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The effect of TQM practices on The effect of

TQM practices
operational performance: on operational
performance
an empirical analysis of ISO 9001:
2008 certified manufacturing 407
organizations in Ethiopia Received 13 March 2019
Revised 16 August 2019
4 November 2019
Mulugeta Kebede Adem 16 January 2020
6 April 2020
School of Management Studies, Punjabi University, Patiala, India and 16 July 2020
Department of Management, Debre Markos University, Debre Markos, Ethiopia, and Accepted 24 July 2020

Sandeep Singh Virdi

School of Management Studies, Punjabi University, Patiala, India

Abstract
Purpose – This study is aimed at examining the effect of Total Quality Management (TQM) practices on the
operational performance of ISO 9001:2008 certified manufacturing companies in Ethiopia.
Design/methodology/approach – A cross-sectional survey was conducted to meet the purpose. Primary
data was collected from the managers and senior experts working under the production and quality
management units of the surveyed firms. Data was obtained from a survey of 302 participants found in 73 ISO
9001:2008 certified manufacturing organizations. Both EFA and CFA were applied to validate and confirm the
instrument, and Structural Equation Modeling (SEM) was used to test the hypotheses.
Findings – The results revealed that among the practices of TQM used in the model only supplier quality
management, continuous improvement and process management were found to have significant and positive
effect on the operational performance of the ISO 9001:2008 certified manufacturing organizations in Ethiopia.
Research limitations/implications – Future studies are suggested to consider some contextual variables
such as firm age, scope of operation, firm size and firm strategy while addressing the objective.
Practical implications – The study will encourage managers of manufacturing companies in Ethiopia to
utilize a reliable and valid framework of TQM practices for better operational performance results.
Originality/value – The fact that Ethiopian manufacturing organizations are required to improve their
product’s quality in order to improve their productivity and enhance their competitiveness in a global market is
the rationale of this study. Even though several studies have evolved to scrutinize the link between TQM and
operational performance across the world, nearly nothing, is known about this linkage in Ethiopia. Thus, the
study represents one of the first attempts to empirically investigate this linkage in Ethiopian context.
Keywords TQM practices, Operational performance, ISO 9001:2008 certified manufacturing organizations
Paper type Research paper

1. Introduction
In today’s hyper-dynamic global business environment where customers are becoming more
demanding and international competition more fierce, it becomes very clear through time that
only organizations determined to deliver quality will flourish. It has become very tough for
companies to survive unless they uphold good quality in their business (Bajaj et al., 2018).
Quality is a highly relevant concept and a key strategic factor that plays an important role in
organizational success (Hoang et al., 2006; Herzallah et al, 2014). Placing high emphasis to
quality enables organizations to properly address the needs and desires of customers, and
eventually, leads to the realization of improved competitive position and business success The TQM Journal
(Lee et al. 2010; Lam et al., 2012; Fernandez-Perez and Gutierrez-Gutierrez, 2013; Aquilani Vol. 33 No. 2, 2021
pp. 407-440
et al., 2017). One of the most commonly adopted and prominent philosophy of quality © Emerald Publishing Limited
1754-2731
improvement in the contemporary business environment is total quality management (TQM) DOI 10.1108/TQM-03-2019-0076
TQM (Zu et al., 2010; Bajaj et al., 2018). Currently, TQM is adopted by several manufacturing
33,2 organizations around the world for its ability to facilitate better performance which can be
justified through operational excellence (Garcı
a-Bernal and Ramı
rez-Aleso
n, 2015; Modgil
and Sharma, 2016; Vasantharayalu and Pal, 2016; Chauke et al., 2019), financial performance
(Gharakhani et al., 2013; Herzallah et al., 2014; Dubey and Gunasekaran, 2015; O’Neill et al.,
2016), and non-financial performance (Arumugam et al., 2008; Montgomery et al., 2011; Phan
et al., 2011; Ngambi and Nkemkiafu, 2015; Shafiq et al., 2017).
408 Organizations that adopt the TQM philosophy are able to generate substantial benefits
such as high-quality products, satisfied customers, reduced operational costs, improved
performance in terms of financial, quality and innovation measures and even enhanced
employee satisfaction (Zehir et al., 2012; Ahmad et al., 2013; Dubey, 2015). It provides a set of
critical success factors that focus on continuous improvement, meeting the needs and
requirements of customers, minimizing re-work and waste, increased employee
empowerment and involvement, team-based problem solving, process management, close
relationship with suppliers, top management’s commitment and regular support, human
resource training and development, benchmarking and constant measurement of results
using scientific methods (Terziovski and Samson, 1999; Buch and Rivers, 2002; Kayank, 2003;
Agus and Hassan, 2011; Sabella et al., 2014; Aquilani et al., 2017).
Several studies claimed substantial benefits of implementing TQM in terms of
productivity improvement, quality performance, cost minimization and waste elimination
which comprehensively leads to customer satisfaction (Samson and Terziovski, 1999; Nair,
2006; Kaynak, 2003; Baird et al., 2011; Brun, 2011). Other studies in this area established that
TQM activities help organizations reduce the dispersion of production processes and
eliminate the wastes and redundancies while improving the quality performance (Arumugam
et al., 2008; Modgil and Sharma, 2016). Several empirical evidences show the direct and
indirect relationships between TQM practices adaptation and organizational performance
levels (Nawanir et al., 2013; Tan, 2013; Sadikoglu and Olcay, 2014; O’Neill et al., 2016).
More specifically, considering the performance of organizations from the operations side
as a criterion variable, several researchers found a positive and significant effects of TQM
practices on operational performance (Samson and Terziovski, 1999; Brah et al., 2002; De
Cerio, 2003; Kaynak, 2003; Demirbag et al., 2006; Saravanan and Rao, 2007; Tar
ı and Claver,
2008; Sadikoglu and Zair, 2010; Agus and Hassan, 2011; Phan et al., 2011; Barros et al., 2014;
Truong et al., 2014; Sadikoglu and Olcay, 2014; Vasantharayalu and Pal, 2016).
Hence, all the scientific findings outlined above showed that the TQM practices have a
positive and significant effect on the operational performance of organizations. The question
lies on the core point that “Would it work for the manufacturing companies in developing
countries, and more specifically to companies in Ethiopia, the same way it was established?”
Several studies have been conducted in many developed countries and some in developing
countries about the causal linkage of TQM and operational performance (Temtime and
Solomon, 2002; Chavez et al., 2013; Calvo-Mora et al., 2014; Sabela et al., 2014; Kiprotich et al.,
2018). But, little or no research has been conducted so far with an aim of investigating the
effect of TQM practice on operational performance of ISO 9001:2008 certified manufacturing
companies in African countries including Ethiopia.
On a recent study concerning the implementation of TQM, Haile and Raju (2016) found
that product quality has emerged as a key issue in most of Ethiopian manufacturing
companies recently and that most of those organizations have started implementing TQM to
improve their competitiveness. They also indicated that the status of TQM practices among
the sampled Ethiopian manufacturing firms has been far below other developing countries
though comparison output is not depicted in their study. The researchers, at the end,
suggested that Ethiopian manufacturing organizations are required to improve their
products quality in order to improve their productivity and competitiveness, and eventually
start to export their products abroad. From the above findings it can be spotlighted that the The effect of
TQM implementation in this sector needs to be comprehensive enough, systematic and of TQM practices
higher level to realise global competitiveness, and that it has to be linked to some performance
results if it has to lead organizations into a competitive edge (Prajogo and Sohal, 2001;
on operational
Rahman and Bullock, 2005; Arumugam et al., 2008). Birhanu and Daniel (2014), in a study performance
aimed at diagnosing quality-management practices in Ethiopian manufacturing and service
industries, also mentioned poor quality as the major cause of the industries’ poor performance
and low competitiveness in the global market. Therefore, studying the link between TQM 409
practices and operational performance results was found to be necessary to provide
conceptual as well as practical platform (Talib et al., 2010) to Ethiopian Manufacturing firms
which, with the help of growth and transformation plans of the government, are on the urge of
fitting in the global competition.
Most of the published works conducted in Ethiopia concerning quality management
issues are largely descriptive that focused on assessing quality management practices and
quality-related problems (Daniel and Fasika, 2003; Tesema, 2008; Birhanu and Daniel, 2014;
Haile and Raju, 2016); and scrutinising the relationship between QM practices and business
performance results (Alemu et al., 2011). These studies lack appropriate methodological and
analytical rigor, and measurement tools to examine the causal linkages between quality
management practices and organizational performance results. This, again, shows that the
effect of TQM practices on operational performance has not been particularly addressed in
the context of Ethiopian organizations. Correspondingly, Birhanu (2011) pointed out that
there is lack of studies that focused on quality management practice and its consequence on
manufacturing performance results such as operational productivity and profitability in
developing African nations like Ethiopia. Proclaiming the significance of TQM in developing
countries as a strategic approach in the current global business environment, Al-Qahtani et al.
(2015) suggested that more studies should be carried out on the business sector to provide a
better understanding of TQM implementation and associated performance outcomes. In
consideration of the mixed effect of TQM practice on organizational performance in different
countries, Sila and Ebrahimpour (2005) suggest that the link between TQM and performance
needs to be examined in the context of a specific county. Furthermore, Shafiq et al. (2017)
specified that most of the studies on the relationship between TQM and organizational
performance are conducted in the context of developed countries.
The present study, therefore, applies Structural Equation Modeling (SEM) technique to
examine the effect of TQM practices on operational performance of ISO 9001:2008 certified
manufacturing companies in Ethiopia. The study is expected to fill the gap in literature
concerning the linkages between TQM practices and operational performance in the context
of the under researched developing country’s manufacturing sector.

2. Literature review and hypothesis

2.1 TQM practices
TQM is a multi-dimensional concept, and the fact that it is a multi-faceted construct is proven
by different studies. One of the major advocates of this theory, Kaynak (2003), in the study
focusing on the relationship between TQM practices and their effects on firm performance,
indicated that scholars with a desire of conducting studies on the areas of TQM should pay
attention to several research design issues of which most important ones include recognizing
the multidimensionality of TQM construct.
Flynn et al. (1994) categorized the quality management practices into seven dimensions,
namely: top management support, customer relationship, supplier relationship, workforce
management, quality information, product/service design and process management. These
sets of quality management practice have been widely used in several quality management
TQM researches as the critical success factors of TQM (Sabella et al., 2014; Sadikoglu and Olcay,
33,2 2014; Aquilani et al., 2017). By the same token, Zhang et al. (2000) generated a set of practices
for best-established TQM implementation and quality improvement framework in a Chinese
setting; which include: leadership, supplier quality management, customer focus, process
control and improvement, vision and plan statement, evaluation, product design, employee
participation, recognition and reward, education and training and quality system
improvement. The International Organization for Standardization (2001) states that there
410 are eight key principles that make up the TQM philosophy, namely: customer focus,
leadership, people’s involvement, process approach, systems approach to management
continuous improvement, factual approach to decision making and mutually beneficial
relationships with suppliers.
In general, it has become apparent from various literature that TQM is a combination of
different valuable constructs and principles by organizations. The dimensions used in this
study to operationalize TQM and hypothesized to affect operational performance include: top
management support, customer focus, employee empowerment and involvement, supplier
quality management, process management, continuous improvement and education and
training. These factors have been identified and most frequently used by several renowned
empirical studies (Terzvioski and Samson, 1999; Zhang et al., 2000; Salaheldin, 2009; Lakhal,
2014; Sabella et al., 2014; Sadikoglu and Olcay, 2014; Almansour, 2016; Bajaj et al., 2018).
Moreover, according to Arumugam et al. (2008), these practices constitute elements that
represent both the hard and soft elements of TQM.

2.2 Operational performance

Operational performance refers to quality, cost, productivity and delivery outcomes of an
organization (Kaynak, 2003; Nawanir et al., 2013). Correspondingly, Heizer et al. (2008) defined
operational performance as an organization’s ability to reduce operational management
costs, meet order cycle time, improve raw material utilization efficiency and meet delivery
capacity. Operational performance is highly significant to manufacturing organizations as it
brings effectiveness of production, high-quality products, satisfied customers and increased
revenue and profit (Kaynak, 2003; Kaynak and Hartley, 2008; Ou et al., 2010; Truong et al.,
2014). Salaheldin (2009) considered the indicators of operational performance as the
immediate resultants of the TQM implementation or actions taken on the urge to realize the
key elements of TQM.
Regarding the measures, Bayraktar et al. (2009) argued that operational performance
cannot be indexed by using a single measure. Thus, several researchers proposed varied
dimensions and indicators for operational performance. For instance, Corbett and Van
Wassenhove (1993) developed a model for organization’s operational performance based on
three dimensions: cost, quality and delivery time. Whereas, Samson and Terziovski (1999)
operationalized the concept of operational performance using productivity, quality of output
and delivery performance indicators. In the same context, Jabbour et al. (2013) used cost,
quality, flexibility, delivery, new product development and time-to-market for new products
to measure operational performance. On another study, Nawanir et al. (2013) operationalized
operational performance using quality, inventory minimization, delivery, productivity and
cost, and Ataseven et al. (2014) used quality, cost and delivery time. More recently, Abdallah
et al. (2016) measured it in terms of cost, quality, delivery, flexibility and innovation. The core
elements (objectives) of operations performance, according to Slack et al. (2010), include cost,
quality, speed, dependability and flexibility. Hallgren and Olhager (2009) also specifically
suggested the consideration of quality, cost, delivery time and flexibility to measure
operation performance in manufacturing companies as these are the core of manufacturing
capabilities that leads to competitiveness.
 Given the fact that cost, quality, productivity and flexibility and delivery (time) are the The effect of
most widely and frequently used measures of operational performance in extant literature TQM practices
(Nawanir et al., 2013; Truong et al., 2014; Leite and Braz, 2016; Nabass and Abdallah, 2018)
these measures are also used in this study.
on operational
performance
2.3 The relationships between TQM practices and operational performance
Most of the previous studies on the areas of TQM practices and operational performance have 411
specifically claimed that TQM enables companies to achieve better operational performance
measured in terms of quality, cost, productivity, flexibility and delivery time (Samson and
Terziovski, 1999; Nair, 2006; Demirbag et al., 2006; Tar
ı and Claver, 2008; Sadikoglu and Zair,
2010; Tan, 2013; Kibe and Wanjau, 2014; Truong et al., 2014; Sadikoglu and Olcay, 2014;
Garcı
a-Bernal and Ramı
rez-Aleso
n, 2015).
Vasantharayalu and Pal (2016) conducted an empirical study concerning the effect of
TQM practices on the operational performance of Indian manufacturing and service
organizations. The findings of the survey from 50 companies showed that leadership support,
strategy and planning, customer focus, information and analysis, people’s management and
quality performance are statistically significant in their relationship with operational
performance. Another study conducted by De Cerio (2003) on the implementation level of
TQM practices and operational performance on 950 manufacturing plants in Spain
established that there is a significant relationship between quality management practices and
operational performance improvement in terms of cost, quality and flexibility. The study also
found that manufacturing plants with a higher level of implementation of the quality
management practices are more likely to improve their operational performance. Similarly,
Sousa and Voss (2002) claimed that quality management practices have a positive and
significant impact on quality (internal process and product) and operational performance of
organizations. However, some researchers have come up with findings that do not support
the positive significant effects of TQM practices on operational performance (Sadikoglu,
2004; Prajogo and Sohal, 2006).
Based on an intensive review of extant literature the following hypotheses were developed
to indicate the relationship between each TQM practice and operational performance.
(1) Top Management Support
Top management commitment and leaders’ involvement are the most important factors for
the effectiveness of TQM practices (Sadikoglu and Olcay, 2014). Previous researchers have
found that top management support and leadership practice of TQM has a positive and
significant effect on operational performance (Samson and Terziovski, 1999; Parast et al.,
2011; Phan et al., 2011; Zahari and Zakuan, 2016; Chauke et al., 2019). Some other researchers,
such as Truong et al. (2014), however, argued that top management support plays the
driving force for the implementation of other QM practices, and indirectly improves
operational performance. Based on the literature reviewed, the following hypothesis is
proposed.
H1. Top management support has a positive and significant effect on operational
performance
(2) Customer Focus

Chen et al. (2008) asserted that customer focus results in a better understanding of the needs
and expectations of customers, which in turn can be translated specific operating instructions
for further improvement, which subsequently leads to higher quality performance. A study
conducted by Jeng (1998) on ISO 9000 certified organizations of Taiwan and found that
TQM customer focus is the most commanding practice of quality performance with high
33,2 discriminating power while other QM practices presented little discriminating powers. Other
several studies have also found that customer focus has a positive and significant effect on
operational performance (Samson and Terziovski, 1999; Khanna et al., 2011; Phan et al., 2011;
Sadikoglu and Olcay, 2014; Vasantharayalu and Pal, 2016; Chauke et al., 2019). Having the
above support from the literature, the following hypothesis is suggested.
412 H2. Customer focus has a positive and significant effect on operational performance
(3) Employee Empowerment and Involvement

Since TQM emphasizes the value of involving all employees in work performance and
development; employee empowerment is considered as a key practice that facilitates
successful implementation of TQM (Mustafa and Bon, 2012). Powell (1995), in a review and
empirical study concerning TQM as competitive advantage found that employee
empowerment produced significant partial correlations for both TQM performance
(operational) and overall business performance measures. De Cerio (2003) found a strongly
significant and positive relationship between human resource variables (employee
empowerment and involvement included) and operational performance. The researcher
suggested that the key to operational performance in industrial organizations lies in the
elements of human resource management that include employee involvement, empowerment,
training and information sharing. Thamizhmanii and Hasan (2010) also established that
employee empowerment increases productivity by 30%. In the same context, Yoo et al. (2006)
asserted that employee empowerment practices improve both internal and external quality
results. In a recent study on a South African Bakery firm, Chauke et al. (2019) also found a
strong and positive relationship between employee involvement and operational
performance. Accordingly, the following hypothesis is proposed.
H3. Employees empowerment and involvement has a positive and significant effect on
operational performance
(4) Suppler Quality Management

Ellram (1991) as cited in Kaynak (2003) asserted that the strategic management of supplier
relationships is highly essential to the success of organizations because of the level of
commitment it requires and the nature competitive information being exchanged among the
actors. Supplier quality management enables firms to select few and highly reliable suppliers
purely on quality considerations, which in turn secures the provision of high-quality items
(supplies). Corresponding to the above TQM practices, several empirical studies recognized
the significant and positive relationships that supplier quality management has with
operational performance (Kaynak, 2003; Kannan and Tan, 2005; Sadikoglu and Zehir, 2010;
Baird et al., 2011; Phan et al., 2011; Sweis and Saleh, 2017; Chauke et al., 2019). From the
literature reviewed it can be postulated that keeping close relationships with suppliers would
result in improved operational performance. The proposed hypothesis is presented as follows.
H4. Supplier quality management has a positive and significant effect on operational
performance
(5) Process Management

Rad (2006) asserted that the TQM approach improves the performance of organizations
through improving the processes. The direct impact of process management on
organizational performance has been examined in detail and verified in several recent studies The effect of
(Kaynak, 2003; Prajogo and Brown, 2004; Sila and Ebrahimpour, 2005; Fening et al., 2008; TQM practices
Kaynak and Hartley, 2008; Phan et al., 2011; Blome et al., 2013; Truong et al., 2014). On the
other hand, some studies established that process management affects operational
on operational
performance (Khanna et al., 2011; Chauke et al., 2019) by improving the product quality performance
(Zehir and Sadikoglu, 2010), and reducing process variance (Flynn et al., 1995). Results from
the above literature pave a way to the formulation of the following hypothesis.
413
H5. Process management has a positive and significant effect on operational
performance
(6) Continuous Improvement

A study by Arumugam et al. (2008) on Malaysian ISO 9001:2000 certified manufacturing

organizations revealed that continuous improvement is significantly and positively related to
quality performance. They added that the higher the degree of continuous improvement
practice, the more likely the manufacturing organizations which are ISO certified will achieve
higher quality performance. Based on the empirical study they conducted in Kenya, Kiprotich
et al. (2018) found that there is a positive relationship between continuous improvement and
operational performance. On the same context, Bell and Omachonu (2011) as cited in Kiprotich
et al. (2018) argued that continuous improvement significantly affects every indicator of the
company’s operational performance and thereby increase firm competitiveness. Similarly,
Kemboi (2016) indicated that continuous improvement was the only practice that brings about
and sustains organizational productivity, which in turn is one of the indicators of operational
performance according to Salaheldin (2009). Other studies also found a direct and positive
effect of continuous improvement on operational performance (Agus, 2005; Arnold, 2014;
Olepein, 2015; Salah, 2018). Accordingly, the researcher proposed the following hypothesis.
H6. Continuous improvement has a positive and significant effect on operational
performance
(7) Education and training

Previous studies stressed the importance of people management and alignment of strategies
and TQM objectives as essential factors underlying and sustaining business growth (Lau and
Idris, 2001; Fuentes et al., 2006). Some studies point out the significant and positive
relationship between employee education and training and operational performance
(Kaynak, 2003; Agus, 2005; Sadikoglu and Olcay, 2014; Kiprotich et al., 2018). Accordingly,
the following hypothesis is proposed:
H7. Education and training has a positive and significant effect on operational
performance

2.4 Operationalization of the constructs and research framework

In this study, TQM practice is measured by seven dimensions. These include top
management support, customer focus, employees’ empowerment and involvement,
supplier quality management, process management, continuous improvement and
education and training. These dimensions are selected based of their frequency of use in
previous (recent) studies and their applicability (usage) in studies conducted on both
developed and developing countries.
Some of the studies in which those dimensions were considered include: leadership and
top management commitment, customer focus (Salaheldin, 2009; Fening et al., 2013;
TQM Almansour, 2016; Anil and Satish, 2016; Haile and Raju, 2016; Bajaj et al., 2018), Employees
33,2 involvement and empowerment (Omar and Tuyakbayeva, 2013; Idam et al., 2014; Anil and
Satish, 2016; Bajaj et al., 2018), supplier quality management (Sadikoglu and Olcay, 2014;
Almansour, 2016; Anil and Satish, 2016; Haile and Raju, 2016; Bajaj et al., 2018), process
management (Fening et al., 2013; Zeng et al., 2015; Almansour, 2016; Haile and Raju, 2016;
Bajaj et al., 2018), continuous improvement (Almansour, 2016; Anil and Satish, 2016; Raju and
Baye, 2016; Bajaj et al., 2018) and education and training (Salaheldin, 2009; Zeng et al., 2015;
414 Almansour, 2016, Anil and Satish, 2016; Aquilani et al., 2017; Bajaj et al., 2018).
The dependent variable in this study is operational performance. It is measured with cost,
quality, productivity and flexibility and speed (time of delivery) as suggested by Salaheldin
(2009), Nawanir et al. (2013), and Nabass and Abdallah (2018). The present study thus
attempts to bridge the gap by providing a basis for a thorough and insightful discernment of
the relationship between TQM practices and operational performance. The model suggests
that the greater the extents to which these TQM practices are present, the operational
performance of organizations will be higher. The framework is provided in Figure 1 below.

3. Methodology
In this part, the population and sample issues, operational measures of variables, reliability
and validity output and statistical techniques used to test the hypotheses are discussed.

3.1 Population and sample

The study population is made up of ISO 9001:2008 certified organizations in the Ethiopian
manufacturing sector. The initial listing of the companies, that is the sampling frame was
taken from the directories of three organizations that are responsible for ISO registration
which include the DQS Ethiopia, Ethiopian Standard Agency (ESA) or Ethiopian Conformity
Assessment Enterprise (ECAE) and Addis Ababa Chamber of Commerce & Sectorial
Associations (AACCSA). Based on the data obtained from the aforementioned organizations,
a total of 99 manufacturing organizations have been certified with ISO 9001 until the end of
2016. The study sample consisted of all ISO 9008: 2001 certified manufacturing companies in
Ethiopia after discarding the companies that were reported to have their certificates cancelled

Top management support

Customer focus

Employee empowerment
TQM Practices

& involvement
Operational
Supplier quality Performance
management

Process management

Continuous improvement
Figure 1.
The proposed research
framework Education & training
for not conforming to the agreed standards and not maintaining their operations accordingly The effect of
(n 5 94). Accordingly, the survey questionnaire was distributed among the executives and TQM practices
senior experts working under operations and quality management areas of 94 ISO 9001:2008
certified manufacturing organizations. More specifically, questionnaires were distributed
on operational
among 412 participants across 94 companies. It is because these group of participants are performance
generally believed to have good understanding of issues pertaining to both the TQM
practices and operational performance results. Finally, 302 useful questionnaires were filled
and returned across 73 organizations. Generally, the response rate was found to be around 415
77.7% (company wise), which is considered a good representation of the population for
business survey (Saunders et al., 2009).
Major reasons for considering ISO 9001:2008 certified organizations include the concern
provided by such entities to quality management activities by allocating necessary resources
to the quality function, and the arguments forwarded by previous studies (Dale et al., 2000a;
Psomas et al., 2014) that ISO 9000 certified organizations are expected to have implemented
most of the TQM elements as the foundations of ISO 9000 standard are based on quality
management principles that are in line with TQM.

3.2 Survey instrument

The research instrument is a self-administered structured questionnaire. It was designed in
the way it incorporates close-ended questions with limited number of open ended less
draining questions included. The TQM practices part was designed in a five-point Likert
scale arrangement containing multiple items for each variable which ranges from 1
representing a “strongly disagree” response through 5 indicating “strongly agree”. Once
prepared the questionnaire was transcribed in to the local work language with the help of
experts from the language department, and back translated to ensure interpretative
consistency, and distributed to the subjects of interest with the help of enumerators. The
scales used, indicators, and where they were adopted from are presented in Table A1.

3.3 Data analysis techniques

Both Exploratory factor analysis (EFA) and Confirmatory Factor Analysis (CFA) were
applied to refine the latent constructs of TQM and operational performance, and to assess the
measurement model reliability and validity. The hypotheses explaining the causal
relationships between the TQM practices and operational performance were tested using
the structural equation modelling (SEM) technique through AMOS 23.

4. Results
4.1 Firm characteristics
Survey output concerning the characteristics of sample organizations is presented in Table 1.
17.8% of the sample organizations are under the sub-division of Chemical and chemical
products industries, 16.4% were from Metal and engineering products industries, and 15.1%
from rubber and plastic product industries. While, organizations which are operating under
the food and beverage products and leather and leather products make up 12.3% and 11% of
the entire sample respectively, companies under, companies Wood and Pulp Products
industries and non-metallic mineral products industries each account for 9.6% of the entire
sample. Finally, companies under the textile and apparel sub-division make up 8.2% of the
sample. Considering the scope of operation, the survey output showed that the largest
proportion of sample organizations (i.e. 56.2%) do business for domestic market followed by
those getting involved in both domestic and international business making up 35.6%. Only
8.2% of the sample organizations were reported to operate solely in international market.
TQM Characteristics Description Frequency Percentage (%)*
33,2
Industry type (sub-division) Food and beverage product industries 9 12.3
Textile and apparel products industries 6 8.2
Leather and leather products industries 8 11.0
Wood and pulp products industries 7 9.6
Metal and engineering products industries 12 16.4
416 Non-metallic mineral products industries 7 9.6
Chemical and chemical products industries 13 17.8
Rubber and plastic product industries 11 15.1
Scope of operation Domestic 41 56.2
International 6 8.2
Both 26 35.6
Years of operation 1–5 years 7 9.6
6–10 years 7 9.6
Table 1. Above 10 years 58 79.5
Characteristics of the Missing 1 1.4
companies Note(s): *Not including missing respondents, N 5 73

Pertaining to years of operation, the survey result indicated that more than half of the
surveyed organizations (79.5%) were quite established and had been in operation for more
than 10 years, followed by those that have been in existence for 1–5 years and 6–10 years each
making up 9.6% of the entire sample.

4.2 Construct validity and reliability

4.2.1 Scale validity. The researcher arranged a panel of experts comprised of four subject
matter scholars at Debre Markos University in order to establish the content validity of the
instrument. The evaluation output established that items in the instrument possess sufficient
content validity. Moreover, a pilot test was conducted with 10% of the sample respondents in
conveniently selected five organizations to improve the structure and content of the
questionnaire, and to ensure the suitability of the survey questionnaire. Number of
respondents in the pilot test totalled 35. The returned instruments showed that there were no
major concerns with the wordings of the instrument.
To make sure that the items involved in each scale are truly measuring what they set out
to measure and to provide assurance that the findings reflect an accurate measure of the
dimensions of TQM and operational performance construct validity was ensured through
both exploratory and confirmatory factor analysis (Sabella et al., 2014). The results are
discusses as follows.
4.2.1.1 Exploratory factor analysis (EFA). Exploratory factor analysis (EFA) was
performed using maximum likelihood extraction using SPSS 23. Independent and dependent
variables (TQM practices and operational performance measures) were used together in EFA.
Oblique rotation using Promax method was considered as an appropriate procedure of factor
rotation presuming that the constructs under the TQM practice are correlated each other to
some extent (Matsunaga, 2010). The appropriateness of the data was determined by the
examination of the Kaiser-Meyer Olkin (KMO) measure of sampling adequacy and Bartlett’s
Test of Sphericity. The KMO was 0.905 implying that data was sufficient and suitable for
factor analysis (Tabachnick and Fidell, 2001; Yong and Pearce, 2013). Moreover, the Bartlett’s
Test of Sphericity, which tests the null hypothesis that correlation matrix, is an identity
matrix is found to be highly significant (p 5 0.000). Items with a loading above 0.5 were
retained to attain the “highly significant level of loading” threshold suggested by Hair et al.
(2010). The final EFA resulted in 11 factors with the eigenvalue for all being greater than one
(Zhang et al., 2000; Matsunaga, 2010). These eleven factors accounted for 69.6% variance in The effect of
analysed items, which is exactly above the desired 60% cut-off suggesting a satisfactory TQM practices
consideration (Hair et al., 2010).
Results of the EFA yielded an exactly the same number of factors as considered in the
on operational
hypothesized original framework of this study. Nine (9) indicators were dropped due to the performance
problems attributed to small loadings, cross loadings and no loadings at all. Generally, of
the sixty one (61) measured indicators subjected to EFA, fifty two (52) were retained. The
extracted factors were: top management support (TM), customer focus (CF), employee 417
empowerment and involvement (EE), supplier quality management (SQ), process
management (PM), continuous improvement (CI), education and training (ET), cost
performance (OPC), quality performance (OPQ), productivity and flexibility (OPP) and
delivery (time) performance (OPT). While the first seven factors were attributed to TQM the
later four factors are to operational performance. Refer Table A2 for the EFA results.
4.2.2 Scale reliability. The reliability analysis was tested by computing the Cronbach’s
alpha for the main constructs. Items that do not significantly contribute to the reliability were
eliminated for parsimony purpose. Accordingly, the Cronbach’s alpha reliability statistics for
all constructs exceeded the most commonly agreed and used cut-off point of 0.7 (see Table 2)
indicating satisfactory internal consistency, and thus supporting the reliability of the
measures (Hair et al., 2010). Likewise, as it is presented in Table 4, the composite reliability
(CR) values for all constructs were more than 0.8, which is above the 0.7 guideline given by
Hair et al. (2017c), providing additional support for the good level of reliability.
4.2.2.1 Confirmatory factor analysis (CFA). CFA was conducted using Amos 23 to refine
the resulting scales in EFA and to assess the unidimensionality and validity of the measures
(Matsunaga, 2010). Criteria used in CFA were item loading paths, the average variance
extracted (AVE), composite reliability (CR) and the different types model fit indices
mentioned below. Baselines with which each criterion is evaluated against were taken from
several previous empirical studies. The overall measurement model fit results suggest the
Unidimensionality of the latent variables as revealed by the goodness of fit indices
(χ 2 5 1244.582; df 5 1020; Comparative fit index (CFI) 5 0.92; Tucker–Lewis index
(TLI) 5 0.912, Parsimony comparative fit index (PCFI) 5 0.832, Root mean square error of
approximation (RMSEA) as an error index 5 0.055, Root Mean Square Residual
(RMR) 5 0.029 and Pclose 5 0.217) and each item’s loading path supports the convergent
validity for the measures as the figures exceed 0.50 (Russel, 2002; Hair et al., 2010). The
normed χ 2 of 1.220 is less than the maximum suggested value of 3.0 (Hair et al., 2010), and
other model fit indices were within the recommended values suggesting that the model fits
the data acceptably. Two more items (TM6 and CF7) were deleted from two TQM dimensions
to meet the standard values of each criterion. Both AVE and CR values for each scale were
also found to be above the desired cut-offs as indicated in Table 4.
Table 2 shows the revised scale containing measurement items, standardized loading
paths and the Cronbach’s alpha (α) statistics for each construct (see Table 3).
4.2.2.2 Convergent validity. The standardized regression coefficients for all items were
greater than 0.60 and were higher than twice their standard errors, providing support for
convergent validity (Anderson and Gerbing, 1988). Corroborating evidence for ensuring
convergent validity is provided by the AVE statistics of all constructs, which is greater than
the desired threshold of 0.5, indicating that all the constructs explain more than half of the
variance of their respective indicators (Hair et al., 2017c).
4.2.2.3 Discriminant validity. Discriminant validity was ensured by confirming that the
square root of each AVE is greater than the absolute correlation value between that
measurement scale and other scales (Fornell and Larcker, 1981; Hair et al., 2010). Scales for all
constructs met this criterion, supporting discriminant validity), as shown in Table 4. In
addition, the AVE value for each scale was greater than the maximum shared squared
TQM Independent variables (first order latent variables and associated items)
33,2 Loading
Constructs Observed variables pathsa CA. (α)

Top management support (TM) Top management actively participates in 0.709 0.905
quality improvement efforts (TM1)
Top management empowers employees to 0.732
solve quality problems (TM2)
418 Top management allocates resources for 0.835
continuous improvement of the quality
management system (TM3)
Top management acknowledges and rewards 0.863
employees’ contributions to bettering quality
(TM4)
Top management develops a comprehensive 0.895
quality plan to meet goals (TM5)
Customer Focus (CF) Quality-related customer complaints are 0.741 0.901
treated with top priority (CF2)
Customer satisfaction is measured on a regular 0.751
base (CF3)
The company continuously seeks customer 0.883
inputs to determine their requirements solved
(CF4)
The company focuses on achieving greater 0.768
customer satisfaction (CF5)
The company uses customer requirements as 0.809
the basis for quality (CF6)
Employee empowerment and involvement The company uses an extensive employee 0.764 0.870
(EE) suggestion system (EE3)
Employees are encouraged to fix problems they 0.786
find (EE5)
Reporting work problems is encouraged in our 0.879
company (EE6)
The company improves working conditions 0.898
determinedly (EE7)
Supplier Quality Management (SQ) The company regards product quality as the 0.816 0.894
most important factor for selecting suppliers
(SQ2)
The company gives feedback on the 0.889
performance of suppliers’ products (SQ4)
The company regularly conducts supplier 0.852
quality audit (SQ5)
The company has detailed information about 0.85
supplier performance (SQ6)
Process Management (PM) Process capability can meet production 0.805 0.894
requirements (PM1)
Production equipment is maintained well 0.808
according to maintenance plan (PM2)
The company implements product inspections 0.864
effectively (PM3)
Production processes are assessed regularly in 0.831
an attempt to bring in quality improvement
(PM4)
Quality-related criteria predominate over other 0.847
strategies when developing new products
Table 2. (PM5)
Construct validity and
reliability Statistics (continued )
Independent variables (first order latent variables and associated items)
The effect of
Loading TQM practices
Constructs Observed variables pathsa CA. (α) on operational
Continuous Improvement (CI) Signboards and labels are used as 0.759 0.886 performance
communication tools (CI1)
The company has clear records management 0.942
system (CI2)
Decisions regarding quality improvement are 0.93 419
based on objective data (CI3)
Housekeeping is conducted as part of our 0.746
continuous improvement scheme (CI4)
Education & Training (ET) Resources are apportioned for employee 0.87 0.942
education and training (ET1)
Employees are trained on how to use quality 0.881
management tools (ET2)
Quality control awareness is given to 0.898
employees (ET3)
Specific work-skills training is given to all 0.857
employees (ET4)
Employees are regarded as valuable, long-term 0.868
resources worthy of receiving education and
training throughout their career (ET5)
Operational performance measures: First-order latent variables and their indicators
Cost (OPC) Production cost is diminished (OPC1) 0.911
Production waste is eliminated significantly 0.784 0.895
(OPC2)
Costs per unit produced are kept minimum 0.844
(OPC3)
Quality (OPQ) Product and process quality is kept to be 0.862
reasonably high (OPQ1)
Defect rate on products (as a % of total product 0.889 0.920
volume) is low (OPQ2)
Amount of products cause to undergo rework is 0.84
reduced (OPQ3)
Product reject rates are decreased (OPQ4) 0.812
Productivity and flexibility (OPP) The company’s total productivity is 0.774
outstanding (OPP1)
Value added per employee is increasing 0.83
continually (OPP2)
Work design is continually improved (OPP3) 0.8 0.934
Hours of productive work are maintained to be 0.882
high (OPP4)
Process flexibility is achieved (OPP5) 0.878
Overall production efficiency (capability) is 0.812
improved (OPP6)
Delivery time (OPT) Order processing time is kept minimum (OPT1) 0.884 0.928
Speedy (rapid) delivery is ensured (OPT2) 0.883
On-time delivery (in full) is upheld (OPT3) 0.948
Dependent variable and first order-latent variables
Second order latent variable First-order latent variables Loading CA (α)
pathsa
Operational Performance (OP) Cost performance (OPC) 0.671 0.930
Quality performance (OPQ) 0.652
Productivity and flexibility performance 0.752
(OPP)
Delivery (time) performance (OPT) 0.764
Note(s): aAll loading paths are significant at p < 0.01, and are >0.5 confirming convergent validity. CA
(α) 5 Cronbach’s alpha Table 2.
TQM variance (MSV) and average shared squared variance (ASV) values, indicating further
33,2 support for discriminant validity (Hair et al., 2010).
The AVE, CR, MSV results and the discriminant validity matrix are presented in Table 4.

4.3 Structural model

After establishing the measurement model through CFA, the research hypotheses were
420 tested by using the Structural Equation Modeling (SEM) technique with maximum likelihood
method employed to estimate the parameters (Hair et al., 2010). The results of the structural
equation model (SEM) are presented in Figure 2. The TQM practices (seven factors) were
treated as exogenous variables, whereas operational performance as considered as the
endogenous variable. The overall fit of the structural model was supported by the fitness
indices. The fit indices (CFI 5 0.92, TLI 5 0.914, and PCFI 5 0.849) and error index
(RMR 5 0.034, RMSEA 5 0.055) indicate that the model fit is good. The ratio of χ 2 (1265.339)
to degrees of freedom (1041), i.e. 1.216, is well below the recommended cut-off point of 3.0 for
satisfactory fit of a model to the data (Hair et al., 2010). Results are indicated in Figure 2.
Parameters on the arrows are standardized regression weights (path coefficients). Test
results indicated that the path pertaining to supplier quality management and operational
performance is supported by the collected data (with standardized regression weight (β) of
0.346 at the significant level of p < 0.01). Moreover, the paths associated with continuous
improvement and operational performance, and process management and operational
performance are also supported by the data (with standardized regression weights (β) of 0.233
and 0.268 respectively at the significant level, p < 0.05). The coefficient of determination (R2)
for the model is 45.2%, indicating that the TQM practices can explain around 45% of the

Goodness of fit statistics Measurement model Recommended values for satisfactory fit to data

CMIN/DF 1244.582/1020 5 1.220 <3.0a

CFI 0.920 >0.9a
TLI 0.912 >0.9a
Table 3. PCFI 0.832 >0.5b
Goodness-of fit Pclose 0.217 >0.05c
statistics summary for RMSEA 0.055 <0.08b
measurement model Note(s): Thresholds were adapted from: aHair et al. (2010), bByrne (1998), cRussel (2002)

CR AVE MSV EE CF PM TM ET SQ CI OP

EE 0.871 0.629 0.227 0.793

CF 0.918 0.691 0.172 0.203 0.832
PM 0.896 0.633 0.278 0.377 0.415 0.795
TM 0.902 0.647 0.410 0.476 0.239 0.465 0.805
ET 0.897 0.636 0.410 0.439 0.379 0.445 0.640 0.797
SQ 0.888 0.665 0.189 0.435 0.213 0.364 0.390 0.414 0.815
CI 0.895 0.681 0.278 0.319 0.378 0.527 0.326 0.413 0.402 0.825
OP 0.870 0.626 0.176 0.291 0.290 0.412 0.362 0.389 0.382 0.420 0.791
Note(s): Thresholds for reliability, CR > 0.70; Convergent validity (CR > AVE>0.50); Discriminant validity
Table 4. (MSV < AVE) (Hair et al., 2010). Where, EE 5 Employee involvement and empowerment, CF5Customer focus
Convergent and PM5 Process management, TM 5 Top management support, ET 5 Education and training, SQ5 Supplier
discriminant validity quality management, CI5 Continuous improvement, and OP5 Operational performance
 The effect of
TQM practices
on operational
performance

421

Figure 2.
Path diagram of the
statistical analysis
TQM variance in operational performance. Therefore, it can be said that TQM practices suggested
33,2 in this study have important role in improving operational performance (see Table 5).
Supplier quality management was found to have a statistically significant and positive
effect on operational performance (path coefficient 0.346 at p < 0.01); hence supporting H4.
The study also reveals that process management has a significant and positive effect on
operational performance (path coefficient 0.268 at p < 0.05), thus supporting H5. Moreover,
continuous improvement was found to have a statistically significant, positive and strong
422 effect on operational performance, thus, supporting H6 (path coefficient 0.233 at p < 0.05).
Other TQM practices, namely: top management support, customer focus, employee
empowerment and involvement, and education and training, however, had no statistically
significant effect on operational performance. Thus, H1, H2, H3 and H7 were not supported.
The results of the hypotheses are outlined in Table 6.

5. Discussion of the findings

The main outcome that can be drawn from this study is summarised by confirming the
significant positive effects of TQM practices and operational performance in the target
manufacturing organizations in Ethiopia. However, among the set of practices hypothesized
to have a direct positive and significant effect on operational performance, only supplier

Correlations
Constructs TM CF EE SQ PM CI ET OP

TM 1
CF 0.579** 1
EE 0.416** 0.374** 1
SQ 0.302** 0.379** 0.285** 1
PM 0.429** 0.413** 0.337** 0.488** 1
CI 0.358** 0.373** 0.388** 0.349** 0.336** 1
ET 0.248** 0.347** 0.190** 0.346** 0.373** 0.200** 1
OP 0.334** 0.331** 0.250** 0.372** 0.364** 0.340** 270** 1
Note(s): **Correlation is significant at the 0.01 level (2-tailed). Where, TM 5 Top management support,
CF5Customer focus, EE 5 Employee involvement and empowerment, SQ5 Supplier quality management,
Table 5. PM5 Process management, CI5 Continuous improvement, ET 5 Education and training and OP5
Correlation matrix Operational performance

Hypo Pathways Est S.E. C.R. P Result

H1 OP → Top management support 0.096 0.114 0.843 0.399 Not

supported
H2 OP → Customer focus 0.155 0.112 1.382 0.167 Not
supported
H3 OP → Employee empowerment and 0.146 0.091 1.596 0.111 Not
involvement supported
H4 OP → Supplier quality management 0.379 0.134 2.834 0.005** Supported
H5 OP → Process management 0.237 0.110 2.159 0.031* Supported
H6 OP → Continuous improvement 0.268 0.121 2.205 0.027* Supported
H7 OP → Education and training 0.236 0.133 1.778 0.075 Not
Table 6. supported
Direct effects between Note(s): *coefficient is significant at 0.05 level. **coefficient is significant at the 0.001 level. Where,
research variables OP5Operational performance
quality management, continuous improvement and process management were confirmed to The effect of
have supported the hypothesized linkages. This result is in agreement with the findings of TQM practices
several previous studies such as Baird et al. (2011), Talib et al. (2013), Mehmood et al. (2014),
Sadikoglu and Olcay (2014), Psomas and Jaca (2016), Qasrawi et al. (2017) and Shafiq et al.
on operational
(2017), which indicated that not all of the TQM practices have a significant effect on performance
organizational performance results. The TQM practices considered in the model, in general,
explained 45.2% of the variance in operational performance of ISO 9001:2008 certified
manufacturing organizations in Ethiopia. The R-square in this study is above the results 423
reported in studies by Sadikoglu and Olcay (2014), where TQM practices explained 29% of
the variance in the operational performance of ISO certified Turkish industrial organizations,
and Samson and Terziovski (1999), where TQM practices were found to have accounted for
21% of the variance in operational performance. Detailed results of the path analysis in the
present study are discussed hereunder along with supporting empirical literature.
Supplier quality management was found to have a significant positive effect on the ISO
9001:2008 certified manufacturing organizations’ operational performance. This finding
supports several prior studies on the area. Baird et al. (2011), from a survey conducted on 145
(largely ISO 9000 certified) Australian manufacturing and service business organizations,
found that supplier quality management significantly affects the operational performance in
terms of inventory management. Similarly, the finding is in agreement with Sweis and Saleh
(2017) who found that establishing long-term relationship with suppliers and actively
engaging them in quality improvement efforts can facilitate the systemic exchange of
information between supplier and manufacturers that influence the operational performance
of organizations in terms of quality and inventory management measures. Correspondingly,
this result corroborates the study by Kaynak (2003) in which supplier quality management
was found to be a key TQM practice that has a direct effect on operating performance along
with product/ service design and process management. It is also in agreement with the
findings of other previous studies in the literature (Kannan and Tan, 2005; Sadikoglu and
Zehir, 2010; Zakuan et al., 2010; Phan et al., 2011). Therefore, evaluating and selecting
suppliers based on their commitment to quality, managing quality- related issues with
valuable suppliers, and building long-term collaborative relationship with them would
improve manufacturing organizations’ performance in terms of product quality, delivery
time, and product or volume flexibility and productivity while keeping the cost of production
minimum.
The path analysis output also revealed that continuous improvement had a statistically
significant and positive effect on the operational performance of ISO 9001:2008 certified
manufacturing organizations in Ethiopia. This is in agreement with several previous studies
(Arumugam et al., 2008; Arnold, 2014; Mehmood et al., 2014; Salah et al., 2018). Arnold (2014)
conducted a study on 147 small and medium scale manufacturing firms in Kenya with an aim
of examining the relationship between continuous improvement and operational
performance, and found that continuous improvement practices (operationalized with such
powerful variables as benchmarking, industry practices and lean supply management) had a
positive and significant effect on operational performance. Arumugam et al. (2008) have also
established that continual improvement is one of the dominant TQM practices that affect the
quality performance of ISO 9001:2008 certified manufacturing organizations. Thus, adopting
different communication and problem solving techniques such as sign boards, clear
housekeeping strategy, records management system and utilization of objective quality data
can encourage continuous improvement efforts, and eventually lead to improved operational
performance results.
Process management was also found to have a statistically significant and positive effect
on the operational performance of the target organizations. This finding is in agreement with
several studies such as Lee et al. (2003), Rad (2006), Khanna et al. (2011), Phan et al. (2011) and
TQM Chauke et al. (2019). The finding also concurs with the findings of a study by Lee and Lee
33,2 (2014), which established that continuous improvement and process management had a
positive and significant impact on business performance. Academics such as Forza and
Filippini (1998), Kaynak (2003) and Cua et al. (2001) have also propounded that process
management leads to improved operational performance through reduced process variance
and the resultant scraps and reworks. Chauke et al. (2019), in their study of examining the
effect of TQM on operations performance, also found that process management is positively
424 and significantly related to operational performance. Thus, the finding of the present study
along with the literature support specified above draws attention to the argument that
process management facilitates production flow which in turn leads to improved
performance in terms operational criteria.
The insignificant effect of the other TQM practices on operational performance is
probably due to different factors. To begin with, it may signify the requirement of
mediational (indirect) relationship, consideration of some contextual variables or the
existence of moderating variables such as firm age and size (Kaynak, 2003; Baird et al., 2011;
Sadikoglu and Olcay, 2014). For instance, Nawaz et al. (2014) revealed that knowledge
management fully mediates the effect of most TQM practices that include leadership/top
management support, customer focus and information and analysis on organizational
performance. Birasnav (2014) also confirmed the mediating role of knowledge management
between the “leadership/top management support” element of TQM and organizational
performance. On the other hand, top management support/leadership may not necessarily
have a direct effect on organizational performance results (Qasrawi et al., 2017). In another
study, Sadikoglu and Olcay (2014) affirmed that leadership/ top management support does
not have significant effect to any performance measures. It lays a foundation to, and affects,
all other TQM practices which in turn affect organizational performance. In the same vein,
Kaynak (2003) showed that management leadership directly influences training, employee
relations and supplier quality management practices, and indirectly affects process
management. He further added that the management leadership and training elements of
TQM affect operating performance through supplier quality management, product/service
design and process management elements. Similar point was also made by several
researchers (Green, 2012; Ingelsson et al., 2012; Herzallah et al., 2014). Therefore, the forgoing
extracts can again explain the insignificant direct effect of top management support and
education and training on operational performance in this study.
In addition to the above issues, it is quite evident that most of the leaders or top
management of Ethiopian organizations are not committed enough to provide practical
support for quality improvement efforts. This is specifically affirmed by Daniel and Fasika
(2003) who asserted that the management of many Ethiopian firms does not have strong
quality sense, and Haile and Raju (2016) who found that top management in Ethiopian
manufacturing organizations focuses on short-term profit and fails to allocate adequate
resources for quality improvement programs. Then again, without the top management’s
support, organizations do not dedicate the required resources to such TQM practices as
education and training, which eventually hinders the factors’ contribution to operational
performance improvements. The significance of top management’s role in implementing
TQM and also to enhance firm performance was emphasized by Aquilani et al. (2017). With
poor attention given to the TQM elements by top management, it is apparent that the
prospect of improvements in operational performance as a result of those elements is
minimal. Therefore, top management leadership is a fundamental TQM practice that can
facilitate all aspects of quality improvement by developing effective strategies and allocating
sufficient resources (Spoelstra, 2013; Sweis et al., 2016).
The insignificant results of top management support is also in agreement with the
findings of Sadikoglu and Olcay (2014), which established that leadership has an
insignificant direct effect on operational performance results. The outputs of the path The effect of
analysis in this study also showed that customer focus has insignificant effect on operational TQM practices
performance. This can be justified by the assertions of Qasrawi et al. (2017), who explicated
that the effect of customer focus on organizational performance does not appear in the short
on operational
term. This can be particularly true as most of the manufacturing organizations in Ethiopia performance
are new for quality management approaches. In another study, Mehmood et al. (2014) also
established that customer focus and top management commitment had insignificant effect on
organizational performance. The insignificant results associated with customer focus in this 425
study may also be explained in the light of the findings of Haile and Raju (2016), which
indicated that most manufacturing companies in Ethiopia give poor attention to the needs
and requirements of customers. In this regard, Herzallah et al. (2014) asserted that, as part of
the TQM program, managers should regularly identify the requirements of customers and
minimize their complaints so as to achieve better performance results. Therefore,
manufacturing organizations in Ethiopia should keep in touch with customers and get
tacit information about their customers’ demand for product quality, cost and delivery time
issues which could be used in operational performance improvement efforts. Finally, the
insignificant effect of employee empowerment on operational performance in the present
study can be explained by the poor commitment of most managers on quality improvement
efforts (Haile and Raju, 2016).
The analysis result also established that all of the constructs of TQM are positively and
significantly correlated to each other. This would suggest that the TQM practices
complement each other and, therefore, need to be applied in a combined fashion (Agus and
Hassan, 2011). Moreover, it was also found that all of the TQM practices are positively and
significantly correlated with operational performance which indicates that an increase in the
implementation of TQM practices causes increments in the firms’ operational performance
(Zehir et al., 2012).

6. Conclusion and implications of the study

This study examined the effect of TQM practices on operational performance of ISO 9001:
2008 certified organizations using the Structural Equation Modeling technique. The causal
relationship between TQM practices and operational performance validated in this study
with respect to the Ethiopian manufacturing sector contributes to the TQM literature in
developing countries. Overall, the study showed the importance of implementing TQM
practices for improvements in operational performance results. The findings presented in the
previous section, however, showed that not all TQM practices did significantly impact the
companies’ operational performance.
Of the TQM practices considered in the theoretical framework, supplier quality
management, continuous improvement and process management were found to have a
positive, direct and significant effect on operational performance. However, other TQM
practices, such as top management support, customer focus, employee involvement and
empowerment and education and training had an insignificant effect on operational
performance.
It has been found that supplier quality management is the major tenet of TQM that
significantly and directly affects the operational performance of ISO 9001:2008 certified
organizations in Ethiopia. Using quality as an important criterion for selecting suppliers,
participating in supplier activities related to quality, providing feedback on the performance
of suppliers’ products, conducting supplier quality audit on a regular basis and documenting
detailed information about supplier performance were the major issues considered under the
supplier quality management. Therefore, managing quality related issues with suppliers can
help manufacturing organizations to enhance their performances with respect to product
TQM quality, delivery time, flexibility and productivity while keeping the cost of production
33,2 minimum.
The other important TQM practice which was found to have a significant effect on the
operational performance of ISO 9001:2008 certified manufacturing companies is continuous
improvement. This should be encouraging for practitioners. Major issues that contributed to
this significant and positive effect were utilization of sign boards and labels as
communication tools concerning organizational efforts on improving process and product
426 quality, availability of clear records management system which facilitates the decision
making process on quality issues, consideration of objective decisions regarding quality
improvement, and use of housekeeping strategy that facilitates the effective maintenance of
production equipment and neat work place.
The study also found that process management significantly affects operational
performance. This important result is attributed to such key practices as attaining process
capability that meets production requirement, maintaining production equipment according
to the maintenance plan, conducting regular assessment of production process and
prioritizing quality-related criteria over other strategies when developing new products. To
sum, controlling the production processes periodically and monitoring data on quality
continuously will certainly help organizations to achieve better performance results in terms
of operational criteria.
The findings of this study can help managers of manufacturing organizations in Ethiopia
to comprehend the importance of supplier quality management and continuous improvement
practices for operational excellence. It can also encourage managers to commit organizational
resources to facilitate the implementation of the TQM elements for better performance
results. Moreover, the fact that all TQM practices are correlated to each other and to
operational performance can help managers realize the crucial improvements triggered by
the synergy among the TQM factors. In general, the empirical evidence provided by this
study will encourage managers of manufacturing companies in Ethiopia who are seeking to
capitalize on the TQM approach.

7. Limitations and future studies

The study was not without any limitation, though the impact of the limitations does not
compromise the validity of the study output. The scope was limited to ISO certified
manufacturing organizations which, in a broader sense, may limit its generalization to the
non-ISO certified organizations. Therefore, future studies are recommended to incorporate
both ISO 9000 certified and non-certified organizations. The fact that the study was
conducted with manufacturing organizations as specific targets in order to control for the
industry effect is construed to be another limitation. Therefore, further research needs to be
conducted in a wider scope to test the generalizability of this study’s findings, and present a
more complete picture of the issues considered in this study. It is also acknowledged that it
would be more informative if objective performance data would have been used instead of
using subjective (perceptual measure).
The measurement scale of TQM practices and operational performance developed and
validated empirically in this study may assist future researchers who wish to conduct studies
on the same area. It will have great significance for researchers who wish to undertake studies
in Ethiopia, where the linkage between TQM practices and different performance criteria
remained unexplored in several sectors. On the basis of this study, future studies will be able
to focus on examining the same issue (i.e. the TQM-performance link) in different sub-
divisions of the industrial sector for which quality management has unprecedented
relevance. The future researches are also suggested to apply multiple methods and
informants to eliminate any potential common method bias and advance the ability of the
findings to be generalized. Moreover, the latest versions of ISO 9001 for instance, ISO 9001: The effect of
2015 can also be considered in future studies. Finally, yet importantly, the researchers TQM practices
suggest the consideration of some contextual variables such as, age of the firm, scope of
operation, firm size, and firm strategy while addressing the linkage between TQM practices
on operational
and operational performance. performance
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435

Corresponding author
Mulugeta Kebede Adem can be contacted at: mkmikegunit@gmail.com
TQM Appendix 1
33,2

Constructs and measurement items (indicators) Adopted from

(1) Top management support (TM)

436 Top management actively participates in quality Zhang et al. (2000), Phan et al. (2011), Sila
improvement efforts (TM1) (2007), Zu et al. (2010), Fotopulous and
Top management empowers employees to solve quality Psomas (2010), Sadkoglu and Olcay (2014),
problems (TM2) Sabella et al. (2014), Truong et al. (2014)
Top management allocates resources for continuous
improvement of the quality management system (TM3)
Top management acknowledges and rewards employees’
contributions to bettering quality (TM4)
Top management develops a comprehensive quality plan to
meet goals (TM5)
Top management accepts quality improvement
responsibility (TM6)
Top management inspires people and creates a culture of
excellence that helps them do their job (TM7)
(2) Customer focus (CF)
Procedures to incorporate and deal with customer proposals Zhang et al. (2000), Prajogo and Sohal (2006),
are established (CF1) Sadkoglu and Olcay (2014), Rahman and
Quality-related customer complaints are treated with top Bullock (2005), Sila (2007), Zu et al. (2010),
priority (CF2) Fotopulous and Psomas (2010)
Customer satisfaction is measured on a regular base (CF3)
The company continuously seeks customer inputs to
determine their requirements solved (CF4)
The company focuses on achieving greater customer
satisfaction (CF5)
The company uses customer requirements as the basis for
quality (CF6)
Our company builds strong relationship with valuable
customers (CF7)
(3) Employee empowerment and involvement (EE)
Our company has cross-functional teams to improve quality Zhang et al. (2000), Rahman and Bullock
(EE1) (2005), Fuentes-Fuentes et al. (2007),
Employees are actively involved in quality-related activities Fotopulous and Psomas (2010), Sabella et al.
(EE2) (2014), Truong et al. (2014)
The company uses an extensive employee suggestion system
(EE3)
Employees receive recognition for superior quality
performance (EE4)
Employees are encouraged to fix problems they find (EE5)
Reporting work problems is encouraged in our company
(EE6)
Table A1. The company improves working conditions determinedly
Measurement items (EE7)
and source from which
they were adopted (continued )
 The effect of
Constructs and measurement items (indicators) Adopted from TQM practices
on operational
(4) Supplier Quality Management (SQ)
Our company has established long-term co-operative Zhang et al. (2000), Hong and Satit (2005), performance
relations with suppliers to resolve quality-related problems Rahman and Bullock (2005), Baird et al. (2011)
(SQ1)
The company regards product quality as the most important 437
factor for selecting suppliers (SQ2)
Our company participates in supplier activities related to
quality (SQ3)
The company gives feedback on the performance of
suppliers’ products (SQ4)
The company regularly conducts supplier quality audit (SQ5)
The company has detailed information about supplier
performance (SQ6)
(5) Process Management (PM)
Process capability can meet production requirements (PM1) Zu et al. (2010), Fotopulous and Psomas
Production equipment is maintained well according to (2010), Baird et al. (2011), Sadkoglu and Olcay
maintenance plan (PM2) (2014), Sabella et al. (2014), Ataseven et al.
The company implements product inspections effectively (2014), Truong et al. (2014)
(PM3)
Production processes are assessed regularly in an attempt to
bring in quality improvement (PM4)
Quality-related criteria predominate over other strategies
when developing new products (PM5)
Our company uses statistical process control tool for process
control and improvement (PM6)
(6) Continuous Improvement (CI) Fuentes-Fuentes et al. (2007), Sila (2007),
Signboards and labels are used as communication tools (CI1) Prajogo and Sohal (2006), Zu et al. (2010)
The company has clear records management system(CI2)
Decisions regarding quality improvement are based on
objective data (CI3)
Housekeeping is conducted as part of our continuous
improvement scheme (CI4)
Our company uses statistical methods to measure and
monitor quality (CI5)
(7) Education & Training (ET) Zhang et al. (2000), Prajogo and Hong (2008),
Resources are apportioned for employee education and Tari et al. (2008), Truong et al. (2014)
training (ET1)
Employees are trained on how to use quality management
tools (ET2)
Quality control awareness is given to employees (ET3)
Specific work-skills training is given to all employees (ET4)
Employees are regarded as valuable, long-term resources
worthy of receiving education and training throughout their
career (ET5)

(continued ) Table A1.

TQM
33,2 Constructs and measurement items (indicators) Adopted from

Operational performance measures Cost performance(OPC)

Production cost is diminished (OPC1) Nawanir et al. (2013), Nabaas and Abdallah
Production waste is eliminated significantly (OPC2) (2018), Ataseven et al. (2014), Tatoglu et al.
Costs per unit produced are kept minimum (OPC3) (2015), Modgil and Sharma (2016)
438 Cost of quality (scrap, rework, warranty claim, etc.) is
generally low (OPC4)
Inventory turnover is high (OPC5)
Quality (OPQ) Fotopulous and Psomas (2010), Baird et al.
Product and process quality is kept to be reasonably high (2011), Nawanir et al. (2013), Nabaas and
(OPQ1) Abdallah (2018), Ataseven et al. (2014),
Defect rate on products (as a % of total product volume) is low Truong et al. (2014)
(OPQ2)
Amount of products cause to undergo rework is reduced
(OPQ3)
Product reject rates are decreased (OPQ4)
Productivity and flexibility (OPP) Sharma (2006), Terziovski et al. (2003),
The company’s total productivity is outstanding (OPP1) Nawanir et al., 2013), Nabaas and Abdallah
Value added per employee is increasing continually (OPP2) (2018), Ataseven et al. (2014), Tatoglu et al.
Work design is continually improved (OPP3) (2015)
Hours of productive work are maintained to be high (OPP4)
Process flexibility is achieved (OPP5)
Overall production efficiency (capability) is improved (OPP6)
Delivery time (OPT) Hallgren and Olhager (2009), Nawanir et al.
Order processing time is kept minimum (OPT1) (2013), Nabaas and Abdallah (2018), Ataseven
Speedy (rapid) delivery is ensured (OPT2) et al. (2014), Truong et al. (2014)
Table A1. On-time delivery (in full) is upheld (OPT3)
Pattern matrix
KMO 5 0.904
Bartlett’s test of Sphericity 5 0.000
Factors Appendix 2
Items* TM CF EE SQ PM CI ET OPC OPP OPQ OPT

TM1 0.806
TM2 0.793
TM3 0.904
TM4 0.705
TM5 0.749
TM6 0.747
CF2 0.782
CF3 0.827
CF4 0.766
CF5 0.841
CF6 0.741
CF7 0.702
EE3 0.761
EE5 0.796
EE6 0.823
EE7 0.767
SQ2 0.736
SQ3 0.827
SQ4 0.845
SQ5 0.865
SQ6 0.736
PM1 0.729
PM2 0.793
PM3 0.901
PM4 0.728
PM5 0.747
PM6 0.729
CI1 0.733

(continued )
performance
TQM practices

439
The effect of

and operational
on operational

EFA (pattern matrix)

Table A2.

performance
for both TQM practices
 33,2

440
TQM

Table A2.
Pattern matrix
KMO 5 0.904
Bartlett’s test of Sphericity 5 0.000
Factors
Items* TM CF EE SQ PM CI ET OPC OPP OPQ OPT

CI2 0.910
CI3 0.788
CI4 0.773
ET1 0.780
ET2 0.883
ET3 0.884
ET4 0.815
ET5 0.771
OPC1 0.786
OPC2 0.889
OPC3 0.771
OPP1 0.805
OPP2 0.882
OPP3 0.795
OPP4 0.865
OPP5 0.857
OPP6 0.734
OPQ1 0.824
OPQ2 0.915
OPQ3 0.802
OPQ4 0.755
OPT1 0.720
OPT2 0.907
OPT3 0.838
OPP TM CF TE PM OPQ SQ CI EE OPC OPT
Eigenvalues 14.972 5.421 3.448 2.693 2.237 2.049 1.771 1.675 1.460 1.341 1.019
Cumulative % of var. explained 28.9 39.4 45.7 50.5 53.9 57.5 60.0 62.7 65.6 67.8 69.6
Note(s): Extraction Method: Maximum Likelihood; Rotation Method: Promax with Kaiser Normalization; *Item labels (descriptions) are given in Table A1. Where,
TM 5 top management support, PM 5 process management, CF 5 customer focus, SQ 5 supplier quality management, ET 5 education and training,
EE 5 employee empowerment and involvement, OPP 5 productivity and flexibility, OPQ 5 quality, OPC 5 cost, OPT 5 time