Melbourne Business School - Theses
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ItemThe relationship between quality management strategies and organisational performance in manufacturing firms( 1997)Higher requirements for improved quality of products and services have led to three important changes in international business over the last decade. These changes include: • The growing recognition of the strategic importance of Total Quality Management (TQM) philosophy and methods. • A major push by organisations worldwide to seek certification to the ISO 9000 quality standards. • The growing recognition and application of the Malcolm Baldrige National Quality Award (MBNQA), the Australian Quality Award (AQA), and the European Quality Award (EQA). Although there are many cases where the above quality strategies have been successfully applied, there is still considerable confusion, frustration and uncertainty surrounding the applied role and business value of TQM and ISO 9000 certification. For example, many managers believe that gaining certification to the ISO 9000 standards is synonymous with adopting the TQM philosophy or winning a quality award. Anecdotal evidence and the limited number of empirical studies in the literature suggest considerable variability in the performance of TQM, ranging from unprecedented successes to abandonment of TQM, and even bankruptcy. The purpose of this study, therefore, is to address the gaps and contradictions in the literature. This was achieved by investigating the relationship between TQM philosophy and ISO 9000 certification (individually and in combination) with organisational performance. An Integrated Continuous Improvement Framework (ICIF) was developed from the literature to show the theoretical relationship between TQM, ISO 9000 certification, and organisational performance. The TQM component of the framework was developed as a surrogate MBNQA (S-MBNQA) model. This model allowed comparison of the S-MBNQA scoring criteria with the 1995 MBNQA criteria. Hypotheses were developed based on relationships within the integrated framework. The relationships were tested using a large data base consisting of 962 responses from Australian manufacturing firms and 379 responses from New Zealand manufacturing firms. The tested hypotheses were further explained by utilising six case studies of Australian manufacturing organisations that had been implementing TQM and ISO 9000 certification as part of the Australian Best Practice Demonstration Program. The first major finding of the study was that the MBNQA criteria are a generally valid and reliable model for measuring and predicting the relationship between TQM practice and organisational performance. For example, specific dimensions of the TQM philosophy: leadership commitment, people management, and customer focus, were significantly related to organisational performance. These dimensions were also significant differentiators between high, medium, and low performing firms. The second major finding was that ISO 9000 certification was not significantly related to organisational performance. Both high and low performing firms seek ISO 9000 certification in roughly equal proportions, within strong and weak TQM environments, without any significant effect on performance outcomes. The study concluded that adopting TQM philosophy and gaining ISO 9000 certification are not synonymous. However, ISO 9000 certification and TQM can complement each other as part of an Integrated Quality Strategy. The limitations of the study and the implications of the research findings are reviewed, along with the directions for future research.