformance
0.322***
2
EOPerformance
0.498***
Notes: *p o 0.05; **p o0.01; ***p o0.001

OPI

OPL

SD

t-value

p-value

0.057
0.040

5.676
12.522

0.000
0.000

607
Table III.

SP

0.791
0.654 0.801
0.478 0.530 0.909
0.478 0.512 0.676 0.867

SE

The impact of
TQM and EO
on OP

Table IV.
Correlations of
discriminant validity

Decision
Supported
Supported

According to Wetzels et al. (2009), the baseline values are (0.36 large, 0.25 medium,
0.1 small). The GoF, of this study, according to Table VII was 0.634 which is
considered as large which in turn refers to the adequacy of the model validity.
5. Discussions and conclusion
The purpose of this study was to examine the effect of TQM and EO on OP. Based on
Resource-based View theory of the firm, TQM and EO are considered among the most
important resources that can help organization to enhance their organizational
performance (Abdi et al., 2008; Weerawardena and Coote, 2001). Due to the
inconsistency of the results in the previous studies regarding the relationship between

Table V.
Hypotheses testing
results

Figure 2.
Path coefficient
results

ML

0.564

0.824
SD

0.785
HRI
IA

0.855

EOI

0.528

0.727

EOP

0.699

0.836

EO

0.000

TQM

0.846

EOR

0.716

B 0.944

0.756
Cl

0.891

0.498

0.322

Performance

0.549

0.900

OPL

0.810

OPI

0.648

OPC

0.693

OPF

0.805

0.832

0.719

0.517

608

0.000

0.751 0.827 0.886 0.908 0.925 0.870

SP

0.685

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IJQRM
33,5

ML

EOI

24.274

SP

SD
IA

EOP

24.479 38.090

EO

TQM

45.870

EOR

37.203 63.674 107.208105.39 756.634

248.937

HRI

B
CI

12.522

5.676

31.540

OPL

OPI

OPC

OPF

44.154

24.268

Performance
68.265

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The impact of
TQM and EO
on OP
609

Figure 3.
Hypotheses testing
results

IJQRM
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610

Table VI.
Prediction relevance
of the model

TQM and OP from one side, and EO and OP from the other, the relationships between
TQM, EO, and organizational performance were empirically examined. The data of this
study was gathered through questionnaire surveys from Dubai police departments
and police stations and the hypothesized model was tested by using PLS-SEM.
The statistical results showed that the two postulated hypotheses were supported.
Specifically, a significant and positive relationship between TQM and OP was
confirmed at the 0.001 level of significance ( 0.322, t 5.676, p o 0.001) in line with
other previous studies that confirmed these results (Chong and Rundus, 2004; Faisal
et al., 2011; Hasan and Kerr, 2003; Miyagawa and Yoshida, 2010). Similarly, the effect of
TQM on OP was examined and found to be significant and positive at the 0.001 level of
significance ( 0.498, t 12.522, p o 0.001) in consistent with other studies (Abebe,
2014; Dada and Watson, 2013; Jogaratnam and Tse, 2006; Lumpkin and Dess, 1996;
Zhang and Zhang, 2012)
In this study, there are many theoretical contributions that can be considered.
The investigation of the joint effect of TQM and EO on OP is one of these contributions.
In addition, there are many practical implications as a result of this study. The results can
help practitioners, managers, and decision makers to enhance their OP through
implementing TQM practices with the existing of entrepreneurial traits and activities to
develop and increase this business and OP. As the TQM is an overall management
philosophy, an organization should look at implementing this philosophy as a great
change in the organization that should tolerate the associated risk for seizing the foreseen
opportunities. The successfulness of the TQM philosophy could also dependent on the
entrepreneurial culture of the organization that should be adopted by all the members
while transforming their organization toward new levels of excellent horizons.

Construct
Organizational performance

Construct

Table VII.
Goodness of
fit (GoF)

Benchmarking
Continuous improvement
Innovativeness
Proactiveness
Risk-taking
HRM
Information and analysis
Management leadership
Customer
Financial
Internal process
Learning and growth
Service design
Strategic planning
Performance
Average

R2

Cross-validity redundancy

Cross-validity communality

0.549

0.223

0.426

R2

Average variance extracted

Goodness of fit

0.816
0.797
0.726
0.777
0.706
0.696
0.758
0.844
0.653
0.625
0.625
0.641
0.826
0.751
0.549
0.549

0.732

0.634

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The impact of
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33,5

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614

Further reading
Reed, R., Lemak, D.J. and Mero, N.P. (2000), Total Quality Management and sustainable
competitive advantage, Journal of Quality Management, Vol. 5 No. 1, pp. 5-26.
Sharma, A. and Dave, S. (2011), Entrepreneurial orientation : performance level, SCMS Journal
of Indian Management, Vol. 8 No. 4, pp. 43-53.
Corresponding author
Hassan Saleh Al-Dhaafri can be contacted at: hassan_saleh3@hotmail.com

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