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International Journal of Quality & Reliability Management

Quality management practices and their impact on performance


Lassad Lakhal Federico Pasin Mohamed Limam

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Lassad Lakhal Federico Pasin Mohamed Limam, (2006),"Quality management practices and their impact
on performance", International Journal of Quality & Reliability Management, Vol. 23 Iss 6 pp. 625 - 646
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(1999),"The link between total quality management practice and organisational performance",
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(2008),"The impacts of quality management practices on business performance: An empirical investigation
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(2011),"The relationships between organizational culture, total quality management practices and
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Quality management practices


and their impact on performance

Quality
management
practices

Lassaad Lakhal
Faculte de Droit et des Sciences Economiques et Politiques de Sousse-Tunisia,
Sousse, Tunisia

Federico Pasin
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HEC Montreal, Canada, and

625
Received September 2004
Revised April 2005

Mohamed Limam
ISG Tunis, Tunisia
Abstract
Purpose This paper aims to explore the relationship between quality management practices and
their impact on performance.
Design/methodology/approach First, critical quality management practices are identified and
classified in three main categories: management, infrastructure, and core practices. Then, a model
linking these practices and performance is proposed and empirically tested. The empirical data were
obtained from a survey of 133 Tunisian companies from the plastic transforming sector.
Findings The results reveal a positive relationship between quality management practices and
organizational performance. Moreover, the findings show a significant relationship between
management and infrastructure practices. In addition, the results illustrate a direct effect of
infrastructure practices on operational performance and of core practices on product quality.
Research limitations/implications The conceptual model proposed and tested in this study can
be used by researchers for developing quality management theory. In addition, this model may offer a
flow chart to practitioners for effective quality management implementation.
Originality/value The proposed model is the first one to distinguish the direct effects of
infrastructure practices on performance from the indirect effects of these practices through the core
practices. Besides, the use of path analysis method to study the direct and indirect relationships
between quality management practices and their effect on performance dimensions.
Keywords Quality management, Performance measurement (quality), Modelling
Paper type Research paper

1. Introduction
Quality gurus have put forth several approaches to improve company performance.
These approaches are embodied in a set of quality management practices, known as
total quality management (TQM). Several authors have attempted to clarify the
concept of TQM (Dean and Bowen, 1994; Dean and Evans, 1994; Hackman and
Wageman, 1995). TQM is generally described as a collective, interlinked system of
quality management practices that is associated with organizational performance
(GAO, 1991; Tornow and Wiley, 1991; Waldman, 1994; Madu et al., 1995).
In this respect, several studies have attempted to identify the key quality management
practices on which the success of a TQM process is based (Saraph et al., 1989; Flynn et al.,
1994; Ahire et al., 1996). However, these studies have not considered possible
interaction between practices. Recent studies, especially those of Cua et al. (2001),
Sousa and Voss (2002) and Kaynak (2003), underline the importance of causal relations

International Journal of Quality &


Reliability Management
Vol. 23 No. 6, 2006
pp. 625-646
q Emerald Group Publishing Limited
0265-671X
DOI 10.1108/02656710610672461

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626

between quality management practices. Furthermore, many authors (Anderson et al.,


1995; Flynn et al., 1995a; Mohrman et al., 1995; Choi and Eboch, 1998; Terziovski and
Samson, 1999; Cua et al., 2001; Douglas and Judge, 2001; Kaynak, 2003) suggested a
positive association between TQM practices and organizational performance. However,
conflicting reports have been published regarding the effectiveness of TQM programs.
For instance, Rategan (1992) reported a 90 percent improvement rate in employee
relations, operating procedures, customer satisfaction, and financial performance,
whereas Burrows (1992) reported a 95 percent failure rate for initiated TQM programs.
Authors diverge in the way they perceive the links between quality management practices
and performance. Some authors think that there is a hierarchy in the quality management
practices and that infrastructure practices may only have a positive effect on performance
if core practices have also been established (Flynn et al., 1995a; Anderson et al., 1995). In
opposition, other authors (Powell, 1995; Dow et al., 1999; Samson and Terziovski, 1999)
have suggested that each practice can improve performance even without the core
practices.
As we just seen, many important questions have recently been raised in the field of
quality management theory. In our study, we have focused on the three following
research questions:
(1) Which quality management practices are critical?
(2) How different quality management practices are related?
(3) What is the nature of the relationship between quality management practices
and performance?
In this paper, we propose and empirically test a conceptual model that links different
quality management practices and performance. The definitions of TQM and
performance retained in this study are consistent with those adopted by Hendricks and
Singhal (1996, 1997), Easton and Jarrell (1998) and Douglas and Judge (2001). Note that
we operationalisze TQM as a multidimensional construct, in contrast to the studies
mentioned above, which all use a single construct. Performance will here be defined in
relation to the quality of the organizations results. Moreover, performance will be
considered as a multidimensional construct.
2. Theoretical background
2.1 Quality management practices
Quality management practices have been investigated extensively (Saraph et al., 1989;
Flynn et al., 1994; Waldman, 1994; Powell, 1995; Ahire et al., 1996; Anderson and Sohal,
1999; Najmi and Kehoe, 2000; Zhang et al., 2000; Sun, 2001; Sila and Ebrahimpour,
2002; Kaynak, 2003). Although a plethora of practices have been described, similarities
among practices can be discerned. To generate distinct generic practices, we first
defined a list of all the practices proposed in a large set of articles. We then took each
practice, one at the time, analyzing it and questioning ourselves whether it was
different or similar to the practices previously analyzed. This process resulted with the
ten following distinct generic practices: top management commitment and support,
organization for quality, employee training, employee participation, supplier quality
management, customer focus, continuous support, improvement of quality system,
information and analysis, and statistical quality techniques use. Table I presents, for
each generic practice, a list of similar practices proposed by other authors. This list

Practice

Related practices

Top management commitment


and support

Top management commitment (Ahire et al., 1996; Powell, 1995;


Tamimi, 1998), top management team involvement (Douglas and
Judge, 2001), leadership (Anderson and Sohal, 1999; Sun, 2001;
Zhang et al., 2000)
Quality management design (Ahire et al., 1996), open organization
(Powell, 1995), cross-functional teams (LaHay and Noble, 1998),
control and improvement of processes (Zhang et al., 2000)
Training (Saraph et al., 1989), education and/or training
(Ahire et al., 1996; Kannan et al., 1999; Powell, 1995; Tamimi, 1998;
Zhang et al., 2000), emphasis on TQM-oriented training
(Douglas and Judge, 2001)
Participation (Zhang et al., 2000), delegation (Ahire et al., 1996;
Powell, 1995), employee involvement (Ahire et al., 1996), employee
relations (Saraph et al., 1989)
Supplier quality management (Ahire et al., 1996; Saraph et al., 1989;
Zhang et al., 2000), supplier management (Tamimi, 1998),
suppliers (Najmi and Kehoe, 2000; Sun, 2001), supplier relations
(Forza and Filippini, 1998; Powell 1995)
Customer focus (Ahire et al., 1996; Anderson and Sohal, 1999;
LaHay and Noble, 1998; Zhang et al., 2000), strong relations with
customers (Powell, 1995), customer satisfaction (Forza and
Filippini, 1998), customer driven (Douglas and Judge, 2001)
Continuous improvement (Douglas and Judge, 2001), recognition
and rewards (Zhang et al., 2000)
Quality system improvement (Zhang et al., 2000)
Information and analysis (Anderson and Sohal, 1999; Choi and
Eboch, 1998), information (Sun, 2001), information flow (Kannan
et al., 1999), quality information system (Najmi and Kehoe, 2000),
process measurement (LaHay and Noble, 1998), use of internal
information on quality (Ahire et al., 1996), Quality data
(Saraph et al., 1989), measurement of quality (Powell, 1995),
benchmarking (Ahire et al., 1996; Powell, 1995)
Use of statistical procedure (Ahire et al., 1996), total quality
methods (Douglas and Judge, 2001)

Organization for quality

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Employee training

Employee participation
Supplier quality management

Customer focus

Continuous support
Quality system improvement
Information and analysis

Statistical quality techniques


use

illustrates the foundations of our generic practices, and has strongly inspired the
definition of items that will operationalize each practice. Table I also establishes links
between practices examined in our research and those described in other studies.
Appendix 1 displays the specific scales and the 43 items used in our study to measure
the quality management practices.
After selecting ten generic practices, we grouped them into three main categories
following the classification of Flynn et al. (1995a), Pannirselvam and Ferguson (2001)
and Sousa and Voss (2002), namely:
(1) management practice: issued from the top management;
(2) infrastructure practices: intended to support core practices; and
(3) core practices: based on tools and techniques specifically related to quality.

Quality
management
practices
627

Table I.
Links between practices
retained and literature

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628

This classification constitutes the basis of our model, and highlights the links between
quality management practices and firm performance. Table II presents the
classification of practices into each of the three categories.
2.2 Organizational performance
Following a literature review on strategic management, marketing and operations
management, we have chosen three performance related dimensions: financial
performance, operational performance and product quality. The choice of key
indicators of financial performance is based on the research of Kaplan and Norton
(1992). Moreover, the operational performance indicators are inspired from Grandzol
and Gershon (1998), while the product quality indicators are based on studies carried
out by Garvin (1987), Forker et al. (1996), Curkovic et al. (1999) and Kelada (1996).
Appendix 1 shows a detailed list of the retained indicators.
3. Conceptual model and hypotheses
3.1 Conceptual model
Figure 1 shows a model of relations between top management practice, infrastructure
and core practices, product quality, operational and financial performance.
Some other similar models have already been proposed in the quality
management literature. These models can be divided in two groups. In the first
group (Flynn et al., 1995a; Anderson et al., 1995; Pannirselvam and Ferguson, 2001;
Kaynak, 2003), infrastructure practices act indirectly on performance through core
practices. In the second group (Powell, 1995; Dow et al., 1999; Samson and
Terziovski, 1999), infrastructure practices can improve performance even without
core practices. Our model can be viewed as a combination of the two groups of
models. More importantly, our model is the first one to distinguish the direct effects
of infrastructure practices on performance from the indirect effects of these practices
through the core practices.
3.2 Hypotheses
The selected hypotheses stem directly from the model. More precisely, we have defined
a hypothesis for each link that appears in the model. These links symbolize a direct
relation between two elements of the model.
H1. Management practice is directly related to infrastructure practices.
The effect of management practice on the various components of infrastructure
practices were highlighted in the management literature. For instance, Adam et al. (1997)
show through their research that leadership has a significant impact on training.

Table II.
Classification of quality
management practices

Management practice

Infrastructure practices

Core practices

Top management commitment


and support

Organization for quality


Employee training
Employee participation
Supplier quality management
Customer focus
Continuous support

Quality system improvement


Information and analysis
Statistical quality techniques use

Quality
management
practices

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629

Figure 1.
Relations between
management practice,
infrastructure practices,
core practices and
performance

In addition, several studies confirm a statistically significant correlation between


management practice and infrastructure practices (Ahire et al., 1996; Zhang et al., 2000).
Recently, some studies found statistically significant causal relations between
management practice and infrastructure practices (Flynn et al., 1995a; Handfield et al.,
1998; Pannirselvam and Ferguson, 2001; Kaynak, 2003):
H2. Infrastructure practices is directly related to core practices.
Many studies have found statistically significant causal relations between
infrastructure practices and core practices (Anderson et al., 1995; Flynn et al., 1995a;
Ho et al., 2001; Pannirselvam and Ferguson, 2001; Rahman and Bullock, 2002).
Moreover, other studies have shown the existence of statistically significant
correlations between specific infrastructure practices and some core practices (Ahire
et al., 1996; Zhang et al., 2000):
H3. Infrastructure practices is directly related to operational performance.
This hypothesis is consistent with the study of Samson and Terziovski (1999) which
reveals that several infrastructure practices: workforce commitment, shared vision,
and customer focus, are significantly related to operational performance. This
hypothesis also corroborates the findings of Adam (1994), Flynn et al. (1995a, b, c),
Forza (1995), Madu et al. (1996), Adam et al. (1997) Anderson and Sohal (1999), Dow et al.
(1999), Terziovski and Samson (1999), Cua et al. (2001) and Rahman and Bullock (2002),
which all show a statistically significant link between infrastructure practices and
operational performance components.
Similarly, in a US defense contractors survey, Grandzol and Gershon (1997) found
that employee fulfillment, cooperation, and customer focus were significantly related to
perceived customer satisfaction:

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H4. Infrastructure practices is directly related to financial performance.


Several empirical studies have measured the relationship between infrastructure
practices and financial performance. For instance, Adam (1994) found a statistically
significant relationship between human resources management practices and the
previous years return on assets (ROA). Powell (1995) found that having a zero-defect
mentality, empowering employees, using cross-functional teams, top management
commitment to quality, and working more closely with suppliers to accomplish quality
management objectives were statistically related to perceived financial performance.
This hypothesis has also been tested by Ittner and Larcker (1996), Anderson and
Sohal (1999), Terziovski and Samson (1999), Najmi and Kehoe (2000), Sun (2000) and
Nilsson et al. (2001), who reported a link between infrastructure practices and financial
performance indicators. Moreover, Barker and Cagwin (2000) confirm the positive
effect on financial performance of specific infrastructure practices, namely: general
management commitment, customer focus, supplier relations, employee training,
employee participation, internal cooperation, and open organization.
Adam et al. (1997) demonstrate a weak but statistically significant relationship
between infrastructure practices, namely: top management implication, employee
involvement, employee satisfaction, employee selection and development,
compensation and customers with financial profitability.
The work of Hendricks and Singhal (1997) has provided evidence of a relation
between the financial performance and the effectiveness of the implementation of
TQM. Many factors were taken into account in this research, notably the firm size, the
degree of capital intensity, the degree of firm diversification, the maturity of the TQM
implementation and the timing of the TQM implementation:
H5. Core practices is directly related to operational performance.
Adam et al. (1997) have shown a positive impact of certain core practices on different
aspects of operational performance. In addition, Choi and Eboch (1998) found a
significant direct link between core practices: process quality and information and
customer satisfaction. This hypothesis is consistent with Anderson et al. (1995) and
Flynn et al. (1995a), who report a statistically significant causal relation between core
practices and operational performance. This hypothesis also relies on studies
conducted by Adam (1994), Flynn et al. (1995b) Ittner and Larcker (1996) Anderson and
Sohal (1999) Terziovski and Samson (1999) and Rahman and Bullock (2002), who found
a link between core practices and operational performance:
H6. Core practices is directly related to financial performance.
Pannirselvam and Ferguson (2001) identified statistically significant direct link
between core practice: product and process management and financial results. In
addition, Barker and Cagwin (2000) revealed a positive relationship between core
practices: continuous improvement tools design and improvement of processes and
the ROA indicator of financial performance.
This hypothesis is also consistent with several studies which found a link between
core practices and financial performance indicators (Adam, 1994; Adam et al., 1997;
Easton and Jarrell, 1998; Anderson and Sohal, 1999; Terziovski and Samson, 1999;
Najmi and Kehoe, 2000; Sun, 2000; Nilsson et al., 2001):

H7. Core practices is directly related to product quality.

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This hypothesis is consistent with the empirical studies conducted by Forza (1995) and
Choi and Eboch (1998), which confirm the relationship between quality management
practices and product quality. This hypothesis is also consistent with Ahire et al. (1996),
who show that product quality has a statistically significant correlation with the
following core practices: statistical quality techniques use and internal quality
information.

Quality
management
practices
631

4. Research methodology
In this section we explain the methodology used to collect the data. We also draw the
statistical techniques used to test the research framework, the identification of critical
quality management practices and the construct validity of the measurement instrument.
4.1 Data collection
The data used in this study was obtained using a survey questionnaire filled by
Tunisian managers from the plastic transforming sector. This sector was chosen
because it reflects that of the Tunisian manufacturing sector, mainly by its wide
variability of quality management implementation levels. Also, it is a manageable
sector in terms of size of the study. First, a list of 133 Tunisian companies was defined
on the basis of the industrial and commercial guide of Tunisia, which includes all the
manufacturing industries. Then, these 133 companies were classified into three
categories (strong, medium and weak performance) based on ROI, ROA and growth of
sales indicators, and following the methodology proposed by Kotter (1992). The final
sample includes 92 companies with high and medium financial performance. Table III
presents the classification of studied companies into three categories.
To collect the data we have used a questionnaire. As Madu (1998) and Bavagnoli
and Perona (2000) assert, the questionnaire is a popular data collection method in
studies of quality management. The data collection instrument was pre-tested in ten
companies. The pre-tests included structured interviews with the general manager,
quality manager, process engineer, human resources manager, several supervisors and
workers. All of them were asked:
.
whether the questions were easy to understand;
.
whether there were any other questions that needed to be included; and
.
who was the right person to contact for the real study.
Feedback from the pilot study was used to clarify some questions. Based on the
feedback, some items in a few scales were dropped or added. In addition, to confirm
that the main aspects of quality management practices were covered, the draft
Performance
High
Medium
Low
Total

Number of companies
28
64
41
133

Table III.
Company classification

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questionnaire was reviewed by academicians and practitioners experts. Finally,


because of their familiarity with both quality management practices and performance,
general managers were considered as the most appropriate respondents.
Face-to-face interview was the method used to collect the data from each companys
respondent. The availability of the research team helped clarify any ambiguity
concerning definitions or issues related to the survey instrument.

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632
4.2 Statistical techniques
The causal relations shown in Figure 1 will be tested by means of the path analysis
method. Path analysis is a multivariate analytical methodology for empirically
examining sets of relationships represented in the form of a linear causal model
(Duncan, 1966; Li, 1975). Mathematically, path analysis decomposes empirical
correlations or covariances among measured variables to estimate the path coefficients
in a path diagram (Neumann, 1978). Path analysis use simple bivariate correlations to
estimate causal relations in a structural equation system (Hair et al., 1998).
One advantage of path analysis over conventional regression analyses is the ability
to extend the single-multiple-regression-equation treatment to a network of equations
involving more than one equation (Li, 1975). In addition, this method can differentiate
direct and indirect effects (Duncan, 1966; Pannirselvam and Ferguson, 2001).
4.3 Identification of critical quality management practices
The critical quality management practices are determined according to the following
two analyses: principal factor analysis, and confirmatory factor analysis (Goodhue,
1998; Grandzol and Gershon, 1998). Principal factor analysis is used in order to bring to
the foreground a factorial structure. Confirmatory factor analysis is applied in order to
confirm the factorial structure. Table IV displays the results of the principal component
analysis (factors 1 and 2) and the confirmatory factor analysis (factor loadings).
Principal factor analysis show that some items should be deleted from the analysis,
either because of very low factor loadings or because of multiple factor loadings too
high to ignore (Grandzol and Gershon, 1998). Besides, confirmatory factor analysis
confirms these results. In fact, items indicated as potentially problematic according to
the principal factor analysis surfaced again in the confirmatory factor analysis. More
precisely, items with factor loadings below the suggested cut-off of 0.6 (Hatcher, 1994)
were considered problematic. Given all these considerations, several items were deleted
from the analysis (Table IV) and three practices (supplier quality management,
continuous support, and statistical quality techniques use) were eliminated from the
analysis. Therefore, the final measurement instrument consists of seven quality
management practices and 24 items.
4.4 Construct validity of the measurement instrument
To empirically test the construct validity of the measurement instrument based on the
seven quality management practices that emerged from the previous analysis, we have
applied the three steps proposed by OLeary-Kelly and Vokurka (1998):
(1) unidimensionality analysis;
(2) reliability analysis; and
(3) validity analysis.

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Quality management practices

Itemsa

Factor 1 Factor 2 Factor loadings

Top management commitment and support (TMCS) TMCS 1


TMCS 2
TMCS 3
TMCS 4
TMCS 5

0.779
0.681
0.811
0.744
0.006

0.096
0.195
0.08
0.184
0.972

0.75
0.63
0.85
0.7
0.07

Organization for quality (OFQ)

OFQ 1
OFQ 2
OFQ 3
OFQ 4
OFQ5

0.903
0.221
0.186
0.003
0.902

0.201
0.861
0.707
0.853
0.196

0.88
0.44
0.44
0.14
0.9

Employee training (ET)

ET 1
ET 2
ET 3
ET 4
ET 5

0.711
0.742
0.736
0.343
0.654

0.7
0.82
0.64
0.38
0.61

Employee participation (EP)

EP 1
EP 2
EP 3

0.822
0.821
0.868

0.68
0.71
0.91

Suppliers quality management (SQM)

SQM 1
SQM 2
SQM 3
SQM 4

0.019
0.605
0.848
0.801

Customer focus (CF)

CF
CF
CF
CF

1
2
3
4

0.773
0.818
0.801
0.709

Continuous support (CS)

CS
CS
CS
CS

1
2
3
4

0.358
0.657
0.802
0.164

Quality system improvement (QSI)

QSI 1
QSI 2
QSI 3
QSI 4

0.109
0.799
0.793
0.778

0.42
0.76
0.75
0.75

Information and analysis (IAA)

IAA 1
IAA 2
IAA 3
IAA 4

0.735
0.751
0.778
0.855

0.66
0.66
0.73
0.88

Statistical quality technique use (SQTU)

SQTU
SQTU
SQTU
SQTU
SQTU

Note: Items in italics are deleted from the analysis

1
2
3
4
5

0.099
0.378
0.244
0.745
0.853

0.893
0.659
0.779
0.608

Quality
management
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633

0.17
0.39
0.45
0.36
0.78
0.82
0.68
0.61

0.735
0.745
0.652
0.897

0.996
0.716
0.836
0.673
0.703

0.32
0.37
0.36
0.43

0.12
0.23
0.39
0.42
0.41

Table IV.
Selection criteria for
critical practices

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Unidimensionality implies satisfaction of two implicit conditions (OLeary-Kelly and


Vokurka, 1998), namely:
(1) an empirical indicator must be significantly associated with a latent variable;
and
(2) an empirical indicator must be associated with one and only one latent
variable.

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Unlike the studies carried on by Fynes and Voss (2002) and Kaynak (2003), the
unidimensionality analysis was performed on the basis of a principal component
analysis of each of the seven practices. The results of this analysis reveal that the
items, for each practice, allow the extraction of a single factor. The unidimensionality
of the measurement scale is therefore confirmed.
The reliability analysis was performed based on Joreskogs r of internal
consistency (Joreskog et al., 1999). The convergent validity analysis was verified
according to Fornell and Larcker (1981) approach. Table V illustrates the results of
these analyses.
The results confirm the reliability of the quality management practices retained.
Specifically, Joreskogs r are all higher than the threshold of (0,8), with the exception of
the r representing the employee training practice, which is nonetheless very close to
that level (0, 78). Moreover, Table V illustrates good convergent validity. All factor
loadings are greater than the threshold of (0, 6). Moreover, the r of convergent validity
exceeds the threshold of 50 percent for all measurement scales, except employee
training.
To examine the discriminant validity, the Chi-squares of the constrained and
unconstrained models were compared (Anderson and Gerbing, 1988). Significantly
lower Chi-squares for the unconstrained model would indicate that each correlation
between pairs is less than 1.0 (Bagozzi et al., 1991), and that the constructs are
empirically distinct, rendering support for the discriminant validity of the constructs.
In our case, the Chi-squares (x 2) of the unconstrained model (x 2 410.15; df 231)
was significantly lower than the Chi-squares of the constrained model (x 2 963.85;
df 252). Given the differential of 21 degrees of freedom (Ddf 252 2 231 21) and
a type 1 risk of 1 percent, the tabulated value of the Chi-squares is 39.932. As the
difference in Chi-squares (Dx 2 963.85 2 410.15 553.7) largely exceeds the
tabulated value, the discriminant validity is confirmed.

Latent variables

Table V.
Reliability and
convergent validity
analyses

Top management commitment and support


Organization for quality
Employee training
Employee participation
Customer focus
Information and analysis
Quality system improvement

Joreskogs r

r of convergent validity

0.81
0.90
0.78
0.81
0.83
0.82
0.80

0.53
0.81
0.49
0.60
0.56
0.54
0.57

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5. Empirical findings
After testing construct validity, we then tested the causal relations between the latent
variables in order to confirm or refute the hypothesis presented earlier. Thus,
consistently with Swamidass and Newell (1987), Anderson et al. (1995) and Flynn et al.
(1995a), we tested our conceptual model by means of the path analysis approach. The
conceptual model can also be represented by equations (see Appendix 2).
The model does not deny the existence of variables such as organizational context,
industry, structure and technology, which may play an important role in the
explanation of organizational performance. Despite that, these variables are not
included in our model explicitly. Their effects will be considered by the nine error
terms specified in the model.
Before testing the hypothesis, we will validate for the absence of the
multicolinearity problem. To do so, we applied the methodology proposed by Flynn
et al. (1995a), which consists in studying the diagonal of the inverse of the correlation
matrix. This diagonal includes elements called variance inflation factors (VIF) equal to
1/(1-R 2), where R 2 measures the portion of variance of each variable explained by the
other variables. Neter et al. (1990) assert that the VIF values must not exceed the
recommended threshold of ten. Since, all the coefficients (VIF) are situated between
1.11 and 3.70, the multicolinearity is not a problem in this case.
To calculate the path coefficient, in order to indicate the explanatory power of each
antecedent variable on the dependent variable, we used LISREL software, with the
correlation matrix as the input, and we applied the methodology used by Anderson
et al. (1995). The results are presented in Table VI.
Of the 26 relations tested, 18 were found to be significantly different from zero with
an error risk below 1 percent, 2 are different from zero with a risk below 5 percent, and
6 relations were not statistically significant.
Table VI shows that top management commitment and support practice has a
statistically significant direct effect ( p-value , 0.01) on the following practices:
organization for quality employee training employee participation and customer
focus. This finding confirms the first hypothesis.
The practices organization for quality employee training and employee
participation have a statistically significant direct effect ( p-value , 0.01) on the
information and analysis practice. Moreover, the practices employee training
employee participation and customer focus have a statistically significant direct
effect ( p-value , 0.01) on the quality system improvement practice. Customer
focus practice does not have a significant effect on the information and analysis
practice. Organization for quality practice does not have a significant direct effect on
quality system improvement practice. To summarize, the infrastructure practices do
not all have a significant effect on the core practices; yet overall, their effect is
significant. This partly confirms the second hypothesis.
The results show that all infrastructure practices have a statistically significant
direct effect on operational performance. This confirms the third hypothesis. Note that
in addition to having a direct effect on operational performance, organization for
quality and employee training practices also have a significant indirect effect on
operational performance via core practices.
The results also illustrate that the practices: organization for quality and
customer focus have a statistically significant direct effect ( p-value , 0.05) on

Quality
management
practices
635

Organization for quality


Employee training
Employee participation
Customer focus
Information and analysis
Quality system improvement
Financial performance
Product quality
Operational performance
Information and analysis
Information and analysis
Information and analysis
Information and analysis
Quality system improvement
Quality system improvement
Quality system improvement
Quality system improvement
Financial performance
Product quality
Operational performance

support
support
support
support
support
support
support
support
support

Top management commitment


Top management commitment
Top management commitment
Top management commitment
Top management commitment
Top management commitment
Top management commitment
Top management commitment
Top management commitment
Organization for quality
Employee training
Employee participation
Customer focus
Organization for quality
Employee training
Employee participation
Customer focus
Organization for quality
Organization for quality
Organization for quality

and
and
and
and
and
and
and
and
and

Dependent variable

Table VI.
Structural model analysis

Independent Variable

Indirect effect
0.00
0.00
0.00
0.00
0.57 * *
0.59 * *
0.30 * *
0.40 * *
0.42 * *
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.22 *
0.15 *
0.26 * *

0.52 * *
0.43 * *
0.74 * *
0.31 * *
0.00
0.00
0.00
0.00
0.00
0.46 * *
0.36 * *
0.27 * *
2 0.06ns
2 0.007ns
0.41 * *
0.44 * *
0.31 * *
0.19 *
0.00
0.68 * *

636

Direct effect

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0.52 * *
0.43 * *
0.74 * *
0.31 * *
0.57 * *
0.59 * *
0.30 * *
0.40 * *
0.42 * *
0.46 * *
0.36 * *
0.27 * *
2 0.06ns
2 0.007ns
0.41 * *
0.44 * *
0.31 * *
0.41 * *
0.15 *
0.94 * *
(continued)

Total effect

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Financial performance
Product quality
Operational performance
Financial performance
Product quality
Operational performance
Financial performance
Product quality
Operational performance
Financial performance
Product quality
Operational performance
Financial performance
Product quality
Operational performance

Employee training
Employee training
Employee training
Employee participation
Employee participation
Employee participation
Customer focus
Customer focus
Customer focus
Information and analysis
Information and analysis
Information and analysis
Quality system improvement
Quality system improvement
Quality system improvement

Notes: *p , 0.05; * *p , 0.01; the symbol ns means not significant

Dependent variable

Independent Variable
2 0.06ns
0.00
0.60 * *
2 0.12ns
0.00
0.82 * *
0.20 *
0.00
0.51 * *
0.50 * *
0.34 * *
0.57 * *
0.035ns
0.34 * *
2 0.13ns

Direct effect

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0.19 *
0.26 * *
0.20 *
0.15 *
0.24 *
0.09ns
20.02ns
0.09ns
20.07ns
0.00
0.00
0.00
0.00
0.00
0.00

Indirect effect

0.13ns
0.26 * *
0.80 * *
2 0.03ns
0.24 *
0.91 * *
0.18 *
0.09ns
0.44 * *
0.50 * *
0.34 * *
0.57 * *
0.035ns
0.34 * *
2 0.13ns

Total effect

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637

Table VI.

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638

financial performance. Employee training and employee participation practices are


not significantly linked to financial performance. In this sense, the fourth hypothesis is
partly confirmed.
Moreover, the practices: organization for quality employee training and
employee participation have a significant indirect effect ( p-value , 0.05) on
financial performance via core practices. Overall, we can assert that the infrastructure
practices have a notable indirect effect on financial performance.
Information and analysis practice have a statistically significant direct effect
( p-value , 0.01) on both operational and financial performance. In contrast, the
quality system improvement practice does not have a significant direct effect neither
on operational nor on financial performance. This implies that the fifth and sixth
hypotheses are partly confirmed.
The information and analysis and the quality system improvement practices
have a statistically significant direct effect ( p-value , 0.01) on product quality. This
implies that the seventh hypothesis is confirmed.
Lastly, note that some relations, which were not covered by the hypotheses, were
highlighted during the analysis. This is the case of the indirect effects of the practice
top management commitment and support on the practices information and
analysis quality system improvement and product quality and on operational and
financial performance. It is also the case of indirect effect between the infrastructure
practices (except for the customer focus practice) and product quality.
6. Discussion
6.1 Discussion of results
In this study we have provided empirical evidence that quality management practices
have a positive impact on organizational performance. This result corroborates the studies
of Douglas and Judge (2001), Easton and Jarrell (1998) and Hendricks and Singhal (1996,
1997). Note that all of these studies operationalize TQM as a single construct, in contrast
with our study, which operationalizes it as a multiple construct. Our approach is therefore
inspired by Palich et al. (2000), who underscored the importance of obtaining consistent
results among multiple studies that use different methodologies.
Besides, the results highlight the crucial role played by top management
commitment and support. Specifically, the management practice has a statistically
significant direct and indirect link with all the other practices of our model. These
conclusions corroborate previous studies by Adam et al. (1997), Ahire et al. (1996),
Ahire and OShaughnessy (1998), Flynn et al. (1995a) Pannirselvam and Ferguson
(2001) and Wilson and Collier (2000).
Moreover, the results of our empirical study clarify the relative importance and the
interplay between infrastructure, core practices and organizational performance. These
findings notably show that infrastructure practices have a statistically significant
direct effect on operational performance. These results support the ones of Powell
(1995), Dow et al. (1999) and Samson and Terziovski (1999).
The findings also illustrate that infrastructure practices act on product quality and on
operational and financial performance by means of core practices, in that the indirect
effect of infrastructure practices on performance dimensions is statistically significant.
These results are consistent with the empirical studies of Flynn et al. (1995a), Anderson
et al. (1995), Pannirselvam and Ferguson (2001) and Kaynak (2003). In addition, the
results clarify the direct and significant effect of core practices on product quality. They

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also reveal that the core practice information and analysis is the only one that has a
direct and significant effect on both operational and financial performance.
Besides, the results also support the interdependence between quality management
practices. This finding is in line with the studies of Flynn et al. (1995a), Anderson et al.
(1995), Pannirselvam and Ferguson (2001) and Kaynak (2003).
From a managers point of view, the empirically validated positive effects of quality
management practices on organizational performance is encouraging for those who
take the initiative to implement TQM. Besides, the measurement instrument developed
and validated empirically in this paper can be used by managers to evaluate their TQM
implementation and to target improvement areas.
6.2 Limitations of findings
Several limitations of this study should be discussed in this section. First, the data
collection method was based on managers perceptions. As reported by Dearborn and
Simon (1958), managers respond to questionnaires from their own local environment,
which may or may not reflect what is going on in the organization as a whole.
Consequently, it is rather dangerous to readily assume that an individual response is a
reliable and valid indicator of an organization-level construct (Venkatraman and
Grant, 1986). Nevertheless, the use of managers perceptions is frequently used in
quality management research (Madu, 1998). Second, based on the type of data used in
the analysis, our study was not able to capture the effects of other mutually supportive
process management techniques (e.g. business process reengineering and JIT) on firm
performance (Flynn et al., 1995b).
In addition to the limitations already mentioned, we acknowledge the fact that the
sample size is relatively small. The results of this study should not be generalized beyond
what is reasonable, given the nature of the sample. Future studies should consider
substantially larger samples including greater representation of industries and countries.
Given the cross-sectional nature of the data, we should exercise caution in drawing causal
inferences from the findings of this study. Despite this caveat, we observe an association
between management practice, infrastructure and core practices, and performance. More
detailed longitudinal studies may be appropriate for assessing causality.
7. Conclusion and future directions
The primary objective of this paper is to study the relationship between quality
management practices and their impact on performance. This research attempts to
contribute to the development of a quality management theory.
To carry out this research, we started by identifying a set of practices and items of
quality management presented in the literature. Then, we used this set to formulate our
conceptual model that links management practice, infrastructure and core practices,
product quality, operational and financial performance. Seven hypotheses regarding
the relations between the elements of the model were specified. An empirical study
then enabled us to select, among all the practices and items proposed in the literature,
24 items that made up the following seven practices: top management commitment and
support, organization for quality, employee training, employee participation, customer
focus, information and analysis, and quality system improvement.
The hypotheses regarding the relationships in the model were then empirically
tested on a sample of 92 companies in the plastics transformation industry using the
path analysis method. The results highlight the crucial role played by top management

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commitment and support and clarify the relative importance and the interplay between
infrastructure, core practices and organizational performance.
The majority of the research related to TQM theory can be classified into the
mapping and relationship stage of the scientific inquiry process as defined by
Handfield and Melnyk (1998). Further research must advance beyond this stage
towards the last two stages of the scientific inquiry process: theory validation and
theory extension/refinement. In this respect, future research that focus on applying
the proposed model in new industrial and national contexts would be helpful. Besides,
there is also a need to refine and clarify the relative importance and the interplay
between core and infrastructure practices in determining performance.
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Appendix 1. TQM practices
For the seven TQM practices, respondents indicated the extent to which the items represented
practices in their organizations (1 very low to 5 very high). Items in italic type were
eliminated from the analysis:
(1) Top management commitment and support:
General management is actively involved in quality improvement.
Management provides the necessary resources to carry out activities efficiently.
General management encourages employees to consider customers needs and
expectations.
Management quality objectives are disseminated to all employees.
Top management pursues long-term objectives.
(2) Organization for quality:
The organization has a process management method.
Interdepartmental groups are common.
Processes are continuously improved.
The organization uses quality circles.
There is a little bureaucracy (formal hierarchy, procedures and detailed rules) in the
organization.
(3) Employee training:
The company provides continuous training for its managerial personnel.
The company provides continuous training for its non-managerial personnel.
Training needs are always evaluated.

Employees can take training leave.


The company measures employee satisfaction with training received.
(4) Employee participation:

Quality
management
practices

Employees are encouraged to be totally involved.


Management lets employees participate in achieving organizational objectives.
Employees are responsible for the tasks they perform, and inspect their own work.
(5) Suppliers quality management:
The company purchases raw materials only from suppliers with ISO 9,000 certification.

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The company works in close collaboration with suppliers to improve processes.


The company supplies technical assistance to suppliers.
The company is partnering with its suppliers.
(6) Customer focus:
Client is integrated in the product development process.
Company carries out studies to evaluate customer satisfaction.
Company carries out market studies to determine its customers needs and wants.
Company has a system to collect customers complaints.
(7) Continuous support:
Company has put in place a reward system to encourage new ideas.
Organization insists on continuous improvement of its products and services.
General management actively displays an ongoing commitment to quality improvement.
General management has appointed a coordinator who is in charge of operationalizing
the quality program within the company.
(8) Quality system improvement:
Company has a clear quality manual.
Quality system in our company is improved continuously.
Company has a clear documentation procedure.
Company has a clear set of work instructions.
(9) Information and analysis:
Important information is presented and transmitted to employees.
Company collects and analyzes data related to its activities.
Company harnesses information to improve its key processes, products and services.
Company has precise data about the competition used to identify areas of improvement.
(10) Statistical quality techniques use:
Cards and graphs are used to measure and control quality.
General management encourages the use of statistical methods.
Statistical techniques are used intensively in the company.
Employees participate in training programs related to statistical techniques for quality.
Statistical techniques are effective at improving product quality.

645

IJQRM
23,6

Organizational performance
The scale represents the organizations relative performance (1 much worse than the
competitors to 5 much better than the competitors).
Financial performance Operational performance Product quality
Return on investments

Wastelevel

Reliability

Return on assets

Productivity

Durability

Sales growth

Cycle time

Tenacity

646

Regularity

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Appendix 2
OFQ p21 TMCS e1
ET p31 TMCS e2
EP p41 TMCS e3
CF p51 TMCS e4
IA p62 OFQ p63 ET p64 EP p65 CF e5
QSI p72 OFQ p73 ET p74 EP p75 CF e6
FP p82 OFQ p83 ET p84 EP p85 CF p86 IA p87 QSI e7
PQ p96 IA p97 QSI e8
OP p102 OFQ p103 ET p104 EP p105 CF p106 IA p107 QSI e9
with, TMCS: Top management commitment and support, OFQ: Organization for quality, ET:
Employee training, EP: Employee participation, CF: Customer focus, IA: Information and
analysis, QSI: Quality system improvement, FP: Financial performance, PQ: Product quality, OP:
Operational performance, pij Path coefficient, ei Errors outside the model
Several points of the model are worth noting:
All paths are included in the figure. There is no return path. Our model is thus recursive.
The only exogenous variable is top management commitment and support.
The conceptual model is made up of nine endogenous variables. Each endogenous
variable is explained by one or more variables plus an error term. One endogenous
variable can influence another endogenous variable.
The first variable is not explained by any other variable in the model.
In the path analysis approach e refers to lost causes or causes outside the model.
Linear relations between the variables are additive.
Each variable is taken to be in standard form; that is, if Vi is the ith variable as measured,
 svi : The same convention holds for the residuals.
then X i V i 2 V=
Corresponding author
Lassaad Lakhal can be contacted at: lassaad_lakhal@yahoo.com
To purchase reprints of this article please e-mail: reprints@emeraldinsight.com
Or visit our web site for further details: www.emeraldinsight.com/reprints

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