Total Quality Management and Firm Performance

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Table of Contents

Summary or the Article
Main Learning Points
Critical Analysis
Practical Implications
Future Directions
Work Cited

Summary or the Article

“The relationship between total quality management practices and their effects on firm performance” is an article written by Hale Kaynak and published in 2003 in the Journal of Operations Management. The author presents a study that explores the influence of total quality management (TQM) strategies on the performance of businesses at various organizational levels. The article establishes that this research is different from previous reports focused on the same topic, due to its approach. It is specified that TQM was not studied as a single and solid construct; instead, the author examined different levels of performance, and changes in them, as direct and indirect outcomes of versatile features and aspects of the TQM strategy.

The author begins her introductory section with an explanation of how the quality improvement methods and techniques came about, and that one of these approaches was TQM. As the process of globalization gained pace all around the world, expansion became more relevant to companies and businesses. However, growth was only possible and successful when the production and operation processes were able to cut costs and increase their effectiveness.

This is why quality improvement strategies proved to be highly important and useful. Logically, the research in this sphere of knowledge became more active as more effective and applicable strategies started to be required. The author moves on to describe the early attempts, at the end of the 1980s and the beginning of the 1990s, to research TQM. Initially, the studies focused on the ways total quality management is viewed and applied in various countries and businesses, to identify the differences; over time, the researchers moved on to exploring the effects TQM has on organizational performance (Kaynak 406).

Further, the author presents research questions in the article, with a focus on the relationships among different practices of total quality management, to include which of the practices can produce a direct impact on marketing, finance, and operating aspects, and which practices influence the same aspects in more indirect ways (Kaynak 406). The author specifies that, even though the research duplicates their previous work, it is still unique, due to taking a new approach to TQM practices, as well as performance levels and dimensions.

In the theoretical background section of the article, the author defines TQM and describes its functions and roles. This section also offers a table that demonstrates how the practices and dimensions of the TQM were identified in different studies. Out of this scope of studies, the author selects those that research TQM as a construct with multiple dimensions, and that present its direct and indirect impacts on organizational performance.

In her research, Kaynak identifies management leadership as the primary dimension of TQM that facilitates the changes in all the other spheres. The author supports her choice with the statement that “it is almost impossible to change an organization without a concentrated effort by management aimed at continuous improvement, open communication, and cooperation throughout the value chain” (409). Continuing, the author moves on to the proofs, presenting another table that reflects the summaries of relevant studies that outline the relationship between the application of TQM strategies and the resulting organizational performance.

Immediately following the tables, there is another demonstration—a chart that includes all the dimensions that are a part of the financial and market end performance of businesses. These involve management leadership, training, employee relations, data and reporting, supplier quality management, process management, product or service design, inventory management performance, quality performance, and financial and market performance (Kaynak 414). The arrows that connect the items in the chart reflect their relationships (which dimension has a positive influence on which). The statements behind the arrows are the hypotheses of the study; overall, there are 18 hypotheses.

Going on, the author explains that the data for her research were taken “from a cross-sectional mail study conducted to investigate TQM, just-in-time purchasing (JITP) and the performance of firms operating in the 48 contiguous states of the US that have implemented TQM and JITP techniques” (Kaynak 418). As measures, the author identifies three levels that reflect organizational performance: market, operating, and financial. The survey was pilot-tested on a group of 11 respondents, and the results calculated using Cronbach’s alpha; the pilot study was successful, and the results were evaluated as satisfactory.

The actual study moved on to a much larger sample of respondents from industries likely to use TQM strategies. In total, 1,884 participants were provided with questionnaires by mail. Of these, 383 were returned by the respondents, of which, 382 were usable. As to the demographics of the sample, the respondents who returned the questionnaires were located in 38 states of the United States, were not clustered geographically, and demonstrated a wide and sufficient coverage of the country.

The vast majority of the respondents were upper managers or occupied executive positions in their companies. In addition, the respondents’ professional duties involved quality improvement tasks and concerns, so it might be possible to state that the respondents included in the sample were relatively knowledgeable, in terms of quality strategies and their effects.

Each scale of TQM dimensions further underwent testing using Cronbach’s alpha calculations to determine its reliability, and the results were evaluated as satisfactory. Overall, the results of the study show that there is a relationship between the extent to which total quality management strategies are applied in an organization and its performance in terms of financial profit, operations, and marketing.

Moreover, the results of the study pointed out that leadership management is a primary and necessary element, producing direct and indirect influences on a variety of other dimensions, such as employee relations, training, product design, process management, and quality data and reporting; that way, leadership management can be determined as one of the major and most influential drivers of organizational performance.

At the same time, quality data and reporting turned out to be the least influential dimension, without any direct impact on any of the three levels of performance. The author recommends that future studies focus more thoroughly on this particular aspect of her findings, and investigate the relationship and impact of quality data and reporting on performance. The author concludes that operating performance is directly impacted by supplier quality management, process management, and product or service design; in turn, financial and marketing performance are directly affected by operating performance (Kaynak 426).

Finally, the author emphasizes that it is critical to recognize the importance of the multidimensional structure of the TQM concept, to achieve effectively and, in terms of practicality, useful results of the research. TQM is a highly efficient quality improvement strategy, and that is why its nature needs to be understood appropriately for future application in business practice and theory.

Main Learning Points

Summarize the paper highlighting the main points.

The main points of the study by Kaynak include the statement that TQM is one of the crucial strategies in the contemporary world, where businesses are attempting to increase their effectiveness using optimizing their operations and cutting costs. In addition, another critical aspect and an important learning point in the author’s work is the recognition of the multidimensional structure of TQM. According to the latter perspective, it is irrelevant to examine and test TQM as a solid concept; such an approach would not be likely to result in any practical findings applicable to real-life business situations and environments.

Instead, TQM needs to be seen as a complex construct comprised of a multitude of interrelated aspects and factors that create a chain of impacts with the capacity to contribute to the outcome of organizational performance. Also, one of the main points of the paper was to determine which dimensions are included in TQM, and how they are related to one another, and the final performance at three different levels. The conclusion of the study summarized the relationships within TQM dynamics, and how they tend to affect operating, marketing, and financial performance.

The author found that the former level of organizational performance produces an influence on the other two, and in its turn, it is directly impacted by such TQM dimensions as supplier quality management, process management, and product or service design. Moreover, one of the key findings in the study is the effect of leadership management as one of the most influential dimensions of the total quality management process. In particular, leadership management is identified as the most necessary factor, without which TQM would be completely impossible.

Critical Analysis

Do you disagree with any of the paper parts? Why?

In my opinion, all of the parts of this study are reliable and reflect valuable practical and theoretical points. I do not disagree with any parts of the study. First of all, the study provides a comprehensive explanation as to why it was conducted and what intention it pursued. The author also clearly outlines the three research questions and the 18 hypotheses. In addition, Kaynak explains the need for this research and how it is unique and different from all the previous studies (including the one it duplicates).

Moreover, the concepts researched in the study include multiple factors and dimensions. In addition, the strategy is based on a multitude of studies. The author adds tables and charts to achieve better accessibility of her ideas and findings, as well. The study is cleverly designed; each part has a strong basis and is supported by evidence and demonstrations.

Are the study methodology and its findings apply to other or all industries? Why?

The industries that served as the sources for the respondents were described as those that are the most likely to apply TQM. Other than this description, there do not seem to be any limitations as to which industries are more or less suitable for the application of the research findings. In other words, it is possible to state that any industry that uses total quality management as a quality improvement strategy is suitable for the practical application of the research findings. The author is thorough in her intent to achieve the best applicability and transferability of her research. The demographics of the sample used for the data collection are wide and inclusive, and it can be argued that there are no visible limitations as to the firms or industries to which the study results would be relevant.

Practical Implications

The study was conducted only within the territory of the United States of America, and it attempted to cover as much as possible of this country; namely, the survey included several respondents from as many as 38 states, which presents quite a large territory and a wide variety of firms and companies. GCC countries may differ culturally; however, the leaders and managers there are just as interested in quality improvement strategies in general, and total quality management in particular.

In consideration of that fact, the overall applicability of TQM operations could be very high for the GCC countries. At the same time, it is important to remember that the author of this study specifically emphasizes that total quality management is a multifaceted concept, comprised of a variety of dimensions. She identifies the dimensions using analyzing multiple previous studies and their findings. The dimensions affecting the three main levels of performance in the GCC countries may differ from those outlined by Kaynak, due to the cultural differences between the GCC region and the United States. As a result, the applicability of the findings of this research may be limited.

It could make sense to conduct a similar study using the previous works of authors who were focusing specifically on TQM strategies applied in the GCC region, and in this study establish a more relevant set of factors, dimensions, relationships, and influences. In that way, the study findings would reflect the most appropriate determinants of the relationship between the application of TQM strategies and the final performance of organizations. However, it is possible to assume that most of the findings in this research would be fully applicable to companies operating in the GCC region, because Kaynak does not evaluate any factors or impacts specific to the United States only, and she relies on previous studies from diverse countries.

Future Directions

The work by Kaynak presents one of the first studies focusing on TQM as a complex concept, driven by a multitude of factors and influences having internal connections and function, forming chains of interactions that affect the final performance results of the organizations using this method. This research is new in its sphere of knowledge because it takes a qualitatively new approach that views TQM from a new perspective. It is possible to take this research a step further through several different means.

First of all, one of the ways to continue this research would be to follow the recommendations of the author, and focus on the exploration of the roles and effects of the dimension of quality data and reporting, because Kaynak did not find any direct impacts of this aspect of TQM on any of the end performance levels. The second way to expand the research would be to emphasize leadership management, as the most powerful factor, and its influence on the other TQM dimensions.

In practical terms, the strategies and practices that create stronger or weaker effects on different areas could be researched. The third way to take this research one step further would be to do what was already described in the previous section: to duplicate this study, focusing on the GCC countries only, to establish whether or not cultural differences serve as a factor in the dynamics and effects of TQM structure, relationships, and impacts. The findings of this study could be used by other researchers to determine how their cultures and regions affect the results and outcomes of the implementation of total quality management techniques (or if they have any effect at all).

Work Cited

Kaynak, Hale. “The relationship between total quality management practices and their effects on firm performance.” Journal of Operations Management 21 (2003): 405–435. Print.

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