Total Quality Management & Business Excellence

This article was downloaded by:[Universidad Granada][Universidad Granada]

On: 16 February 2007Access Details: [subscription number 758062591]Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

Total Quality Management &Business ExcellencePublication details, including instructions for authors and subscription information:http://www.informaworld.com/smpp/title~content=t713447980

Total Quality Management, strategic orientation andorganizational performance: the case of SpanishcompaniesM. Mar Fuentes Fuentes a; F. Javier Lloréns Montes a; Luis Molina Fernández aa Faculty of Economics and Business, University of Granada. Granada. Spain

To link to this article: DOI: 10.1080/14783360500451358URL: http://dx.doi.org/10.1080/14783360500451358

Full terms and conditions of use: http://www.informaworld.com/terms-and-conditions-of-access.pdfThis article maybe used for research, teaching and private study purposes. Any substantial or systematic reproduction,re-distribution, re-selling, loan or sub-licensing, systematic supply or distribution in any form to anyone is expresslyforbidden.The publisher does not give any warranty express or implied or make any representation that the contents will becomplete or accurate or up to date. The accuracy of any instructions, formulae and drug doses should beindependently verified with primary sources. The publisher shall not be liable for any loss, actions, claims, proceedings,demand or costs or damages whatsoever or howsoever caused arising directly or indirectly in connection with orarising out of the use of this material.© Taylor and Francis 2007

http://www.informaworld.com/smpp/title~content=t713447980

http://dx.doi.org/10.1080/14783360500451358

http://www.informaworld.com/terms-and-conditions-of-access.pdf

Dow

nloaded By: [Universidad G

ranada] At: 12:07 16 February 2007

Total Quality Management, StrategicOrientation and OrganizationalPerformance: the Case of SpanishCompanies

M. MAR FUENTES FUENTES, F. JAVIER LLORENS MONTES &LUIS M. MOLINA FERNANDEZ

Faculty of Economics and Business, University of Granada, Granada, Spain

ABSTRACT This paper examines the relationship between strategy and Total Quality Management(TQM) implementation, as well as the impact of the adaptation of both to organizationalperformance. We have used the emphasis on cost leadership, differentiation on marketing anddifferentiation on innovation as strategic dimensions to develop four great strategicconfigurations. The degrees of implementation of the TQM elements in each of them, as well astheir associations to the various types of performances have been studied. Our resultssignificantly support the hypotheses proposed, and suggest differences in TQM implementationdepending on the selected strategy. It is also noticed that companies with greater degrees ofco-alignment between their strategies and TQM are those with the highest levels of performance.

KEY WORDS: Strategy, organizational performance, co-alignment

Introduction

One of the key issues for the success of TQM has been its possibility to become globally

integrated in the strategic planning of the companies that have implemented it, permitting

many of them to keep or improve their competitive position by means of a perfect fitting of

Total Quality Management and the business strategy implemented.

Various works have proved the relationship between TQM and business strategy in

theory (Pruett & Thomas, 1996; Schonberger, 1992; Srinidhi, 1998; Wilcox et al.,

1996), but practical evidence can hardly be found (e.g. Barclay, 1993; Dansky &

Brannon, 1996). Belohlav (1993: 58) states that the way in which quality fits with the cor-

porative strategy is not very clear, and thus has given rise to some confusion, as the word

quality has been used with different meanings. Quality has been considered as an operative

Total Quality Management

Vol. 17, No. 3, 303–323, April 2006

Correspondence Address: M. Mar Fuentes, Faculty of Economics and Business, Campus de Cartuja, s/n, 18071

Granada, Spain. Email address: [email protected]

1478-3363 Print=1478-3371 Online=06=030303–21 # 2006 Taylor & FrancisDOI: 10.1080=14783360500451358

Dow



activity to describe techniques such as the circles of quality; as part of a system character-

izing processes such as statistical control; or as a philosophy to which the decisions and

actions that comprise the corporative strategy underlie. Therefore, it is difficult to establish

the relationship between quality and corporative strategy. This view is endorsed by Pruett

& Thomas (1996), who think that a lack of clarity remains as to the effects of quality on the

strategic management process, and by Powel (1995: 16), who states that the impact of

TQM on strategic practice and research has not been clarified nor examined yet, and

that case studies on TQM performance – directed only at helping managers implement

TQM more effectively – lack rigor and theoretical basis.

In light of the above, a demand arises for studies aimed at clarifying how TQM relates to

business strategy, and ultimately to business performance. On this regard, this paper aims

to bring some light on the question on a two-fold basis. First, by establishing the type of

strategies that relate to TQM dimensions and determining whether there are strategic con-

figurations that favour the implementation of TQM elements. Secondly, by analysing how

well an adequate co-alignment between TQM and strategy serves to attain a higher per-

formance level.

Literature Review

Relationship between TQM and Strategy

The concept of quality and, therefore, the strategic considerations underlying it, have

suffered an important evolution. Traditionally, quality was considered as part of a functional

manufacturing strategy consisting of four dimensions: costs, quality, flexibility and

dependability (Buffa, 1984; Wheelwright, 1984). Each element yields an effect through

a set of variables such as economies of scales, capability of adaptation to technological

changes, inventory policies, etc (Swamidass & Newell, 1987). The cost entails a measure-

ment of the efficiency of the manufacture function. Quality is a variable related to the

capability of the company to supply superior products and services. Dependability com-

prises on-time delivery to highly loyal customers. Flexibility is a measurement of the

company capability to respond expeditiously to the market requirements or technological

shifts. In principle, the relationship between these four dimensions was considered as one

of exchange, that is, an improvement in one of them was detrimental for the others

(Skinner, 1969). Hence, for instance, it was considered that a quality improvement

involved an increase in costs. In the 1980s, the Japanese industry proved these premises

to be wrong, and quality becomes the bottom line of production strategy. Nakane’s

(1986) cumulative model establishes quality as the basis for all improvements. When it

reaches a critical point, dependability can be enhanced, then costs can be reduced, and

at the end quickness or efficiency can improve. Maintaining each one of the elements is

possible only with the sustainability of the previous dimensions, to which systems such

as Just in Time or Total Quality Control have contributed.

In light of the proved importance of quality during the 1980s, its role in the business

strategy has experienced two significant advances (Dean & Evans, 1994). First, many

companies have recognized that a quality-driven strategy can lead to gaining significant

competitive advantage. Second, the gap between quality business strategies and generic

business strategies increasingly disappears. According to these authors, the current

trend consists of integrating quality planning within the normal business planning, that

304 M. M. F. Fuentes et al.

Dow



is to say, to transform TQM into a basic operational philosophy (Dean & Evans, 1994:

261). Consequently, the importance of including quality into strategic planning has

been made evident. Thus, the Baldrige Award has a strategic planning category, which

examines the integration of the key quality requirements in overall business planning.

Also, some authors consider strategic management of quality as one of the areas that

needs further study in future research on TQM (Godfrey & Blanton, 1993). Similarly,

according to Pruett & Thomas (1996), the strategic management perspective can contrib-

ute to the creation of an integrated concept of quality management through the following

elements, present in both subject matters: environment, leadership, method and system. In

strategic management, the environment plays an important part and some of the external

forces such as customers or competitors can also be relevant. Leadership and definition

of a mission are further common aspects of quality and strategic management.

The implementation of the appropriate methods to achieve the goal is relevant for strategy

whereas quality management, in a similar way, focuses on the study of the work structure.

Finally, although strategy focuses on companies, at the same time it recognises that these

are part of a system designed to supply products and services to final consumers. That way,

these authors suggest that the strategic management of quality means that the company

uses quality, cooperation and long term viability as matters interrelated to orientation,

information, education and motivation; whereas those items with which it interacts are

used with the purpose of continuously improving and reinforcing personal and process

input, interactions, dependability, relationships and outputs that encompass the

company and the system where it belongs Pruett & Thomas (1996: 40).

But the link between Total Quality Management and strategic planning not only occurs

during the implementation stage. Actually, it appears from the very moment of formu-

lation. The strategy formulation process can be fostered by TQM in various ways

(Dean & Evans, 1994): (1) it favours a company’s consideration of the customer perspec-

tive; (2) it relieves senior management of the leading role in strategy implementation and

development; (3) orientation to objective measurement and reasoning promotes the track-

ing of the degree of goals attainment; (4) orientation to teamwork creates expectation, as

all members in the organization play a part in formulating the strategy; and (5) it entails the

incorporation of quality as a fundamental to strategy.

According to Belohlav (1993), the quality value for a competitive strategy consists of

creating choices and opportunities that do not exist for other competitors. From the stra-

tegic standpoint, the company determines how the quality advantage it has created will be

used. According to this author, the real benefit of incorporating quality to the organization

does not lay in providing better strategic choices. Rather, it underlies shifting the environ-

ment perception from a macro to a micro perspective. In particular, a quality-oriented

company focuses more on fighting competitors than on industry, that is, on the products

and services competitors supply. Secondly, customer focus supersedes market orientation.

Thus, customer characteristics are analysed individually, and the ‘hows’ and ‘whys’ of the

utilization of a given product are studied along the entire value chain. Finally, the last shift

lays in the transformation of a functional organization into a process organization, so that

it is envisaged as a system with all constituencies interrelated.

Powell (1995) considers TQM as an irrepressible event and a strategic force that glob-

ally survives in the current industrial economy. According to him, the relationship

between TQM and strategic management can be further explained thanks to the theory

of resources, according to which TQM is considered as an intangible strategic resource

TQM, Strategic Orientation and Organizational Performance 305

Dow



that can hardly be copied by competitors. Madu & Kuei (1993), with the so-called

Strategic Total Quality Management (STQM), have made a proposal of integration of

TQM and strategic processes. STQM is a philosophy based on the development of a

total quality system perspective (Madu & Kuei, 1993: 122). This broad vision considers

quality as a mirror of the overall business performance, and does not refer merely to

quality in products or services. On the other hand, Strategic Total Quality Management

takes account of socially-conscious decisions and is environmentally-sensitive.

TQM Dimensions

One of the most outstanding characteristics of TQM literature is the lack of a consensus on

a TQM definition. There is neither a unique theoretical formulation nor a final list of prac-

tices therewith associated. Many researchers agree on the significant difficulty they find at

attempting to define the principles, practices and elements required for quality implemen-

tation. Nevertheless, a revision of the existing literature permits us to determine a series of

dimensions where major consensus has been reached, and they are listed below.

Customer focus

In an organization embracing the principles of TQM, both actions and functions are

designed and performed with the aim of meeting the needs of customers, who also deter-

mine their value. This way, they ensure long-term success, as customer satisfaction relates

to customer keeping and market share gaining. The importance of this principle is proved

by the fact that there are few TQM definitions that do not take account of it, either directly

or indirectly (e.g. Bowen & Lawler, 1992; Ciampa & Moreno, 1993; Dean & Bowen,

1994; Spencer, 1994; Sitkin et al., 1994; Grant et al., 1994; Waldman, 1994).

Continuous improvement

This is one of the core concepts of TQM based on a commitment to ongoing process revi-

sion, both technical and administrative, directed at continuously improving such processes

(Dean & Bowen, 1994). Authors such as Deming (1982) and Imai (1989), for instance,

have remarked the importance of this notion for the survival of the company in the long

term.

Teamwork

It is the bottom line for the company to be committed to learning and to the changes

produced by quality improvement. Potential learning capabilities are greater in team

environments than in individual ones (Morgan & Murgatroyd, 1994). According to

Dean & Bowen (1994), teamwork must be considered from a broad perspective, and on

this basis, they extend the concept to the common work performed: (a) by management

and non-management staff, (b) across all functions, and (c) between the company and

its customers and suppliers.

Management commitment and leadership

Top managers must direct the entire Total Quality process at creating values, setting goals

and developing systems designed to meet customer expectations and to improve organiz-

ational performance. Many authors agree with the fact that the main task of the manage-

ment is to create a vision that incorporates Total Quality as an integrating part of the


Dow



business, and, immediately after, implementing policies, practices and structures that are

consistent with that mission. Rather than planning, running and controlling, the manage-

ment role must be directed at driving, involving and assessing.

Employees’ participation and involvement

The involvement of the employees is considered as the bottom line in TQM processes.

Such involvement requires that employees assume responsibilities to achieve quality in

accomplishing their tasks, and actively take part in the process of continuous improve-

ment. In particular, participation can improve the quality of products and services in differ-

ent ways: by means of self-inspection, which decreases inspection costs and encourages

employees to do things right at first; through problem-solving techniques, or by means

of the employees’ motivation and creativity.

Training and Education

These are important aspects, as they must provide employees with the necessary knowl-

edge and skills to enable them to cope with problem solving and self-management and

self-control in task accomplishment.

Management process

This represents a series of management practices that allows for the operativeness of all

the other elements, and constitutes a scientific approach to problem solving. Among

these practices, orientation to prevention, statistical control of processes, motivation

activities, award systems, and so on, are included.

Dimensions of the Business Strategy

Business strategic literature considers various generic strategic classifications, which can

be applied both to specific situations (i.e. industries in decline, with low market shares, low

production, etc) and to a wide range of business situations; the later being used more

extensively as they can be applied in a wider variety of fields, such as the applications

illustrated by Abell (1980), Hofer & Schendel (1978), Miles & Snow (1978) and Porter

(1980, 1985).

This paper considers three strategic dimensions, in a way similar to Lee & Miller

(1996): cost leadership, differentiation on marketing and differentiation on innovation.

Such dimensions reproduce Porter’s (1980, 1985) scheme, but accounting for the reformu-

lation made by Miller (1986, 1988), who sets forth the two types of differentiation. Cost

leadership is directed at gaining market superiority over competitors by means of a

low-cost position able to yield an effect, in turn, on lower prices. To achieve such a

goal, companies can act by reducing production costs; increasing their capacity utilization,

controlling materials supply or product distribution, among other things. This strategy is

similar to that proposed by Miles & Snow’s (1978) advocates. Marketing differentiation is

similar to the analysers’ category proposed by Miles & Snow (1978). The objective is to

enhance customer loyalty, by creating a unique product image, which can be reached

through advertising, market segmentation or a high price, without needing to have a

superior design. Differentiation on innovation involves the introduction of new products

or services in the market through new technology implementation.


Dow



Hypotheses

Relationship between TQM Dimensions and Strategy

Cost leadership-driven companies focus their efforts on cost control and greater

production efficiency. According to Miller (1988), these companies will seek customers

that appreciate product price over image or innovation. Thus, innovation becomes a super-

fluous activity in these cases. This leads us to suggest that customer focus and actions

related to product enhancement will be minimized, as customers are characterized as

having more stable preferences. However, tasks related to process efficiency, such as pre-

vention, and those associated with training and learning will have a greater importance

weight. On top of this, studies such as those of Dess & Davis (1984) suggest that

success in cost leadership depends on the implementation of technological processes

permitting one achieve economies of scale. On the other hand, leadership, teamwork

and employee involvement will be TQM low-profile elements. In view of the above,

the following hypothesis can be posed:

H1: Costs-leadership positively and significantly relates to management processes

and to employees’ learning and training, and, to a lesser extent, to the other TQM

elements.

Companies that place an emphasis on differentiation on marketing will require a high

customer focus and the company image can be backed up with a leadership capable of

deploying the company vision, to both employees and customers. In this strategy, the man-

agers’ degree of knowledge of the customer needs and market products are a priority

(Miller, 1988). On the other hand, it also requires that employees be highly involved,

so that customers have an image of the company as worthy of trust and confidence.

As the success of the company’s products will not depend on the company’s technological

level, actions aimed at upgrading technology will be a low-profile activity. As a matter of

fact, market orientation can be attained more easily by means of an image and quality shift

than by changing the nature of the products (Miller, 1987). Therefore, the following

hypothesis arises:

H2: Differentiation on marketing positively and significantly relates to leadership,

customer focus and employees’ involvement, and to a lesser extent to the other

TQM elements.

The creation of new products demands flexible structures in companies, which serves to

promote cooperation between different specialists. Lawrence & Lorsch (1967) and

Mintzberg (1979) showed that intensive cooperation, open communication and empower-

ment facilitate continuous innovation. In this sense, the cooperation among different

members in the organization, as promoted by TQM, can foster the implementation of

this strategy, whereas it can also give rise to a higher degree of involvement by employees,

as their being empowered can increase their degree of satisfaction with the task accom-

plished. On the other hand, the assumption that differentiation on innovation is based

on the creation of products superior to those of competitors in terms of quality, efficiency,

or design innovation, will make companies emphasize more their continuous improvement

actions, as well as on learning and training actions. Therefore,


Dow



H3: Differentiation on innovation positively and significantly relates to cooperation,

employees’ involvement, continuous improvement, employees’ learning and train-

ing, and to a lesser extent to the other TQM elements.

Strategic Configurations and Implementation of TQM Elements

The relationship between TQM and strategy can be tackled according to two different

procedures. The first option has been explained in the previous paragraph and consists

of establishing individual relationships between TQM implementation elements and the

types of strategy. According to Miller (1986), this type of study does not reflect reality,

since it only establishes bivariant or multivariant linear relationships. Venkatraman &

Prescott (1990) term it the reductionist approach. Nevertheless, it helps to give us a

first idea of the existing associations between the variables studied. Miller (1986)

further distinguishes a second alternative to study the relationship between two

constructs by defining configurations, gestalts or archetypes. Gestalts are defined in

terms of the level of internal coherence of a set of theoretical attributes (Venkatraman,

1990). This second approach responds to Venkatraman & Prescott’s (1990) holistic pos-

ition with regard to the co-alignment or fitting concept in strategic studies, at the same

time as it permits us consider an interrelation between the different TQM dimensions

and strategy. Therefore, this option allows us to analyse the degree of implementation

of the different TQM elements in terms of the types of strategy executed by the

companies. The difficulty in setting forth a priori strategic configurations leads us to

the following general hypothesis:

H4: The degree of implementation of the TQM elements varies for each strategic

group.

Alignment of the Strategy with TQM Elements and Business Performance

The most recurrent argument used by quality advocates is its relation with performance.

Both Deming’s (1989) chain of reactions and Juran’s progress spiral justify investments

in quality (Juran and Gryna, 1988), as they suggest that improving quality results in a pro-

gressive decrease in costs, an improvement in productivity, an increase in the market

share, major business stability, creation of better jobs and product enhancement.

Nevertheless, Kiernan (1993) considers that TQM is a means for strategy implemen-

tation. In his model of Strategic Architecture, strategy is determined on the basis of an

analysis of the market, of the customer needs and of the competitive advantage sources.

Once the strategy has been shaped for implementation, TQM elements such as partici-

pation, leadership or continuous improvement are essential points. Similarly, Schonberger

(1992) suggests that TQM principles contribute to link operational activities and decisions

made with the strategic objectives. That is, although principles are not strategic decisions,

they can improve the chances that such decisions are the right ones.

In light of the above, it can be concluded that if a right co-alignment exists between the

degree of TQM implementation and the strategy adopted by the company, a higher

competitive advantage can be gained. According to this, it is interesting to study which

TQM dimensions provide higher performance levels depending on the business strategy


Dow



adopted. Bearing in mind that benefits of TQM implementation can involve different types

of performance, the following hypothesis should be considered:

H5(a): The relationship between the level of implementation of the TQM elements

and the financial performance varies for each strategic group.

H5(b): The relationship between the level of implementation of the TQM elements

and the operational performance varies for each strategic group.

H5(c): The relationship between the level of implementation of the TQM elements

and the employees’ performance varies for each strategic group.

Methods

The Sample

Data used in the study have been gathered by submitting a questionnaire to a sample of

1550 privately-owned Spanish companies that have embraced TQM implementation.

As there is no such a thing as an official register of companies meeting this requirement,

the sampling was selected from the company members of the Club de Gestion de Calidad

(Quality Management Club), or from those companies that hold a quality certification. The

figure amounted to 7500 companies in September 1999.

The Quality Management Club defines itself as a national association of companies

(both privately and publicly owned), leading their respective business fields and com-

mitted to TQM. On the other hand, companies that have a quality certification hold a docu-

ment stating their fulfilment of certain quality assurance requirements. Although this does

not necessarily involve their having implemented – or being in the process of implement-

ing – TQM, Askey & Dale (1994) or Stephens (1994) have proved that being a holder of a

quality certification is often a preliminary step to Total Quality implementation. In this

regard, the questionnaire included an item relating the years into TQM, in order to

verify the above circumstance.

The questionnaires were sent via ‘snail mail’ and fax. The snail mailing was made in a

prepaid envelope for returning the questionnaire. The mailing included an identification

system in order to determine the companies that had already submitted the questionnaire,

so that we could send a reminder to those pending answer. The number of questionnaires

posted by snail mail amounted to 465. The outstanding forms were faxed without previous

telephone contact with the company.

All questionnaires were addressed to the person responsible for quality matters within

the company, should he/she be the general director or a member of the management.

Posting and reception of the questionnaires took place throughout the months of Septem-

ber 1999 and February 2000. In this period, mailing was progressively made. The final

number of questionnaires received amounted to 286, of which 273 were valid, the response

rate amounting to 17.61%. Out of this figure, 105 were snail mailed questionnaires

(22.58% response) and 168 faxed ones (15.48% response).

The business profile of the companies taking part in the final sample comprises 68.9%

industrial companies, and 31.1% companies working in the service sector. Regarding the

number of employees, most companies analysed ranged from 51 to 250 employees

(29.5%), while the smallest amount corresponded to companies of between 501 and

1000 employees (6.8%). 73.4% companies were in the range of companies with fewer


Dow



than 250 employees, whereas 26.6% had larger numbers of staff. The sample is relatively

homogeneous in terms of the number of years into TQM implementation, as 76.8% of

cases started implementation less than 5 years ago, whereas only 23.2% had more than

5 years of implementation.

In 78.4% of cases, the questionnaire has been filled-in by the company quality manager,

16.1 % were answered by the general director, and the rest, by another member of the man-

agement. This information suggests that the polled companies have a specific position for

quality management activities, in which the managing director delegates his/her respon-

sibilities. Asked about their quality education and training, the higher percentage (45.9%)

describes it as advanced and 24% as expertise, which indicates a high level of quality train-

ing (in total nearly 70% ranges between advanced and expertise), whereas 30% considers

their training as medium or basic (4.4% basic and 25.9% medium).

The Measures

Total Quality Management

Total Quality Management has been measured with Grandzol & Gershon’s scale (1998)

consisting of 39 items grouped in seven dimensions: leadership (5), internal/external

cooperation (8), customer focus (4), continuous improvement (4), management process

(8), employee involvement (5) and learning (5). The person polled has been asked to

value each item using a 7-point Likert scale ranging from 1 (strongly disagree) through 7

(strongly agree). The items used for measuring each of the items are showed in the Appendix.

Strategy

Strategic dimensions have been measured with a 7-item scale used in the studies carried

out by Lee (1989) and Lee & Miller (1996) (see Appendix): (2) for cost leadership, (3) for

marketing differentiation, and (2) for differentiation on innovation. We asked for an

assessment of the emphasis placed on each activity during the years of implementation

of TQM ranging from 1 (none) to 7 (great).

Performance

The appendix includes a 10-item scale for measuring the performance that affects various

indicators of the goal achievement as stated by TQM experts and used in previous works

(e.g. Adam & Everett, 1994; Anderson et al., 1995; Chenhall, 1997; Forker et al., 1996;

Grandzol & Gershon, 1998; Mohr-Jackson, 1998; Powell, 1995). According to the organ-

ization performance model set forth by Venkatraman & Ramanujam (1986), we dis-

tinguish three dimensions: financial performance, operational performance and

employee performance. The different variables have been valued with a scale ranging

from 1 (extremely bad) to 7 (extremely good) regarding the values existing prior to

TQM implementation. This sort of subjective measurement allows for a better comparison

between different types of industries and situations.

Analysis and Results

Reliability and Validity of Scales

To check the reliability and validity of the scales implemented in our study, we performed

a confirmatory analysis of the factors for each construct (TQM, strategy and performance).


Dow



In the case of TQM, items were based on a questionnaire developed by Grandzol &

Gershon (1998). Although the authors proved its reliability and validity we have

considered it convenient to double-check them, as: (1) we have used a 7-point Likert

scale for measuring, instead of the 6-point semantic differential used by them; (2) our

questionnaire was exclusively addressed to members of the management, whereas theirs

was answered by representatives of different hierarchical layers in the organization.

Similarly, the measuring scale for strategy is not specific of this study. The scale was

designed for Korean manufacturer companies and therefore it has also been considered

convenient to carry out a confirmatory analysis to guarantee reliability and validity.

Results of the analysis are shown in Table 1. The first step to interpreting the results of

confirmatory factor models is to assess the overall fit model. As indicated in Table 1, most

of the overall model fit rates are acceptable (GFI, AGFI, normed chi-squared and

RMSEA); the next step is then to evaluate and interpret the estimated model benchmarks.

In the final scales all indicators have significant positive weights ( p , 0.05) and factor

loadings exceed the minimum threshold of 0.4 (Hair et al., 1998), the significantly good

construct validity of the latent variables proposed. The squared multiple correlation (R2)

for each indicator gives the communality of the indicator and it can be used to assess

how good or reliable a variable is for measuring the construct that it purports to

measure. Although there are no hard and fast rules regarding how high the R 2 should

be, Sharma (1996) suggests that it should be at least greater than 0.5. In the present

case, most of the R2 exceed this value. Finally, Cronbach’s alphas, constructs reliabilities

Table 1. Results of confirmatory factor analysis

Scale title

Range of

standardized

estimatesaRange of

R2Construct

Reliability

Variance

extracted

Cronbach’s

a

total quality managementLeadership 0.84–0.89 0.70–0.79 0.85 0.75 0.62Teamwork 0.79–0.90 0.62–0.81 0.94 0.72 0.85Customer focus 0.87–0.91 0.76–0.84 0.85 0.66 0.84Continuous

improvement0.74–0.97 0.55–0.94 0.86 0.68 0.70

Process management 0.86–0.91 0.74–0.83 0.88 0.78 0.74Employee fulfilment 0.87–0.97 0.75–0.93 0.95 0.86 0.87Learning 0.74–0.92 0.55–0.85 0.87 0.69 0.78Goodness of fit GFI ¼ 0.97; RMSEA ¼ 0.034; AGFI ¼ 0.96

strategy dimensionsCost leadership 0.52–1.00 0.24–1.00 0.76 0.64 0.61Marketing diff. 0.67–0.78 0.45–0.60 0.76 0.51 0.69Innovation diff. 0.80–0.80 0.64–0.64 0.78 0.64 0.76Goodness of fit GFI ¼ 0.98; RMSEA ¼ 0.082; AGFI ¼ 0.94

organizational performanceFinancial p. 0.94–1.00 0.88–1.00 0.97 0.94 0.94Operational p. 0.71–0.78 0.51–0.60 0.79 0.56 0.74Employee p. 0.65–0.81 0.53–0.74 0.78 0.64 0.65Goodness of fit GFI ¼ 0.99; RMSEA ¼ 0.057; AGFI ¼ 0.99

ap , 0.05.


Dow



and extracted variances indicate an adequate internal consistency of the constructs. The

reliabilities are fully acceptable, since they exceed the 0.70 threshold, while the extracted

variances approach the 0.50 target value.

Hypotheses 1 through 3

To verify the three first hypotheses (H1 to H3), correlations between TQM implementation

elements and the three strategic dimensions considered have been calculated. Results are

shown in Table 2. According to them, correlations range from -0.011 and 0.392.

The absence of high correlations and their range of variance suggest that we are dealing

with different constructs.

According to the results shown in Table 2, Hypothesis 1 achieves a weak endorsement

for, as can be noticed, there is only one significant negative correlation between cost lea-

dership and employee involvement. In the case of Hypothesis 2, data partly confirm the

relationships suggested. Dimensions of leadership and employees’ involvement show

greater correlations, although this does not apply for customer focus, where the existing

correlation is similar to the correlation between the dimensions of cooperation and man-

agement process. On the other hand, the resulting correlations between the dimensions of

continuous improvement and learning are also higher. Finally, Hypothesis 3 is partially

confirmed. According to our expectations, results show that there is a higher correlation

between differentiation on innovation and the dimensions of continuous improvement,

employees’ involvement and learning. Nevertheless, the association with the cooperation

dimension is similar to that of other dimensions, such as leadership or management

process. The fact that the weakest value of correlation of this strategy occurs for its cor-

relation with customer focus must be pointed out.

Despite the fact that the verified hypotheses are confirmed only in part, if we considered

data overall, the above theory obtains significant support. Thus, results back up the argu-

ment that there is a relationship between TQM and the strategic dimensions considered.

Hypothesis 4

Verification of Hypothesis 4 has required a previous cluster analysis with SPSS software,

in order to establish gestalts or strategic configurations for the dimensions considered.

Firstly, a hierarchical analysis has been carried out (simple link, full link and Ward)

to determine the best number of groups. According to Hair et al.’s (1988) orientation,

we have calculated the percentage of change in the multiple coefficients for the three

analyses, and found that the shift from four to three groups showed the highest percentages

of change. Thus, the four-group solution was selected. Then, the final conglomeration

centres have been calculated through k-mean, which served to interpret them. Table 3

showed the strategic dimensions’ means in every cluster. Additionally, we performed

an ANOVA in order to verify differences among groups. With the purpose of interpreting

the clusters, both Bonferoni’s and Tamhane’s tests were carried out, aiming at analysing

differences in terms of homogeneity of the variances.

Cluster 1 was called ‘differentiated companies’ as the dimensions of marketing differ-

entiation and differentiation on innovation presented high mean values, in contrast to the

cost-leadership dimension. Post-hoc trials permitted us to determine that the means for


Dow



Table 2. Correlations matrix of variables

1 2 3 4 5 6 7 8 9 10 11 12 13

1. Cost leadership2. Marketing differentiation 0.0003. Innovative differentiation 0.200�� 0.355��

4. Leadership 20.097 0.365�� 0.252��

5. Cooperation 20.093 0.284�� 0.249�� 0.721��

6. Customer focus 20.011 0.285�� 0.125� 0.495�� 0.573��

7. Continuous improvement 20.023 0.376�� 0.345�� 0.577�� 0.663�� 0.523��

8. Process management 20.092 0.272�� 0.254�� 0.606�� 0.756�� 0.535�� 0.632��

9. Employee fulfilment 20.151� 0.351�� 0.322�� 0.631�� 0.711�� 0.454�� 0.559�� 0.729��

10. Learning 20.056 0.387�� 0.392�� 0.607�� 0.634�� 0.416�� 0.592�� 0.667�� 0.676��

11. Financial performance 0.223� 0.172�� 0.174�� 0.167�� 0.162�� 0.245�� 0.181�� 0.086 0.144�� 0.247��

12. Operational performance 0.044 0.210�� 0.241�� 0.383�� 0.447�� 0.332�� 0.382�� 0.430�� 0.377�� 0.389�� 0.135�

13. Employee performance 20.047 0.395�� 0.203�� 0.497�� 0.522�� 0.327�� 0.384�� 0.484�� 0.596�� 0.489�� 0.281�� 0.500��

�p , 0.05; ��p , 0.01.

31

4M

.M

.F

.F

uen

teset

al.

Dow



differentiation dimensions were significantly greater than in groups 3 and 4. Also, the cost-

leadership dimension mean was significantly inferior to those of groups 2 and 4.

Cluster 2 comprises companies showing similar values for the three strategic

dimensions and, on this basis, it has been called ‘companies catch in the middle’.

Mean values for the differentiation dimensions are significantly higher than in groups 3

and 4, while values for the costs leadership dimension are also higher than in the other

groups.

Table 3. Means of the business strategy in each cluster

Cluster 1 Cluster 2 Cluster 3 Cluster 4 ANOVA

Post-hoc analysisn ¼ 79 n ¼ 94 n ¼ 37 n ¼ 62 F

Cost leadership 2.91 5.12 1.95 4.72 196.194�� 1 , 2,4 a,��

3 , 1,2,4 a,��

4 , 2 a,�

Marketingdifferentiation

5.29 5.45 4.74 3.83 34.012�� 3 , 2 b,�

4 , 1,2b,��

4 , 3b,��

Innovationdifferentiation

5.75 5.49 2.42 3.33 151.248�� 3 , 1,2b,��

3 , 4 b,��

4 , 1,2 b,��

aBonferroni test; bTamhane test.��p , 0.001.

Cluster 1: differenciated companies; cluster 2: companies catch in the middle; cluster 3: marketing-orientated

companies; cluster 4: cost-orientated companies.

Table 4. Means of the TQM dimensions and performance in each cluster

Cluster 1 Cluster 2 Cluster 3 Cluster 4 ANOVA

Post-hoc analysisn ¼ 79 n ¼ 94 n ¼ 37 n ¼ 62 F

Leadership 5.78 5.63 5.35 4.85 8.36�� 4 , 1,2 a,��

Cooperation 5.34 5.13 5.00 4.57 6.33�� 4 , 1a,��

4 ,2a,��

Customer focus 6.03 5.98 5.93 5.67 1.66Continuous

improvement5.95 5.71 5.36 5.05 10.27�� 4 , 1b,��

4 ,2b,��

Processmanagement

5.50 5.03 4.81 4.54 7.12�� 3 , 1a,��

4 , 1a,��

Employeefulfilment

5.30 4.78 4.41 4.24 11.97�� 2 , 1 b,��

3 , 1 b,��

4 , 1 b,��

4 , 2b,�

Learning 5.53 5.32 4.59 4.32 14.95�� 3 , 1 b,��

3 , 2 b,�

4 , 1,2b,��

aBonferroni test; bTamhane test.�p , 0.05; ��p , 0.01; ��p , 0.001.

Cluster 1: differentiated companies; cluster 2: companies catch in the middle; cluster 3: marketing-oriented com-

panies; cluster 4: cost-oriented companies.


Dow



Cluster 3 has been called ‘marketing-oriented companies’ as the marketing differen-

tiation dimension shows a higher value than the two outstanding dimensions. On top of

this, such dimensions – i.e. cost-leadership and differentiation on innovation – show

mean values significantly lower than those of the other groups.

Finally, companies in cluster 4 are ‘costs-oriented companies’ as the cost-leadership

dimension presented a higher value regarding the differentiation dimensions. Actually,

the marketing differentiation shows a mean value significantly lower, and differentiation

on innovation is lower as compared to groups 1 and 2’s figures.

Once the groups of companies have been determined with different strategic orien-

tations, we have carried out an analysis of variance of TQM dimensions in the different

clusters (Table 4). Results show significant differences ( p , 0.001) for all TQM dimen-

sions with the exception of the customer focus dimension. Additionally, a post-hoc analy-

sis (Bonferroni and Tamhane) was performed to identify significant differences of the

mean values among the groups. Results, considered as a whole, suggest confirmation of

Hypothesis 4, that is, TQM dimensions show different implementation degrees among

the established strategic configurations.

Hypothesis 5

Hypothesis 5 suggests a relationship differing in intensity between TQM dimensions

and performance, depending on the strategy selected by companies. Table 5 shows

correlations between TQM dimensions and the three types of performance on each

group. In the case of financial performance (H5(a)), data show particular correlations of

three dimensions in three out of the four existing clusters. Customer focus significantly

correlates at a 0.05 level to the groups of companies oriented to differentiation. There is

a positive significant correlation ( p , 0.01) between the improvement dimension and

the performance for cost-oriented companies. Finally, the learning dimension significantly

correlates ( p , 0.05) to financial performance both in the differentiation-oriented group

and in the group exclusively oriented to marketing. Therefore, Hypothesis 5(a) is partly

confirmed.

TQM dimensions differently and positively relate to operational performance in the four

clusters considered. In particular, leadership, cooperation and management process show

significant correlations in the four groups. Customer focus and continuous improvement

correlate to operational performance in clusters 2, 3 and 4. Finally, involvement and learn-

ing dimensions significantly relate to such performance in the first three clusters. In this

case, results support Hypothesis 5(b), since for every TQM dimension, a significant var-

iance exists, in the range of each dimension’s relationship with financial performance for

every strategic cluster.

Finally, the relationship between TQM dimensions and employees’ performance

(H5(c)) is significant for all strategically oriented groups except for the customer

focus and continuous improvement groups. For companies with either a marketing

differentiation orientation or a cost leadership orientation, there is no statistically

significant relationship between employees’ performance and customer focus. Similarly,

in the differentiation-oriented group, no significant correlation has been found between

this performance and continuous improvement. Hypothesis 5(c) is strongly supported in

this case.


Dow



Conclusions and Discussion

In the first place, results suggest that a relationship exists–and not only in theory–between

TQM and the strategies adopted by companies. On a first approach, we have verified

that most TQM dimensions are linked to the main strategies of a company. Only

cost-leadership shows a single significant correlation with employees’ involvement,

but with a minus sign. Such a relationship can arise from the very nature of the activities

carried out by the company in pursuing cost leadership. In these cases, products and

procedures use show few changes, and they are usually standardized and require

little employee qualification. Also, formal controls can put a limit on how employees

perceive their role within the organization. On a preliminary analysis, the fact that

customer focus does not show higher values when the company develops a

marketing differentiation-oriented strategy also needs to be pointed out. Nevertheless,

this fact can be due to the importance weight of the said dimension for companies

pursuing TQM. On this regard, activities aimed at meeting customer needs are not the

sole responsibility of the marketing department, and involve all functional areas within

the firm.

Table 5. Zero-order correlations between the TQM dimensions and performance in each cluster

Financial perf. Cluster 1 Cluster 2 Cluster 3 Cluster 4

Leadership 0.126 0.116 0.095 0.228Cooperation 0.113 0.154 0.214 0.139Customer focus 0.531� 0.163 0.015 0.102Continuous improvement 0.012 0.15 0.124 0.353��

Process management 0.17 0.083 0.166 -0.111Employee fulfilment 0.155 0.096 0.239 0.092Learning 0.231� 0.163 0.411� 0.17

Operational perf.Leadership 0.280� 0.393�� 0.426�� 0.379��

Cooperation 0.290� 0.496�� 0.590�� 0.383��

Customer focus 0.104 0.374�� 0.522�� 0.370��

Continuous improvement 0.202 0.315�� 0.584�� 0.380��

Process management 0.526�� 0.300�� 0.441�� 0.462��

Employee fulfilment 0.396�� 0.366�� 0.432�� 0.252Learning 0.331�� 0.474�� 0.405� 0.222

Employee perf.Leadership 0.510�� 0.552�� 0.462�� 0.309�

Cooperation 0.283� 0.668�� 0.550�� 0.422��

Customer focus 0.316� 0.319�� 0.326 0.252Continuous improvement 0.2 0.322�� 0.458�� 0.418��

Process management 0.533�� 0.448�� 0.456�� 0.368��

Employee fulfilment 0.463�� 0.681�� 0.518�� 0.573��

Learning 0.532�� 0.510�� 0.335� 0.395��

�p , 0.05; ��p , 0.01.

Cluster 1: differentiated companies; cluster 2: companies catch in the middle; cluster 3: marketing-oriented

companies; cluster 4: cost-oriented companies.


Dow



The relationship between TQM and strategy has been reinforced in cases where it has

been established between companies with different strategic configurations. In most cases,

differentiation-driven companies show the highest degree of implementation of TQM

dimensions. However, the majority of cost-oriented companies show levels of implemen-

tation of the TQM dimensions statistically lower than those of companies focused on

differentiation. Secondly, results greatly support the idea that an adequate TQM

implementation can produce higher financial, operational and staff performances.

Results show how the attainment of a higher profitability and return on assets by compa-

nies implementing TQM depends on how TQM fits the company strategy. Companies with

strategies based on differentiation both with regard to the product image and to the

implementation of technological upgrades, have the opportunity to achieve better financial

results due to the major emphasis placed on customer focus. However, this relationship

does not occur when the company is oriented to marketing, to cost leadership or to a com-

bination of various strategies. Learning also shows a significant correlation with financial

performance in companies focused on differentiation in general, although this relationship

is much stronger in companies with a strategic orientation based on marketing differen-

tiation. In cases where companies are oriented to cost leadership, continuous improvement

is the only TQM dimension that can help to achieve better financial results. In companies

lacking a clearly defined strategy (i.e. ‘companies catch in the middle’) results show that

no significant relationship exists between any of the TQM dimensions and financial

performance.

With regard to the relationship between operational performance and TQM dimen-

sions, data show that the degree of such a relationship depends on the companies’ stra-

tegic configuration. For differentiation-oriented companies, customer focus and

continuous improvement are the only dimensions that do not relate significantly to oper-

ational performance. If a major emphasis is placed on management processes, the

company will reach higher quality levels, lower failure rates and high levels of customer

satisfaction. In companies primarily oriented to marketing, the dimensions of

cooperation, continuous improvement and customer focus are those permitting a

greater increase in operational performance. The TQM dimension relationship with oper-

ational performance in ‘companies catch in the middle’ (cluster 3) is significant in all

cases, although to a lesser extent than for other strategic orientations. Finally, involve-

ment and learning do not improve financial performance in companies directed at cost

leadership.

Similarly, the third type of performance studied here relates to the TQM dimensions

that differently depend on the company strategy. In differentiation-oriented companies,

leadership, management processes and learning are the dimensions that contribute the

most to increase the degree of satisfaction of employees and to reduce absenteeism.

However, when the continuous improvement processes are emphasized, there is no

impact on this type of performance. In marketing-oriented companies, the dimensions

of cooperation and employees’ involvement are especially important for employee

performance, whereas customer focus has no effect. When companies are ‘catch in

the middle’, employees will have a higher degree of satisfaction and lower levels of

absenteeism if higher cooperation and involvement levels are achieved. Finally,

companies that put the stress on cost reduction will have a greater association between

employee involvement and performance, whilst customer focus does not contribute to

improve this level.


Dow



References

Abell, D. F. (1980) Defining the Business: The Starting Point of Strategic Planning (Englewood Cliffs, NJ:

Prentice-Hall).

Adam, E. E., Jr. (1994) Alternative quality improvement practices and organization performance, Journal of

Operations Management, 12, pp. 27–44.

Anderson, J. C. et al. (1995) A path analytic model of a theory of quality management underlying the Deming

management method: preliminary findings, Decisions Science, 26(5), pp. 637–657.

Askey, J. M. and Dale, B. G. (1994) From ISO 9000 series registration to total quality management: an examin-

ation, Quality Management Journal, July, pp. 67–85.

Barclay, C. A. (1993) Quality strategy and TQM policies: empirical evidence, Management International Review,

33(1), pp. 87–98.

Belohlav, J. A. (1993) Quality, strategy, and competitiveness, California Management Review, 35(3), pp. 55–67.

Bowen, D. E. & Lawler III, E. E. (1992) Total quality-oriented human resources management, Organizational

Dynamics, 20, pp. 29–41.

Buffa, E. S. (1984) Meeting the Competitive Challenge (Homewood, Ill: Dow Jones-Irwin).

Burns, T. & Stalker, G. M. (1961) The Management of Innovation (London: Tavistock).

Chenhall, R. H. (1997) Reliance on manufacturing performance measures, total quality management and

organizational performance, Management Accounting Research, 8, pp. 187–206.

Ciampa, D. & Moreno, M. (1993) Calidad Total. Guıa para su Implantacion (Wilmintong, Delaware, Eua:

Addison-Wesley).

Dansky, K. & Brannon, D. (1996) Strategic orientation and TQM: linking vision to action, Journal of Quality

Management, 1(2), pp. 227–243.

Dean, J. W. & Evans, J. R. (1994) Total Quality Management, Organization, and Strategy (Minneapolis: West

Publishing Company).

Dean, J. W. & Bowen, D. E. (1994) Management theory and total quality: improving research and practice

through theory development, Academy of Management Review, 19(3), pp. 392–418.

Deming. W. E. (1982) Out of the Crisis (Cambridge: Cambridge University Press).

Dess, G. G. & Davis, P. S. (1984) Porter’s (1980) generic strategies as determinants of strategic group member-

ship and organizational performance, Academy of Management Journal, 27, pp. 467–488.

Forker, L. B., Vickery, S. K. and Droge, C. L. M. (1996) The contribution of quality to business performance,

International Journal of Quality Science, 16(8), pp. 44–62.

Godfrey, A. (1993) Ten areas for future research in total quality management, Quality Management Journal, 1(1),

pp. 47–70.

Grandzol, J. R. & Gershon, M. (1998) A survey instrument for standardizing TQM modelling research,

International Journal of Quality, 3(1), pp. 80–105.

Grant, R. M., Shani, R. & Krishnan, R. (1994) TQM’s challenge to management theory and practice, Sloan

Management Review, 36, winter, pp. 25–35.

Hair, J. F. et al. (1998) Multivariate Data Analysis (London: Prentice-Hall International).

Hofer, C. & Schendel, D. (1978) Strategy Formulation: Analytical Concepts (St. Paul, MN: West Publishing).

Imai, M. (1989) Kaizen: The Key to Japan’s Competitive Success (New York: McGraw-Hill).

Juran, J. M. and Gryna, F. M., Jr. (Eds.) (1988) Juran’s Quality Control Handbook (New York: McGraw-Hill).

Kiernan, M. J. (1993) The new strategy architecture: learning to compete in the Twenty-First Century, Academy

of Management Executive, 7(1).

Lawrence, P. R. & Lorsch, J. W. (1967) Organization and Environment (Boston, Massachusetts: Harvard

Business School Press).

Lee, J. (1989) Environmental change, strategy type and performance: comparative-static analysis, Korean

Management Review, 18, pp. 245–273.

Lee, J. & Miller, D. (1996) Strategy, environment and performance in two technological contexts: contingency

theory in Korea, Organizations Studies, 17(5), pp. 729–750.

Madu, C. N. & Kuei, C. (1993) Introducing strategic quality management, Long Range Planning, 26(6),

pp. 121–131.

Miles, R. E. & Snow, C. C. (1978) Organizational Strategy, Structure, and Process (New York: McGraw-

Hill).

Miller, D. (1986) Configurations of strategy and structure: towards a synthesis, Strategic Management Journal, 7,

pp. 233–249.


Dow



Miller, D. (1987) The structural and environmental correlates of business strategy, Strategic Management

Journal, 8, pp. 55–76.

Miller, D. (1988) The relationship of Porter’s business strategy to environment and structure, Academy of

Management Journal, 31, pp. 280–308.

Mintzberg, H. (1979) The Structuring of Organizations (Englewood Cliffs, NJ: Prentice-Hall).

Mohr-Jackson, I. (1998) Conceptualizing total quality orientation, European Journal of Marketing, 32(1/2),

pp. 13–22.

Morgan, C. & Murgatroyd, S. (1994) Total Quality Management in the Public Sector. An International

Perspective (Buckingham, UK; Philadelphia: Open University Press).

Nakane, J. (1986) Manufacturing Futures Survey in Japan, a Comparative Survey 1983–1986 (Waseda

University, Tokyo: Systems Science Institute).

Porter, M. E. (1980a) Competitive Advantage (New York: The Free Press).

Porter, M. E. (1980b) Competitive Strategy (New York: The Free Press).

Powell, T. C. (1995) Total quality management as competitive advantage: a review and empirical study, Strategic

Management Journal, 16, pp. 15–37.

Pruett, M. & Thomas, H. (1996) Thinking about quality and its links with strategic management, European

Management Journal, 14(1), pp. 37–46.

Schonberger, R. J. (1992) Is strategy strategic? Impact of total quality management on strategy, Academy of

Management Executive, 6(3), pp. 80–87.

Sharma, S. (1996) Applied Multivariate Techniques (New York: Wiley).

Sitkin, S. B. et al. (1994) Distinguishing control from learning in total quality management: a contingency

perspective, Academy of Management Review, 19(3), pp. 537–564.

Skinner, W. (1969) Manufacturing-missing link in corporate strategy, Harvard Business Review, 47(3), pp. 136–145.

Spencer, B. A. (1994) Models of organization and total quality management: a comparison and critical evalu-

ation, Academy of Management Review, 19(3), pp. 446–471.

Srinidhi, B. (1998) Strategic quality management, International Journal of Quality Science, 3(1), pp. 38–70.

Stephens, K. (1994) ISO 9000 and total quality, Quality Management Journal, (fall), pp. 57–71.

Swamidass, P. M. & Newell, W. T. (1987) Manufacturing strategy, environmental uncertainty and performance: a

path analytic model, Management Science, 33(4), pp. 509–524.

Venkatraman, N. (1990) Performance implications of strategic coalignment: a methodological perspective,

Journal of Management Studies, 27(1), pp. 19–41.

Venkatraman, N. & Prescott, J. E. (1990) Environment-strategy coalignment: an empirical test of its performance

implications, Strategic Management Journal, 11, pp. 1–23.

Venkatraman, N. & Ramanujam, V. (1986) Measurement of business performance in strategy research: a

comparison of approaches, Academy of Management Review, 11(4), pp. 801–814.

Waldman, D. A. (1994) The contributions of total quality management to a theory of work performance, Academy

of Management Review, 19(3), pp. 510–536.

Wheelwright, S. C. (1984) Strategy, management, and strategies planning approaches, Interfaces, 14(1),

pp. 19–33.

Wilcox, M. et al. (1996) Managing for quality: the strategic issues, International Journal of Technology Manage-

ment, 12(1), pp. 59–74.

Appendix

Items indicated with (-) are reverse scored.

The items with (�) have been deleted in the confirmatory factor analysis.

Total Quality Management Principles

(a) Leadership

L1. Senior executives share similar beliefs about the future direction of this organization.

L2. Activities and investments that have long-term benefits receive little support from

management. (-) (�)


Dow



L3. Employees have the opportunity to share in and encouraged to help the organization

implement change.

L4. Managers and supervisors rarely allow employees to take necessary action on their

own. (-) (�)

L5. Senior executives anticipate change and make plans to accommodate it. (�)

(b) Cooperation

T1. Managers emphasize activities that lead to a lack of cooperation between our organ-

ization and our suppliers. (-)

T2. Management encourages use of few suppliers based on quality rather than on price

alone. (�)

T3. Managers, supervisors, and employees from different departments work independently

to achieve their own department’s goals. (-)

T4. In this organization, teamwork is commonplace–the expected way of doing business.

T5. In this organization, everyone participates in improving our products, services, and

processes.

T6. Senior executives look at the ‘whole picture’ when they make decisions.

T7. Employees are hesitant to voice their opinions, make suggestions, or inquire about any

of the activities of the organization. (-) (�)

T8. Senior executives insist on accuracy and reliability of all information and communi-

cations within the organization.

(c) Customer focus

CF1. Our processes and activities are centred on satisfying our customers.

CF2. Managers and supervisors encourage activities that improve customer satisfaction.

(�)

CF3. Satisfying our customers, and meeting their expectations, is the most important thing

we do.

CF4. Senior executives behave in ways that lessen the importance of customers. (-)

(d) Continuous improvement

CI1. This organization encourages continual study and improvement of all its products,

services and processes.

CI2. Employees usually don’t get an opportunity to suggest changes or modifications to

existing processes (-).

CI3. Many of our products/services have been improved in the recent past.

CI4. This organization has received recent compliments and recognition for improving its

products/services/processes. (�)

(e) Process management

PM1. Preventing defective products/services from occurring is a strong attitude in this

organization.

PM2. The processes used in this organization do not include in-process measures of

quality. (-) (�)

PM3. The processes for designing new products/services in this organization ensure

quality. (�)


Dow



PM4. Employees involved in different processes know how to use statistical process

control methods to evaluate their processes. (�)

PM5. Explaining the variation in process is rarely used as an analysis technique in this

organization. (-) (�)

PM6. In this organization, numerical quotas are not the only, nor the most important,

measure of an employee’s performance. (�)

PM7. Managers and supervisors understand how to motivate employees and encourage

them to perform at their highest levels.

PM8. Senior executives look at the total costs of products and services, including indirect

an overhead costs. (�)

(f) Employee fulfilment

EF1. My work duties and responsibilities contribute little to satisfying my need to create

quality products/services. (�)

EF2. I like my job because I’m doing what I want to do.

EF3. Employees in this organization are dedicated to their jobs.

EF4. Managers and supervisors sometimes ask employees to compromise their desire for

excellence. (�)

EF5. Managers and supervisors create a work environment that encourages employees to

perform to the best of their abilities.

(g) Learning

L1. Managers and supervisors ensure that all employees receive training that helps them

understand how and why the organization does what it does.

L2. Many employees in this organization do not possess sufficient knowledge about the

basics of our industry. (2)

L3. Few employees in this organization understand the basic processes used to create our

products/services. (-) (3)

L4. Top management has established an environment that encourages continuous

education.

L5. Managers and supervisors participate in specialized training on how to conduct

business, whether dealing with employees or external customers.

Strategic Dimensions

(a) Cost leadership

CL1. Costs reduction efforts

CL2. Price-cutting ability

(b) Marketing differentiation

MD1. Brand image

MD2. Advertising investment

MD3. Marketing channels and service

(c) Innovation differentiation

ID1. R&D expenses/sales

ID2. Number of new products


Dow



Organizational Performance

(a) Financial performance

FP1. Growth in profits

FP2. Profitability growth

(b) Operational performance

OP1. Sales growth. (�)

OP2. Market share growth. (�)

OP3. Reducing customer complaints. (�)

OP4. Level of satisfaction customer.

OP5. Level of defects in the products/services.

OP6. The products/services quality to meet or exceed customer’s demands.

(c) Employee performance

EP1. Level of employee satisfaction.

EP2. Level of absenteeism.


Documents

Total Quality Management & Business Excellence