Implications of TQM in firm’s innovation capability

Abstract

Purpose Over the last few decades, some researchers have analysed the role of total quality management (TQM) as a precursor of innovation. However, the relationship between TQM and organisational innovation remains unclear and contradictory. The purpose of this paper is to provide a framework intended to clarify the complex effect that the implementation of a TQM system has on organisational innovation, where market orientation (MO) and knowledge management (KM) play a mediator role. Design/methodology/approach Data in this study come from a survey of 706 Spanish CEOs. The results were analysed employing structural equation modelling to determine how TQM, MO and KM influence innovation. Findings The results of the empirical study show that there is a curvilinear effect between TQM and organisational innovation. Both MO and KM perspectives play a mediator role between TQM and innovation. Practical implications Managers should be aware that management based on TQM help organisations not only to get higher quality but also to be market oriented and better manage their knowledge; what will help them to develop innovations. Originality/value This research sheds light on the question of the relationship between TQM and organisational innovation that has received mixed conclusions in the literature. There is evidence in this research that the relationship between TQM and innovation responds to a curvilinear relationship, where high levels of TQM favour a more than proportionate effect on the development of innovation. It also clarifies the mechanisms by which this effect is produced, with MO and KM as mediator variables.

Quality and lean practices synergies

“…Our findings are in line with previous studies that elicit the positive impact of quality practices on performance (Asif, 2019;Shokri and Nabhani, 2019;Basu et al, 2020;Jim enez-Jim enez et al, 2020). This is an important finding and provides empirical support from a global perspective.…”

Impact of process quality management on firm's operational performance: a mediation analysis of firm's absorptive capacity

“…The results of the current research showing a significant support for the second set of hypotheses reinforce the theoretical perspective of knowledge-based view that manufacturers leverage knowledge resources and internal competencies to enhance their ability to be market responsive resulting in improving firm's OP. As very little research exists directly relating PQM toward building firm's AC, the current study complements several research studies that highlighted the role of PQM in building the individual dimensions of OL (Tortorella et al, 2020), KM (Abbas, 2020) and IC (Jim enez-Jim enez et al, 2020). Thus, the results in the current research extends support to the third set of hypotheses that strengthen the practitioner's understanding of the importance of PQM in manufacturing firms and their role in enhancing knowledge-driven absorptive capabilities for realizing superior performance.…”

“…This is certainly relevant with the increased uncertainty of a volatile marketplace, where it is more impossible to discern what competitors are doing to gain their knowledge and to apply it to new products and processes (Albort-Morant et al, 2018;Xie et al, 2018). Supporting above discussions, several scholars in the OM research concluded that the adoption of PQM can only increase the OP of firms to a certain degree, emphasizing that the effectiveness of PQM on OP depends on several dimensions of the firm's absorption capability, such as organizational learning (Akg€ un et al, 2014;Tortorella et al, 2020), knowledge management (Abbas, 2020;Jim enez-Jim enez et al, 2020) and innovation capability (Akg€ un et al, 2014;Sahoo, 2019). These research studies have shown that the mentioned three dimensions of AC of the organization have more indirect impact than direct ones on operational productivity parameters, indicating their mediating roles.…”

“…In contrast, some researchers discovered out that there is a negative association or no connection (Chandler and Hanks, 1994;Subramanian and Nilakanta, 1996;Zhang, 2011). However, substantial scholarly literature indicates that innovation is a vital strategy for manufacturers to survive and thrive in today's intensely competitive markets (Jim enez-Jim enez et al, 2020;Ferreira et al, 2020). The following sub-hypothesis may then be suggested.…”

“…Here, people in the organization indulge in knowledge and experience sharing, recognize outdated perceptions and alter and introduce new business concepts to improve their market sustainability (Prajogo et al, 2018). Furthermore, PQM activities build social networks or knowledge communities inside and around an organization steered by social connections that promote business transformation due to dynamic reciprocal associations and continuous feedback exchanges (Akg€ un et al, 2014;Tajeddini, 2016;Jim enez-Jim enez et al, 2020). This enables manufacturers identify the needs of consumers, establish new market partnerships and benchmark commercial solutions to customer-related concerns, resulting in internal initiatives to transform organizational processes, replace current corporate strategies with new strategies and achieve better modes of administration and coordination with network firms (Gutierrez-Gutierrez et al, 2018;Tortorella et al, 2020).…”