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The impact of total quality

management on service
company
performance: evidence from
Spain
Zainab Ghaddar
200902569

as competition increases in the new global economy. Understanding and applying quality philosophies by top .Introduction Nowadays. There is a need to understand the term “quality” better where it is fundamental factor for companies to create competitive advantage to be successful and become profitability leaders.

Effective TQM practices in the modern era should go beyond meeting requirements to engage additional dimensions of customer satisfaction focus such as : • Training • Education • Empowerment of Employees • Continuously improve performance .Introduction to Total Quality Management Total quality management (TQM) is a leading force in shaping and spreading quality management ideology and practices in modern business management.

Australia and elsewhere and its influence has been remarkable. service industries in Spain have lead it to be third in the world (behind China and Italy) in the number of ISO 9001 quality management certifications by implementing ISO 9001 standards and winning quality . the USA. For example.The Trend of TQM The trend of TQM is strong in Europe. Japan.

Despite that. there was a need to continue studying the Relationships between TQM critical factors and the results that the companies obtain from the quality perspective of Services industry to achieve customer satisfaction .The quality management phenomenon TQM research studies has been conducted worldwide and in different sectors has been the subject of much debate concerning the linkage of TQM factors to other business dimensions such as improved financial performance and service quality.

employee empowerment . practices. it would include the following components: Management commitment and strategic quality planning Training. However.What varies is the number and the priority of Quality principles .TQM in the Service Sector TQM in service company is a network of interdependent elements . and techniques. if there was a consensus among experts regarding what constitutes TQM.and .

Spanish Service Companies The service companies operating in northern Spain including education. healthcare. Noting that these companies that employ quality managers with either university degrees or extensive experience in service sector have been certified according to ISO 9001. These factors contribute to consider the Spanish service companies an important sample to study the effect of TQM practices on Companies performance . food and beverage catering have been implementing improvement methodologies in an effort to achieve the business excellence level . ISO 14001. consultancy. insurance. communications. ISO 18001. banking/finance.

Service company performance from TQM implementation The aim of a business implementing quality management is long-term profitability and cost effectiveness. 2. sales growth and market share. Organizational effectiveness: productivity. 4. Employee satisfaction: management-employee relation. The performance benefits of companies can be broadly categorized into four main groups : 1. 3. Financial and market benefits: profitability. innovation. Customer satisfaction and loyalty : defects rate and competitive price. and cost and waste reduction. .

The impact of TQM on service company performance TQM impact on the organization’s overall performance cannot be underestimated. operational performance. competitive performance. the proper implementation of TQM principles/elements positively influences company performance in many dimensions concerning organizational performance. different TQM practices affect company performance in different levels of influence . quality performance. financial performance. market performance. However .

desires are recorded and analyzed Customers are encouraged to submit complaints and proposals for quality improvement .The impact of the TQM factors on the performance dimensions According to the results. “operational performance” is affected by two TQM factors. requirements. namely:  “Employee knowledge and Education”: The employees have knowledge and know-how The employees are educated in subjects with regard to their specialty and daily work  “Customer focus”: Customers’ needs.

satisfaction level and proposals for quality improvement are selected . employee knowledge and education.The findings also showed that customer focus. and operational performance affects product/service quality performance : Quality data are taken into consideration from employees during their daily work. Process quality data are recorded and analyzed The critical processes are determinedevaluated Data are collected from employees regarding their satisfaction and suggestions for improvements Customers’ complaints.

Top management gives the authority to employees to manage quality problems “Customer focus” .Moreover “customer satisfaction” is significantly affected by the following factors: Product/service quality performance” : The quality policy is taken into consideration in strategic planning The quality objectives are being set based on customer needs and requirements Quality practices of top management: Top management sets the quality issues on the agenda of the managers’ meetings .

“financial performance” is significantly affected by operational performance and employee quality management that is reflected in company’s profitability . Its worth noting that there are indirect TQM benefits concerning the external environment with regard to society welfare. . and its ability to access foreign markets.Finally.the company’s cash flow from operations.

which can help a service company concentrate its efforts on specific quality initiatives in order to enhance the benefits derived from TQM implementation. . However. knowledge and management. customer orientation. each performance dimension is affected by specific TQM factor.:Conclusion From the above discussion it is apparent that some TQM factors are more significant than others in improving a performance dimension of a service company such as: employees’ education.

33 Iss 3 pp.398 . 380 .Reference International Journal of Quality & Reliability Management. Vol.