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A comparative study of TQM A comparative

study of TQM
practice and organisational practice

performance of SMEs with and

without ISO 9000 certification Received January 2000
35

Shams-ur Rahman Revised June 2000

University of Western Australia, Nedlands, Perth, Australia
Keywords Performance, ISO 9000, Small to medium enterprises, TQM, Australia
Abstract Recently, a highly credible report suggested that the quality philosophy and quality
standards have not effectively reached the core of Australia's commercial base ± 780,000 small
and medium enterprises (SMEs). Drawing on this critical finding, this study aims at providing
empirical evidence on the differences in total quality management (TQM) implementation and
organisational performance of SMEs in Western Australia, with and without ISO 9000
certification. Using the criteria of the Australian Business Excellence (ABE) framework as a
guide, a questionnaire with 36 items was developed, checked for reliability and validity and
applied to create a self-assessment measure of TQM practices. The results showed that there was
no significant difference between SMEs with and without ISO 9000 certification with respect to
TQM implementation and organisational performance. This result concurs with the findings of
studies conducted in the context of large organisations in Australia.

Literature review and research hypothesis

Over the last two decades, many studies have reported on the implementation
of total quality management (TQM) principles and methods in organisations
around the world. However, until recently, there have been only a few attempts
to empirically establish the link between TQM practice and organisational
performance. For example, Garvin (1986) studied quality practices and
performance in the room air conditioner industry, and Roth et al. (1990)
examined the relationship of various quality practices and performance in the
USA, Europe and Japan. Since the appearance of Garvin's (1988, p. 92) caution
note that ``More refined research is vital; otherwise, managers will continue to
lack the hard evidence linking quality with the bottom line'', many studies have
reported on the link between TQM practice and organisational performance.
For instance, Bemowski (1991) studied quality practices of over 500
organisations and concluded that some of the quality practices such as process
improvement methods, strategic plan deployment, and supplier certification
programs, have a significant impact on performance regardless of type of
industry and country of location. Garvin (1991) investigated the impact of TQM
improvement strategies on the performance of 20 US companies that had
performed well on the MBNQA in 1988/1989. He found a strong link between
International Journal of Quality &
Reliability Management,
The author wishes to express his appreciation to the editor and the two anonymous referees for Vol. 18 No. 1, 2001, pp. 35-49.
their helpful suggestions. # MCB University Press, 0265-671X
IJQRM TQM practices and organisational performance measured in terms of
18,1 productivity, profitability, customer satisfaction and employee relations. More
recently, Madu et al. (1995) compared the quality practices and performance in
manufacturing firms in the USA and Taiwan, as did Flynn et al. (1995) among
world-class manufacturing firms in the USA. Madu et al. (1995) found that the
practice of quality as perceived by middle managers in Taiwan is different
36 from that of the USA. Taiwan's managers view customer satisfaction as the
major factor in achieving significant improvement in organisational
performance, whereas US managers view employee satisfaction as the primary
element in achieving significant improvement in organisational performance.
Powell (1995) studied 39 US manufacturing companies and found that only the
``soft'' aspects of quality practices, such as employee commitment, shared vision
and customer focus contributed to organisational performance.
Several empirical studies have been conducted to establish the link between
TQM practice and organisational performance in the contexts of Australia and
New Zealand (e.g. Terziovski and Samson, 1999; Samson et al., 1999; Dow et al.,
1999; Sluti, 1992). The results of these studies indicate that TQM implementation
has had a mixed success. For example, Terziovski and Samson (1999) and Dow et
al. (1999) analysed data collected by the Australian Manufacturing Council
(AMC, 1994) for 962 Australian and 379 New Zealand manufacturing companies
and found a significant relationship between quality management practices and
organisational performance. However, the results of these studies showed that
only a handful of ``soft'' quality management practices have a positive
relationship with organisational performance. Since the bivariate correlation
coefficients of the quality management practices in both studies were found to be
high, the conclusion regarding the effect of individual practices has to be treated
with caution. Sluti (1992) studied 184 manufacturing companies in New Zealand,
and found no conclusive evidence of the link between quality management
practices and organisational performance. The results, however, showed that
quality practices had significant positive impact on performance measures for
work-in-process inventory levels, on-time delivery, product costs, process
utilisation, and process output.
As for TQM practice, many studies have been conducted to understand and
assess the effectiveness of the ISO 9000 standards. The implementation of ISO
9000 has been found to improve customer satisfaction (Avery, 1994), gain
competitive advantages (Vloeberghs and Bellens, 1996), increase profitability
(Scotto, 1996) and improve product and service quality (Idris et al., 1996).
Lloyds Register Quality Assurance (1994) commissioned a large study in the
UK to determine why organisations obtain ISO 9000 certification and what
effect it has on their business. One of the main conclusions of the study was
that ``Like a fine wine, the benefits of ISO 9000 registration improve with age''
(p. 61). The study found that ISO 9000 companies experienced improvement in
management control, better service delivery, higher productivity and
competitive advantage. Research also revealed that ISO 9000 certification can
provide the building blocks for successful implementation of TQM (Askey and A comparative
Dale, 1994). study of TQM
It is evident from the literature that the implementation of both TQM practice
practice and ISO 9000 standards has impacted organisational performance.
However, there seems to be no general agreement on how ISO and TQM are to
be linked. Some researchers support the idea of starting with ISO as the first
step towards TQM (e.g. Bradley, 1994), while others prefer to focus only on 37
TQM (e.g. Binney, 1992). Taylor (1993) found that 33 per cent of organisations
which had introduced ISO 9000 also had TQM in place and of those which did
not, 43 per cent were either planning to introduce TQM or were considering it.
On the other hand, 42 per cent of the organisations with TQM were planning to
introduce ISO 9000.
Based on these studies, a conceptual model is shown in Figure 1 which
makes explicit the links among three components: TQM, ISO 9000 and
organisational performance. In this model, TQM philosophy is equated with
various criteria of the Australian Business Excellence (ABE) framework and
posited as a primary influence on an organisation's performance. (The
extended version of the model is shown in Figure 2.) The implementation of
ISO 9000 enhances the organisation's performance directly, and also indirectly
through the implementation of TQM philosophy. Therefore, the evaluation of
impact of quality management and quality standards can be seen in three
different ways:
(1) Impact of TQM practice on organisational performance.
(2) Impact of ISO 9000 implementation on organisational performance.
(3) Impact of TQM plus ISO 9000 (or ISO 9000-TQM) on organisational
performance.
Most studies on TQM and ISO 9000 implementation discussed above were
conducted in the context of large manufacturing companies. Little research has
been conducted on how TQM and ISO 9000 have been applied in small
businesses in Australia. In a recent report on Quality, Productivity and
Competitiveness, Foley et al. (1997) highlighted that ``Neither the quality

Figure 1.
Conceptual framework
IJQRM
18,1

38

Figure 2.
Proposed links between
TQM criteria, ISO 9000
and organisational
performance

philosophy (TQM) nor quality standards (ISO 9000) have effectively reached
the core of Australia's commercial base 780,000 small and medium enterprises''
(p. 81).
In light of the above discussion and drawing on the critical finding of the
Foley et al. (1997) report that SMEs have not taken full advantage of either
TQM practices or ISO 9000 standards, the following hypothesis is proposed.

Hypothesis
TQM impact on organisational performance is greater for SMEs with ISO 9000
than for SMEs without ISO 9000.

SMEs in Western Australia

Businesses generally are defined or classified on quantifiable characteristics
such as number of employees, sales volume or worth of assets. However, the
classification based on the number of employees is most commonly used in
management research (Terziovski et al., 1997; Haksever, 1996; Ghobadian and
Gallear, 1996). In this study, the Australian Bureau of Statistics (ABS)
classification of number of employees was used. The ABS, which categorises
business into three groups: small (1-49 employees); medium (50-99 employees); A comparative
and large (100 or more employees). The reason for using this classification is study of TQM
that the number of people a company employs is usually proportional to the practice
magnitude of its financial resources, and these resources may play an
important role in the implementation of TQM.
The small business sector is a vital contributor to the overall performance of
the Western Australian economy. SMEs account for approximately 97.5 per 39
cent of all private sector businesses and 58.4 per cent of the private sector
workforce (ABS, 1999). Detailed statistics are given in Table I. Latest statistics
indicate Western Australia's small business sector continues to experience
positive growth. In 1998, the number of small businesses increased by 8.5 per
cent. Over the last decade, Western Australia has led the country in small
business growth, averaging annual growth rates of 5.1 per cent compared to a
national growth rate of 3.5 per cent. During the same period, the number of
employees in Western Australia grew by an annual average of 4.2 per cent, well
above the national average of 3 per cent (SBDC, 1999).

Methodology
Development of the survey instrument
The criteria specified in the ABE, previously called Australian Quality Award
(AWA) framework served as our conceptualisation of the TQM approach to
management. The framework is structured with seven criteria: leadership,
strategy and planning, information and analysis, people, customer focus,
processes, products and services, and organisational performance (see Figure
2). Under each criterion exists one or more sub-criteria, which describe in more
detail aspects of the criterion. Using these sub-criteria as a guide, a
questionnaire with 36 items was developed to create a self-assessment measure
of TQM practices. Additional questions were included to measure the quality
perception and ISO 9000 certification status of the participating companies. A
five-point Likert scale was used to measure the extent to which certain

Number of employees
Small (1-49) Medium (50-99) Large (+ 100) All enterprises
Industry division ('000) (%) ('000) (%) ('000) (%) ('000) (%)

Mining 5.4 0.97 1.6 0.29 22.3 4.0 29.3 5.24

Manufacturing 27.0 4.83 6.9 1.23 32.3 5.8 66.2 11.83
Construction 20.4 3.65 3.8 0.68 16.9 3.0 41.1 7.35
Wholesale trade 23.6 4.22 7.1 1.27 10.2 1.8 40.9 7.31
Retail trade 56.4 10.08 8.1 1.45 39.3 7.0 103.8 18.55
Finance and insurance 8.0 1.43 6.3 1.13 14.9 2.7 29.2 5.22
Property business 43.7 7.81 12.3 2.20 40.1 7.2 96.1 17.18
Other business 78.8 14.1 17.3 3.1 56.8 10.2 152.9 27.3 Table I.
Total 263.3 47.1 63.4 11.3 232.8 41.6 559.5 100.0 Industry division and
size of employement in
Source: Adapted from ABS (1999) Western Australia
IJQRM management practices were used by managers (a higher score indicates greater
18,1 agreement that the firm uses that particular management practice).
Additionally, respondents were given an option to indicate if the item was not
applicable to their company. A similar approach was applied by Kaldenberg
and Gobeli (1995) and Quazi and Padibjo (1997) in their studies on SMEs in the
USA and Singapore, respectively. The questionnaire was pretested using
40 several companies not included in the random sample. Consequently, several
questions were rewritten.

Sampling procedure
The sample for the study consisted of 250 firms which were randomly selected
from a list of SMEs prepared by the Western Australian Department of Trade
and Commerce. A questionnaire was mailed to the top management of each
firm. A reply-paid envelope was included. A total of 53 firms responded to the
questionnaire, giving a response rate of about 21 per cent. Given the low
response associated with mail surveys, this response rate was considered
reasonably adequate. Four of the responses received were not useable due to
incomplete data. The analyses are based on the remaining 49 companies.

Discussion of results and findings

Profile of the respondents
Table II provided an industry classification of the sample companies. The
construction/engineering constituted the largest portion of respondents, with
42 per cent of respondents in this category. Among the remainder,
manufacturing (durable and non-durable) accounted for the next largest
portion of respondents with 11 per cent in each category. Approximately 31 per
cent of the companies were subsidiaries of large companies, 23 per cent were
limited liabilities, followed by partnership (11 per cent), sole proprietorship
(9 per cent) and associate company (9 per cent) (Table III). In terms of sales
volume (average of the last three years), about 27 per cent of the companies had
$5-10 million in sales, 35 per cent had below $5 million, 32 per cent had $10-50
million and 6 per cent had more than $50 million in sales (Table IV).

Industry type Per cent

Construction/engineering 42
Chemicals/extractives 9
Financial/insurance services 3
Manufacturing (durable) 11
Manufacturing (non-durable) 11
Non-profit organisation 6
Table II. Utilities 6
Types of companies in Services 6
the sample Others 8
Of the 49 companies that responded, 55 per cent were ISO 9001/9002 certified. A comparative
Among the companies without ISO certification, 62 per cent expressed their study of TQM
intention to get such a certificate within the next five years. practice
Reliability and validity of the survey instrument
The survey instrument with 36 items was developed based on the seven
criteria: leadership (L1-L4), information and analysis (IA1-IA3), strategy and 41
planning (SP1-SP4), people (P1-P8), customer focus (CF1-CF8), processes,
products and services (PPS1-PPS6) and the dependent variable, organisational
performance (OP1-OP3) (see Table V). The instrument was evaluated for
reliability and validity. Reliability refers to the instrument's ability to provide
consistent results in repeated uses (Gatewood and Field, 1990). Validity refers
to the degree to which the instrument measures the concept the researcher
wants to measure (Bagozzi and Phillips, 1983). Three types of validity tests
were considered in this study: content validity, construct validity, and criterion
validity (Hair et al., 1998). A thorough reliability and validity analysis on
measurement instruments in empirical research is essential for several reasons.
First, it provides confidence that the empirical findings accurately reflect the
proposed constructs. Second, empirically-validated scales can be used directly
in other studies in the field for different populations and for longitudinal
studies (Flynn et al., 1994).
The data set of 36 items developed, based on the seven criteria of the ABE
framework, was factor analysed by principal component analysis. Out of the
seven criteria, ten factors were extracted. In factor analysis, a rotation

Companies by ownership Per cent of companies

Associate company 9
Family trust 3
Joint venture 3
Limited liability 23
Partnership 11
Sole proprietorship 9 Table III.
Subsidiary 31 Companies by
Others 11 ownership

Sales (three-year average) ($million) Per cent of companies

Less than 1.0 6

1.0-3.0 16
3.1-5.0 13
5.1-10.0 27
10.1-20.0 16
20.1-50.0 16 Table IV.
More than 50.0 6 Company sales volume
 42
18,1

analysis
IJQRM

Table V.

reliability and
within-scale factor
Results of construct
Revised factor Reliability of revised
Criteria Factors Items loadings construct

Leadership Leadership L1: Conduct regular reviews of quality performance 0.670

L2: Maintain close contact with customers X
L3: Enforce total quality commitment to all staff 0.741
L4: Give quality issues top priority as criteria when decision making 0.827 Alpha = 0.605 (0.595)

Information Information IA1: Carefully collect data on all facets of business 0.884
and analysis and analysis IA2: Analyse all work processes in the business 0.830
IA3: Key performance figures are always available for analysis and
decision making 0.873 Alpha = 0.820
Strategy and Strategy and SP1: Do regular strategic planning 0.873
planning planning SP2: Business has clear quality goals 0.773
SP3: Strategic plan is linked to quality values 0.807
SP4: Planning process includes continuous quality improvement 0.760 Alpha = 0.814

People Employee P1: Work as a team with clear goals 0.608

empowerment P5: Each member is encouraged to develop new ways to do their job better 0.723
and employee P6: All staff understand how their tasks fit into an overall plan 0.723
involvement P7: Ensure that all staff are focused on continuous improvement effort
in all areas 0.825 Alpha = 0.720
Employee P3: Encourage personal growth of staff 0.832
training and P4: Reward staff who help improve product/service quality 0.832
development P2: Staff members are aware of long term business goals X
P8: Staff members receive appropriate training and are multiskilled X Alpha = 0.610 (0.525)

Customer focus Customer CF1: Collect data to monitor changes in customer needs 0.777
management CF2: Systematically ask customers what they expect in products/services 0.893
CF3: Systematically ask customers if they are satisfied with the
products/services 0.839
CF5: Investigate when we lose a customer 0.800 Alpha = 0.846
(continued)
 Revised factor Reliability of revised
Criteria Factors Items loadings construct

Customer CF4: Record all customers' complaints 0.806

satisfaction CF6: A customer is adequately satisfied if they continue to use our
products/services 0.810
CF7: Know what customers expect from our products/services 0.630
CF8: Use customer complaints to improve products/services 0.810 Alpha = 0.753

Processes, Design quality PPS1: Continually make improvements in products/services 0.734

products and management PPS2: In the past year we have introduced at least one new product/
services service 0.905 Alpha = 0.766
PPS3: Improved at lease one feature of products/services in the past 0.889
year
Process control PPS4: Monitor all production/service processes 0.892
PPS5: Use statistical process control to monitor production/service
processes 0.753 Alpha = 0.714
PPS6: Always incorporate quality factors in product/service design 0.809

Organisational Organisational OP1: Profitability has increased in the past three years due to our
performance performance quality programmes 0.878
OP2: Due to quality improvement effort revenue dollars have increased
in the past 0.898
OP3: The number of customers has increased in the past three years 0.822 Alpha = 0.833

Table V.
A comparative

practice

43
study of TQM
IJQRM procedure is commonly applied which maximises the correlations of each item
18,1 on a factor (Comrey, 1973). The quality management practice construct
comprises many interrelated factors (Dow et al., 1999) and, therefore, oblique
rotation was applied as the rotation procedure. The Kaiser-Mayer-Olkin (KMO)
measure of sampling adequacy was used to measure the adequacy of the
sample for extraction of the ten factors.
44 Reliability. Using SPSS, an internal consistency analysis was performed to
assess the reliability aspect of the survey instrument. Coefficient (Cronbach's)
alpha is the basic measure for reliability. The items in each factor were grouped
into ten scales, and coefficient alpha was calculated for each group. Three out
of 36 items (L2, P2 and P8) were eliminated, which improved the reliability
slightly. The reliability coefficient (Cronbach's alpha) of the factors ranged
between 0.605 (leadership) and 0.846 (customer management) (Table V). Values
of the alpha indicate the relative reliability of each factor as a scale. These
results are similar to the results of Dow et al. (1999) and Samson and Terziovski
(1999). Nunnally (1967) suggested that in exploratory research such as this,
alpha value of 0.6 is sufficient. The alpha values found for each scale indicate,
therefore, that each factor is a sufficiently reliable measure.
Content validity. A measure has content validity if there is general consensus
among researchers that the instrument includes items that cover all aspects of
the variable being measured (Bohrnstedt, 1983). It is not numerically evaluated
but subjectively assessed by the researchers. In this study, the measurement
instrument was developed based on the ABE framework (similar to the
Malcolm Baldrige Award framework) which is widely used by Australian
companies to measure and benchmark performance. The criteria of the ABE
framework are similar to criteria considered by many researchers to define
quality management practices (Saraph et al., 1989; Powell, 1995; Samson and
Terziovski, 1999). The instrument developed based on the ABE framework is
therefore considered to have content validity.
Construct validity. The items assigned to each of the seven TQM criteria
were submitted to principal component factor analysis to determine the
number of factors and factor loadings extracted by the Kaiser criterion (with
eigenvalue greater than one). Out of 36 items, ten factors were extracted. The
results are shown in Table V. Three items (L2, P2, and P8) were eliminated to
improve the reliability of the instrument and the revised loadings were
calculated. The revised loadings ranged between 0.608 and 0.905. These results
are broadly similar to those of Black and Porter (1996) and Samson and
Terziovski (1999).
The KMO measure was used to assess the suitability of the sample for each
unifactorial determination. The KMO values found (see Table VI) are generally
considered acceptable (Kim and Mueller, 1978). All factors in each unifactorial
test accounted for more than 60 per cent of the variance of the respective
variable sets. This suggests that only a small amount of the total variance for
each group of variables is associated with causes other than the factor itself.
 Variance explained A comparative
Factors KMO (%) study of TQM
practice
Leadership 0.603 63.80
Information and analysis 0.710 74.50
Strategy and planning 0.768 64.70
Employee empowerment and involvement 0.714 60.10
Employee training and development 0.500 69.29 45
Customer management 0.777 68.65
Customer satisfaction 0.656 60.97
Design quality management 0.643 71.56 Table VI.
Process control 0.623 67.25 Construct validity tests
Organisational performance 0.702 75.11 of the factors

Criterion validity. A criterion-related validity analysis was performed utilising

the nine factors as independent variables and organisational performance as
the dependent variable. The multiple correlation coefficient was found to be
0.620, indicating that the criteria have a high criterion-related validity when
taken together.

Hypothesis test
Tests for the factor means. The means and standard deviations for the ten
factors for SMEs with and without ISO 9000 are shown in Table VII. The
means ranged between 3.01 and 4.18 for firms with ISO 9000 certification and
between 2.92 and 4.14 for firms without ISO 9000 certification. A score of 4 or
more indicates high agreement with a particular criterion, a score between
3 and 4 (excluding 4) indicates moderate agreement and a score less than

Firms with ISO 9000 Firms without ISO 9000 F-test t-test
Factors Mean Std dev. Mean Std dev. p-value p-value

Leadership 4.18 0.75 4.14 0.79 0.389 0.920

Information and
analysis 3.97 0.87 3.86 1.05 0.342 0.524
Strategy and planning 4.01 0.88 3.93 0.98 0.119 0.736
Employee empowerment
and involvement 4.00 0.80 4.10 0.63 0.438 0.971
Employee training and
development 4.13 0.65 4.05 0.81 2.100 0.574
Customer management 3.63 1.12 3.71 0.88 0.423 0.032
Customer satisfaction 3.83 0.87 3.78 0.79 0.577 1.050
Design quality
management 4.19 0.63 4.17 0.57 0.313 0.750
Process control 4.25 0.88 3.76 1.02 0.087 0.012 Table VII.
Organisational Mean rating of the
performance 3.01 1.08 2.92 1.10 0.322 0.403 factors
IJQRM 3 indicates a low agreement with a criterion. Broadly, responses fell between
18,1 moderate and high for firms both with and without ISO certification .
Leadership had the highest overall mean rating of the ten factors for both
firms with and without ISO certification, indicating that it plays a significant
role in stimulating quality consciousness in these organisations. The small
standard deviations indicate that there is general agreement on the role of
46 leadership.
Process control had the second highest overall mean rating followed by
design quality management, strategy and planning, employee empowerment
and involvement for firms with ISO 9000 certification. Employee empowerment
and involvement had the second highest overall mean rating for firms without
ISO 9000 certification, followed by design quality management, employee
training and development, and strategy and planning.
Except for the ``process control'' criterion, the mean ratings of all other
criteria were found to be about the same for both firms with and without ISO
certification. Process control had much higher mean rating for firms with ISO
9000 (4.08) compared to firms without ISO 9000 (3.45). This was expected, since
firms generally spend substantial amount of resources to document their
processes as part of the ISO certification process.
Except for the process control factor, the t-test shown in Table VII indicates
no significant differences between the impacts of TQM practices on
organisational performance for firms with and without ISO 9000 certification.
Tests based on firm category. We classified the firms into three categories:
High TQM, Moderate TQM and Low TQM firms. A firm scoring 4 or more (on
a scale of 1 to 5) in all nine factors (independent variables) is considered a ``High
TQM'' firm. A firm scoring 4 or more in at least five out of nine factors is
considered a ``Moderate TQM'' firm, whereas, a firm scoring 4 or more in less
than five factors is considered a ``Low TQM'' firm. The results are shown in
Table VIII. It is evident that relatively higher proportion of firms with ISO 9000
fell into the higher TQM categories compared to firms without ISO 9000. An
analysis was done to assess the impact of ISO 9000 certification on each
category of firm. The t-test indicates no significant differences between the
impacts of TQM practices on organisational performance for firms with and
without ISO 9000 certification. These results are consistent with the findings of
Terziovski et al. (1997) and Terziovski and Samson (1999). However, their
studies are with respect to large organisations in Australia and New Zealand.

Organisational performance
Firms with Firms without Firms with Firms without
ISO 9000 ISO 9000 ISO 9000 ISO 9000 t-test
Firm category (%) (%) Mean Std dev. Mean Std dev. p-value
Table VIII.
Mean rating of the High TQM 26 19 3.6 0.92 3.44 0.51 0.800
three categories of Moderate TQM 36 31 2.81 1.07 3.00 0.71 0.736
firms Low TQM 38 50 2.62 0.56 2.83 1.25 0.671
Summary, limitations and conclusions A comparative
In this study, the criteria specified in the ABE framework served as our study of TQM
conceptualisation of TQM approach to management. Using these criteria, a practice
survey instrument with 36 items was developed and applied to create a self-
assessment measure of TQM practices. The items assigned to each of the seven
TQM criteria were submitted to principal component factor analysis and ten
factors were extracted. The instrument was evaluated for reliability and 47
validity. The results showed that the TQM approach based on the ABE
framework is a valid and reliable instrument to assess organisational
performance for SMEs.
This study assessed the impact of quality management factors on
organisational performance for SMEs in Western Australia with and without
ISO 9000 certification. Except for the factor ``Process control'', the results
indicated no significant difference between the impacts of TQM practices on
organisational performance for firms with and without ISO 9000 certification.
Process control had a much higher mean rating for firms with ISO 9000,
compared to firms without ISO 9000. This was expected, since firms generally
spend a substantial amount of resources to document processes as part of the
certification process.
We classified the firms into three categories: high TQM, moderate TQM and
low TQM firms and studied the mediating influence of ISO 9000 certification on
each category. Again, the test showed no significant differences between the
impacts of TQM practices on organisational performance for firms with and
without ISO 9000 certification.
The survey methodologies used in this study had several limitations. The
reliability and validity tests and the analysis were performed based on 49 firms
only. Although comparable with several other studies (Galvin, 1991; Powell,
1995), the sample size used in this study is considered small. The results of the
study must, therefore, be treated with caution.
This survey was conducted during the second half of 1997. The sample data
used in the study is therefore a snapshot at one specific point in time. It does not
account for changes over time. All studies of such nature suffer from this
limitation. A longitudinal study would be necessary to overcome such a
limitation.
Terziovski and Samson (1999) found that the relationship between TQM
practice and organisational performance is strengthened when covaried for
company size. Several studies which used large sample sizes (Dow et al., 1999;
Samson and Terziovski, 1999) considered a set of firms that varied in size from
20 to 3,000 employees. However, in their analysis they have not considered the
impact of company size on organisational performance. This project studied
the relationship between TQM practices and organisational performance for
SMEs where the size of the firms varied between 20 and 99 employees and thus
did not suffer from this limitation. However, this study had a limitation in the
sense that it did not consider the effect of industry type on organisational
IJQRM performance. Further research would be needed to assess the impact of
18,1 industry type on organisational performance.

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