The Effect of TQM on Organizational Performance

DEBRE MARKOS UNIVERSTY
COLLEGE OF GRADUATE STUDIES
THE EFFECT OF TOTAL QUALITY MANAGEMENT ON

ORGANIZATIONAL PERFORMANCE IN BAHIR DAR TEXTILE
SHARE COMPANY
BY:
AREGASH MANDIE
A Thesis Submitted in Partial Fulfillment of the Requirements of the

Award of the Degree of Master of Business Administration (MBA)
Program
ADVISOR: WASIHUN TIKU (PHD)
JUNE, 2018
DEBRE MARKOS, ETHIOPIA
1
THE EFFECT OF TOTAL QUALITY MANAGEMENT ON
ORGANIZATIONAL PERFORMANCE IN BAHIR DAR TEXTILE
SHARE COMPANY
By:
AREGASH MANDIE
Advisor
WASIHUN TIKU (PHD)
A Thesis Submitted in Partial Fulfillment of the Requirements of the

Award of the Degree of Master of Business Administration (MBA)
Program
June, 2018
Debre Markos, Ethiopia
i
Debre Markos University
College of Graduate Studies
This is to certify that the thesis prepared by Aregash Mandie, entitled “the effect of total
quality management on organizational performance in Bahir Dar textile share company”
and submitted in partial fulfillment of the requirements for the degree of “Master of
Business Administration (MBA)” complies with the regulation of the university and
meets the accepted standards with respect to originality and quality.
Name of candidate_____________________ signature ______________ date ________
Name of Advisor ______________________ signature ______________ date _______
Signature of Board of Examiners
External examiner _____________________ signature ______________ date ________
Internal examiner _____________________signature ______________ date ________
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DECLARATION
I hereby declare that this thesis entitled “The effect of total quality management on
organizational performance in Bahir Dar Textile Share Company” with particular
reference to Debre Markos University submitted by me for the award of the degree of
Master of Business Administration, is an original work carried out by me and it has not
been submitted previously in part or full Master, Degree or Diploma.
By: Aregash Mandie

Signature_________________
Date_____________________
i
ACKNOWLEDGMENT
First of all, I express my deep gratitude to the Almighty God for giving me the
strength, patience and guidance to endure and complete this project. I would also like to
express my appreciation to my research adviser Dr. Wasihun Tiku, for his invaluable
comments, encouragement, and expert guidance during the whole process of research
writing.
I also wish to thank all my classmates who have been incredibly supportive and
collaborative over the last few years. My deepest appreciation and thanks go to Tilahun
Tesfaye, as he provided me with all the necessary support, guidance, materials and
constructive criticisms that helped me stay focused from the beginning of this work to the
end.
Last but not the least, my special thanks goes to Bahir Dar Textile Share Company
employees at all levels that assisted me in doing the research, especial thanks to human
resource department, quality department, production department, purchase and store,
and marketing and selling departments for their respective cooperation during
questionnaire distribution and collection.
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TABLE OF CONTENT
DECLARATION ......................................................................................................... i
ACKNOWLEDGMENT ............................................................................................. ii
TABLE OF CONTENT ............................................................................................. iii
LIST OF FIGURES .................................................................................................. vii
LIST OF TABLES ................................................................................................. viii
ACRONYMS .............................................................................................................. ix
ABSTRACT.................................................................................................................. x
CHAPTER ONE ......................................................................................................... 1
INTRODUCTION....................................................................................................... 1
1.1Background of the Study .......................................................................................... 1
1.2 Statement of the Problem ........................................................................................ 3
1.3 Research Questions ................................................................................................. 4
1.4 Objective of the Study ............................................................................................. 4
1.4.1 General Objective ............................................................................................. 4
1.4.2 Specific Objectives ........................................................................................... 4
1.5 Research Hypothesis ............................................................................................... 5
1.6 Significance of the Study ......................................................................................... 5
1.7 Scope of the Study ................................................................................................... 6
1.8 Limitation of the Study ............................................................................................ 6
1.9. Operational Definition of Terms ............................................................................ 6
1.10 Organization of the Study ...................................................................................... 8
CHAPTER - TWO ...................................................................................................... 9
LITERATUE REVIEW .............................................................................................. 9
2.1 Theoretical Literature .............................................................................................. 9
2.1.1 Quality-an explanation ...................................................................................... 9
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2.1.2 The Concept of Quality ................................................................................... 13
2.1.3 TQM definitions and the development of TQM ............................................. 13
2.1.4 Total Quality Management Principles ............................................................ 15
2.1.4.1 Customer focus......................................................................................... 15
2.1.4.2Top management commitment .................................................................. 15
2.1.4.3 Process management ................................................................................ 16
2.1.4.4 Continuous improvement ......................................................................... 16
2.1.4.5 Supplier Quality Management ................................................................. 17
2.1.5 Benefits of TQM Implementation ................................................................... 17
2.1.6 The obstacles to TQM practices ..................................................................... 17
2.1.7 Definition of Organizational Performance...................................................... 19
2.2 Empirical Literature............................................................................................... 19
2.3. Conceptual Framework......................................................................................... 21
CHAPTER THREE .................................................................................................. 22
RESEARCH METHODOLOGY ............................................................................. 22
3.1 Description of the Study Area ............................................................................... 22
3.2 Research Design .................................................................................................... 22
3.3. Target Population of the Study ............................................................................. 22
3.4. Sample Size and Sampling Technique ................................................................. 22
3.5 Data Source and Type............................................................................................ 24
3.6 Data Collection Method ........................................................................................ 24
3.7. Method of Data Analysis ...................................................................................... 24
3.8 Model specification ............................................................................................... 25
3.9 Reliability and Validity of the Instrument ............................................................. 25
CHAPTER FOUR..................................................................................................... 27
DATA PRESENTATION, ANALYSIS AND INTERPRETATION ...................... 27
4.1 Demographic Characteristics of the Respondents ................................................. 27
iv
4.2 Data Analysis Related to TQM Practices .............................................................. 29
4.2.1 Perception of Respondents on Issues Related to TQM Practices ................... 29
4.3 Mean and Standard Deviation of Variables ........................................................... 42
4.3 Relationship between TQM dimension and Organizational Performance ............ 43
4.5 Regression Analysis and Presentation ................................................................... 45
4.5.1 Assumptions and Diagnostics Tests .......................................................... 45
4.5.2 Beta Coefficient......................................................................................... 50
4.5.2.1 Finding and Discussion of the result ........................................................ 52
CHAPTER FIVE ...................................................................................................... 57
SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS ... 57
5.1 Summary of Major Findings ................................................................................. 57
5.1.1 Perception of Respondents on Issues Related to TQM Practices ................... 57
5.1.2 The Effects of TQM practice on Organizational Performance ....................... 58
5.2 Conclusions ........................................................................................................... 59
5.3 Recommendations ................................................................................................. 59
5.4 Recommended Further Studies.............................................................................. 61
REFERENCE............................................................................................................ 62
APPENDIXES I ........................................................................................................ 69
APPENDIX II ........................................................................................................... 76
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LIST OF FIGURES
Figure 2. 1 Conceptual Framework ............................................................................. 21

Figure 4. 1 Gender of respondents……………………………………………………..27
Figure 4. 2 Age of respondents ..................................................................................... 27

Figure 4. 3 Level of Education ...................................................................................... 28
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LIST OF TABLES
Table3. 1 Sample size determination ........................................................................... 24

Table3. 2 Reliability test of variables by Cronbach‟s Alpha ........................................ 26
Table 4. 1 Work Experience……………………………………………………………29
Table 4. 2 Job Position ................................................................................................ 29
Table 4. 3 Continuous Improvements .......................................................................... 31
Table 4. 4 Customer focus ........................................................................................... 34
Table 4. 5 Process Management .................................................................................. 36
Table 4. 6 Suppliers Quality Management ................................................................... 38
Table 4. 7Top Management Commitments .................................................................. 40
Table 4. 8 Mean and Standard deviation of Research variables .................................. 42
Table 4. 9 Correlation between Total Quality Management Practice and organizational
Performance................................................................................................................ 44
Table 4. 10 Durbin-Watson Statistics ......................................................................... 46
Table 4. 11 Multicollienarity test................................................................................ 47
Table 4. 12 Model Summary b Enter Method .............................................................. 48
Table 4. 13 ANOVAa .................................................................................................. 49
T able 4. 14 Coefficients a for the Predictor Variable and Organizational Performance 50
viii
ACRONYMS
ANOVA=Analysis of Variance
BDTSC= Bahir Dar Textile Share Company
CI= Continuous Improvement
CF= Customer Focus
GDP= Gross Domestic Product
HRM= Human Resource Management
OP= Organizational Performance
PM= Process Management
SPSS= Statistical Package for Social Science
SQM= Supplier Quality Management
TMC= Top Management Commitment
TQM= Total Quality Management
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ABSTRACT
This study investigates the effect of TQM and its dimension towards organizational
performance in Bahir Dar Textile Share Company. The sample size of this study was
308 employees from 1385 total target population of Bahir Dar Textile Share Company.
The researcher applied the explanatory research design and employed a quantitative
data analysis method. The samples were selected randomly from the population after
creating strata. Hence, stratified random sampling technique was employed. In this
study, primary sources of data were used. The collected data was analyzed using
descriptive statistics such as frequency tables, percentage, charts and inferential
statistics such as correlations and regression analysis. The findings of this study
indicated that there is a significant and moderately positive relationship between TQM
dimension and organizational performance. Again the findings revealed that TQM
dimension has a significant effect on organizational performance. The study concluded
that the successful implementation of quality management practices to generate the
desired performance and which should be planned, systematic and implemented by
Bahir Dar Textile Share Company to this further result as organization productivity
growth and performance. This study has forwarded as recommendations the
government as well as the Share Company has to work more with the improvement of
the current total quality management measures by taking into account the performance
of the organization.
Keywords: Bahir Dar Textile Share Company, organizational performance, TQM practice
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CHAPTER ONE
INTRODUCTION
This chapter includes a description of background of the study, statement of the
problem, research question, research hypothesis, and objective of the study, significance
of the study, scope of the study, limitation of the study and organization of the study.
1.1Background of the Study

Total Quality Management is the culture of an organization to commit to customer
satisfaction through continuous improvement. This culture varies from one country to
another country and between different industries, but has certain essential principles,
which can be implemented to secure greater market share, increase profit and reduce
costs (Kanji, 1997). This statement emphasizes that creating a quality culture within an
organization is recognized as one of the primary condition for successful
implementation of TQM.
The core values of TQM represent how to encourage and motivate employees to the best
way to improve their capabilities, skilled, commitment and productive by giving them
relevant information, power, knowledge, and rewards. So logically, the significant
expected effect of the TQM principles will be on the firms overall business results.
Besides most of the previous studies point out that productivity is one of the measure
business performance directly affected by application of the TQM principles (Ahire et
al.,1996).This means that the adoption of TQM concepts leads to inspiring employees
to succeed and grow, then improving their performance and productivity (Okland,
1993).
In such a competitive environment resulted from world globalization and liberalization,

firms survive with much difficulty unless they create the competitive advantage over
their competitors (Samson and Terziovski, 1999). With the increasing competitive,
business survival pressure and the dynamic, changing customer-oriented environment,
total quality management (TQM) has been recognized as one of the important issues and
generated a substantial amount of interest among managers and researchers (Ahire et al,
1996). Since 1989s, TQM has been regarded as one of effective ways for firms to
improve their competitive advantage. Leading pioneers in the quality area, such as
(Deming, 1986) and (Juran, 1993), asserted that competitive advantage can be gained by
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providing quality products or services. Additionally, (Eng and Yusof, 2003) argued that
quality holds the key competitiveness in today‟s global market.
The benefits of quality improvement can not only be reflected on decreasing costs, but
also on maximizing business profits. In terms of quality improvement, what really
counts for a firm is not just cost minimization, but the effect of superior quality has on
maximizing profits (Freiesleben, 2005). Thus, the study of the relationship between
quality management and firm performance is critical for managers and researchers to
better understand the effects of quality management onto different levels of firm
performance.
Ethiopia has potential for the development of the industrial growth due to its natural
resources bases. However, the industrial sector has not been adequately developed and
its contribution to the national gross domestic product (GDP) and employment has been
limited. According to National Account Statistics Estimate (2002), Ethiopian Fiscal year
the industrial sector has 23% share of GDP and it grew by 20% in the year 2009/2010.
The manufacturing sector has 43% share of Industrial sector and textile industry is one
of the main Industries in this sector.
In order to make Ethiopian textile industries more prosperous and competitive, it proves
to be worthwhile to investigate how TQM may affect business performance. From the
discussion above, this study attempts to examine the relationship between TQM
practices and various levels of organizational performance with a special focus on
Textile Industries in Ethiopia.
Since 2010 the Ethiopian government has put effort to improve, support and expand the
textile industry, both in serving the domestic market but mainly with the aim to export
and be competitive at the global market. Ethiopia has potential of building a textile
industry with governmental support, offering low-cost production, raw material and
with a growing young population eager for jobs. Ethiopia‟s government is apparently
placing special emphasis on the Textile industry by 2016; the country aims to export
more than a billion dollars worth of apparel. Bahir Dar Textile Share Company is one of
the industries which established in 1961 EC, produce garments and apparel for the local
as well as the global market. In order to get competitive advantages in the market, it
needs to put into practice incremental change like TQM, so as to increase performance
and to hold up the country economy. Therefore, this study aims to investigate the effects
of TQM implementation on organizational performance.
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1.2 Statement of the Problem
In today‟s manufacturing companies compete by applying various competitive strategies
and this competitive strategies will help them to win advantages over the competitors
who are engaged in the industry. One of the strategies companies that use is improving
the quality of the products that they are producing than that of the other companies. So
as to do this, they must implement the TQM practices and procedures which are
essential to improve quality of products as well.
Studies investigating the relationship between „hard‟ and „soft‟ TQM factors and
organizational productivity have revealed diverse results. This may be attributed to
focus on different types of TQM practices as well as the use of different measures of
organizational performance across the different studies. Prajogo and Sohal (2004),
stated that different practices embodied in TQM show a different role in predicting
different types of OP. Powell (1995) investigated the relationship between TQM
practices and performance (as measured by “total performance” consisting of five items
and “TQM performance” consisting of eight items). Their findings found that TQM can
produce economic value to the company. In particular, the study found that practices,
including Employee empowerment and executive commitment are highly correlated
with TQM success than “hard” aspects of TQM such as process improvement,
benchmarking, and improved measurement. However, another study conducted by
(Samson and Terziovski, 1999) to determine the association between TQM practices,
individually and collectively, and company performance in Australia showed that some,
but not all, of the categories such as leadership, management of people, and customer
focus were the strongest significant predictors of operational performance.
There are some contradictory findings in the literature, for instance, in contrast to the
(Powell, 1995) findings, (Gadenne and Sharma, 2009) found that improved overall
performance was favorably influenced by a combination of both hard and soft TQM
practices. Demirbag and Koh (2006) investigated the impact of TQM implementation on
OP of SMEs in textile manufacturing companies in Turkey; they reported a significant
and positive impact of TQM implementation on non-financial Organizational
Performance but a poor impact on financial performance.
According to Alkhafaji et al (1998), TQM philosophy can be applied to any

organizations, including manufacturing, and beverage industries. Most of developing
countries enterprises like brewery, textile, sugar, flour, and other Agro-processing
industries are very low in their productivity as compared to other developing and
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developed nations as mentioned on there should be a change, representing nothing short
of breakthrough for those organizations to halt productivity decline, such a change can
be brought through management styles like TQM. However, the adoption of the
ideology by most organization has been hampered due to their non compliance with the
procedures and principles of TQM implementation. While some organization, run TQM
like a program which they expect to function and perform the magic all by itself, others
have used a half hearted approach to it, by using some bits and pieces of the principles.
This has accounted for the failure of most organization in matting up to their expected
target from implementing this ideology (Alkhafaji etal, 1998). There is a need to
continue to buttress the benefit that accrues to organizations from the implementation of
TQM, especially in developing economies, such as Ethiopia where the adoption of these
principles seems farfetched by organizations.
The question of TQM and organizational performance has not exhaustively under
investigation in Ethiopian context particularly in textile industry. Thus, this thesis
proposes a framework to investigate the current status of TQM implementation and its
effect on organizational performance in Bahir Dar Textile Share Company, accordingly
making TQM initiatives more efficient and active in Ethiopian Textile Industry.
1.3 Research Questions

In view of the problems, the researcher formulates the following research questions
1. Does continuous improvement affect organizational performance in BDTSC?

2. Does customer focus strategy affect organizational performance in the company?
3. Does practicing process improvement strategy affect organizational performance
in the company?
4. How supplier quality management strategies affect organizational performance
in the company?
5. How top management commitment affect organizational performance in the
company
1.4 Objective of the Study
1.4.1 General Objective

The general objective of this study was to investigate the effect of Total Quality
Management on Organizational Performance in Bahir Dar Textile Share Company.
1.4.2 Specific Objectives

The specific objectives of this study are: -
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 To examine the effect of continuous improvement on organizational
performance in BDTSC.
 To evaluate the effect of customer focus on organizational performance in
BDTSC.
 To evaluate the effect of process management on organizational performance in
BDTSC.
 To examine the effect of supplier quality management on organizational
performance in BDTSC.
 To examine the effect of top management commitment on organizational
performance in the BDTSC.
1.5 Research Hypothesis

In this study the following hypothesis were developed in order to investigate the effects
of TQM practice on organizational performance:
H1: Continuous improvement has a positive significant effect on organizational

performance.
H2: Customer focus has positive significant effect on organizational performance.
H3: Process management has a positive significant effect on organizational

performance.
H4: Supplier quality management has a positive significant effect on organizational

performance.
H5: Top management commitment has a positive significant effect on organizational

performance.
1.6 Significance of the Study

After it has been conducted; this study will have its own contribution. Some of
contributions of this study are listed as follows:
 It will help the company to know its status of total quality management
implementation and to take corrective action if it is necessary.
 The research outcome would be an important input into the company to make
the necessary adjustment and improvement based on the recommendation of the
study.
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 It helps to create awareness about the effects of TQM on organizational
performance and assist to understand effects of TQM practices in managing
human and other resource to achieve the common goal and objective in BDTSC.
 It will be helpful as a stepping stone for further study in the subject matter.
 It will help the researcher, to increase the knowledge about the total quality
management practice and its effect on organizational performance.
1.7 Scope of the Study

This study is also conceptually limited to the effect of total quality management on
organizational performance. Even though wide range of variables may be expected to be
studied; this study were contemplated on examination of total quality management and
organizational performance, under TQM practices only the following variables are
taken as the studying variables such as ; continuous improvement, customer focus,
process management, supplier quality management, and top management commitment.
Geographically, this study is also delimited only one textile manufacturing company of
Bahir Dar Textile Share Company. Methodologically, the study applied explanatory
research design and stratified random sampling technique were used to determine the
sample size. A structural Self-administered questionnaire with closed ended questions
was used to collect data.
1.8 Limitation of the Study

The researcher proposes that, there are some limitations. The geographical scope of this
study was limited in BDTSC only. This study employed the cross sectional data and it is
difficult to determine the time series link across variables. Hence, the research result
may differ if it is conducted in other time. Conceptually this study was contemplates on
examination of total quality management practices of five variables (continuous
improvement, customer focus, top management commitment, suppliers quality
management and process management would be taken as studying variables.
1.9. Operational Definition of Terms

To clarify the language of this study, the following definitions have defined.
Total Quality Management: - It is a comprehensive and structured approach to

organizational management that seeks to improve the quality of products and services
through ongoing requirements in response to continuous feedback (Nechi, 2012).
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Continuous improvement: A continues effort to find new ways and techniques in
producing better quality products and services. Production, be more competitive, as well
as exceed customer expectations (Al-Damen, 2017).
Customer Focus: - The degree of an organization toward serving its clients' needs and
expectations. By determining the customer‟s needs, as well as to receive feedback on
the extent to which those needs are being met., and through involving the customer in
the product design and development process, and focusing in achieving greater customer
satisfaction (Al-Damen, 2017).
Process management: - Process management deals with how organization designs and
introduces the product and services. It integrates production and delivery requirements
that include relationship management with the suppliers (Brah and Tee, 2002).
Supplier quality Management: - The set of supplier-related quality management
practices for improving suppliers‟ quality of products and services. This is exemplified
by firm-supplier partnership, product quality as the criterion for supplier selection,
participation in suppliers, communication with suppliers, understanding of supplier
performance, and supplier quality audit (Zhang, 2000).
Organizational Performance: - A set of financial and nonfinancial indicators which
offer information on the degree of achievement of objectives and results (Al-Damen,
2017).
Top management commitment: It is the degree of acceptance of quality responsibility
by top management, and participation in quality improvement efforts and monitoring
this application. Including, identifying culture for quality, commitment for quality
improvement, guiding and affecting the company in setting quality strategy direction
and sustaining effective leadership through the organization. They set policy, plan
strategy and launch tactics for staff to execute (Al-Damen, 2017).
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1.10 Organization of the Study
The research consists of five chapters. Chapter one the introductory part contains
background of the study, statement of the problem, research questions, research
objectives, significance of the study, scope and limitation of the study, operational
definition of terms and Organization of the study. Chapter two provides a theoretical,
conceptual and empirical literature review informing the reader of what is already
known in this area of study. Chapter three discusses the methodology employed in the
study, including, research design, sample size and sampling technique, data source and
collection method, procedure of data collection and method of data analysis. Chapter
four describe the data presentation and interpretations based of the finding. Finally,
chapter five contains summary of major finding, conclusions and recommendations.
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CHAPTER - TWO
LITERATUE REVIEW
Introduction
In order to access the suitability of the various of TQM for the Ethiopian Textile Factory
context, this chapter will provide a brief conceptual framework of Quality, TQM
philosophy in terms of its definitions, development of TQM and its practices, critical
success factors, obstacles and benefits. The chapter further provides information,
empirical studies based on both Quality modes and other framework established in both
developing and undeveloped countries. The final section of this chapter focuses on
reviewing organizational performance associated with TQM implementation.
2.1 Theoretical Literature
2.1.1 Quality-an explanation

Revisiting the literature review on definitions of Quality, it is obvious that there is no
general agreement about which quality philosophy organizations should follow.
Therefore, the perspectives of all of the following: Crosby, Deming, Feigenbaum,
Ishikawa, Juran, Shewart, Taguchi are examined because they are well known for their
contribution as well as their role in advancing Quality in the 20 th century. Their
definitions of quality fit into two general classifications:
1- A simple matter of manufacturing products or delivering services whose

measurable characteristics meet a fixed set of specifications that are usually
numerically defined.
2- Implies that quality products and services are simply those that satisfy customer
expectations for their use or consumption.
The definition in classification 1 urges that Quality means to produce a product (or
to provide a service) according to the predefined specifications and classification
two urges to satisfy the customer.
The essence of Phil Crosby‟s definition of Quality is strictly a classification in

which the quality of a product or service is equivalent to being sure all measurable
or to be more accurate, all measurable -characteristics of the product or service
satisfy the characteristics‟ specification criteria. The main essential points of his
definition are (Crosby, 1979).
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 It is essential to define quality as conformance to requirements if we are to
manage it.
 The customer deserves to receive exactly what we have promoted to
produce. Means, we must know somehow the requirements, and translate
them (whenever possible) into measurable product or service characteristics.
 With requirements stated in terms of numerical specifications, we can
measure the characteristics of a product (diameter of a hole) or service
(customer service response time) to see if it is of high quality (zero defects).
Zero defects are the attitude of defect prevention. It means (do the job right
the first time).
It is not at all clear from Crosby‟s definition whether there are many different levels of
Quality or merely two levels acceptable and unacceptable. Is it the case, for example,
that all product or service units that conform to the requirements are of equal quality?
Crosby does not address this issue, but one gets the impression that his answer to this
question is (yes).
Deming (1988) perspective of Quality is clearly consistent with the second level of
classification. Deming„s essential arguments are:-
 Quality must be defined in terms of customer satisfaction.

 Quality is multidimensional. It is virtually impossible to define the quality of a
product or service in terms of a single characteristics or agent.
 There are definitely different degrees of quality. Because quality is essential
equated with customer satisfaction, the quality of a product will highly depend
on degree of satisfying customer‟s needs expectations.
Quality is obviously a level two definition. The main essential points of his definition
are (Feigwnbaum, 1983):-
 Quality must be defined in terms of customer satisfaction.

 Quality is multidimensional. It must be defined comprehensively.
 Because customers have changing needs and expectations, quality is dynamic.
It means that, as the quality assessment is up to the customer, we need to be close to our
customer to measure their satisfaction and to have the ability to translate the customer‟s
satisfaction into product characteristics. This becomes essential. He emphasizes the role
of marketing and production for the first evaluation of the level of Quality customers
10
want how much they are willing to pay for it. The second reduces this marketing
evaluation to the customers‟ exact specifications. However, determining how much
customers are willing to pay to obtain an approximation of their ideal product (or
service) and then translating that information into specifications for a variety of product
(or service) characteristics can be the real challenge for every TQM expert. In addition,
(Feigwnbaum, 1983), notion seems fairly weak on the filling of translating customer
expectations into product or service characteristics. Yet, the basic components and
issues of a modern quality focused organization are will outlined in his book Total
Quality Control (TQC).
Ishikawa‟s definition of quality makes it clear that the proof of high quality is the
satisfaction of ever changing consumer expectations (Ishikawa, 1985). The essential
points of his definition are:
 Quality is equivalent to consumer satisfaction;

 Quality must be defined comprehensively. It is not enough to say the product
is of high quality; we must pay attention to the quality of every part of the
organization‟s role; the customer‟s needs in achieving this ideal and note that
this will be always changing. Hence, the definition of quality is ever changing.
 The price of a product or service is also important when evaluating its quality.
Ishikawa believes that no matter how high the quality, if the product is
overpriced, it cannot gain the customer‟s satisfaction. Therefore, quality
cannot be defined without considering price.
Juran (1974) defined quality as fitness for use. The first part of the definition itself (use)
is apparently linked to customers‟ needs, and the second part (fitness) suggests
conformance to measurable product characteristics. This definition however implies an
understanding g of the relationship between customer satisfaction and the conformance
of product characteristics to product specifications (Juran and Gryna, 1988). In addition,
Juran‟s definition of Quality obviously includes two levels; level one (linking product
characteristics and buyer‟s needs) and level two (linking quality with the absence of
nonconformity) (Juran, and Gryna, 1988).
Ishikawa‟s definition of quality is a level two definition. He is very insightful and has a
great deal to say the in-plant, practical level. He does not, however, have much to say
about how manufacturing procedures can be designed to assure the satisfaction of
customer needs and expectations.
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Taguchi defined Quality as the avoidance loss of a product to society after being
shipped (Taguchi and Wu, 1979), the losses to society with respect to the product
quality fall into two main groups: the first losses incurred as a result of destructive
effects to society e.g. pollution and the second losses incurred because of excessive
variations in functional performances. This indicates that the cost of quality should be
measured as a function of product performance variation and the losses measured
system wide. The main essential points of his definition are:
 The measurement of the quality of a manufactured product is the total loss

generated by that product to the society;
 To control the quality of a product, the focus is on “achieving the targeted
values and minimizing the variability around the target value”, instead of
“achieving conformance to the specification.
Taguchi‟s objective is to focus on minimizing loss to society in order to maximizes

quality process and product design can be improved through the identification of
controllable factors and their settings, which minimize the variation of a product around
a target response.
Garvin (1987) provides a well-known framework for thinking about product quality that
is based on eight dimensions; performance, features, reliability, conformance, durability,
serviceability, aesthetics, and perceived quality. Garvin does argue that these eight
dimensions can be used to explain variations among the five traditional approaches to
defining quality. Therefore, all definitions of quality are classified into five approaches
to quality, as the following points show:
1. Transcendental approach quality simply cannot be precisely defined. Quality may be

recognized only through experience;
2. Approach directed to the product- quality is linked to precisely defined product
properties;
3. The approach focused on user‟s (or buyer) satisfaction;
4. Manufacturing approach - quality is linked to the fulfillment of specifications.
5. Value approach –quality is linked to the relationship between the realized value and
costs.
Garvin particularly favored the product –based approach focusing on performance,

features, and durability; the user-based approach focusing on aesthetics and perceived
12
quality; and the manufacturing-based approach focusing on conformance and
reliability” (Garvin, 1984). From the above it is conclude that the range of definitions of
quality shows clearly that there is no one agreed upon definition. What is clear that
quality is multi-dimensional value and its dimensional varies from organization and
organization? Garvin(1984) has noted that these multiple in order for firms to address
quality issues that change as products move through various stages, from design,
through production and to the market (Garvin, 1984).
2.1.2 The Concept of Quality

Quality is a significant element of production or services in keeping the customers
satisfied. There are different definitions and views of the term quality by different
people and the common element of the business definitions is that the quality of a
product or services refers to the perception of the degree to which the product or
services meets the customer‟s expectations.
Crosby, (1979), defined quality as the conformance to requirements to specifications

and also suggested that to manage quality adequately; it must be able to be measured.
2.1.3 TQM definitions and the development of TQM

Over time, Quality in manufacturing terms has developed from Inspection to TQM.
Indeed, it is generally thought, that the Egyptians were the first to use Inspection as a
test of Quality when building the pyramids. In the Second World War, when aircraft
Technology became more complex, the inspection technique was impractical due to its
cost in staff and equipment (Kanji, 2002). Inspection developed into quality control in
which Quality manuals, document control, self inspection, product testing in addition to
the use of statistics, become the control systems used to assure product quality. The
subsequent stage was to move from the focus on product quality through quality
circle(QC), to Quality Assurance or QM where the focus on the quality of the system,
which encompasses audits, process control, cost of poor quality and non- production
operations are used (Kanji, 2002). As mentioned above, the understanding of Quality
developed into TQM where Quality is managed through principles and practices with in
all sections of the operational units of the organization. Just as there are many
definitions of Quality, there are many definitions of TQM. The next section will provide
the various TQM concepts as defined by well known quality gurus: all of these should
be examined for their appropriateness in the present context.
13
Juran (1974) defined TQM as „fitness for use‟, which came to be viewed as a key to all
encompassing means of business success in the 1990s when compare with other
established performance indices, such as price and delivery. Juran (1974) introduced
the concept of quality trilogy: that, in order to execute continuous improvement, work
based training should be implemented on a frequent basis. Quality management is the
approach that concerns the prevention of problems occurring by creating the attitudes
and controls that make such prevention operational (Crosby, 1979). Crosby emphasized
the phrase „Do it right the first time‟ and the notion of „zero defects‟, indicating that a
prevention based system is crucial to achieve this. He also used the phrase „ quality is
free‟, arguing that efforts to achieve quality would pay back more than the cost involved
in terms of savings in waste, reworking, inspection and returns. As with Deming, and
Juran, Crosby also stressed the role of management in quality improvement efforts and
the use of statistical process control in measuring and monitoring quality.
Ishikawa (1990) argued that TQM is characterized by the strategic goals that are
focused towards the customer‟s preferences, likes, tastes, and applications. He is known
for developing various statistical tools for quality problem solving and emphasized the
idea of „internal customer‟, that is, the next person in the process. Furthermore,
(Ishikawa, 1990) also advocated the idea of Quality Circles, which is a small team of
employee experts who deal with quality problems. (Taguchi, 1999), stressed that
companies should focus their quality efforts on product design stages, and called this
„robust design‟, because it is much cheaper and easier to make changes during the
design process rather than during the production phase. Kanji and Yui (1997) developed
a benchmarking toll for quality and argued that it is necessary for top managers to
develop a „quality culture‟ within an organization by taking an active leadership role
and involving all employees.
Zairi (1998) provided a comprehensive toll for organizations to undergo a two-stage

external and internal benchmarking exercise, and stressed the role of leadership for
implementing continuous improvement. TQM philosophy is the effective initiative that
produces a wide range of benefits, which include improved internal communication,
better problem solving, greater employee commitment and motivation, stronger
relationships with suppliers, understanding of customers needs, improved customer
satisfaction, fewer errors and reduced waste (Powell, 1995). However, TQM is mostly
implemented in the manufacturing/operations function with little progress in other
functional areas (Sohal and Terziovsk, 2000). More recently, (Kanji, 2002) defined
14
TQM as a philosophy applied throughout the world in all types of organizations. He
defined TQM particularly as a management philosophy that fosters an organizational
culture, committed to customer satisfaction through continuous improvement. Since
TQM is so fundamental to business, it is applicable to all organizations. However, the
definitions of TQM vary slightly from country to country and from culture to culture.
In summary, the essence of quality is do it right the first time, and satisfy customers‟
requirements all the time, through the involvement of everyone in the organization.
TQM is therefore a philosophy of management that aims to make the best use of all
available resources and opportunities through continuous improvement. It requires
sufficient time to reach the maturity of QMS and it is dynamic. Since the 1970s, TQM
has been deemed essential for improving efficiency and competitiveness and a key
business improvement strategy.
2.1.4 Total Quality Management Principles

There is a consensus view that companies should follow a number of principles in an
integrated way for successful TQM implementation .Furthermore, to determine critical
factors of total quality management, various studies have been carried out and different
instruments were developed by individual researchers, Such as Flynn et al. (1994),
Ahire et al. (1996).
2.1.4.1 Customer focus

Organizations rely on their customers, so they must understand the current and future
needs, and achieve their needs, and work to exceed their expectations. This is achieved
through research and understand all the needs and expectations of the customer in terms
of products, services and delivery date, price and reliability, and to link the goals
established with the needs and expectations of the client, and follow the way of ensuring
Alkhafaji et al. (1998) a balance between the needs and expectations of customers and
other stakeholders (owners, employees, suppliers and the community), and inform all
levels in the facility this needs and expectations, and measure customer satisfaction and
act according to the results, customer relationship management to achieve the common
interest.
2.1.4.2Top management commitment

Total Quality philosophy derives its strength from the commitment of senior
management in the application of total quality management in various organized
activities. Leadership should play a key role in the establishment of a clear future vision
of the facility, the development t of common values , justice and models of moral
15
principles at all levels of the facility and maintain them, build trust and eliminate fear,
and support personnel with the necessary resources and adequate training motivate
employees and encourage the spirit of enthusiasm in them and appreciate the positive
efforts, encouraging open communication, and improve awareness, education ,training
of workers, and exhibit their commitment to quality by example.
This element is considered as an important tool of TQM as it examines the senior
Executives, leadership and personal involvement to provide direction for maintaining
and building a system that enhances organizational performance. Leadership is liable for
the Setting of goals that lead the organization towards increased performance. Deming
(1986) provided that leadership is responsible to implement a quality Process in the
organization.
2.1.4.3 Process management

Process management deals with how organization designs and introduces the product
and services. It integrates production and delivery requirements that include relationship
management with the suppliers (Brah and Tee, 2002). Deming (1986) said that
improvement in the quality lies in the handling and controlling of the process. Many
organizations found major improvement in the performance through the process
redesigning and reengineering.
Desired outcome achieved more effectively and efficiently when resources and activities
are managed as a process-related. This is achieved by: identifying the activities needed
to achieve the desired result, and measure the inputs and outputs of the process, and to
identify the communication channels of main activities of the business, and the risk
assessment results and the potential impacts of operations on customers, suppliers and
other stakeholders, define clearly the responsibilities and authorities of the of the
management of main activities. The focus should be on how best design, manage and
improve processes in order to fully satisfy, and generate increasing value for, customers
and other stakeholders (Al-Damen, 2017).
2.1.4.4 Continuous improvement

A major component of TQM is continual improvement. Continual improvement leads to
improved and higher quality processes. The term continues refers to both incremental
and breakthrough improvement. Continual improvement ensures companies find new
ways and techniques in producing better quality products, production, be more
competitive, as well as exceed customer expectations. Continues improvement is
16
designed to ensure efficient and effective utilization of the resources of the organization
and to achieve a quality driven culture (Al-Damen, 2017).
2.1.4.5 Supplier Quality Management

The success of TQM is vastly depending upon the organization's ability to satisfy and
fulfill the interests of various stakeholders. Suppliers' ability to fulfill the needs of the
organization, in terms of delivering quality input, is however also crucial for the
organization. The importance of creating and sustaining superior supplier relationships
is widely emphasized in empirical studies, as the quality of input, such as purchased raw
materials, is directly related to the organizational product (Al-Damen, 2017).
2.1.5 Benefits of TQM Implementation

The effective implementation of TQM will increase customer satisfaction with the
service offering (Freiesleben, 2005). Quality enhances customer loyalty through
satisfaction; this in turn can generate repeat and lead to the attraction of new customers
through positive word of mouth. The word of mouth communication will help in cost
reduction. This will provide competitive edge to the company.
Total quality management is a management philosophy which emphasizes devolution of

authority to the front line staff. It insure the participation of everyone in the decision
making process through activities such as quality cycles and teamwork. The question is,
does this devolution of authority leads to employees‟ satisfaction or not?
The implementation of TQM ensure that every worker in the organization does his work
with quality the first time, thus improving the efficiency of operation and avoiding
some associated with waste. This in turn will offer more value to customers in term of
price and services quality, thus making them satisfied.
2.1.6 The obstacles to TQM practices

When implementing a TQM program, many companies face unique problems resulting
from their own external and internal environments (Ljungstrom and Klefsjo, 2002).
Identifying the obstacles that hinder TQM implementation can be used to assist in
guiding managers in performing self-audits of their current implementation of TQM
program and to develop effective strategic policies and related action programmers
planned to overcome the barriers. Dale (2000), found that the lack of success of TQM is
not as a result of the concept but rather the way it had been introduced into an
organization and used by managers; it is expected that many fundamental mistakes will
be made by senior managers in additional to their advisers in issues related to
17
communication, training, infrastructure, teams and projects, involvement, problem
solving, and measurement. Overall, they add that there is a fundamental failure of
management to stick to the basics (Dale, 2000). Another study carried out by (Amar and
Zain, 2002) to examine the barriers faced by manufacturing organizations in the
implementation of TQM identified 11 pertinent factors acting as barriers that are most
frequently faced by Indonesian organizations. These are issues relating to employees,
management, attitudes towards quality, organizational culture, interdepartmental
relations, raw materials, machines and equipment, information, method and training.
However, the most frequent barriers according to results of the above study, pertains to
the human resources factor, (Bayazit, 2003) reported that lack of qualified quality
consultants, the conflict between management structure and TQM, the difficulty in
developing company specific models, the difficulty in achieving teamwork among
employees were the most frequent difficulties faced by Turkish manufacturing
companies when implementing TQM. Rad (2005), also investigated barriers that hamper
the success of TQM implementation in developing country and concluded that the
failure of TQM may be due to two key reasons; methodology and implementation.
Methodology refers to the techniques and tools being employed to improve a process;
these should be suitable and sufficient to improve a process.
On the other hand, the failed implementation of TQM is due to several factors mostly
related to human resource problems such as lack of non monetary motivation
mechanisms for support employees‟ involvement and low wages and salaries and
culture problems (Rad, 2005). Other researchers discussed the causes of management
inadequacies in handling change initiatives such as TQM and concluded that such
inadequacies could be contributed to the lack of knowledge about TQM, mobility of
management, and avoiding taking risk in the interest of maintaining the status quo. In
order to maintain top management commitment, the knowledge of TQM principles and
stability of management need to be present as other important factors that lead to
maximize management efforts towards TQM success (Soltani, 2005). More recently,
(Bhat and Rajashekhar, 2009) empirically investigated the barriers that Indian industries
experience and found that lack of customer orientation; lack of employee involvement
and management commitment; lack of planning for quality and resources, employee
resistance to change, and no benchmarking of other company‟s practices are the most
important TQM barriers.
18
2.1.7 Definition of Organizational Performance
Performance measurement tools can also be availed within the organizational
framework. Activities around this area establishes the most important client needs,
identifying specific quantifiable outputs and establishing targets against which results
are to be scored. A variety of perspectives exists on the best approach to measure and
quantify organizational performance depending on the dynamics of the industry.
Measuring profitability margins highlight the amount a given organization has invested
in its operations. Raw growth revenue is important as it highlights the organizational
expansion capacity and the scope of potential economies of scale. The market share of
an organization can also be used to highlight its success relative to its immediate
competition. In manufacturing organizations, brand loyalty can also be used to gauge
the consumer loyalty and overall retention. It is only through performance that
organizations are able to grow and progress (Crosby, 1979). In a manufacturing setting,
knowing the determinants of organizational performance is the key in predicting the
future, considering the numerous economic crises and shocks that have hit the economic
landscape in the globe. The factors that are of most impact are isolated and then treated
with utmost interest so as to ensure superior performance (Zabel and Avery, 2002).
Further on, knowing the factors that generate success and how they can be measured is
of critical importance.
2.2 Empirical Literature

Total Quality Management is truly generic as it can be implemented in both
manufacturing and services sectors and despite their different natures; they face similar
problems in realizing the full benefits of TQM (Huq and Stolen, 1998). The
implementation of quality program is gaining acceptance as a way of maintaining a
competitive edge, of simply surviving in fiercely competitive market or increasing
performance and productivity. From this perspective, product development or service
development, and cost reduction is imperative (Al-khalifa and Aspinwall, 2000).
Small manufacturing companies that would face difficulties, in implementing TQM
programs such as size related difficulties, the lack of bargaining power against suppliers,
and lack of resources can focus on internal changes to improve quality, reduce
inventory, and encourage employee participation and can, in general help to achieve
competitive advantages in both domestic and international markets (Lee, 2004) .
Das et al., (2006) found a positive association between TQM implementation and
organizational performance and five of TQM principles, customer focus, continuous
improvement; top management commitment, employee involvement, and product
19
innovation have a significantly positive effect on product quality, recommending the use
of reward and recognition for involving employees in TQM efforts. Salaheldin (2009)
revealed that the implementation of TQM has a positive effect on both the operational
and the organizational performance. The results show that customer focus, continuous
improvement, top management commitment, employee involvement and product
innovation are significantly and positively related to product quality.
Sadikoglu et al. (2014) found that different TQM practices significantly affect different
performance outcomes. Abuzaid (2015) indicated that the Jordanian private hospitals
applying the total quality management practices with high degree. The highest focus of
private hospitals within total quality management practices is on customer orientation,
supplier management, and high support from top management to the quality efforts and
a concern from the target hospitals in participation of employees in quality management
activities. Most empirical studies seem to agree with those of Powell (1995), Hendricks
and Singhal (1997) that TQM practices has a positive impact on organizational
performance. In Powell‟s study (1995), data from 166 American firms were used to
show that overall performance of TQM correlated positively and significantly with both
implementing TQM and its degree of advancement or organizational performance.
Although the empirical literature suggests a positive link between TQM and
organizational performance, the level of contribution attributed to TQM was not large,
suggesting that there could be other variables at play. Those variables could be the
differences in the processes of implementing TQM with respect to economic trends, the
type of industry, the business environment including technology, competitiveness and
market, corporate strategy, resources of firm, etc. Prajogo and Brown (2004) conducted
an empirical study on Australian organizations to investigate the relationship between
TQM practices and quality performance. The results indicated a strong and positive
linkage between those two variables. Brah and Tee , (2002) examined the relationship
between TQM constructs and organization performance by measuring the quality
performance of Singapore companies. They found that TQM and performance were
positively correlated.
Another wave of research has focused on the study between TQM and financial
performance; Fotopoulos et al (2009) studies show that firms that focus on improving
the quality of their product and processes improve revenues and reduce costs. So the
financial performance of a firm as a result of quality initiatives can be measured by the
increase in the level of sales and revenues, the level of cost reduction, the return on
investment, and by the increase in market share.
20
Hendricks and Singhal (1997) compare recipients of quality awards with a group of
“control companies”. Using operating income, sales, return on assets, return on sales as
a measure of performance, they found that companies that had received a quality award
outperform those that did not receive the awards. These results were confirmed by
Easton and Jarrell (1998) studies.
2.3. Conceptual Framework

The independent variable is Total Quality Management. The indicators of total quality
management are continuous improvement, customer focus, process improvement,
supplier quality management, and top management commitment. The dependent
variable is Organizational Performance.
Figure 2. 1 Conceptual Framework
Total Quality Management

Continuous
improvement
Customer Focus
Organizational
Performance
Process improvement
Supplier quality
management
Dependent variable Dependent variable
Top management
commitment
Independent variable
Source: (Jaafreh and Al-Abedalla, 2013; Al-Damen, 2017; Aysel etal., 2014; and
Shafiq etal., 2017).
21
CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Description of the Study Area

Bahir Dar, the capital of Amhara National Regional State, is situated on the southern
shore of Lake Tana, the source of Blue Nile River, approximately 565 kms northwest of
Addis Ababa at an altitude of 1801 m.a.s.l, having latitude of 11038′′N and longitude of
37010′′E. The average elevation in the town is about 1795 m.a.s.l with “Woina Dega”
type of agro ecological zone. The town covers an area of about 16,000 hectares. The
study area experiences average annual rainfall that ranges from 1200 to 1600 mm and it
has mean annual temperature of 26°C. It is a rapidly expanding town with commercial
centers, small industries, and residences in all sectors of the town. The textile factory
located at the edge of head of Blue Nile River discharges its effluents directly into head
of Blue Nile River. .
3.2 Research Design

For this study the researcher was apply the explanatory type of design to analyze the
data. According to Saunders et al (2007), explanatory research design is that establish
causal relationship between variables may be termed explanatory studies here is on
studying the problem in order to explain the effect of TQM on organizational
performance. It enables the researcher to analyze the effect of independent variables
(TQM practices) on dependent variable (Organizational Performance).
3.3. Target Population of the Study

There are 1495 total employees in Bahir Dar Textile Share Company. For the purpose
of this study, the researcher identified the entire permanent employees of 1385 workers.
From this 502 are females and 883 males.
3.4. Sample Size and Sampling Technique

The researcher was used stratified random sampling for this study appropriate for
selecting samples from the population. Stratified random sampling allows us to take into
account the different subgroups of people in the population (such as different divisions
& departments) and helps guarantee that the sample accurately represents the population
on specific characteristics. The researcher started by dividing the population into sub
departments or strata and in this study cases the criteria of strata identification is
22
departmental units. Then sample is randomly selected from each stratum or department
units.
According to data from human resource department of BDTSC, there are 1385
employees as of 2017 budget year that make up the sampling frame. The sampling
frame for any probability sample is a complete list of all the cases in the population
from which the sample was draw. Using the following formula (Yamane, 1967) the
sample size is determined as follows:
𝑁
𝑛 = 1+𝑁(𝑒)2
Where, n is the sample size, N is the total target population which is1385, and e is the
error or confidence level, the conventional confidence level of 95% would be used to
ensure a more accurate result from the sample. Based on this, the error term would equal
to 0.05. Using the total Population of 1385and error margin of 0.05, the sample size was
calculated. Hence, out of the total population 1385, a total sample size of 308 numbers
of respondents is taken.
1385
𝑛= , 𝑛 = 308
1 + 1385(0.05)2
Therefore, the population can be divided into five sub groups such as; human resource
management, marketing, production, and purchasing and store departments. These
groups can be considered as stratum. Finally lottery random sampling was employed.
Then the researcher selects samples from each stratum as follows: The number of
samples is determined proportionally by considering the number of employees in each
departments of the Bahir Dar Textle Share Company. In order to determine the number
of samples to each category the researcher was used the following formula:
Each category of respondants

𝑥 Total sample,
Total target population
The following table summarizes the total target population in each department of
respondents‟ and the corresponding Sample size would be taken from each stratum as
follows.
23
Table 3. 1 Sample size determination
Departments Total number of Proportion for Sample size

target population each category
HRM 84 84/1254×308 21
Marketing and 15 15/1254 ×308 4
Selling
Production 1125 1125/1254×308 276
Purchasing and 13 13/1254×308 3
store
Quality 17 17/1254×308 4
Total 1254 308
Source: BDTSC human resource department (2018)
3.5 Data Source and Type

The source of the data was entirely from primary sources. Primary data was collected by
use of structured questionnaires across the strata.
3.6 Data Collection Method

The survey was conducted directly to respond workers that exist in the BDTSC
targeting the respondents at stratified random sampling method from the population of
the whole Bahir Dar Textile Share Company employees. Self-administered
questionnaires which consists closed ended questions were used. Questionnaires are
considered the best in collection of primary data because they provide an avenue for the
researchers to ask probing questions, they are fast, cheap and can be self administered
(Mugenda & Mugenda, 2003). The instrument that it is employed in this research is a
questionnaire adapted from (Shafiq etal 2017; Al-Damen, 2017; Aysel et al.2014;
Jaafreh and Al-abedallat 2013) who measured the scale in different studies. The
questionnaires would be rated on the five points Likert scale ranged from strongly
disagrees, allocate a scale of 1, to strongly agree, allocate a scale of 5.
3.7. Method of Data Analysis

In this study data collection from survey questionnaire was interred into SPSS
(statistical package for social science) software, version 20 for analysis.
Both descriptive statistic and inferential analysis were used to analyze the data.
Descriptive statistics allows researcher to present the data queried in structured,
accurate, and summarized manner (Collis & Roger, 2003). The descriptive statistics
24
(frequency, percentage, mean and standard deviation) utilized in this study were used to
analyze the demographic data and for the descriptive analysis of the variables.
Inferential analysis is concerned with the Pearson correlation and multiple regression
analysis was performed. Multiple regression analysis was used to determine the
relationship between the independent variables (continuous improvement, customer
focus, process management, supplier quality management, and top management
commitment) and the dependent variable (organizational performance).
3.8 Model specification
OPi=βo+β1CIi+ β2CFi+ β3PMi+β4SQMi+β5TMCi+Ei;
Where OP=dependent variable, i.e. organizational performance. CI, CF, PM, SQM,
TMC= independent variables, i.e. continuous improvement, customer focus, process
management, supplier quality management, and top management commitment
respectively. βo is the intercept, β1, β2 , β3, β4, β5 measures of change in y with respect
to CI, CF, PM, SQM, TMC respectively, holding other factor fixed , and Ei is error
term.
3.9 Reliability and Validity of the Instrument

The reliability of the questionnaire was evaluated through Cronbach‟s Alpha which
measures the internal consistency. The Alpha measures internal consistency by
establishing if certain item measures the same construct. Cronbach‟s Alpha was
established for every objective in order to determine if each scale (objective) would
produce consistent results should the research be done later on. The findings of the pilot
study shows that all the four scales were reliable as their reliability values exceeded the
prescribed threshold of 0.7 (Mugenda and Mugenda, 2003).
Validity is the most critical criterion and indicates the degree to which an instrument
measures what it is supposed to measure (Kothari, 2004).In order to ensure the validness
of this study the instruments were checked and evaluated by professionals in the subject
matter area. Moreover my advisor had evaluated and commented on the instruments
before they are distributed to the respondents.
25
Table 3. 2 Reliability test of variables by Cronbach’s Alpha
Variables No of items Cronbach's Alpha

Continuous Improvement 5 .723
Customer Focus 5 .747
Process Management 4 .728
Supplier Quality Management 5 .702
Top Management Commitment 6 .721
Organizational Performance 11 .720
Source: Own Survey, 2018
As its shown from the table 3.2 the reliability test cronbach alpha of all variable
indicates above 0.7 which indicates all domains of variables reliable and it measuring
what its suppose to measure.
26
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND INTERPRETATION

This chapter explains the information gathered from the survey through the use of
questionnaires. The responses of respondents have been analyzed and results have been
presented in the form of chart, tables and figures. In this chapter, the first part of the
study, which is devoted to the demographic characteristics of respondents, is dealt with.
The second part is linked with the analysis of collected data that carried out in relation
to the objectives of the study. This includes the TQM implementation and its effect on
organizational performance in Bahir Dar Textile Share Company.
4.1 Demographic Characteristics of the Respondents

The survey on demographic characteristics of the respondents constituted of gender, age
distributions, educational level, work experience and current job position of
respondents.
Figure4. 1 Gender of respondents

Respondents by Gender
36%
Male
64%
Female
Source: Own Survey, 2018.

According to the figure 4.1 above, 198 (64.3%) of respondents were Males whilst
110(35.7%) were Females. The fact that the majority of the respondents are Males, as
per the researcher‟s observation, strongly confirms that has more male staff than female
in Bahirdar textile Share Company.
Figure 4. 2 Age of respondents
27
Distribution of respondants by Age
124
95
60
29
18-30 31-40 41-50 51 years and above

The frequencies from figure 4.2 showed that 124 (40.3%) of respondents who
participated in the survey were between the age range of 18 to 30 years, followed by the
range of 31 to 40 years comprising 95 respondents (30.8%), 60 (19.5%) constituting an
age from 41 to 50 years old whereas, the remaining 29 (9.4%) were the respondents
between 51 years and above. The data shows that the majority of the respondents were
at productive ages i.e. age range from 18 to 39 years or constitute 71.1%. Accordingly,
such employees who are in the age range above need to be treated because it is
productive age for the company.
Figure 4. 3 Level of Education
140
120
100
80
60 ferequency
40
20 percentage
0
Certificate and Diploma First Degree Masters and
Below Above

It is revealed from the bar chart that 124 (40.3%) are diploma holders followed by 98
(31.8%) first degree, 79 (25.6%) certificate and below, 7 (2.3%) of masters and above.
The research shows that greater percentage of workers in Share Company is well
educated that is diploma and above holders this implies it is good understanding in order
to perform their own tasks.
28
Table 4. 1 Work Experience
Years of service in the company

Frequency Percentage
1-5 years 57 18.5
5-10 years 43 14.0
10-15 years 48 15.6
Valid
15-20 years 111 36.0
Above 20 years 49 15.9
Total 308 100.0

On the other hand, from the above table 111 (36%) respondents‟ have worked in the
company for 15-20 years followed by 57 (18.5%) for 1-5 years, 49 (15.9%) above 20
years, 48 (15.6%) for 10-12 years and 43 (14%) for 5-10 years. From this the researcher
found the majority of the employees do work beyond 10 years or more. This implies the
share company employees have experienced which results well informed the rule and
regulation of the company also knows the trend of total quality management in the
company.
Table 4. 2 Job Position
Distribution of Respondents by job position.

Frequency Percentage (%)
Valid Manager 44 14.3
Non managerial 264 85.7
Total 308 100.0

As per the table above, out of the total sample size of Three Hundred Eight (308), 264
(85.7 %) were selected from non managerial position, and the rest 44 (14.3%) would be
selected from managerial position. This shows that most employees engaged in the
share company is at non managerial level.
4.2 Data Analysis Related to TQM Practices
4.2.1 Perception of Respondents on Issues Related to TQM Practices

The researcher distributed a total of 308 self administered questionnaires. All 308
completed questionnaires have returned back. This shows that the rate of response is
100 percent. The responses were coded, arranged and tabulated using Statistical
Packages for Social sciences (SPSS) version 20. The data exported, therefore, was
29
presented in the form of tables, graphs and percentages in order to easily interpret and
understand the research findings.
In this section the study wants to identify the most important forms of TQM Practices
that were drive most to organization in their day to day activities. Though, respondents
were requested to share their views on which practices among the five selected
dimensions in which TQM most to become effective at organization. In addition,
respondents were asked to indicate their perceptions based on Likert Scale for the issues
raised related to these TQM practices at Bahir Dar Textile Share Company.
30
Table 4. 3 Continuous Improvements
Questions Valid Frequency Percent
The organization encourages Strongly Disagree 110 35.7

continual survey and improvement of Disagree 95 30.8
all its products, services and Neutral 40 13.0
processes. Agree 58 18.8
Strongly Agree 5 1.6
Total 308 100.0
I have got continuous training to Strongly Disagree 30 9.7
enhance internal quality of Disagree 113 36.7
performance. Neutral 97 31.5
Agree 65 21.1
Total 308 100.0
There is frequently measure the Strongly Disagree 111 36.0
product and process quality. Disagree 70 22.7
Neutral 73 23.7
Agree 47 15.3
Total 308 100.0
The company uses Plan Do Check Strongly Disagree 176 57.1
Act cycle (PDCA) extensively for Disagree 94 30.5
process control and improvement Neutral 14 4.5
Agree 18 5.8
Total 308 100.0
The decisions regarding quality Strongly Disagree 131 42.5
improvement always are based on Disagree 106 34.4
objective data. Neutral 43 14.0
Agree 22 7.1
Total 308 100.0
31
Table 4.3 above shows, It is clearly stated that 113 (36.7%) have strongly disagreed
with the organization encourages continual survey and improvement of all its products,
services and processes. The other 95 (30.8%) of the respondents have also disagreed
with the question raised. But, 58 (18.8%) of respondents have agreed with the
organization encourages continual survey and improvement of all its products, services
and processes. 40 (13%) of respondents have come to be indifferent or are not quite sure
to share their views. The remaining 5 (1.6%) of the respondents have also strongly
Agree. From the above respondents response majority or 205 (66.6%) of them are
against or disagree and above the question the organization encourages continual survey
and improvement of all its products, services and processes.
The second item of the above table the respondents stated that 137 (37.5%) of them are
disagreeing, 97 (31.7%) neither agrees nor disagree, 65 (21.1%) respondents‟ answers
agree, 30 (9.7%) strongly disagree and 3 (1%) strongly agree with getting continuous
training to enhance internal quality of performance. From the above result majority or
143 (46.7%) respondent answer the question disagree and above with getting continuous
training to enhance internal quality of performance. This response shows that there is no
getting continuous training to enhance internal quality of performance.
The third item of the above table the respondents stated that 111 (36%) of them are
strongly disagreeing, 73(23.7%) neither agrees nor disagree, 70 (22.7%) respondents‟
answers disagree, 47 (15.3%) agree and 7 (2.3%) strongly agree with there is frequently
measure the product and process quality. From the above result majority or 181 (58.8%)
respondent answer the question disagrees and above with there is frequently measure the
product and process quality. This response shows that there is no frequently measure the
product and process quality.
The forth item of the above table the respondents stated that 176 (57.1%) of them are
strongly disagreeing, 94 (30.5%) respondents‟ answers disagree, 18 (5.8%) agree, 14
(4.5%) neither agrees nor disagree, and 6 (1.9%) strongly agree with the company uses
Plan Do Check Act cycle (PDCA) extensively for process control and improvement.
From the above result majority or 270 (87.7%) respondent answer the question
disagrees and above with The Company uses Plan Do Check Act cycle (PDCA)
extensively for process control and improvement. This response shows that the company
does not uses Plan Do Check Act cycle (PDCA) extensively for process control and
improvement.
32
The study indicated whether there is the decisions regarding quality improvement
always are based on objective data. Therefore, among the total respondents as shown in
table 4.3 above, majority that representing 41.5 % strongly disagreed with the idea.
Likewise, 34.4% respondents also disagree on this issue. The next largest respondents
were neutral which represents 14% and followed by 7.1% agree respondents and the rest
1.9% that strongly agreed on the decisions regarding quality improvement always are
based on objective data. From this we can understand that in Bahir Dar Textile Share
Company there is no always quality improvement based on objective data.
33
Table 4. 4 Customer focus
Product design, development and Strongly Disagree 99 32.1
delivery are based on meeting the
Disagree 111 36.0
needs of the customer.
Neutral 42 13.6
Agree 53 17.2
Total 308 100.0
Key customer requirements are Strongly Disagree 140 45.5
identified. Disagree 104 33.8
Neutral 45 14.6
Agree 17 5.5
Strongly Agree 2 .6
Total 308 100.0
There is a measure of customer Strongly Disagree 167 54.2
satisfaction on a regular base. Disagree 100 32.5
.
Neutral 33 10.7
Agree 6 1.9
Strongly Agree 2 .6
Total 308 100.0
The Company conducts customer Strongly Disagree 122 39.6
feedback surveys regularly Disagree 89 28.9
Neutral 40 13.0
Agree 49 15.9
Total 308 100.0
Customer-focused strategies and Neutral 9 2.9
approaches are continuously reviewed Agree 163 52.9
for further improvement. Strongly Agree 136 44.2
Total 308 100.0
Table 4.4 above shows, it is clearly stated that 111 (36%) have disagreed with Product
design; development and delivery are based on meeting the needs of the customer. The
other 99 (32.1%) of the respondents have also strongly disagreed with the question
raised. But, 53 (17.2%) of respondents have agreed with the Product design,
development and delivery are based on meeting the needs of the customer. 42 (13.6%)
of respondents have come to be indifferent or are not quite sure to share their views. The
remaining 3 (1%) of the respondents have also strongly Agree. From the above
respondents response majority or 200 (68.2%) of them are against or disagree and above
the question Product design, development and delivery are based on meeting the needs
of the customer.
34
The second item of the above table the respondents stated that 45.5% of them are
strongly disagreeing, 33.8% disagree, 14.6% neither agrees nor disagree, 5.5%
respondents‟ answers agree, 0.6% strongly agree with Key customer requirements are
identified. From the above result majority or 79.2% respondent answer the question
disagree and above with Key customer requirements are identified. This response shows
that there is no identified key customer requirement.
The third item of the above table the respondents stated that 167 (54.2%) of them are
strongly disagreeing, 100 (32.5%) respondents‟ answers disagree, 33 (10.7%) neither
agrees nor disagree, 6 (1.9%) agree and 2 (0.6%) strongly agree with there is a measure
of customer satisfaction on a regular base. From the above result majority or 86.7%
respondent answer the question disagrees and above with there is a measure of customer
satisfaction on a regular base. This response shows that there is no a measure of
customer satisfaction on a regular base.
From the above table 4.4 the respondents stated that 122 (39.6% 0of them are strongly
disagreeing, 89/29.8% respondents‟ answers disagree, 49 (15.9%) agree, 40 (13%)
neither agrees nor disagrees, and 8 (2.6%) strongly agree with the question the
Company conducts customer feedback surveys regularly. From this result majority or
210 (68.5%) respondent answer the question disagree and above with the Company
conducts customer feedback surveys regularly.
The study indicated whether there is a Customer-focused strategy and approaches are
continuously reviewed for further improvement in the company. Therefore, among the
total respondents as shown in table 4.4, majority that representing 52.9 % agreed with
the idea. Likewise, 42.2% respondents also strongly agree on this issue. The rest 2.9%
that neutral on Customer-focused strategy and approaches are continuously reviewed for
further improvement in the company. From this we can understand that there is
continuously reviewed customer focus strategy and approach for further improvements
in company.
35
Table 4. 5 Process Management

Production equipment is maintained Strongly Disagree 74 24.0
well according to maintenance plan. Disagree 92 29.9
Neutral 75 24.4
Agree 66 21.4
Strongly Agree 1 .3
Total 308 100.0
We have site wide standardized and Strongly Disagree 11 3.6
documented operating procedures. Disagree 150 48.7
Neutral 80 26.0
Agree 64 20.8
Total 308 100.0
The company systematically Strongly Disagree 85 27.6
conducts extensive benchmarking Disagree 90 29.2
of other companies business Neutral 77 25.0
Agree 55 17.9
process.
Strongly Agree 1 .3
Total 308 100.0
Production processes are capable of Strongly Disagree 59 19.2
producing products according to
Disagree 108 35.1
design specifications
Neutral 94 30.5
Agree 45 14.6
Strongly Agree 2 .6
Total 308 100.0
Table 4.5 above revealed that, majority of respondents representing 29.9% disagreed;
followed 24.4% neutral on Production equipment is maintained well according to
maintenance plan. In other case, 24% strongly disagree and 21.4% agree respectively. In
addition to this, 0.3% of respondents strongly agreed on Production equipment is
maintained well according to maintenance plan. Here, in the company there is no
majority of Production equipment is maintained well according to maintenance plan.
The other point was about the site wide standardized and documented operating
procedures. From the above table 4.5 the respondents stated that 150 (48.7%) of them
are disagreeing, 80 (26%) neither Agree nor disagree. On the other hand 64 (20.8%)
agree, 11 (3.6%) strongly disagree and 3 (1%) strongly agrees with the question. From
36
this result majority or 52.3% respondent answer the question disagree and above with
the site wide standardized and documented operating procedures.
The other point was about the company systematically conducts extensive
benchmarking of other companies business process. Hence, as shown in table 4.5 above,
29.2% disagreed, 27.6% strongly disagree with the company systematically conducts
extensive benchmarking of other companies business process. In the same table above,
25% neutral, 17.9% agree and 0.3% strongly agrees systematically conducts extensive
benchmarking of other companies business process respectively. From this result
majority or 56.8% respondent answers the questions disagree and above with the
systematically conducts extensive benchmarking of other companies business process.
In addition, respondents were asked to the Production processes are capable of

producing products according to design specifications. Hence, in as indicated in table
4.5 majorities of the respondents that representing 35.1%, 30.5% and 19.2% disagreed,
neutral and strongly disagree respectively. On the other hand 14.6% respondents agreed
and 0.6% strongly agrees with the capability of Production processes on producing
products according to design specifications. So the majority of the respondent do not
satisfied with the capability of Production processes on producing products according to
design specifications of the organization.
37
Table 4. 6 Suppliers Quality Management
Questions Valid Frequenc Percent

y
The company has established Strongly Disagree 89 28.9
long-term relationship with Disagree 102 33.1
suppliers. Neutral 59 19.2
Agree 52 16.9
Total 308 100.0
The company always gives Strongly Disagree 32 10.4
feedback on the performance of Disagree 99 32.1
supplier‟s products. Neutral 88 28.6
Agree 79 25.6
Total 308 100.0
The company has detailed Strongly Disagree 74 24.0
information about supplier Disagree 135 43.8
performance. Neutral 49 15.9
Agree 44 14.3
Total 308 100.0
The company always participates Strongly Disagree 88 28.6
in supplier activities related to Disagree 100 32.5
quality. Neutral 39 12.7
Agree 78 25.3
Total 308 100.0
The company treats the major Strongly Disagree 137 44.5
supplier as partner. Disagree 158 51.3
Neutral 5 1.6
Agree 8 2.6
Total 308 100.0

The field survey shows that 62% of the respondents disagrees and above with The
Company has established long-term relationship with suppliers but only 19% of the
respondents agree with the statement that they The company has established long-term
relationship with suppliers 19% been neutral as shown in table 4.6 above.
When respondents were asked about whether the company always gives feedback on the
performance of supplier‟s products. Table 4.6 shows that 42% of respondents
38
representing disagree with the company always gives feedback on the performance of
supplier‟s products, 29% of them are agree with The company always gives feedback
on the performance of supplier‟s products whilst 29% are uncertain.
The respondents were asked to indicate the Company has detailed information about
supplier performance. From table 4.6, it can be noted that 68% of the respondents does
not believes that Company has detailed information about supplier performance. 26% of
them are agree with the Company has detailed information about supplier performance
whilst 16% are uncertain. Going with the majority, it can be concluded that the
Company has not detailed information about supplier performance.
From the field survey, the results shows that 61% majority of the respondents believes
that there is the company does not always participates in supplier activities related to
quality and 26% of the respondents believes that company has always participates in
supplier activities related to quality but 13% neither agree nor disagree as shown in table
4.6. This implies that company does not always participate in supplier activities related
to quality.
In addition Table 4.6 above shows that 96% of the respondents in the company disagree
with the company treats the major supplier as partner. Only 3% agree with the statement
and 2% uncertain with The Company treats the major supplier as partner.
39
Table 4. 7 Top Management Commitments
Questions Valid Frequenc Percent

y
Top executives are actively involved in Strongly
99 32.1
establishing and communicating the Disagree
organization vision, goals, and values Disagree 80 26.0
for quality program. Neutral 42 13.6
Agree 73 23.7
Total 308 100.0
Top management views quality as Strongly
76 24.7
being more important than meeting Disagree
production schedules. Disagree 116 37.7
Neutral 47 15.3
Agree 62 20.1
Total 308 100.0
Top management allocates adequate Strongly
87 28.2
resources towards effort to improve Disagree
quality. Disagree 109 35.4
Neutral 62 20.1
Agree 46 14.9
Total 308 100.0
Top management strongly encourages Strongly
116 37.7
employee involvement in quality Disagree
management activities Disagree 78 25.3
Neutral 50 16.2
Agree 49 15.9
Total 308 100.0
All major department heads within our Strongly
125 40.6
company accept their responsibility for Disagree
quality. Disagree 58 18.8
Neutral 47 15.3
Agree 67 21.8
Total 308 100.0
Top management pursues long-term Strongly
111 36.0
business success. Disagree
Disagree 93 30.2
Neutral 44 14.3
Agree 49 15.9
Total 308 100.0
40
The table 4.7 above reveals that 32 % of the respondents strongly disagree with the Top
executives are actively involved in establishing and communicating the organization
vision, goals, and values for quality program, 26% also disagree, 24% agree, 14% are
uncertain with the statement the remaining 4% is strongly agree. From the analysis, the
majority of 58% disagrees with the statement.
Table 4.7 shows that 62% of the respondents are not agreeing with Top management
views quality as being more important than meeting production schedules. But 22%
agree with the statement which serves as Top management views quality as being more
important than meeting production schedules and the remaining 16% been neutral. This
implies that the Top management has not views quality as being more important than
meeting production schedules.
The other point was about Top management allocates adequate resources towards effort
to improve quality. From the above table 4.7 the respondents stated that 109 (34.4%) of
them are disagreeing, 87 (28.2%) strongly disagree, 62 (20.1%) neither Agree nor
disagree, 46 (14.9%) agree, the remaining 4 (1.3%) strongly agree with the statement.
From these result majorities or 196 (63.6%) respondent answer the question disagree
and above with the Top management allocates adequate resources towards effort to
improve quality. This indicates that there is no allocation of adequate resources towards
effort to improve quality at work place in company.
Again, when the respondents were asked to evaluate the extent to Top management
strongly encourages employee involvement in quality management activities. Table 4.7
shows that the majority of respondents representing 63% are not Top management
strongly encourages employee involvement in quality management activities whilst 21%
agree with the statement the remaining 16% unsure of the statement. These suggest that
Top management does not strongly encourage employee involvement in quality
management activities in the company.
The other point was about the All major department heads within the company accept
their responsibility for quality or not. From the above table 4.7 the respondents stated
that 125 (40.6%) of them are strongly disagreeing, 67 (21.8%) agree, 58 (18.8%)
disagree, 47 (15.3%) neither Agree nor disagree the remaining 11 (3.6%) strongly agree
with the statement. From the above result majority or 183 (59.4%) respondent answer
the question disagree and above with the major department heads within the company
accept their responsibility for quality at work place. This indicates that there is no
41
acceptance of major department head responsibility for quality at work place in
company.
From the field survey, the results shows that 66% majority of the respondents believes
that there is no Top management pursues long-term business success in the company
and 20% of the respondents believes that there is Top management pursues long-term
business success in the organization but 14% neither agree nor disagree as shown in
table 4.7 above. This suggest that Top management is not pursues long-term business
success in the company.
4.3 Mean and Standard Deviation of Variables
It explores and presents an overview of all variables used in the analysis. Descriptive
statistics produced the mean and standard deviation for each variable for the study.
Mean and standard deviation are used mostly in research studies and regarded as very
satisfactory measures of variations. In brief, mean, SD is used to determine the extent of
spread of the data. The summary statistics of all the variables in this study is presented
as in the following table 4.8 shows that there are 308 observations for each variables,
the mean and standard deviation values.
Table 4. 8 Mean and Standard deviation of Research variables
Variables N Mean Std. Deviation

Continuous Improvement 308 2.13 0.56
Customer Focus 308 2.44 0.49
Process Management 308 2.49 0.67

Supplier Quality Management 308 2.27 0.63
Top Management Commitment 308 2.30 0.69
Organizational Performance 308 3.01 0.41
Valid N (listwise) 308

The above descriptive statistics clearly depicts the corresponding arithmetic mean and
standard deviation of every construct totals (total of every individual categorical
construct). Thus, continuous improvement total has a mean of 2.13 and a standard
deviation of 0.56, customer focus total has a mean of 2.44 and a standard deviation of
0.49, process management total has a mean of 2.49 and a standard deviation of 0.67,
supplier quality management total has a mean of 2.27 and a standard deviation of 0.63,
42
top management commitment has a mean of 2.30 and a standard deviation of 0.69. The
results indicated the mean of the TQM dimensions ranged from 2.13 to 2.49. Process
management has the highest mean 2.49 while continuous improvement has the lowest
mean 2.13. Finally total quality management dimension in the company shows below
the average cut-off point of three. The means of all variables in the study below the
scale midpoint which is most respondents share similar opinions toward each variable in
this study. This analysis of mean of categorical constructs showed that all constructs
variables have a mean value less than the average standard. Accordingly, it implies that
the low level of practicing TQM in the company. Also the SD is less than one; that is,
the variations in respondent‟s opinions were small. The organizational performance
mean value is 3.01 and standard deviation of 0.41 values indicates that respondents in
the share company are answering at average standard in the study area or the same
variations.
4.3 Relationship between TQM dimension and Organizational Performance
Correlation shows the strength and direction of relationship between variables. The
linear relationship between variables can be measured by correlation coefficient (r),
which is commonly called Pearson product moment correlation. Person‟s “r” mainly
measures the data from the interval or ratio level and used to measure based on the
deviation from the mean. Somekh and Lewin (2005) the extent (strength) of relationship
between two variables was described. If Correlation coefficient (r) is less than 0.33
(r<0.33), the strength of relationship would be weak; if r-between 0.34 and 0.66, there
would be moderate relationship and if correlation coefficient (r) lies between 0.67 and
0.99 there would have strong relationship. The Pearson Correlation analysis is shown in
the following section.
In order to determine the effect of total quality management on organizational
performance in Bahir Dar textile share company, relationship between independent
variables (i.e. continuous improvement, customer focus, process improvement, supplier
quality management, and top management commitment) and dependent variable i.e.
(organizational performance), correlation analysis has been conducted by classifying the
relationship with each dimension.
43
Table 4. 9 Correlation between Total Quality Management Practice and organizational
Performance
Variables OP CI CF PM SQM TMC

Pearson Correlation 1
Organizationl
Sig. (2-tailed)
Performance
N 308
Pearson Correlation .373** 1
Continuous
Sig. (2-tailed) .000
Improvement
N 308 308
**
Pearson Correlation .348 .180** 1
Customer
Sig. (2-tailed) .000 .001
Focus
N 308 308 308
** **
Pearson Correlation .365 .279 .247** 1
Process
Sig. (2-tailed) .000 .000 .000
Management
N 308 308 308 308
** ** **
Supplier Pearson Correlation .547 .320 .290 .341** 1
Quality Sig. (2-tailed) .000 .000 .000 .000
Management N 308 308 308 308 308
** ** ** **
Top Pearson Correlation .476 .414 .209 .335 .468** 1
Management Sig. (2-tailed) .000 .000 .000 .000 .000
Commitment N 308 308 308 308 308 308
**. Correlation is significant at the 0.01 level (2-tailed).
Table 4.9 above shows the correlation between Total Quality management practice and
organizational performance results. The correlation analysis has indicated that all
variables were significantly correlated at the p<0.05 with r= 0.373 for continuous
improvement, r = 0.348 for customer focus, r= 0.365 for process management, r= 0.547
for suppliers quality management, and r = 0.476 for top management commitment. The
result shows all independent variables of total quality management practice namely
continuous improvement, customer focus, process improvement, supplier quality
management, and top management commitment are significantly and moderately
positive related to organizational performance. This implies that if the total quality
management practice offered to the organization were altered, there would be a change
in organizational performance.
The correlation coefficients describe about the independent variables, use to check
whether they are related to each other or not. The maximum correlation coefficient is
r=0.468(see appendix II) showing that there is weak or moderate correlation among
44
independent variables. However since its value is <0.5 there is no problem of
multicollinearity.
4.5 Regression Analysis and Presentation

In this particular section presents the diagnostic test of basic classical regression
assumptions, the goodness of fit through ANOVA and model summary tables and
finally the result of multiple regressions.
4.5.1 Assumptions and Diagnostics Tests

Brooks (2008) suggests critical assumptions that must be met be utilizing OLS
(Ordinary Least Square) estimation in order to reasonably test the hypothesis and
estimate the coefficient. Hence, the basic classical linear regression model assumptions
and their diagnostic tests are discussed below.
1. Normality Assumption: this assumption requires the disturbances in
the model to be normally distributed variables with a mean of zero.
To test the normality of residual, we must look at the histogram and
normal probability plot.
 Histogram of Residuals
A histogram of residuals is a simple graphic device that used to learn something
about the shape of the probability density function of a random variable. On the
horizontal axis, the values of the variable of interest are divided in to suitable
intervals, and in each class interval rectangle are erect equal in height to the
number of observations (frequency) in the class interval. If the residuals are
normally distributed around its mean of zero the histogram is a bell shaped. The
shape of the histogram revealed that the residuals are normally distributed
around its mean of zero (see appendix II).
 Normal Probability Plot
In addition of the histogram of residuals, the normal probability plots were used
to test the normality of data .It is comparatively simple graphical device to study
the shape of the probability density function of a random variables in the normal
probability plot (NPP). Its values of the variable of interest are on the horizontal
axis and the expected value of this variable on the vertical axis. If the fitted line
in the NPP is approximately a straight line, one can conclude that the variable of
interest is normally distributed. Hence, the residuals from the research model
regression are approximately normally distributed, because a straight line gives
45
the impression to fit the data reasonably well. This test also shows the normal
distribution of residuals around its mean of zero (see appendix II).
2. Autocorrelation between the Disturbances: it assumed that the
errors are not correlated with one another. If the error are correlated
with one another, it would be stated that they are ‟serially correlated‟.
This assumption is likely to be met if the Durbin Watson statistics is
close to 2(and between 1 and 3). A test of this assumption is therefore
conducted the Durbin Watson statistics which is shown in the
regression output of the model as shown in table 4.10 below is very
close to 2 which is (1.899). Hence this assumption is certainly met.
Table 4. 10 Durbin-Watson Statistics
Model Durbin-Watson
1 1.899
3. Multicollinearity among Predictors: this assumption assumed that
there should be no explanatory variable that can be written as a linear
function of other explanatory variables. To check the assumption of
multicollinearity, we can use the VIF (variance inflation factor) values
from the table 4.11 in the SPSS output. Tolerance is the proportion of
variables variance not accounted for by other independent variables in
the model.VIF on the other hand is the reciprocal of tolerance
(1/tolerance). If these values are less than 10 then it indicates that there
probably is not cause for concern. If you take the average value of VIF
and this average is not substantially greater than one; then that also
indicates that there is no cause for concern (Field, 2009).
46
Table 4. 11 Multicollienarity test
Model Collinearity Statistics

Tolerance VIF
.792 1.263
Continuous Improvement
Customer Focus .886 1.129
1
Process Management .812 1.232
Supplier Quality Management .708 1.413
Top Management Commitment .684 1.462
Average 1.2998
For this study the VIF values are all well below10, the average value of VIF is
(1.2998) and the tolerance statistics are all well above 0.2 as shown in table 4.11
above. Thus, it can be concluded that there is no collinearity within the data and
predictors.
4. Linear Relationship Assumption: multiple linear regressions need
the relationship between dependent variable and independent
variables to be linear. It also important to check for outliers in this
regard since multiple regression is sensitive to outlier effect. In order
to test the linearity assumption the researcher use SPSS scatter plot
(see appendix II).
5. Homogeneity of Variance Assumption: In terms of homogeneity of
variance assumption, which is where the variances along the line of
best fit remain similar along the line, this was checked by examining
a scatter plot of the residuals against the predicted values. According
to Lundau and Everitt (2004), if this assumption is met, there should
be no pattern to the residuals plotted against the predicted values. The
scatter plots of the residuals against the predicted values are shown in
(appendix II).
In the scatter plots, there was a relatively random display of points, where the
spread of residuals against the predicted values did not strongly point to an
47
inherent pattern. This indicates that homogeneity of variance (i.e.
homoscedasticity) was a reasonable assumption in the model.
6. Model Misspecification Error: with regard to model specification

error the fit of the regression model can be assessed using the model
summary and ANOVA tables from SPSS. R Square tells the
proportion of variance explained by the model. Look for the F
statistics in the column labeled the value less than 0.05 is significant
and accepted. The ANOVA also tells us whether the model is a
significant fit of the data overall. Therefore, this assumption is met
that the model significantly improved the researchers ability to
predict the outcome variables because the p value is less than 0.05 as
it can be seen in the model summary table 4.12 and ANOVA table
4.13 tables below that is (significant at .000).
Table 4. 12 Model Summary b Enter Method
R R Square Adjusted R Std. Error of the Durbin-Watson

Square Estimate
.647a .419 .409 .31169 1.899
a. Predictors: (Constant), Top Management Commitment, Customer Focus, Process

Management, Continuous Improvement, Supplier Quality Management
b. Dependent Variable: Organizational Performance
The table above shows that the value of R is 0.647 which implies that the multiple
correlation coefficients between the outcome and the predictors are 64.7%. The other
measure shows that in the table is R square which already known is a measure of how
much of the variability in the outcome is accounted by the predictors. The value of R
square in the model is 0.419 (41.9%) which implies that 41.9% of the variability of the
dependent variable (organizational performance) is explained or accounted by the
explanatory variables included in the model. The adjusted R square gives some idea of
how well the model generalizes and according to Field (2009) ideally it would be good
its value to be the same or very close to the value of R square. In this study the
difference of the model is small (i.e. the difference between the values is 0.419-
0.409=0.01 which is about 1%). This shrinking implies that if the model was derived
48
from the population rather than the sample it would account for approximately 1% less
variance in the outcome. This indicates that if the model was derived from the
population about 40.9% of the variability of the outcome (organizational performance)
would be explained by the explanatory variables. The value of adjusted R square is
almost similar to the observed value of R square.
The other classical linear regression assumption in regression to be met is errors should
be independent and this can be tested using the Durbin Watson statistics. According to
Field (2009), the closer to 2 that the value is, the better the assumption met. In this study
as it can be seen from the above value of Durbin Watson test is 1.899 which is closer to
2 that the assumption has almost certainly been met which in turn indicates the goodness
of the model at explaining the outcome variable.
Table 4.12 (model summary), displays the results of the multiple regression analysis
between total quality management indicators and organizational performance using the
entering Method. The results indicate that continuous improvement, customer focus,
process improvement, supplier quality management, and top management commitment
contributes a total of 0.419 (41.90%) of variation in organizational performance. This
finding implies that other unexplained variables could account 0.581 (58.10%) for other
variables out of the model.
Table 4. 13 ANOVAa
Model Sum of Squares df Mean Square F Sig.
Regression 21.125 5 4.225 43.489 .000b

1 Residual 29.340 302 .097
Total 50.464 307
a. Dependent Variable: Organizational Performance
b. Predictors: (Constant), Top Management Commitment, Customer Focus, Process
Management, Continuous Improvement, Supplier Quality Management
SPSS output in the above table shows analysis of variance (ANOVA) that tests whether
the model is significantly better at predicting the outcome than using mean as a best
guess.
From the ANOVA table it can be seen that the value of sum of squares of the
model(SSM) which captured by the model is 21.125 and the residual sum of
49
square(RSS) which is not explained by the model is 29.340 and the mean square of the
model and the residual are 4.225 and 0.097 respectively. As a result of much greater the
value of the mean square of the model than the residual the value of F for this model is
43.489 which is higher and highly significant at(p=0.05). As we can see on the above
ANOVA table the result would be expressed as f (5, 302) = 43.489 and p < 0.05. That
means at least one of the five independent variables can be used to explain
organizational performance in the Bahir Dar Textile Share Company. Hence, it can be
concluded that this model can significantly be able to predict the outcome variable
(organizational performance) because the F ratio is significant.
4.5.2 Beta Coefficient

In this section multiple regression analysis was computed at significant level of (p=0.05)
in order to examine the components of total quality management that affects
organizational performance in Bahir Dar textile share company. The output from this
analysis, a beta coefficient, provides an assessment of the significance and the impact of
the predicator variables on the dependent variable.
The coefficients Table (Table 4.14) below presented the strength of the five predicators
(continuous improvement, customer focus, process improvement, supplier quality
management, and top management commitment) towards organizational performance. It
yielded the following result:
Table 4. 14 Coefficients a for the Predictor Variable and Organizational Performance
Model Unstandardized Standardized t Sig.

Coefficients Coefficients
B Std. Error Beta
(Constant) 1.578 .111 14.206 .000
Continuous Improvement .091 .036 .125 2.543 .012
Customer Focus .132 .038 .161 3.456 .001
1 Process Management .066 .029 .111 2.274 .024
Supplier Quality Management .211 .033 .330 6.320 .000
Top Management
.117 .031 .199 3.756 .000
Commitment
The unstandardized coefficients (𝞫1 up to 𝞫5) are the coefficients of the estimated
regression model. Hence, by including the error term (ε), the model for organizational
performance can be written as;
50
OPi=βo+β1CIi+ β2CFi+ β3PMi+β4SQMi+β5TMCi+Ei;
OPi=1.578 + 0.091CIi + 0.132CFi + 0.066PMi + 0.211SQMi+ 0.117TMCi+Ei;
The intercept (𝞫0) is the point on the vertical axis where the regression line crosses the
Y axis. The value of 𝞫0 is 1.578. which means the expected value of organizational
performance is 1.578 when all the five variables assume zero value. For this study all
independent variables (Continuous improvement, customer focus, process improvement,
supplier quality management, and top management commitment) have a positive β
values indicating positively influencing on organizational performance. They tell us to
what degree each predictor affects the outcome if the effects of all other predictors are
held constant. Table 4.14 presents the effect or influence of total quality management
dimensions on organizational performance. The results show that,
H1. Continuous Improvement has a significant positive influence on organizational

performance (B = 0.091, p < 0.05); when continuous improvement increased by
1, organizational performance increased by 0.091 and p-value (0.012) that is less
than 0.05. Thus the first hypothesis is accepted.
H2. Customer Focus has a significant positive influence on organizational performance
(B = 0.132, p < 0.05), when customer focus increased by 1, organizational
performance increased by 0.132 and p-value (0.001) that is less than 0.05. This
implies that the second hypothesis is accepted.
H3. Process Management has a significant positive influence on organizational
performance (B = 0.066, p < 0.05), when process management increased by 1,
organizational performance increased by 0.066 and p-value (0.024) is less than
0.05. Therefore the third hypothesis is accepted.
H4.Supplier Quality Management has a significant positive influence on organizational
performance (B = 0.211, p < 0.05), when supplier quality management increased
by 1, organizational performance increased by 0.211 and p-value (0.000) is less
than 0.05. So the fourth hypothesis is accepted.
H5.Top Management Commitment has a significant positive influence on organizational
performance (B = 0.117, p < 0.05). When top management commitment
increased by 1, organizational performance increased by 0.117 and p-value
(0.000) is less than 0.05. Therefore hypothesis fifth is accepted.
51
The result also indicates that there is a significant influence of continuous improvement,
customer focus, process improvement, supplier quality management, and top
management commitment on organizational performance at significant level of
(p<0.05). As it is indicated in the table 4.15 above, p-value is less than the significant
level for all variables.
The findings indicate that the questionnaire to measure continuous improvement,

customer focus, process improvement, supplier quality management, and top
management commitment exhibit acceptable psychometric properties in terms of both
reliability and validity.
Continuous improvement, customer focus, process management, supplier quality

management, and top management commitment are found significantly influencing
organizational performance in Bahir Dar Textile Share Company. That is they are found
to be affecting organizational performance in the study area and it would be met with
the research objective. Among the independent variables, Supplier Quality Management
has been found to be the most important influencing factor to organizational
performance and explained standardized coefficients (β) of 0.330. It follows by top
management commitment (β = 0.199), customer focus (β = 0.161), continuous
improvement (β =0.125) and process management (β =0.111).
4.5.2.1 Finding and Discussion of the result

In the next section the effect of each independent variables tested is discussed and
analyzed based on the prior empirical studies and hypothesis formulated for this study.
 Continuous Improvement(CI)
According to coefficients table above shows this study with β coefficient of (0.091), t
statistics of (2.543) and (p=0.012) found that there is a positive significant relationship
between continuous improvement and organizational performance. Whenever an
increases in continuous improvement organizational performance also increase holding
other factor constant. The two variables are directly relationship with each other. This
indicates that continuous improvement significantly & positively influences
organizational performance. Therefore the first hypothesis (H1) There is a positive
significant relationship between continuous improvement and organizational‟
Performance is accepted.
52
The study also consistent with the finding of Aysel et al (2014) found that there is a
statistical significant relationship between continuous improvement and business
performance. Al-Damen (2017) in carried out to his studies the impact of Total Quality
Management on organizational performance Case of Jordan Oil Petroleum Company. In
the study, independent variables (continuous improvement) on dependent variable
(organizational performance) they found there is significant relationship between
continuous improvement and organizational performance.
Also Mehmood et al (2014) in Relationship between TQM Dimensions and

Organizational Performance of textile sector in Pakistan their study carried out
continuous improvement significantly and positively affect organizational performance.
In addition to this the impact of total quality management on organizational
performance, (Saizarbitoria, 2006) indicated that there is a positive direct relation
between TQM (continuous improvements) and organizational performance.
Continuous improvement is significantly associated with organizational performance.
This result is consistent with previous studies where researchers find that the continuous
improvement in quality standards has positive impact on different types of performance
(Fuentes et al., 2006; Rahman and Bullock, 2005; Sadikoglu and Zehir, 2010). Keeping
in view the importance of continuous improvement in TQM implementation makes
quality management more relevant for manufacturing firms.
 Customer Focus(CF)
between customer focus with that of organizational performance. Whenever an increases
in customer focus, organizational performance also increase holding other factor
constant. The two variables are directly relationship with each other. This indicates that
customer focus significantly & positively influences organizational performance.
Therefore the second hypothesis (H2) There is a positive significant relationship
between customer focus and organizational Performance is accepted.
The study also consistent with the finding of Jaafreh and Al-abedallat (2013) in their
study The Effect of Quality Management Practices on Organizational Performance in
Jordan: An Empirical Study the results of this study showed that there was a significant
relationship between quality management dimensions (customer focus) and
53
Organizational performance. The finding of Koc (2011) in his study The Relationship
between TQM and Performance in Small Manufacturing Enterprises: The Mediation
Effect of Failure. He found that Customer focus has a significant positive impact on
firm performance. This outcome has also support from the work of (Rahman and
Bullock, 2005) in that customer focus has a significant positive association with
performance. The study also consistent with the finding of other researchers that found
TQM elements such as customer focus and customer satisfaction positively affects
organizational performance (Agus, 2004; Brah et al., 2002; Fotopoulos and Posmas,
2010).
On the other hand the researcher results are not consistent with Al-Damen (2017) in
carried out to his studies the impact of Total Quality Management on organizational
performance Case of Jordan Oil Petroleum Company. In the study, independent
variables (customer focus) on dependent variable (organizational performance) they
found there is insignificant relationship between customer focus and organizational
performance. Ngambi and Nkemkiafu (2015) also found that some measures of
organizational performance could be insignificantly impacted by TQM practices
(customer focus). The study found by Mehmood et al (2014) Customer focus is not
significantly related with organizational performance within textile firms of a
developing country like Pakistan.
 Process Management(PM)
between process management with that of organizational performance. Whenever an
increases in process management, organizational performance also increase holding
other factor constant. The two variables are directly relationship with each other. This
indicates that process management significantly & positively influences organizational
performance. Therefore the second hypothesis (H3) There is a positive significant
relationship between process management and organizational Performance is accepted.
The study also consistent with the finding of Al-Damen (2017) in carried out to his
studies the impact of Total Quality Management on organizational performance Case of
Jordan Oil Petroleum Company. In the study, independent variables (process
management) on dependent variable (organizational performance) the researcher found
that there is significant relationship between process management and organizational
54
performance. This study also provided the empirical evidence that majority of the TQM
constructs has a positive and significant relationship with organizational performance.
As Shafiq et al (2017) studies the effect of TQM on organizational performance:
empirical evidence from the textile sector of a developing country using SEM. Among
these elements, hard TQM elements such as process management have highest positive
relationships with organizational performance.
On the other hand the finding of Jaafreh and Al-abedallat (2013) also indicted that
process management have no significant impact on the organizational performance.
 Supplier Quality Management (SQM)
between Supplier Quality Management with that of organizational performance.
Whenever an increases in Supplier Quality Management, organizational performance
also increase holding other factor constant. The two variables are directly relationship
with each other. This indicates that Supplier Quality Management significantly &
positively influences organizational performance. Therefore the second hypothesis (H4)
There is a positive significant relationship between Supplier Quality Management and
organizational Performance is accepted.
The study also consistent with the finding of Koc (2011) in his study The Relationship
between TQM and Performance in Small Manufacturing Enterprises: The Mediation
Effect of Failure. He found that Supplier Quality Management has a significant positive
impact on firm performance.
On the other hand the study inconsistent with the finding of Al-Damen (2017) in carried
out to his study there is insignificant relationship between Supplier Quality Management
and organizational performance. The finding of Jaafreh and Al-abedallat (2013) also
indicted that supplier quality management have no significant impact on the
organizational performance.
 Top Management Commitment (TMC)
between Top Management Commitment with that of organizational performance.
55
Whenever an increases in Top Management Commitment, organizational performance
also increase holding other factor constant. The two variables are directly relationship
with each other. This indicates that Top Management Commitment significantly &
positively influences organizational performance. Therefore the second hypothesis (H5)
There is a positive significant relationship between Top Management Commitment and
organizational Performance is accepted.
The study also consistent with the finding of Jaafreh and Al-abedallat (2013) in their
study showed that there was a significant relationship between Top Management
Commitment and Organizational performance. This finding is consistent with previous
studies of Arumugam et al., (2008), they found that a positive relationship between top
management support and quality performance. According to Simatupang and White
(1998) top management support serve as a positive foundation for the company‟s whole
processes that ultimately affect organizational performance.
On the other hand the study of Mehmood et al (2014) stated that Top management
support is not significantly associated with organizational performance. The studies of
Kannan and Tan (2005) found that one of TQM practice namely leadership has no
significant relationship with quality performance and financial performance.
From the above discussion and result the researcher conclude that all total quality
management dimensions are positively significantly effect on organizational
performance in the study area.
56
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSIONS AND

RECOMMENDATIONS
This chapter presents the summary of the findings of the study, draws conclusions from
the study and also makes recommendations for the study.
5.1 Summary of Major Findings
The study was carried out solely to identify the effect of total quality management on
organizational performance. Accordingly, the major findings were derived from data
discussions, analysis and interpretations as follows:-
5.1.1 Perception of Respondents on Issues Related to TQM Practices
 The study found that the organization does not encourage continual survey and
improvement of all its products, services and processes. Also found that there is
no getting continuous training to enhance internal quality of performance.
 The study found that there is no frequently measure the product and process
quality. Also found that the company does not use Plan Do Check Act cycle
(PDCA) extensively for process control and improvement. The study also found
that in Bahir Dar Textile Share Company there is no always quality
improvement based on objective data.
 The study found that there is no Product design; development and delivery are
based on meeting the needs of the customer. Also the result shows that there is
no identified key customer requirement.
 The study found that there is no a measure of customer satisfaction on a regular
base. Also the study found that the Company does not conduct customer
feedback surveys regularly. On the other hand the finding of the study indicates
that there is continuously reviewed customer focus strategy and approach for
further improvements in company.
 The study found that in the company there is no majority of Production
equipment is maintained well according to maintenance plan the site wide
standardized , documented operating procedures systematically conducts
extensive benchmarking of other companies business process. Also the majority
57
of the respondent do not satisfied with the capability of Production processes on
producing products according to design specifications of the organization.
 The study found that The Company has not established long-term relationship
with suppliers. The study found company was not always gives feedback on the
performance of supplier‟s products, also the study found that that the Company
has not detailed information about supplier performance. The finding shows the
company does not always participate in supplier activities related to quality and
also in addition the company treats the major supplier as partner.
 The study found that the Top executives are not actively involved in
establishing and communicating the organization vision, goals, and values for
quality program disagrees with the statement. Also the Top management has not
views quality as being more important than meeting production schedules and
allocates adequate resources towards effort to improve quality. Also the study
found that Top management does not strongly encourage employee involvement
in quality management activities in the company.
 The study found that there is no acceptance of major department head
responsibility for quality at work place in company. Also Top management is
not pursues long-term business success in the company.
 The means of all variables in the study below the scale midpoint which is most
respondents share similar opinions toward each variable in this study.
Accordingly, it implies that the low level of practicing TQM in the company.
Also the SD is less than one; that is, the variations in respondent‟s opinions
were small.
5.1.2 The Effects of TQM practice on Organizational Performance
 The study clearly presented that TQM dimensions are positively significant
influence on organizational performance. Meaning that the increase in all TQM
dimensions (Continuous improvement, customer focus, process improvement,
supplier quality management, and top management commitment) also increases
organizational performance keeping other things constant. They are directly
related to each other.
 The correlation analysis has indicated that there is significant and moderately
positive relationship between TQM dimensions with organizational performance
at the p<0.05.
58
 The result of the study showed that all independent TQM dimensions are found
significantly influencing on organizational performance in the study area.
5.2 Conclusions
In line with the specific objectives of the study, the following conclusions have been
drawn:-
From the outcomes of the study, it is clear that the Bahir Dar Textile share company
which does not observe TQM practices. As a result, the cost of operating the business
becomes very expensive hence affecting their profits. It is also noted that organization‟s
that embrace TQM practices, tend to gain a competitive edge against their competitors.
It is seen as being a way in which a business can add value to its product and to gain
competitive advantage over its rivals. This has worked very well with organizations
Bahir Dar Textile Share Company.
It was also found from the correlation analysis that, TQM practices moderately and
positively correlate with organizational performance. The study wind up that there is a
correlation between TQM dimension and organizational performance.
Adopting new quality management practices and their successful implementation is still
lagging in Bahir Dar Textile Share Company. The Supplier Quality Management has
been found to be the most important influencing factor to organizational performance
and it follows by top management commitment, customer focus, continuous
improvement and process improvement which are realizing better organizational
performance. The success of quality management practices in delivering desired
organizational performance is strongly influenced by TQM dimension. It is concluded
that the successful implementation of quality management practices to generate the
desired performance and it is featured with low level of quality management techniques.
5.3 Recommendations
In light of the summary of the findings and conclusions drawn above, the following
major recommendations have been made.
 The company needed to engage suppliers of raw material. So the company

would assist the firms to address the problem of raw material quality variations.
Also by knowing Suppliers would be part and parcel of the value chain hence
59
they end up knowing the exact quality requirements of the various stages of
production and building a good relationship among suppliers.
 The company top management to show their commitment both in theory and
practice. The vision, mission statement and company policies needed to be
translated to action.
 The company rely on their customers, so they must understand the current and
future needs, and achieve their needs, and work to exceed their expectations.
This is achieved through research and understand all the needs and expectations
of the customer in terms of products, services and delivery date, price and
reliability, and to link the goals established with the needs and expectations of
the client, and follow the way of ensuring a balance between the needs and
expectations of customers and other stakeholders (owners, employees, suppliers
and the community), and inform all levels in the facility this needs and
expectations, and measure customer satisfaction and act according to the results,
customer relationship management to achieve the common interest.
 The company should find new ways and techniques in producing better quality
products, production are more competitive, as well as exceed customer
expectations. And also designed to ensure efficient and effective utilization of
the resources of the organization and to achieve a quality driven culture.
 The company should grow a stronger culture that nurtures high-trust social
relationship and respect for individuals, a shared sense of membership of the
organization, and a belief that continuous improvement is for the common good.
 The company must identify the activities needed to achieve the desired result,
and measure the inputs and outputs of the process, and to identify the
communication channels of main activities of the business, and the risk
assessment results and the potential impacts of operations on customers,
suppliers and other stakeholders, define clearly the responsibilities and
authorities of the of the management of main activities. The focus should be on
how best design, manage and improve processes in order to fully satisfy, and
generate increasing value for, customers and other stakeholders.
60
5.4 Recommended Further Studies
Although this research is directly focuses on distinguishing the relation between TQM
dimensions (continuous improvement, customer focus, process management, supplier
quality management, and top management commitment) and organizational
performance, but several factors directly affected organizational performance because
the study explained or accounted by the explanatory variables 41.9% of the variability
of the dependent variable (organizational performance). Therefore, future researches
could study the impact of TQM on organizational performance in wider scope by
investigating the influences of other factors on performance. Another research focus
should be carried out to study the implementation of TQM in the service and
manufacturing sector to provide a better understanding of TQM implementation.
61
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APPENDIXES I
Debre Markos University
College of Business and Economics
Master in Business Administration
Questionnaire
Dear Respondents:
I Am a Graduate Studies Student at Debre Markos University; currently conducting a

research on “The Effect of Total Quality Management on organizational
performance (the case of Bahir Dar Textile Share Company)”.
The questionnaire is designed to collect data related to the query, and the information
that will be provided serves as the primary data of the research in partial fulfillment of
the Degree in Master in Business Administration.
Confidentiality: I want to assure you that, this research is only for academic purpose
authorized by DMU, Thus your ideas and comments are highly honored and kept
confidential.
Thank you for your time and cooperation.
GENERAL INSTRUCTIONS:
I. Please answer all questions
II. All the questions are closed - ended questions. You are required to put “√” or by
encircling on the options of the letters or as instructed.
III. All information given will remain confidential and to maintain anonymity, no names
are required but for the ease of analysis please indicate your personal details as
presented in the questionnaires.
Part One: Demographic Information

1. Gender:
a) Male ❑ b) Female ❑
2. Age:
a) 18-30 ❑ 31-40 ❑ c) 41-50 ❑ d) 51 years and above ❑
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3. What is your current educational status?
a) Certificate and Below ❑ b) Diploma ❑ c) First Degree❑ d) Master‟s Degree and above
❑
4. Years of service in the company:
a) 1-5 b) 5-10 ❑ c) 10-15 d) 15-20 e) Above 20 years
5. . Current position:
a) Managerial ❑ b) Non-managerial ❑
Part Two: Research Related Questions

In this section you are asked to take into account a number of statements of your view of
the current status of your company. The Following Questions are presented on a five
point likert Scale. If the item strongly matches with your response choose 5, if you
moderately agree on the idea choose 4, if you can‟t decide on the point choose 3, if you
disagreed with the idea choose 2, and if you completely disagree with the point choose
1.
5 = Strongly Agree 4 = Agree 3 = Uncertain 2 = Disagree 1 = Strongly Disagree
No Statements 1 2 3 4 5
Continuous Improvement
1 The organization encourages continual survey and
improvement of all its products, services and processes.
2 I have got continuous training to enhance internal quality of
performance.
3 There is frequently measure the product and process quality.
4 The company uses Plan Do Check Act cycle (PDCA)
extensively for process control and improvement.
5 The decisions regarding quality improvement always are
based on objective data.
Customer Focus
1 Product design, development and delivery are based on
meeting the needs of the customer.
2 Key customer requirements are identified.
3 There is a measure of customer satisfaction on a regular
base.
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4 The Company conducts customer feedback surveys regularly
5 Customer-focused strategies and approaches are
continuously reviewed for further improvement.
Process Management
1 Production equipment is maintained well according to
maintenance plan.
We have site wide standardized and documented operating
2 procedures.
3 The company systematically conducts extensive
benchmarking of other companies business process.
4 Production processes are capable of producing products
according to design specifications.
Supplier Quality Management
1 The company has established long-term relationship with
suppliers.
2 The company always gives feedback on the performance of
supplier‟s products.
3 The company has detailed information about supplier
performance.
4 The company always participates in supplier activities
related to quality.
5 The company treats the major supplier as partner.
Top Management Commitment
1 Top executives are actively involved in establishing and
communicating the organization vision, goals, and values for
quality program.
2 Top management views quality as being more important than
meeting production schedules.
3 Top management allocates adequate resources towards effort
to improve quality.
4 Top management strongly encourages employee
involvement in quality management activities
5 All major department heads within our company accept their
responsibility for quality.
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6 Top management pursues long-term business success.
Organizational performance
1 The number of customers (companies/people who buy

products) has increased.
Customers‟ (companies/people who buy products)
complaints have decreased
2 Market share of our company has improved.
3 The size of sales has increased.

4 Defects/errors in the finished products have decreased.
5 The quality of raw materials has improved.
6 Problems in the technical processes have decreased.
7 Effective utilization of organizational resources (e.g.
buildings, equipment, and materials) has improved.
8 Profit level has increased.
9 Employees‟ willingness to work for extra time has increased.
10 Employees‟ absenteeism has decreased in our company.
11 The number of employees leaving their jobs from the
company has decreased.
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ደብረ ማርቆስ ዩኒቨርሲቲ
የቢዝነስ እና ኢኮኖሚክስ ኮሌጅ
የድህረ ምረቃ ፕሮግራም
የፅሁፍ መጠይቅ
ውድ የጥናቱ ተሳታፊዎች
እኔ በደብረ ማርቆስ ዩኒቨርሲቲ የድህረ ምረቃ ፕሮግራም የቢዝነስ አስተዳደር ተመራቂ ተማሪ ስሆን ፤
በአሁኑ ስዓት የመመረቂያ ጽሁፍ ጥናቴን በመስራት ላይ እገኛሇሁ፡፡ የጥናቴ ርዕስም “በባህርዳር
የጨርቃጨርቅ አክሲዎ ማህበር የጠቅላላ ጥራት ስራ አመራር በተቋማዊ ብቃት ላይ ያሇው ተጽዕኖ”
የሚል ነው፡፡ እርስዎ የሚሰጡት መረጃ ሇጥናቱ ብቻ የሚያገሇግልና በሚስጥር የሚያዝ መሆኑን
ላረጋግጥልዎ እወዳሇሁ፡፡ በመሆኑም የእርስዎ መረጃ ሇጥናቱ በጣም አስፇላጊ ስሇሆነ ይህንን መጠይቅ
በመሙላት አሰፇላጊውን ትብብር እንዲያደርጉልኝ በአክብሮት እጠይቃሇሁ፡፡
ሇጊዜዎና ሇቀና ትብብርዎ በቅድሚያ አመሰግናሇሁ !
ጠቅላላ ትዕዛዞች፡
I. እባክዎ ሁለንም ጥያቄዎች ሇመመሇስ ይሞክሩ፡፡

II. ስም መጻፍ አያስፇልግም፡፡
III. ሁለም ጥያቄዎች ዝግ ናቸው እርስዎ የሚጠበቅብዎት ሇእያንዳንዱ ጥያቄዎች ከተሰጡት
አማራጮች ሇእርስዎ የሚስማማዎትን አንድ ብቻ በመምረጥ ያክብቡ፡፡
ክፍል አንድ፡ ግላዊ መረጃ
1. ፆታ ፡- ሀ. ወንድ ሇ. ሴት
2. ዕድሜ፡- ሀ. ከ18-30 ዓመት ሇ. ከ31-40 ዓመት ሐ. ከ41-50 ዓመት መ. 51 ዓመት እና
ከዛ በላይ
3. የትምህርት ደረጃ፡- ሀ. ሰርትፍኬትና ከዛ በታች ሇ. ዲፕሎማ ሐ. የመጀመሪያ ዲግሪ
መ. ማስተርና ከዛ በላይ
4. በተቋሙ ውስጥ ያሇዎት የአገልግሎት ዘመን ፡- ሀ. ከ1-5 ዓመት ሇ. ከ5-10 ዓመት ሐ.
ከ10-15 ዓመት መ. ከ20 ዓመት በላይ
ክፍል ሁሇት፡-በጥናቱ ዙሪያ የተካተቱ ተሇዋዋጭዎች(variables) ሇመሇካት

የቀረቡ ጥያቄዎች
በዚህ የመጠይቅ ክፍል እርስዎ የተጠየቁት አሁን ያሇውን የተቋሙን የአፇጻጸም

ሁኔታ ሇመሇካት ነው፡፡ ስሇዚህ እርስዎ መጠይቁን በሚገባ በመረዳት ሇእያንዳንዱ
መጠይቅ የሚስማማዎትን “  “ ን ምልክት በመጠቀም ይመልሱ ወይም
ይምረጡ፡፡
73
የምላሹ አማራጮች፡- በጣም እስማማሇሁ(5) ፣እስማማሇሁ(4) ፣ሇመወሰን
እቸገራሇሁ(3)፣ አልስማማም(2)፣ በጣም አልስማማም(1)፡፡
ተ.ቁ ጥያቄዎች አማራጮች

5 4 3 2 1
ቀጣይነት ያሇው መሻሻልን በተመሇከተ
1 ተቋሙ በምርቱ፣ በአገልግሎቱና በሂደቱ ቀጣይነት ያሇው
ጥናትና መሻሻል እንዲኖር ያበረታታል፡፡
2 ውስጣዊ የጥራት ብቃትን ከፍ ሇማድረግ ቀጣይነት ያሇው

ልምምድ አግኝቻሇሁ፡፡
3 አመራሩ የምርትና ሂደት ጥራትን በተደጋጋሚ ይሇካል፡፡
4 ተቋሙ የተግባር ሙከራና ስራ ዑደትን እቅድ በማዘጋጀት

ሇሂደት ቁጥጥርና መሻሻል በሰፊው ይጠቀማል፡፡
5 የጥራት መሻሻልን በተመሇከተ የሚወሰኑ ወሳኔዎች ትክክሇኛ

መረጃን መሰረት በማደረግ ነው፡፡
ደንበኞችን ስሇማረካት በተመሇከተ

1 የምርቱ ዲዛይን፣ አመራረትና ስርጭት የደንበኞችን
ፍላጎት መሰረት ያደረገ ነው፡፡
2 የደንበኞች ፍላጎት በዋናነት የታወቀ ነው፡፡
3 የደንበኞች እርካታ በቋሚነት እየተሇካ ይገኛል፡፡
4 ተቋሙ የደንበኞች አስተያየት እና ፍላጎቶች ላይ ጥናቶችን
በቋሚነት ያካሂዳል፡፡
5 ደንበኛ ተኮር ስትራቴጅዎችና ዘዴዎች ተጨማሪ መሻሻልን
እንዳመጡ በተደጋጋሚ ተረጋግጧል፡፡
የሂደት አሰራርን በተመሇከተ

1 የማምረቻ መሳሪያዎች በአጠቃቀም እቅዱ መሰረት ጥንቃቄ
ይደረግላቸዋል፡፡
2 አሇምአቀፋዊ መሇኪያ እና የተቀመጠ የአሰራር ሂደት አሇን፡፡
3 ተቋሙ የሌሎች ተቋማት የንግድ ሂደትን ስልታዊ በሆነ ዘዴ

ከራሱ ጋር ያወዳድራል፡፡
4 የአመራረት ሂደቶች ናሙና መመሪያን መሰረት ያደረጉ ምርቶች
ይመረታለ፡፡
የአቅራቢዎች የጥራት አመራርን በተመሇከተ
1 ተቋሙ ከአቅራቢዎች ጋር የረዥም ጊዜ ቁርኝት አሇው፡፡
2 ተቋሙ በአቅራቢዎች ምርት ላይ ሁልጊዜ አሰተያየት ይሰጣል፡፡
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3 ተቋሙ ስሇ አቅራቢዎች ብቃት ጥልቅ የሆነ መረጃ አሇው፡፡
4 ተቋሙ ጥራትን በተመሇከተ ካለት አቅራቢዎቸ ጋር ይሳተፋል፡፡
5 ተቋሙ ዋና አቅራቢዎችን እንደ አጋር ተቋም ያያቸዋል፡፡
የከፍተኛ የስራ አመራር ቁርጠኝነትን በተመሇከተ
1 ከፍተኛ የስራ አመራሮች ተቋማዊ ራዕይን፣ዓላማን እና እሴትን

በመቅረጽ እና ሰፊ ተግባቦት በመፍጠር በጥራት ዝግጅት ላይ በንቃት
ይሳተፋለ፡፡
2 ከፍተኛ አመራሮች ጥራትን የምርት መርሃ ግብርን ከማሳካት
አስበልጠው ያስቡታል፡፡
3 ከፍተኛ አመራሮች ጥራት ሇማስጠበቅ ሰፊ ግብዓቶችን እያሟለ
ይገኛለ፡፡
4 ከፍተኛ አመራሮች የሰራተኞች ተሳትፎ በጥራት ዙሪያ በከፍተኛ ሁኔታ
ያበረታታለ፡፡
5 በእኛ ተቋም ውስጥ ያለ ሁለም የስራ ክፍል መሪዎች ስሇ ምርት
ጥራት የተሰጣቸውን ኃላፊነት እየተወጡ ይገኛለ፡፡
6 የተቋሙ ከፍተኛ ስራ ኃላፊዎች ስሇ ድርጅቱ የረጅም ጊዜ
ውጤታማነት ተግተው ይሰራለ፡፡
የተቋሙን አፇጻጸም በተመሇከተ
1 የደንበኞች ቁጥር (ምርት የሚገዙ ተቋማት እና ሰዎች ) ከጊዜ ወደ
ጊዜ እየጨመረ ይገኛል፡፡
2 የገበያ ተደራሽነት በእኛ ተቋም ውስጥ ተሻሽሏል፡፡
3 የተቋሙ የሽያጭ መጠን ጨምሯል፡፡
4 ባሇቀላቸው ምርቶች ውስጥ የተበላሹ (ከጥቅም ውጭ የሆኑ) ምርቶች
ቀንሰዋል፡፡
5 የጥሬ እቃዎች ጥራት ተሻሽሏል፡፡
6 ሙያዊ በሆኑ ሂደቶች ውስጥ ያለ ችግሮች ቀንሰዋል፡፡
7 በተቋሙ ውስጥ ያሇ ተቋማዊ የሀብት አጠቃቀም (ህንፃዎች ፣
መሳራያዎች እና እቃዎች) ተሻሽሏል፡፡
8 የተቋሙ የትርፍ መጠን ጨምሯል፡፡
9 ሰራተኞች ከስራ ስዓታቸው ውጭ ሇመስራት ያላቸው ተነሳሽነት
ጨምሯል፡፡
10 የሰራተኞች ከስራ የመቅረት መጠን እየቀነሰ ይገኛል፡፡
11 ስራቸውን ሇቀው ከተቋሙ የሚወጡ ሰራተኞች መጠን አየቀነሰ
ይገኛል፡፡
75
APPENDIX II
SPSS Output for Dependent and Independent Variables
a
Coefficients
Model Unstandardized Standardized t Sig. Collinearity

Coefficients Coefficients Statistics
B Std. Error Beta Tolerance VIF
1.57
(Constant) .111 14.206 .000
8
Continuous Improvement .091 .036 .125 2.543 .012 .792 1.263
Customer Focus .132 .038 .161 3.456 .001 .886 1.129

1
Process Management .066 .029 .111 2.274 .024 .812 1.232
Supplier Quality Management .211 .033 .330 6.320 .000 .708 1.413
Top Management
.117 .031 .199 3.756 .000 .684 1.462
Commitment
76
77

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DEBRE MARKOS UNIVERSTY

COLLEGE OF GRADUATE STUDIES

THE EFFECT OF TOTAL QUALITY MANAGEMENT ON

A Thesis Submitted in Partial Fulfillment of the Requirements of the

ADVISOR: WASIHUN TIKU (PHD)

DEBRE MARKOS, ETHIOPIA

WASIHUN TIKU (PHD)

A Thesis Submitted in Partial Fulfillment of the Requirements of the

Debre Markos, Ethiopia

College of Graduate Studies

Name of candidate_____________________ signature ______________ date ________

Name of Advisor ______________________ signature ______________ date _______

Signature of Board of Examiners

External examiner _____________________ signature ______________ date ________

Internal examiner _____________________signature ______________ date ________

By: Aregash Mandie

TABLE OF CONTENT ............................................................................................. iii

LIST OF FIGURES .................................................................................................. vii

LIST OF TABLES ................................................................................................. viii

CHAPTER ONE ......................................................................................................... 1

1.1Background of the Study .......................................................................................... 1

1.2 Statement of the Problem ........................................................................................ 3

1.3 Research Questions ................................................................................................. 4

1.4 Objective of the Study ............................................................................................. 4

1.4.1 General Objective ............................................................................................. 4

1.4.2 Specific Objectives ........................................................................................... 4

1.5 Research Hypothesis ............................................................................................... 5

1.6 Significance of the Study ......................................................................................... 5

1.7 Scope of the Study ................................................................................................... 6

1.8 Limitation of the Study ............................................................................................ 6

1.9. Operational Definition of Terms ............................................................................ 6

1.10 Organization of the Study ...................................................................................... 8

CHAPTER - TWO ...................................................................................................... 9

LITERATUE REVIEW .............................................................................................. 9

2.1 Theoretical Literature .............................................................................................. 9

2.1.1 Quality-an explanation ...................................................................................... 9

2.1.3 TQM definitions and the development of TQM ............................................. 13

2.1.4 Total Quality Management Principles ............................................................ 15

2.1.4.1 Customer focus......................................................................................... 15

2.1.4.2Top management commitment .................................................................. 15

2.1.4.3 Process management ................................................................................ 16

2.1.4.4 Continuous improvement ......................................................................... 16

2.1.4.5 Supplier Quality Management ................................................................. 17

2.1.5 Benefits of TQM Implementation ................................................................... 17

2.1.6 The obstacles to TQM practices ..................................................................... 17

2.1.7 Definition of Organizational Performance...................................................... 19

2.2 Empirical Literature............................................................................................... 19

2.3. Conceptual Framework......................................................................................... 21

CHAPTER THREE .................................................................................................. 22

RESEARCH METHODOLOGY ............................................................................. 22

3.1 Description of the Study Area ............................................................................... 22

3.2 Research Design .................................................................................................... 22

3.3. Target Population of the Study ............................................................................. 22

3.4. Sample Size and Sampling Technique ................................................................. 22

3.5 Data Source and Type............................................................................................ 24

3.6 Data Collection Method ........................................................................................ 24

3.7. Method of Data Analysis ...................................................................................... 24

3.8 Model specification ............................................................................................... 25

3.9 Reliability and Validity of the Instrument ............................................................. 25

DATA PRESENTATION, ANALYSIS AND INTERPRETATION ...................... 27

4.1 Demographic Characteristics of the Respondents ................................................. 27

4.2.1 Perception of Respondents on Issues Related to TQM Practices ................... 29

4.3 Mean and Standard Deviation of Variables ........................................................... 42

Name of candidate___________ signature date

Name of Advisor ______________ signature date _

External examiner ___________ signature date

Internal examiner ___________signature date