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TQM critical factors and KM value chain

activities
a b c c
Teresa L. Ju , Binshan Lin , Chinho Lin & Hao-jung Kuo
a
Department of Information Management , Shu-Te University ,
Taiwan
b
College of Business Administration , Louisiana State University in
Shreveport , USA
c
Department of Industrial Management Science , Institute of
Information Management National Cheng Kung University , Taiwan
Published online: 24 Jan 2007.

To cite this article: Teresa L. Ju , Binshan Lin , Chinho Lin & Hao-jung Kuo (2006) TQM critical
factors and KM value chain activities, Total Quality Management & Business Excellence, 17:3,
373-393, DOI: 10.1080/14783360500451614

To link to this article: http://dx.doi.org/10.1080/14783360500451614

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 Total Quality Management
Vol. 17, No. 3, 373 –393, April 2006

TQM Critical Factors and KM Value

Chain Activities

TERESA L. JU, BINSHAN LIN, CHINHO LIN† & HAO-JUNG KUO†

Downloaded by [Nova Southeastern University] at 05:25 12 January 2015


Department of Information Management, Shu-Te University, Taiwan,   College of Business Administration,
Louisiana State University in Shreveport, USA, †Department of Industrial Management Science & Institute of
Information Management National Cheng Kung University, Taiwan.

ABSTRACT Just as Total Quality Management (TQM) enjoyed great popularity during the 1980s,
Knowledge Management (KM) has attracted great attention in today’s business and academic
community. Companies are viewing KM as a critical success factor in today’s dynamic
environment; consequently, knowledge managers and knowledge creation teams are created in
many organizations. The idea that both TQM and KM have great influence on a firm’s strategic
competence has also drawn attention. However, most of the related research lacks empirical
evidence on the association between TQQ and KM activities. The major purpose of this study is
to explore empirically the relationships between TQM and KM. We adopted the case study
research method of the qualitative research to generate themes, and the quantitative research
method to refine and support the validity of the findings from qualitative research. Research
results include: (1) we survey the TQM and the KM implementation in the manufacturing
companies; (2) identify the role of TQM critical factors on KM value chain activities; (3)
determine the importance of KM value chain activities to TQM critical factors; (4) confirm the
complementary nature of TQM and KM; and (5) recommend practical applications of TQM and KM.

KEY WORDS : TQM, KM, critical factors, value chain activities, qualitative research, quantitative
research

Introduction
Just as Total Quality Management (TQM) enjoyed great popularity during the 1980s (Ross,
1993), Knowledge Management (KM) has attracted great attention in today’s business and
academic community (Wong, 2005; Chadam & Pastuszak, 2005). Companies are viewing
KM as a critical success factor in today’s dynamic environment; consequently, knowledge
managers and knowledge creation teams are created in many organizations.
The idea that both TQM and KM have great influence on a firm’s strategic competence
has also drawn attention. However, most of the related research lacks evidence and the
results are not practical enough. In this study, we take a more practical approach

Correspondence Address: Binshan Lin, College of Business Administration, Louisiana State University in
Shreveport, Shreveport, LA 71115, USA. Email: BLIN@LSUS.EDU

1478-3363 Print=1478-3371 Online=06=030373–21 # 2006 Taylor & Francis

DOI: 10.1080=14783360500451614
 374 T. L. Ju et al.

to examine the relationship between TQM and KM by using qualitative as well as

quantitative research methods.

Literature Review
TQM Critical Factors
TQM focuses on several critical factors. Through the literature review we have selected
the following ten TQM critical factors for our study: top management commitment, adopt-
ing philosophy, quality measurement, benchmarking, process management, product
design, employee training, employee empowerment, supplier quality management, custo-
mer involvement and satisfaction (Saraph et al., 1989; Flynn et al., 1994; Powell, 1995;
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Madu et al., 1995; Ahire et al., 1996; Zeitz et al., 1997; Lin et al., 1999; Chandler &
McEnvoy, 2000; Motwani, 2001).

Knowledge Management
Contributors from such diverse sources as management science, social science, and infor-
mation science have enriched KM with methods, ideas, and technologies (Levett &
Guenov, 2001; Montano et al., 2001; Bose, 2004; Rowley, 2004). But at the same time, it
has been difficult to combine all the different concepts in a consistent framework (Davenport
& Prusak, 1998; King, 1999). Tiwana (2001) defined knowledge management as ‘manage-
ment of organizational knowledge for creating business value and generating a competitive
advantage.’ Quintas et al. (1997) regarded knowledge management as ‘the process of conti-
nually managing knowledge of all kinds to meet existing and emerging needs, to identify and
exploit existing and acquired knowledge assets and to develop new opportunities.’ Thus, the
process aspect is distinguished from the focus on resources and assets.
KM can be a cognitive state, a process or an object, but KM as a process dominates
(Tan & Platts, 2004; Kodama, 2005; Lin & Tseng, 2005). Shin et al. (2001) proposed a
simple KM value chain that consists of four activities: knowledge creation, knowledge
storage, knowledge distribution and knowledge application. Meanwhile, Holsapple &
Singh (2001) proposed a knowledge chain model that is comparable with Porter’s
(1985) value chain; including both primary and secondary activities. This study focuses
more on the primary activities, and since KM value chain activities stand for the practical
side of KM that fits the main concern of this study, we choose a KM value chain with the
four activities as one of our research dimensions.

The Relationship between TQM and KM

Businesses have always been concerned about managing the knowledge they have within
their organization, and that is the main reason why KM becomes so popular these days.
There are many real-world examples that show that a good combination between continu-
ous and radical improvements can significantly increase the competitive advantages, and
that these two approaches are compatible (Lee & Asllani, 1997). Many researchers have
recognized this point of view and tried to link TQM and KM together (Molina et al, 2004;
Yang, 2004). They want to find out if there exists any commonality and how these two
terms operate in concert. Lim et al. (1999) suggest using Deming’s plan-do-check-act
 TQM Critical Factors and KM Value Chain Activities 375

(PDCA) cycle as the four steps for KM to become an integral part of an organization’s
quality strategy. Zetie (2002) shows that the concepts of total quality and KM, together
with a number of others, are closely linked and are all aspects of a much more fundamental
concept – organizational development. Zetie (2002) also stresses that the recognition of
the linkage between TQM and KM has both theoretical and practical significance. At
the theoretical level, the implication is a possible broader use of explanatory models devel-
oped in a specific context. At the practical level, it increases the implementation options
for those seeking to bring about organization change.
The two researches cited above told us the existence of a relation between TQM and
KM but no detail. Neither did they conduct any test, such as an empirical study, to
support their point of view. The goal of this study is to focus on the practical dimensions
of TQM and KM to identify a clearer relationship between these two processes.
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Research Design
Research Framework
The research framework of this study is illustrated in Figure 1. First, we will examine the
practical implementation of TQM critical factors and the practical implementation of KM
in the manufacturing industry. Then the relationship between TQM and KM will be
correlated. Finally, we will explore the possible effects resulting from the interaction
between KM and TQM.

Research Methodology
The main objective of this study is to explore the relationship between TQM and KM. If
there do exist certain connections, the qualitative research method seems to be more

Figure 1. Research framework

 376 T. L. Ju et al.

suitable for our study. To avoid the subjective nature of qualitative research, we apply
Simon et al.’s (1996) generative research method to generate quality data.
According to Hammersley’s (1996) classification, this study seems to fit with methodo-
logical triangulation. Qualitative research is conducted first, and hopefully the result will
enable the development of themes to add clarity to the relation between TQM and KM.
Quantitative research is then used to test the proposed themes. Therefore, the study
consists of three phases as shown in Figure 2.

Qualitative Case Study

Profile of the Case Study
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Two case studies are conducted on manufacturing companies in Taiwan, ASE Inc. and
AIDC. The profiles of these companies are available upon request.
One challenge with a case study is for the researchers to articulate the acquired infor-
mation (Simon et al., 1996). There are different ways to present interview content.
Some may be purely descriptive or a combination of analysis and description. Others
may record the detail of the cases and then to discuss their implications. This study
adopts the qualitative research analysis method described in Free et al.’s (2002) article,
which shows a typical result of an in-depth interview study. We combine analysis and
description to present the key themes identified.
Based on the arguments proposed by Strauss & Corbin (1990) and Simon et al., (1996),
we set up a theoretical framework through the literature review, then designed interview
questions according to the framework. Finally, the result of the semi-structured interviews
is used to develop a questionnaire for later quantitative study.
The interviewees who participate in the case study are in a good position to comment on
our questions since both of them have worked for their companies throughout the major
period of TQM and KM implementation (see Table 1).
In this research phase, we divide our interview questions into three parts. In part one, we
try to explore the role of TQM critical factors on KM value chain activities. In part two, we

Figure 2. Research Methodology

 TQM Critical Factors and KM Value Chain Activities 377

Table 1. Demographics of the two interviewees

Items Interviewee from ASE Inc. Interviewee from AIDC

Gender Male Male

Job title Knowledge management Knowledge management
director director
Length of time in company 5 years and 11 months 20 years and 8 months
Length of time with TQM 6 years 7 years
Length of time with KM 2 years 3 years

take a different view on the importance of KM value chain activities to TQM critical
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factors. The relation between TQM and KM is explored in part three.

Part 1. The Role of TQM Critical Factors on KM Value Chain Activities

We focus on three dimensions in part one: TQM critical factors, KM value chain activities,
and the key players of TQM or KM. We examine each of the ten critical factors with
respect to the four KM value chain activities to gain a holistic view that would result in
some themes:
(1) Top management commitment versus KM value chain activities
The advocacy of KM in ASE Inc. is led by middle managers; therefore they must keep
persuading top management to gain their support in knowledge creation, which needs a
great amount of money and human resources. On the contrary, the need for KM in
AIDC was first identified by top management. They established the Knowledge Manage-
ment Department and offer resources to support knowledge creation.
To draw attention and favour from top management of ASE Inc., the KM programme
team also had to produce some initial accomplishment; they picked one core department
and organized their knowledge through effective storage. The top management of AIDC
plays a more active role as a facilitator. It is difficult to decide what to store and how to
store knowledge, especially when it is a cross-department affair. AIDC top management
takes the responsibility to communicate with other departments, which is a big help to
the Knowledge Management Department.
Top management commitment is very important in both interviewees’ opinion, no
matter whether the programme is initiated from the top or not. Top management
support is especially needed in knowledge creation and knowledge storage activities.
(2) Adopting philosophy versus KM value chain activities
Both ASE Inc. and AIDC agree that people will contribute their knowledge only when they
feel like doing so, so they work hard to improve the sharing atmosphere and coherence.
Regarding what knowledge should be stored, ASE Inc. gathers key managers’ opinions
to identify important documents. AIDC stores the mistakes they have made before to
prevent the same mistakes from being made again. Both companies also store good prac-
tices as guidance. We conclude that both companies realize the importance of gaining
company-wide coherence on stored contents.
In order to distribute knowledge, ASE Inc. sets up standards and prepares sample docu-
ments for their employees to follow. AIDC stresses the importance of visualizing the tacit
knowledge.
 378 T. L. Ju et al.

ASE Inc. thinks proper regulations can increase the utility of the knowledge base. In
other words, proper pressure is necessary when it comes to knowledge application.
According to the interviewees, their adopting philosophy of KM is coherence.
(3) Quality measurement versus KM value chain activities
While the quality of the created knowledge is usually more important than the quantity of
the created knowledge in the knowledge creation process, the quantity of useful knowl-
edge stored is rather important in the knowledge storage process: the richness and
breadth of the stored knowledge is necessary to deal with users’ various demands.
ASE Inc. has established several indices to measure employees’ contribution to KM
value chain activities. For instance, employees are required to document the created
knowledge. Those created documents are then ranked in terms of their amount and
value. All the contributions will be considered in employees’ performance assessment.
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The frequency of using and responding to the KM system reflects employees’ contri-
bution on knowledge distribution and knowledge application, which may also be con-
sidered in performance assessment.
Although the interviewee did not elaborate, AIDC does have relevant regulations to tie
KM practice to performance assessment. What to store has been defined clearly in AIDC’s
Key Performance Indicator for employees to follow.
Both companies have tied the usage of and contribution to the KM system to the per-
formance measurement system. Therefore, we conclude that quality measurement is a
booster to KM implementation.
(4) Benchmarking versus KM value chain activities
While ASE Inc. cherishes the experiences from other outstanding companies, AIDC treas-
ures their internal intellectual assets. They both look up on benchmarking but value differ-
ent knowledge sources. ASE Inc. has visited several companies for inspiration before
starting its KM project. Continuous benchmarking is beneficial to improving KM
implementation.
(5) Process management versus KM value chain activities
The basic tasks of process management are to reduce cost, shorten cycle-time and increase
efficiency, which can all be applied to the KM value chain activities. Knowledge generated
from every project can be preserved through effective recording, and ASE Inc. did just
that.
In terms of knowledge storage, ASE Inc. defines ‘what to store’ clearly, which can
reduce engineers’ time to record. AIDC records only the mistakes they have made and
good techniques they have used.
As for knowledge distribution, ASE Inc. rearranges all the documents to reduce search-
ing time and improve problem solving efficiency. To apply process management concepts
on knowledge application, ASE Inc.’s project reports are available for employees in need.
AIDC’s smart copy and lessons learned strategies are other ways to reduce time and cost
for solving problems.
(6) Product design versus KM value chain activities
With respect to product design, TQM practice puts an emphasis on quality, customer
involvement, and other departments’ participation. Both ASE Inc. and AIDC take their
customers’ specific requirements and quality desire into consideration when it comes to
product design. Although employees in other departments do not participate in product
design, ASE Inc.’s engineers in the R&D department are required to have operating
experience.
 TQM Critical Factors and KM Value Chain Activities 379

Extraneous and crucial data in all departments are carefully stored in AIDC. The
utilization of knowledge that was generated by other departments is regarded as those
departments’ participation in product design. Moreover, the distribution of a New
Product Development Document can shorten the timeframe to design a new product
and increase product quality. Applying cost reduction techniques on new product
design would satisfy customers’ requirement on price and quality.
(7) Employee training versus KM value chain activities
Both companies plan to incorporate KM concepts and the four KM value chain activities
in their employee training. ASE Inc. further regulates the extent of participation in each
activity. AIDC prefers to appeal to its employees to execute KM value chain activities
for their own benefit.
(8) Employee empowerment versus KM value chain activities
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Knowledge is elusive and top management cannot force their employees to contribute
their knowledge. Therefore, in AIDC’s opinion, there is no such thing as empowerment
in KM. ASE Inc. thinks that top management’s authorization to form formal and informal
groups is a kind of empowerment. Their authorization plays a special role in knowledge
creation and application.
(9) Supplier quality management versus KM value chain activities
Supplier quality management is the only TQM critical factor that has not yet been
considered by both companies when implementing KM.
(10) Customer involvement and satisfaction versus KM value chain activities
The implementation of KM value chain activities in both companies inherits TQM’s
philosophy on customer satisfaction; for instance, including customers’ suggestions
in knowledge creation activities, storing knowledge that is valuable to customers, review-
ing customer complaints and applying that knowledge to enhance customer satisfaction.
By summarizing the opinions offered by the two interviewees, we conclude that every
TQM critical factor except ‘supplier quality management’ plays a positive role on KM
value chain activities. Therefore, we submit our first theme:

Theme 1: TQM critical factors can be used as practical guidance when implementing
KM value chain activities.

Part 2. The Importance of KM Value Chain Activities on TQM Critical Factors

After the analysis of Part 1, we now turn to identify the importance of KM value chain
activities on TQM critical factors. We analyse the information gathered from ASE Inc.
and AIDC based on the same TQM and KM dimensions but change the direction.
The two interviewees from ASE Inc. and AIDC filled out Table 2 while responding to
the relative importance questions. We sort their opinions by the ten TQM critical factors to
generate our second theme.
(1) KM value chain activities versus top management commitment
When practising TQM, top managers often play the role as resource allocators and goal
setters. To introduce TQM, both ASE Inc. and AIDC top management hired consultants
from outside. In this way, knowledge storage and transfer are rather important. They
form a TQM project team to learn and absorb the professional knowledge from TQM con-
sultants. In addition, ASE Inc. and AIDC top management formulate periodic goals for the
TQM team to follow, and the TQM team is required to submit progress reports regularly.
 380 T. L. Ju et al.

Table 2. Relative importance of KM value chain activities to TQM critical factors

KM value chain activities

Knowledge Knowledge Knowledge Knowledge

TQM critical factors creation storage distribution application

Top management commitment q wq wq q

Adopting philosophy q wq wq wq
Quality measurement q w wq q
Benchmarking wq q w wq
Process management w w q
Product design wq wq q wq
Employee training wq q q wq
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Employee empowerment wq q q w
Supplier quality management
Customer involvement and satisfaction w w q

w: ASE Inc.’s perspective.

q: AIDC’s perspective.

All in all, the interviewees stress the need for top management support for the four KM
value chain activities, especially knowledge storage and distribution.
(2) KM value chain activities versus adopting philosophy
To promote the TQM philosophy throughout the organization, the consultant
suggests several programmes, such as Total Control Method and Control Plan, to
become TQM’s common platform. Through those quality-improving programmes,
employees realize that quality is their responsibility and continue practising quality
examination. In ASE Inc’s experience, TQM philosophy developers should emphasize
knowledge storage, distribution and application. But AIDC treats all four activities as
equally important.
(3) KM value chain activities versus quality measurement
TQM philosophy insists that the milestone in a process must be measurable. Quality
performance in all areas is measured in both ASE Inc. and AIDC, and data about
quality control are stored in a common accessible area. Therefore, they rely on knowledge
creation, storage, distribution, and application to help conduct quality management.
(4) KM value chain activities versus benchmarking
Benchmarking is searching for the best practices that will lead to superior performance.
ASE Inc. has engaged in extensive benchmarking on other companies’ operating pro-
cesses. For example, it has benchmarked other companies for new product introduction.
It does not copy verbatim but makes some adjustment to fit its own situation. According
to ASE Inc., knowledge creation, distribution and application are crucial links. Mean-
while, AIDC thinks it important to benchmark the best practices internally and puts an
emphasis on internal knowledge creation, storage and application.
(5) KM value chain activities versus process management
The tasks of process management in TQM are to reduce the cycle-times of order proces-
sing, new product or service development, and overall product or service delivery. ASE
Inc. has developed several programmes to reduce cycle-time, and outlined milestones
for them. Employees must check, record and report the progress, which make knowledge
 TQM Critical Factors and KM Value Chain Activities 381

storage and distribution important. AIDC values only knowledge application to reduce
cycle-time.
(6) KM value chain activities versus product design
Customer requirements are thoroughly analysed in the new product design process. Mis-
takes made before are recorded for product design improvement. In ASE Inc. knowledge
creation, storage, and application are linked to product design, and in AIDC knowledge
distribution is also included.
(7) KM value chain activities versus employee training
TQM practice focuses employee training on understanding TQM principles. Employees of
both companies are trained to improve their knowledge on quality and their ability to use
problem-solving techniques, which are the activities of the KM value chain.
(8) KM value chain activities versus employee empowerment
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The purpose of employee empowerment is to involve employees in design and planning

processes, increase employee autonomy in decision-making and authorize employees to
use a company network for problem-solving. Employees’ involvement in design and plan-
ning processes is part of knowledge creation and knowledge storage, and the increasing
autonomy and authorization in decision-making and problem solving is part of knowledge
distribution and application.
(9) KM value chain activities versus supplier quality management
This has been excluded from the discussion.
(10) KM value chain activities versus customer involvement and satisfaction
Firms often take advantage of customers’ tacit knowledge by interacting with them.
Customer demand is the base of ASE Inc.’s quality policy, so it values customers’
opinion to increase customer satisfaction. AIDC uses interview and questionnaire
techniques to understand their customers’ demand.
Setting aside supplier quality management, we can conclude that KM value chain
activities have a positive practical impact on each TQM critical factor. Thus, we submit
our second theme:

Theme 2: KM value chain activities can be treated as an action programme for TQM
critical factors.

Part 3. The Relation Between TQM and KM

We are looking for any causal relationship or sequential effect between TQM and KM. If
there exists a causal relationship, which one is cause and which one is effect? Similarly, if
there exists a sequential effect, which one should be implemented before the other? Both
of our interviewees have their point of view, as summarized below.

ASE Inc. Knowledge Management Director

In theory, KM is inherited from TQM, and in practice, TQM is introduced earlier than KM
in our company. Our TQM implementation has great influence on our organizational
culture and facilitates KM programme’s introduction. I think it would be better to
implement KM first in a newly established company, because KM motivates the formation
of learning organization, which can improve the sharing atmosphere and the ability to
tolerate changes.
 382 T. L. Ju et al.

AIDC Knowledge Management Director

I think there exists a sequential effect between these two. TQM should be implemented
before KM. Working together, they can generate multiple positive effects. I do not
suggest introducing these two projects at the same time in a newly established
company, because a company has limited resources. Both programmes have strengths
and limitations, so a newly established company should choose one that is most suitable
for it.
Both interviewees agree that TQM and KM together make multiple positive effects but
which one to be implemented first is still without consensus. Therefore, we can only
submit our third theme broadly:
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Theme 3: There exist multiple positive effects between TQM and KM.

Quantitative Survey
Profile of the Survey
For generality, greater contextual richness, and a stronger theoretical connection between
TQM and KM, we operationalized the themes generated from the case study into a six-
page questionnaire, which was first reviewed by a professor and two PhD candidates.
The revised questionnaire consists of closed questions covering the themes and the
background of the organization and respondents. The questionnaire was constructed
using five-point scales and discrete categories. This data collection method allows for
replicability and permits some degree of statistical power (Huizing et al., 1997).
Survey data were collected from the companies chosen from the recipients of National
Quality Award (NQA) and the top 800 manufacturing companies in Taiwan ranked by
China Credit Information Service Ltd. These companies must have practical experience
with TQM and must be aware of KM. Questionnaires were sent to 100 companies. To
increase the return rate, follow-up calls were made to remind the respondents to fill out
the questionnaire. A total of 30 responses were returned resulting in a response rate
of 30%.
All 30 companies had implemented TQM and KM and were able to respond to the entire
questionnaire. Table 3 shows the industries in which the companies operate, the size of
the organizations in terms of number of employees, and the current position of the
respondents. The companies represent almost all the manufacturing industries, such as
steel, car, and electronics industries, and include small, medium-size, and large organiz-
ations. The majority of the respondents take on the role of programme leader during
their TQM or KM efforts.
A quantitative questionnaire was designed for each of the themes generated from the
qualitative research. Findings of the questionnaire are analysed and presented in the
form of tables and figures. First of all, the respondents are asked to judge the degree of
TQM implementation in their company in terms of the TQM critical factors. The
responses are tabulated in Table 4.
The average implementation time of TQM is 13 years and half of the companies (50%)
have executed TQM over 10 years. We also measure the degree of TQM implementation
in terms of the ten TQM critical factors and find that the average degree of each factor
is over 3.8 under a five-point scale (see Figure 3). The medians of factors showed in
 TQM Critical Factors and KM Value Chain Activities 383

Table 3. Profile of organizations and respondents

Industry % No. of employees % Respondents’ job title %

Steel 10.0 ,100 3.3 Engineer, specialist 23.3

Car 26.7 100– 300 3.3 Project manager 10.0
Food 3.3 301– 500 10.0 Division manager 53.3
Electronics 10.0 501– 1000 33.4 Chairman, general 13.3
manager
IT 3.3 1001– 1500 16.7
Plastic and 10.0 1501– 2000 13.3
petrochemistry
Precision machinery 10.0 .2000 20.0
Semiconductor 3.3
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Textile 3.3
Chemical 3.3
Paper-making 3.3
Others 13.5

the box-plot are either 4 or 5. Therefore, we can say that the majority of the responding
companies have implemented TQM quite thoroughly.

Test of Themes
Test of Theme 1
In order to test the validity of Theme 1 we use TQM critical factors as practical guidance
when implementing KM value chain activities. We compare the degree of TQM critical
factors implementation with every KM value chain activity. We hold that manufacturing
companies are able to follow the same critical factors while implementing TQM and KM.
Of the 30 cases, every company has executed TQM longer than KM, and the average
implementation times are 13 years and 6 years (see Table 4). We further conclude that
companies having implemented TQM can use the factors learned from TQM practice as
the guidance to introduce KM value chain activities.
Figure 4 shows the degrees of TQM critical factors’ effect in each KM value chain
activity: knowledge creation, knowledge storage, knowledge distribution, and knowledge
application. For top management commitment, most of the medians fall on the 4 point, and

Table 4. Length of time to implement TQM and KM

Length of time to Length of time to

implement TQM % implement KM %

,5 years 16.7 ,3 years 56.7

5 – 10 years 33.3 3 – 5 years 26.7
11 – 15 years 33.3 6 – 8 years 0
16 – 20 years 10.0 9 – 10 years 3.3
.20 years 6.7 . 10 years 13.3
Average: 13 years Average: 6 years
 384 T. L. Ju et al.
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Figure 3. Degree of TQM implementation

Figure 4. Degree of TQM critical factors’ effects on KM value chain activities

 TQM Critical Factors and KM Value Chain Activities 385
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Figure 4. Continued
 386 T. L. Ju et al.

over 50% of the responses are in the range of the 3 to 5 points. It is reasonable to view the 3
point as ordinary support and the 4 to 5 points as strong support to our theme. Therefore,
we conclude that top management in these companies has committed a great deal to the
four KM value chain activities.
Other relations between TQM critical factors and KM value chain activities are shown in
Figure 4(b) through Figure 4(j). We can see that medians lie between the 3 to 4 points in every
figure, and over 50% of the responses lie above the 3 point except in Figure 4(i). Figure 4(i)
shows that the degrees of supplier management in different KM value chain activities are
different. Some companies have recognized the demand to apply supplier management or
supplier involvement to KM value chain activities but others have not. Maybe that is
because most companies only recently started KM and they need more time to realize it.
In general, top management commitment, adopting philosophy, quality measurement,
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benchmarking, process management, product design, employee training, employee

empowerment, and customer involvement all contribute, to degrees, in knowledge cre-
ation, knowledge storage, knowledge distribution, and knowledge application. The
results reflect the qualitative results obtained earlier: therefore, Theme 1 is further sup-
ported, and the following proposition is presented:

Proposition 1
TQM critical factors can be used as practical directions when implementing KM value
chain activities.

Test of Theme 2
In this section, we want to test the relative importance of KM value chain activities to the
TQM critical factors. The questions designed to test Theme 2, ‘KM value chain activities
can be treated as an action programme for TQM critical factors’, are divided into four parts
in accordance with the four KM value chain activities. Figure 5 shows that the importance
of knowledge creation is different between the ten TQM critical factors. Of the ten factors,
knowledge creation is more important for ‘top management commitment’, ‘adopting

Figure 5. The importance of knowledge creation in TQM critical factors

 TQM Critical Factors and KM Value Chain Activities 387
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Figure 6. The importance of knowledge storage in TQM critical factors

philosophy’, ‘process management’, ‘product design’, and ‘customer involvement and sat-
isfaction’ than for other factors.
Figure 6 shows the relative importance of knowledge storage for the ten TQM critical
factors. Although the response distribution is similar to that in Figure 5, there are slight
differences between them. Knowledge storage is found to be more important for such
factors as ‘Top management commitment’, ‘process management’, ‘product design’,
‘employee empowerment’, ‘customer involvement and satisfaction’ than for other factors.
Figure 7 analyses the relative importance of knowledge distribution for the ten TQM
critical factors. It shows that knowledge distribution is more important for the factors
like ‘top management commitment’, ‘adopting philosophy’, and ‘customer involvement
and satisfaction’ than for the other seven factors.
Figure 8 shows that knowledge application is more important for ‘top management
commitment’, ‘adapting philosophy’, ‘process management’, ‘product design’, ‘employee
training’, ‘customer involvement and satisfaction’ than for other factors. It should be noted

Figure 7. The importance of knowledge distribution in TQM critical factors

 388 T. L. Ju et al.
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Figure 8. The importance of knowledge application in TQM critical factors

that there is no consensus on the importance of knowledge application for ‘employee

empowerment’. The 30 responses are spread widely on the box-plot. To increase
employee autonomy in decision-making and authorize employees to use the company
network for problem solving is part of the purposes of employee empowerment. Therefore,
the management implication of this result may be that they have different points of
view on increasing autonomy and authorization. Some agree to let employees participate
in the decision process; in this way, knowledge application is important. Others disagree
with vast employee empowerment, so they downplay the importance of knowledge
application.
In general, all of the KM value chain activities have some degree of importance for the
TQM critical factors except ‘supplier quality management’. This outcome supports Theme
2. We have thus derived the following proposition:

Proposition 2
KM value chain activities can be treated as an action programme for TQM critical factors.

Test of Theme 3
According to the preceding case study, both interviewees agree that TQM and KM
together have multiple positive effects but the priority of implementing TQM and KM
is still without consensus. Of the 30 respondents, two agree with the causal relationship,
one agrees with sequential effect, one believes that there exists no exact relation, and
others think there are multiple effects between TQM and KM (see Figure 9). The majority
(86.7%) supports Theme 3.
When asking which one to introduce first in a newly established company, seven
respondents agree to implement TQM before KM, three think KM should be implemented
before TQM, one thinks the priority does not matter, others agree with concurrent
implementation (see Figure 10). A majority (63.3%) of the responses shows that TQM
and KM should be implemented at the same time. This is inconsistent with the finding
 TQM Critical Factors and KM Value Chain Activities 389
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Figure 9. TQM and KM relation

from the case study. Although the interviewees do not agree on which one to perform first,
they do think it is logical to introduce one at a time due to the lack of resources and the
nature of the different philosophies. So far, we can only be sure that TQM and KM
together will have multiple positive effects. Thus we have the following proposition.

Proposition 3
There exist multiple positive effects between TQM and KM.
With respect to the development of TQM and KM in Taiwan, our respondents were asked
to answer a few questions using their professional intuition. Figure 11 shows the current
state of TQM and KM implementation in Taiwan. The implementation of TQM is quite
different in the 30 companies according to their responses. We can see in the first item of
the box-plot that the replies are spread very widely. They think the implementation of
TQM is above average in Taiwanese manufacturing industry, as we can see in the third
item of the box-plot. The implementation of KM is above the middle level both in the 30
cases and in Taiwanese manufacturing industry, as shown in the second and the last item
of the box-plot.

Figure 10. Which one to implement first

 390 T. L. Ju et al.
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Figure 11. Current state of TQM and KM implementation in Taiwan

We have analysed all the information gathered from the qualitative research and the
quantitative research. Although the quantitative research is based on a limited set of 30
observations, the findings support our initial themes.

Conclusions
Validity and Reliability Analysis
The purpose of this study is to explore the relationships between the popular management
philosophy in the 1980s – TQM – and the highly valued concept in the 1990s – KM. In
order to achieve this goal, we adopted the case study research method of the qualitative
research to generate themes, and the quantitative research method to refine and support
the validity of the findings from qualitative research. The qualitative research phase of
this study has met the credibility criterion by revealing all facets of the participating
companies and the dependability criterion through two interviewees with diverse perspec-
tives. Both interviewees in this study are knowledge management directors of their
companies. Considering their academic background and practical experiences, we
highly value their contribution towards our research and regard them as qualified intervie-
wees (Miles & Huberman, 1994). To assure a high conformability level, one professor
and two PhD candidates have reviewed the interview questions and the data collected.
Finally, comparing the results with those from the quantitative phase in a similar
context meets the transferability criterion (Hirschman 1986).
Since the study draws on relevant theories, perspectives and literature, the content val-
idity of the interview questions and the questionnaire is sound on theoretical grounds.
Thus, we conclude that our research methodology is valid and reliable.

Research Results
1. Survey of TQM implementation and KM implementation in the manufacturing compa-
nies in Taiwan
 TQM Critical Factors and KM Value Chain Activities 391

Figure 3 and Figure 11 imply that Taiwan indeed pays attention to the TQM critical
factors when introducing TQM.
From Figure 11, we find that in order to sustain growth through competition, manufac-
turing firms in Taiwan have realized the importance of KM and started to introduce it into
their business operation. Although they have not started for long, they are eager to catch up
with those advanced companies. They also look up on their efforts and give above middle-
level rankings in the questionnaires.
2. Identify the role of TQM critical factors on KM value chain activities
In view of the positive role TQM critical factors played on KM value chain activities, we
propose a proposition that TQM critical factors can serve as practical directions for KM.
That is to say, companies can start with these nine factors excluding ‘supplier quality man-
agement’ when practising KM value chain activities. The following are the summary of
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the nine practical directions.

(1) Top management supports the implementation of the four KM value chain activities in
terms of goal setting and resource allocation.
(2) All employees should commit to company’s policies of KM value chain activities.
(3) Set up quality measurement to measure the four KM value chain activities.
(4) Benchmarking other companies that are known for their good practices of KM value
chain activities.
(5) Apply the concept of process management and develop a suitable process for KM
value chain activities.
(6) Apply TQM’s emphasis on quality, customer involvement, and other departments’
participation to KM value chain activities.
(7) Provide training for employees to further understand KM value chain activities.
(8) Authorize the employees to organize formal and informal KM communities.
(9) Value customers’ opinions and satisfaction in the design of the four KM value chain
activities.

3. Determine the importance of KM value chain activities to TQM critical factors

Firms that have engaged in TQM do not have to forsake what they have focused on when
introducing KM value chain activities. In fact, companies can take advantage of the
practical characteristics of KM value chain activities and view them as an action pro-
gramme. Although each KM value chain activity may have a different level of importance
to different TQM critical factors, companies can still make the best connection of them in
view of their own situation.
4. Confirm the complementary nature of TQM and KM
In this study, we explored the possible effects of TQM and KM interaction. The
final proposition is that there exist multiple positive effects between TQM and KM. But
it is still without consensus whether they should be introduced together or one at a
time. We suggest that companies may implement TQM first, KM first, or both at the
same time depending on the circumstances of their own companies. More specifically,
TQM critical factors can work as practical directions for KM implementation, and KM
value chain activities can be treated as an action programme for TQM critical factors.
5. Recommended practical application of TQM and KM
To ensure sustainable competitiveness, an integration of TQM and KM can be one of the
management approaches for many companies. This study takes on a more managerial
 392 T. L. Ju et al.

focus and attempts to develop practical ideas for real-life business applications. Therefore,
the selection of research dimensions is based on the practical point of view, and the ideas
generated can be put directly into practice.

Limitations and Future Research Directions

Due to time and resource constraints, this study has some limitations and some problems
still need to be investigated further.

1. In the qualitative part of this study, we studied only two cases, which may not include
enough information.
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2. We focused only on the manufacturing industry in Taiwan. The research boundary can
be expanded to other industries as well. Furthermore, it would be interesting to
compare the result with the situation in other countries.
3. This research is an exploratory study so the results are only propositions. Although this
study generated only three propositions, they are by no means the only possible
relations between TQM and KM. Further study could be done to find out more
details and more relations.

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