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International Journal of Quality & Reliability Management

Factors affecting the relationship between total quality management and


organizational performance
Fco. Javier Llorns Montes Antonio Verd Jover Luis Miguel Molina Fernndez

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Fco. Javier Llorns Montes Antonio Verd Jover Luis Miguel Molina Fernndez, (2003),"Factors affecting
the relationship between total quality management and organizational performance", International Journal
of Quality & Reliability Management, Vol. 20 Iss 2 pp. 189 - 209
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operational performance", International Journal of Operations & Production Management, Vol. 31 Iss 7
pp. 789-814 http://dx.doi.org/10.1108/01443571111144850
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Factors affecting the


relationship between total
quality management and
organizational performance
Fco. Javier Llorens Montes, Antonio Verdu Jover and
Luis Miguel Molina Fernandez

TQM and
organizational
performance
189
Received December 2001
Revised June 2002

Management Department, Universidad de Granada, Granada, Spain


Keywords Total quality management, Performance, Contingency planning, Psychology,
Behaviour, Learning
Abstract This paper aims to provide a framework for studying the relationship between total
quality management (TQM) and organizational performance. TQM contents as well as TQM
elements are considered. So, from a contingency approach, TQM contents have to be consistent
with business orientation and environmental uncertainty in order to be effective. On the other
hand, the relationship between TQM elements and performance is developed from an industrial
psychology perspective. Hence, TQM elements are considered to impact both behavioural and
individuals learning processes. In the proposed model this relations are mediated by the TQMdriven cultural change acceptance. Moreover, TQM elements impact these individual processes
both directly and mediated by systems and personal factors. Hence, both TQM contents and
elements have to be considered to do the right things and to do it well.

Introduction
In the last few years, the core ideas of total quality management (TQM) have
been generally accepted by the business community throughout the world.
Within the framework of the quality revolution, company managers and
executives have been flooded with articles, books and seminars. TQM has been
described as a new model of thinking in business management (Chorn, 1991), a
comprehensive style to improve organizational performance and quality (Hunt,
1993), an alternative to the management by control (Price, 1989), and more
recently, as a change of paradigm (Broedling, 1990). Some authors consider
TQM as an approach historically unique to improve the organizational
effectiveness, with solid conceptual foundations which, at the same time,
provides us with a strategy to enhance business performance, taking into
consideration the way companies and their staff operate (Wruck and Jensen,
1994).
TQM has become a global phenomenon, as it affects Japanese companies as
much as US, European and Asia-Pacific ones (Chen, 1997; Corbett and Rastrick,
2000). It has been described even as an appropriate method to improve the
competitiveness of companies in developing countries (Mersha and Merrick,

International Journal of Quality &


Reliability Management
Vol. 20 No. 2, 2003
pp. 189-209
q MCB UP Limited
0265-671X
DOI 10.1108/02656710310456617

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190

1997). Similarly, its principles and elements have been assumed by all sectors
in the economy, from the industry (Flynn et al., 1995), where it originated, to the
services (Silvestro, 1998), the public sector (Loomba and Spencer, 1997) and the
education (Elmuti et al., 1996).
Due to the importance of the material and human endeavours that the
organizations must carry out for the implementation of TQM, researchers have
been concerned with its relationship with the improvement of organizational
performance. Thus, an increasing number of studies exist trying to determine
the degree of influence of the different principles and elements of quality on
organizational performance. This relative importance is due to the existing
controversy about the real capability of TQM to impact performance.
Therefore, after a first stage where TQM was envisaged as the solution to the
Western companies problems of lost of competitiveness, the following stage
brought into light the reviling of TQM as another management fad, whose
effects upon organizational performance were evident only in the short term
(Zbaracki, 1998).
The present paper summarises the main contributions made in the field of
TQM to the study of its relationship with organizational performance. Thus, in
this paper, we propose a model that encompasses the factors affecting the
success of the implementation of a quality system, mainly based on industrial
psychology studies. With this purpose, the rest of the work has been organised
in the following way. First, TQM and organizational performance are defined
and the main works on TQM and organizational performance are briefly
revised. Next the proposed model is presented. The rest of the paper deals with
the propositions implicit in the model suggested. Finally, we present the main
conclusions that can be reached.
Definitions
TQM
According to Bemowski (1992), the expression TQM was firstly used in 1985
by the Naval Air Systems Command to describe the Japanese style of
management focused on quality improvements. Although a lot of controversy
exists on finding a definition able to include the efforts made by the different
researchers and professionals about TQM (Gehani, 1993), in this paper we
support the position stated by Snell and Dean (1992), Westphal et al. (1997),
Withers et al. (1997) or Yusof and Aspinwall (2000) and consider it as a
philosophy or an approach to business management.
Within the framework of the TQM, a distinction can be made between
content and elements or processes. The former has been known under the
names content (Reed et al., 2000), principles (Dean and Bowen, 1994), precepts
(Sitkin et al., 1994), values (Hellsten and Klefsjo, 2000) or basic attributes (Dean
and Evans, 1994). Although definitions do not coincide in full, all of them refer
to those fundamentals that make up TQM theoretical frame, without which the

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management system implemented in the organization or the philosophy on


which it is based could not be called TQM.
Similarly, the so-called elements (Waldman, 1994), practices (Dean and
Bowen, 1994), techniques (Hellsten and Klefsjo, 2000), processes (Reed et al.,
2000), interventions (Hackman and Wageman, 1995), principles (Sitkin et al.,
1994), etc., refer to the mechanism through which the above mentioned
established basic foundations are put into effect, by means of the effective
implementation of the different management processes.
Organizational performance
Although many authors have tried to set out a clear definition of performance,
the debate continues nowadays in the academic literature, especially regarding
some aspects of terminology, analysis level, and conceptual basis for
assessment (Ford and Schellenberg, 1982). Venkatraman and Ramanujan
(1986) consider three different levels of performance within organizations.
Thus, they distinguish among financial performance, business performance
and organization effectiveness, although the later has been subsequently
known as organizational performance (e.g. Chu-Hua et al., 2001; Terziovski and
Samson, 1999).
The present work studies the relationship between TQM and performance
on a broad sense, and for this reason, this paper focuses on the relationship
between TQM and organizational performance.
TQM and organizational performance relationship
Studies designed to bring some light over this topic have shown different
results. On the one hand, there are studies dealing with the effects of the TQM
upon the business value. In this regard, Easton and Jarell (1998), Hendricks and
Singhal (2001a) or Ramasesh (1998) found that companies operating in TQM
environments performed better than average in the financial markets. In
opposition to this, Adams et al. (1999) found abnormally above market average
performances, but to a lesser extent than the former.
On the other hand, the works of Adam et al. (1997), Hendricks and Singhal
(2001b) or Maani et al. (1994) showed that TQM affects the objective measures
to monitor performance, such as the return on assets, the return on equities and
the operating income before depreciation. There is controversy as to the results
in this case too, since works such as those of Adam (1994) or Powell (1995) did
not find a significant relation between the degree of implementation of TQM
and financial performance. Nevertheless, according to these studies, TQM did
prove able to capably improve the quality of the company products, according
to the above-mentioned study. This relationship between the TQM
implementation and the quality of the organization products has been
empirically validated (e.g. Choi and Eboch, 1998; Forza, 1995). And a large
number of studies relate a better quality of the products and services to a better
organizational performance (Forker et al., 1996; Golhar and Deshpande, 1999;

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Kroll et al., 1999), this being one of the possible impacts of TQM upon
organizational performance.
TQM researchers, in their attempt to find an explanation for these uneven
results, have sought out the contextual factors that affect TQM effectiveness. In
this research line, they have focused either on environmental factors (Powell,
1995; Terziovski and Samson, 1999) or on the company characteristics
(Hendricks and Singhal, 2001b; Terziovski and Samson, 2000). However, these
papers did not analyse the organizational variables that really differ from one
company to another, and that explain the uneven results of the quality systems
(Douglas and Judge, 2001).
Many of the works that study the effects of TQM followed this sequence:
firstly, a TQM programme is implemented, then, the company productivity
and/or profitability improve, and hence it is concluded that this improvement is
a consequence of the programme implementation (Gilbert, 1992; Raffio, 1992).
But the improvement noticed could have actually originated as a result the
following:
.
Other events concurrent in time with the intervention. That is, the
relationship between the improvement processes and the organizational
results could have been obscured by some exogenous shocks
(environmental or market factors).
.
Very likely, the Hawthorne effect could have occurred, by virtue of which
the company staff works harder and better when they are aware of their
being under study.
.
The time factor can also obscure the relationship between TQM and the
results achieved (Whetton and Cameron, 1994), as some conclusions can
be reached in the short term, without waiting for an analysis of the
consequences in the long run.
.
The case may also have happened where the company managers had
selected organizational units for pilot testing as part of an introductory
stage of the TQM programme.
When the managers and the change agents start planning the programme
implementation, the workforce, workflow and internal organization are
examined in detail. Then, any cause of inefficiency detected at the moment of
the implementation will be corrected. If, as a result, the organizational unit
productivity increases, the quality programme will be deemed responsible for
this improvement. Although this can actually be the case, there is also the
possibility that the improvement occurred only as a result of the paraphernalia
inherent to the programme, and not as a result of the integral programme itself.
This approach makes it difficult to find an explanation for the reasons
underlying the improvements (Hackman and Wageman, 1995; Powell, 1995).

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TQM and performance relationship model


Our model based on a revision of the state of the question both in theory and
in practice gathers the main factors that generally explain a greater variance
in the TQM and performance relationship (see Figure 1). In the model, we
distinguish between TQM content and elements, as both are important
components for the study of the way in which TQM affects organizational
performance. Therefore, on the one side, the model proposes that TQM content
should fit with the business orientation and with the environment, in
agreement with the classical strategic management school of strategyenvironment adjustment and with the organization school of structure-strategy
adjustment (Ginsbert and Venkatraman, 1985). In this sense, a right alignment
between these elements will produce that actions performed by the
organization in agreement with the TQM philosophy are consistent with the
general orientation of the organization and with the demands of the
environment, in such a way that the firm will accomplish the appropriate tasks,
that is to say, it will be efficient.
On the other hand, TQM elements are also included. They will affect the
organizational performance on a twofold basis. On the one hand, TQM affects
the level of learning of the organization members, and thus it also affects the
knowledge applied to their tasks and the learning direction. TQM will also
affect behavioural factors, influencing this way the work effort level, although
these relationships are mediated by the acceptance of the cultural change
inherent in TQM. This relationship between TQM, learning and behavioural

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Figure 1.
Relationship between
TQM and performance

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factors is established directly and through the TQM effect on the existing
relationship between personal factors and system factors. That is, that TQM
has an impact on the way organization members apply their knowledge in the
organization, and therefore it affects organizational performance.
Below, the model propositions are dealt with more deeply.

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194
TQM contents, business orientation and environmental uncertainty
A research line of growing interest is the one that has tried to set out how TQM
contents should be adapted to the objectives of the organization. Thus, Sitkin
et al. (1994) consider that from the TQM common precepts arise some principles
contingent to the main objective to be reached through TQM implementation.
This leads them to distinguish between a learning-focused approach, if the
intention is to provide the organization with the necessary tools to solve new
problems, and a control-focused approach, if the idea is to prevent losses as a
consequence of out-of-control production processes.
On the other hand, Manz and Stewart (1996) consider that there are two
TQM forms related to the definition of quality. Thus, if quality is defined as
conformance or as desirable features, then TQM will adopt some philosophical
fundamentals about a very different work reality in organizations. Thus, in the
former case, TQM tends to adopt a mechanicist, closed-system perspective,
whereas if we take the second definition of quality, it approaches more to the
idea of opened system. At any event, authors such as Waldman (1994) does not
accept the first TQM form as such, as they consider that one of the TQM basic
principles, without which it cannot be considered as such, is the definition of
quality as satisfaction of customer needs.
The importance of taking into consideration the business orientation is an
idea already accepted in the TQM literature (Reed et al., 1996). The idea that
business can either be process-driven, or customer- or market-focused, strongly
appears in the existing literature on business management.
Although the customer focus was traditionally considered as a marketing
concept, the most recent researches and thinking suggest that it is much more
than that. For a company to be customer-driven means that it is able to capably
and positively impact on its value chain. Narver and Slater (1990) were the first
at studying the relationship between market orientation and business
profitability. Their findings showed that the customer focus is positively
related to business profitability.
The process orientation has never been defined nor measured in full. This
concept links to the classical theory of business management (e.g. scientific
management) and there underlies much of our current management theory and
organizational models dealing with the companies internal control and the
management of their activities. Thus, for instance, Spencer (1994) studied seven
factors (objectives, quality definition, environment role/nature, managerial role,
employees role, structure rationality and change-oriented philosophy) that

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widely explain the management practice and found that TQM thinking and the
theory included in the machine-like, organic and cultural organizational models
substantially overlap. Also, Spencer pointed that business management
academics also suggested that managers would better increase their focus on
efficiency improvement and process control.
The business orientation relates to the TQM strategy contents. In the case of
the customer focus, these contents can be further specified throughout a market
advantage and/or product design efficiency. Alternatively, the process focus
can be specified thanks to the products reliability and/or process efficiency.
Reed et al. (1996) consider that customer-focused companies should make
available the favourable conditions permitting them to successfully achieve an
income increase by means of a market advantage and a costs reduction,
through an improvement in the products design reliability. On the other hand,
companies oriented to the processes should be capable to achieve an
improvement in their income by enhancing their products reliability, and
reduce costs by increasing the levels of efficiency in the processes.
So if we study the real intention of organizations in promoting TQM, we find
the classical distinction between exploitation of the organization capabilities
and exploration of new capabilities (Argyris and Schon, 1978). That is to say,
as a large part of the organizational structures allowing innovation are in
conflict with efficiency in current products manufacture, the firm has to chose
between an organization completely closed in the exploitation of existing
capabilities and the exploration of new competitive capabilities. On this regard,
two basic TQM orientations can be considered, relating exploration or
exploitation of the existing capabilities in the organization. Similarly, these are
only two edges in the continuum of possibilities that can arise, but, as stated by
Conner and Prahalad (1996), edges are useful for economic studies, as they
permit to clarify basic concepts of theories. Therefore, this is what Doty et al.
(1993) called a contingent hybrid types structure within configurational theory.
However, Reed and his colleagues suggest that these relationships will
depend upon the uncertainty degree perceived. Thus, for instance, when the
business is half driven to customers and to processes, but the environment
produces a degree of uncertainty be it high or low the improvement of the
results after a TQM programme implementation will not be clear. In highly
uncertain environments, the increase in the income produced by a market
advantage and a reduction in costs due to an improvement in the productdesign efficiency, will be either limited or curbed by the increase in costs linked
to the improvement in the process efficiency and the reliability of the products.
In opposition, with low levels of uncertainty, the reduction in costs produced by
an improvement in the process efficiency, and the increase in the income
arising out of higher levels of reliability of the products, will both be reduced
because of the costs incurred at trying to set forth a market advantage or an
improvement in the product design.

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In the light of the above, it can be established that:


P1. Organizational performance is positively related to the fit between TQM
contents, business orientation and environmental uncertainty.
TQM elements and organizational performance
There is no agreement between academics and practitioners as to which
elements are actually implemented in the organization when a TQM system is
set up. Thus, from Saraph et al.s (1989) works up to nowadays, many studies
have tried to establish the degree of real implementation of a quality system in
a company (e.g. Ahire et al., 1996a, b; Anderson et al., 1995; Flynn et al., 1995;
Grandzol and Gershon, 1998, Rao et al., 1999). The elements considered in these
works can be classified into five large blocks:
(1) managerial leadership and commitment;
(2) human resources management;
(3) the relationship with customers and suppliers;
(4) the internal culture of the organization; and
(5) the process management.
These elements will always be the guidelines to appraise the effectiveness of a
TQM programme following implementation. The company results will differ
depending on the successful implementation of the said elements. Nevertheless,
these elements have different importance weighs in terms of their final
contribution to the results. Thus, Powell (1995) proved that business
performance is influenced by the degree of implementation of the TQM basic
elements. On this premise, he carried out an analysis over 54 companies in
order to study the degree of correlation between the implementation of a TQM
programme in a company and the improvement in its financial profitability.
Out of his findings, it was concluded that:
.
a TQM programme has an economic value for companies, although it
changes from one company to another; and
.
the success of a TQM programme seems to depend more on the
management commitment, the openness towards the environment, the
authority to empower employees; than on benchmarking, training,
flexible manufacture, process improvement and measure systems.
However, the research design was based on transverse data, which
nevertheless does not prevent us from thinking that there could be an
exogenous factor explaining the profitability improvement, more powerful
than those used in our study. In any event, a formal TQM programme is not
necessary to implement the said elements in an organization, though the fact of
implementing them jointly under the TQM system umbrella makes them more
successful (Ahire et al., 1996a, b).

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Nevertheless, the effects of TQM elements in the processes of personal


behaviour can condition the success (Hackman and Wageman, 1995). Thus, for
instance, with company leaders not strongly committed in the long run,
employees can be reluctant to the cultural change; they can lose motivation if
no appropriate internal communication exists, or if the company is excessively
hierarchical; etc. Similarly, the implementation of the TQM elements must
involve changes in the system that increase the levels of training, technological
upgrades, etc. (Dean and Evans, 1994; Waldman, 1994).
To reach its goals, the implementation of a TQM programme if it is aimed
at improving the staff efficiency and performance needs to change the way in
which employees behave at work. Several behavioural and attitudinal
processes are necessary to achieve these goals: work motivation, work
satisfaction and organizational commitment. Nevertheless, the fact that the
employees behaviour and the aforementioned processes can be affected by the
system (system factors), the individuals (personal factors), and the interaction
between system/individual, needs to be emphasised. Dobbins et al. (1993) and
Waldman (1994) all agree in this perspective, although they further suggest a
direct relationship among these factors and the work performance, whereas the
mediation of behavioural processes as posited by Hackman and Wageman
(1995) is therein neglected. This way, many authors identify a feeling that
employees are not totally responsible for their performance. Rather, it is the
system configuration that determines to a great extent their possibilities of
action (Spencer, 1994; Waldman, 1994). Therefore, instead of trying to enhance
employees performance by means of incentives on productivity, organizations
should empower them and provide them with the necessary tools for enhancing
the production processes, at the same time as involve them so as they are able
to identify the organization goals as their owns (Chung, 1999). Thus, training,
increasing of a team vision of their tasks, clarification of the relation of their
work with that of their colleagues within the organization, and the contribution
of their individual work to the overall organizational performance are of
paramount importance as intrinsic motivators. The ingredients that are present
in the processes will be commented below.
System factors. Several authors have described how a series of factors can
affect the work performance either directly or indirectly, through their impact
upon the employees behaviour. These factors are consistent with Peters and
OConnors (1980) so-called situational constraints, with Schneiders (1978,
1980) so-called situational events, and with Brown and Mitchells (1993)
organizational obstacles. Such constraints can put limits to the degree of
influence of the individuals qualities over the behaviour and the work
performance. In the organizational environment, we propose a work structure
consisting of sixteen factors.
For a better understanding, these factors can be split into two categories. In
the first place, factors relating to the employee, which encompass those aspects

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linked to the cognitive appraisal of the behaviour of certain individuals in the


company (e.g. the managers) with the employees, in the organization internal
environment. By internal environment, we mean those elements that are within
the limits of the organization. These factors are based on the accumulation of
experience within the organization. These perceptions create a cognitive map of
how the organization works, at the same time as they help to determine the
appropriate behaviour to cope with a given situation. The factors chosen are
the following:
.
Support/sincerity: perception of the tolerance, support and freedom to
develop an open communication among the members of an organization
and their superiors.
.
Pressure: perception of the necessity of time to complete tasks and
achieve the performance standards.
.
Cohesion: perception of comradeship within the organization
environment, including the members wishes to provide material help.
.
Innovation: perception of the fact that change and creativity are
encouraged in the organization, including the risks assumption in areas
where the members have little or no experience at all.
.
Extrinsic recognition: perception of the fact that the members
contributions to the organization are economically acknowledged.
.
Intrinsic recognition: perception of the fact that the members
contributions to the organization are acknowledged in ways others
than economically.
.
Impartiality: perception that the organizational practices are fair, and not
arbitrary or easily changeable.
Second, factors related to the customer, comprising those aspects linked to the
cognitive appraisal of the behaviour of certain individuals in the company (e.g.
salespeople) with the customers, in the environment where the service takes
place. These organizational obstacles comprise a series of tangible factors of
the work environment that are liable to restrain the staff performance. Many of
these obstacles represent a defective working order or a technological
constraint. Inadequacies in matters such as information, work materials, tools
and equipment, and the physical work environment are also included. Other
obstacles are of a more social nature, as they are based on the interaction with
colleagues and on the inadequate formal empowerment for decision making. In
general, researchers have showed that variables within these two categories
(i.e. the technical and the social) entail obstacles for the employees, the
organization and the work satisfaction, which negatively affect performance
(Brown and Mitchell, 1993; Peters and OConnor, 1980). These factors can be
summarized as follows:

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Work information: perception of the information received by the


employees in terms of quality, rapidity and opportunity.
Technological system problems: perception of the support provided and
the problems caused on work performance by the technological means.
Work materials: perception of whether the material requirements for
performing each job are met or not.
Training: perception of the training received to perform tasks in terms of
quality, rapidity and opportunity.
Work environment: perception of the physical work conditions affecting
the performance of the tasks undertaken.
Empowerment in decisions: perception of the clarity in the definition of
responsibilities for decision making.
Support by functional departments: perception of the support by
functional departments in terms of rapidity and efficiency.
Conflict and ambiguity of roles: the conflict of roles occurs when people are
assigned tasks incompatible with their managers, colleagues or
customers expectations, which can, by no means, be simultaneously
met; the ambiguity of roles occurs when an individuals knowledge or
information degree is inappropriate to perform the tasks assigned to
him/her.
Quality focus: it reflects the extent to which the employees perceive that
both the organizational unit they belong to, and its employees are qualityaware.

Personal factors and the individual/system adjustment. The personal factors


encompass, but are not limited to, the existing differences among individuals in
terms of:
.
knowledge, skill and capability;
.
the level of efforts directed to the performance of the tasks; and
.
the method and form of organising work, that is, the individual, personal
approach to work, related to the general culture and social values.
Researches in the area of the industrial psychology have extensively dealt with
these factors (e.g. Campbell, 1990).
However, these factors can be affected, restrained or strengthened by the
system. Thus, for example, the employees level of knowledge can be reinforced
depending on the attention paid to training by the system. For this reason,
factors arising out of the interaction individual/system must be studied. They
can also be considered in terms of adjustment. Thus, Waldman (1994)
considered the importance of each individuals adjustment to his/her work
environment. Lofquist and Dawis (1969) posited a work adjustment theory
based on the concept of correspondence between the individual and the work

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environment. The correspondence was defined in terms of the mutual meeting


of expectations by both environment and staff. Therefore, the skill
requirements of the job and the characteristics of the individual must match,
in order to create encouraging conditions at the organizational environment.
The effect of the system and/or the personal restraints upon the employees
would negatively impact their motivation, thus affecting their work
satisfaction as a consequence of an eventual fall in their performance and,
consequently, it might explain their commitment to the organization they work
in. This position is further supported by other researchers (Brown and Mitchell,
1993; Ostroff, 1993; Peters and OConnor, 1980; Peters et al., 1985). Though a
significant controversy exists regarding the question of whether the
satisfaction is an antecedent of the performance or vice versa, we tend to
support the majority position, i.e. that the employees performance serves to
explain the employees satisfaction and that both, in a synergy with the
employees organizational commitment, strengthen the effectiveness of the
TQM programme.
Whereas it is the work motivation what provides energy, runs, channels,
keeps and sustains the employees actions and behaviours (Steers and Porter,
1987), it is also the amount of efforts that the staff is willing to carry out in
order to perform a given activity. Deming and Ishikawa identify three sources
of human motivation at work:
(1) the intrinsic motivation determined by the individuals growth, learning
and development;
(2) the task motivation, that accounts for the fact of getting things well done
and in operation; and
(3) the social motivation, determined by the fact of sharing the activities
with other people and being acknowledged by them (see, for example,
Deming, 1986; Ishikawa, 1985).
Finally, the organizational commitment, which shows how prone an employee
is to stay within an organization or otherwise to leave it. Although some
studies suggest that the organizational commitment is an antecedent of the
work satisfaction, we are rather in favour of the opposite position, which is
supported by more empirical evidence (e.g. Dubinsky and Skinner, 1984).
On the other hand, in our view, the explanation of the employees perception
of the effectiveness of a quality improvement programme and of the level of
quality provided by the organizational units they work in, can be found in the
work motivation, satisfaction and commitment. That is to say, those
organizational units whose employees lack motivation, or are dissatisfied or
little committed, on the grounds of the limitations imposed by the system
restraints or of a poor implementation of the TQM elements, will result in a
poor quality level and little effectiveness of the implementation programme.

The studies of Brown and Mitchell (1993), Schneider et al. (1980) and Schneider
et al. (1992) support this theory.
In the light of the above discussion, it can be stated that:

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P2. The TQM elements implementation affects the interaction between the
characteristics of the individual and the system demands/constraints.

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P3. The interaction between the characteristics of the individual and the
system demands/constraints impact on the behavioural processes.
P4. TQM elements implementation will impact positively on performance
because of higher individuals satisfaction, motivation and
commitment.
Learning
Through the incorporation of new ideas about learning, training and process
innovation, the quality movement has been able to demonstrate the potential
capability of the organizations to cope with the uncertain and changeable
circumstances of todays environments (Sitkin et al., 1994). Hackman and
Wageman (1995) put forward three levels of learning:
(1) learning among employees by means of cross-functional teams and
problem solving;
(2) learning about the way to enhance performance and work processes; and
(3) learning about the management of collective objectives and interests.
The quality movement proponents stated that the staff within a company
wants to learn and develop itself. However, this trend can weaken, since
learning may not be a shared, common value in the company, or a lack of the
necessary tools and skills may exist. TQM practices generate ideal
environments for learning, minimising the organizational culture fears and
providing employees with a series of tools enabling them to develop.
Furthermore, with different levels of continuity, TQM informs employees about
the performance level of their work processes, thus encouraging them to deploy
scientifical methods aimed at analysing and improving the said processes.
According to Barrow (1993), TQM and the organizational learning are
intrinsically bounded; the later being the main reason to carry out the
endeavours involved by the former. Thus, the relationship between them can
be studied on a twofold basis:
(1) the TQM itself constitutes a learning process; and
(2) TQM affects the way in which organizations learn.
On the one hand, the very TQM constitutes an organizational learning process,
that involves the introduction of changes in the way organizations act. Thus,
these changes in behaviour are nothing but the result of the new ways of
making the organization tasks have sense, once the knowledge acquired during

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the TQM processes is put into practice. In this regard, TQM has been
considered both as a double-loop learning process (Grant et al., 1994), and as a
single-loop learning process (Hackman and Wageman, 1995). In fact, according
to the former consideration, the changes brought about by TQM result from a
learning process incompatible with the traditional management practices, in
such a way that a change in the premises upon which these practices have been
built is necessary for the success of the TQM practices. On the contrary, those
standing for the TQM as a single-loop learning consider that in TQM, the
rhetoric predominates (Zbaracki, 1998), so that the main change in
organizations relates to the way in which managing processes are named,
whereas the basic premises remain the same.
On the other hand, the TQM affects the staffs knowledge-acquisition
processes, as it is considered that their power comes from their competence to
develop new starting points to solve existing problems in the organizations
(Mukherjee et al., 1998). Thus, one of the basic principles of TQM is the
continuous improvement, which consists in an explicit attempt to learn out of
ones own experience (Miner and Mezias, 1996). This way, organizations focus
on the study of the errors made and the seeking out of solutions. Therefore,
they put into practice one of the knowledge acquisition ways that most
decisively contributes to boost business performance in the short term, for
there is evidence that people learn more from their mistakes than from their
right decisions (Li and Rajagopalan, 1997).
Continuous improvement aspirations must be supported by the system
through the removal of barriers, and also favouring a learning-driven
environment, which includes substantial investments in training and the
spreading of the statistics and cross-personal techniques designed to promote
learning, both at the individual and at the team levels. In any case, the
individuals higher or lower level of learning will not only be subjected to the
support of the system. Rather, it will depend upon the personal characteristics
of that given individual (capability and skill). Generally speaking:
P5. The interaction between the employees personal characteristics and the
system requirements/restraints will influence the level of learning.
P6. TQM elements implementation will affect performance due to the
improvement in the individuals learning processes.
Cultural change acceptance
The existing literature on TQM almost unanimously emphasises the necessity
to change the organization culture, in order to adapt it to the requirements of
the new reality that TQM practices entail (e.g. Adebanjo and Kehoe, 1999;
Ahmed et al., 1999; Kanji and Yui, 1997; Manley, 1998; Vermeulen, 1997),
whereas Ciampa (1991) suggests that there exists a clear risk at believing that
an organizational culture can be permanently altered by one single person or, at

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any rate, by a continuous improvement programme. As a matter of fact,


Hofstede et al. (1990) found that differences among countries in the values of
the same company were larger than among companies within the same
country, thus illustrating that the organizations cannot by virtue of a
socialising process change their employees values with regard to the values
predominating in their societies. Nevertheless, the use of the word culture by
some authors as something liable to be easily changed is rather usual
nowadays. However, in practice, this change cannot occur in the short term.
The culture of an organization is neither something created by a single leader,
nor something that can be controlled and foreseen by the organization
managers. Rather, the culture is something tailored up with the contribution of
every employee in the organization. Though the cultural change is far from
being impossible, it is a slow and hard process (Shadur, 1995).
Also, the difficult that entails any TQM-driven cultural change in the
organization must be pointed out, as it may also represent a distortion in the
behaviour of the organization members. And the bigger the penetration of the
real culture in the organization, the more difficult the change will be. Many
organizations in an attempt to dramatically change the companies culture,
which necessarily led both managers and employees to dissatisfaction, lack of
motivation and frustration have encountered experiences near disaster.
Indeed, Sinclair and Collins (1994) consider that the weakest point in TQM lays
in the assumption that the employees will agree to adopt the new practices that
are proposed to them. Considering the above approach, it can be established
that:
P7. TQM elements implementation effect on individual learning and
behavioural processes will depend on the acceptation of the TQMdriven cultural change.
Conclusions
In the last few years, most companies have scheduled topics related to quality
management. Considering its importance in the administration practice, a
movement has started, which defends the incorporation and development of
TQM research. This philosophy is greatly in agreement with the theory of
business practice (Dean and Bowen, 1994). Although the terminology may
vary, managers who have implemented TQM systems are also familiarised
with concepts such as leadership, strategy, competitive advantage,
information, etc.
In this article, we have considered jointly TQM contents and elements, in
such a way that, according to our propositions, both of them need to be born in
mind at determining TQM impact on performance. This way, TQM content
must fit with the business strategy, and both must fit with the requirements of
the environment. TQM elements, in turn, are related to organizational
performance, using a perspective that is characteristic of the industrial

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psychology, by ways of the transformations produced in organization


members, both regarding what they do and what they are able to do, on the one
hand, and the efforts made to do it, on the other.
In addition, TQM affect on behavioural and learning processes through the
system/persons interaction. The system affects performance by interacting
with the individuals in terms of individual/system adjustment and through
organizational obstacles and barriers. Simultaneously, the personal factors can
have an impact on the system nature and work performance. Additionally, in
the study of the factors determining performance, both the personal and the
system factors must be simultaneously considered. Future researches should
probably focus, both in theory and in practice, on the combined effects
individual/system, in order to have a better understanding of some
performance-related topics. A greater work performance will positively
impact TQM effectiveness. However, this relationship between
individual/system factors and work performance is mediated by various
behavioural processes (motivation, satisfaction, commitment).
In this paper, therefore, we focus on the characteristics of the firm, both
regarding internal as much as external factors. This way, we analyse factors
determining TQM impact on organizational performance, regardless of their
being industrial or service organizations and of their size, and paying attention
to the differences involved by this contingent issues concerning both external
and internal factors.
Therefore, the model proposed here does not analyse if TQM models
implemented must be different depending on the sector or the organization size.
On the contrary, it analyses those factors that really differ on the grounds of
these contingencies. On this regard, the variables set out here should serve as
guidelines prior to implementation by the organizations, with a focus on the
previous analysis of the organization characteristics and as a contribution to
customize quality implementation, instead of choosing a previous model, which
has proved to impact performance more positively (Westphal et al., 1997).
Although the relationship between a given intervention as TQM and
performance depends on a large number of factors, which can hardly be born in
mind in a single model, our proposal may bring some light to some of the
factors that have traditionally been neglected on TQM literature. Future
researches must focus on the study of the relationships herein proposed, and
provide empirical studies.
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