The relationship between TQM and SMEs’ performance

Abstract

Purpose The purpose of this paper is to empirically test the association between total quality management (TQM) and small and medium enterprises’ (SMEs) performance. In particular, it examines whether organizational culture (OC) has a mediating effect on the TQM–SME performance relationship. Design/methodology/approach The conceptual model for this study was developed based on the literature review of TQM, OC and SME performance. As the research framework, a self-administered questionnaire was used to collect data from managers/owners of SMEs in the Riyadh, Mecca and Eastern regions of the Kingdom of Saudi Arabia. The instrument was evaluated for its validity and reliability. A structural equation model was designed to examine the relationships, using PLS 3.0. Findings Statistical outcomes add to the literature through displaying a positive direct effect of TQM and OC on SMEs’ performance, and a significant and positive indirect effect of TQM on SMEs’ performance through OC. Research limitations/implications The quantitative cross-sectional research design investigated a sample of manufacturing SMEs. Future research could use qualitative techniques or a case study approach for further information analysis. Practical implications The findings of this research provide insights into SMEs’ owners/managers in today’s dynamic manufacturing environment, focussing on TQM as a mechanism for improving their performance. The results can help SMEs by providing guidance on OC, because of its effect on the successful implementation of TQM, therefore improving the level of performance. Originality/value The research extends the literature of TQM with a comprehensive understanding of TQM from the perspective of SMEs in Saudi Arabia. It fills the gap in empirical studies that investigate the joint effect of TQM and OC on SMEs’ performance. This paper highlights the theoretical contribution and managerial implications as well as making recommendations for future research.

Effect of entrepreneurial orientation, market orientation and total quality management on performance

“…This technique is consistent with the previous studies that used EO, MO and TQM as a single construct (Aloulou, 2018;Amin et al, 2016;Calvo et al, 2014). With regard to SMEs' performance, one single construct rather than the multiple dimensions (financial and nonfinancial) was utilised in this study's analysis to reflect the total performance of the firm (Hilman et al, 2019;Jusoh, 2008). Therefore, this paper aims to examine the effect of EO, MO and TQM as one construct to improve the understanding on how they relate to other variables.…”

“…Numerous studies have established the importance of TQM approach in hotel industries (Amin et al, 2016), manufacturing organisations (Bhatia and Awasthi, 2018;Patyal and Koilakuntla, 2017), SME firms (Sahoo and Yadav, 2017), public organizations (Al-Dhaafri et al, 2016) and service organisations (Yasin et al, 2004). Thus, TQM is considered a mechanism to improve firm performance and achieve competitive advantage (Hilman et al, 2019;Ferdousi et al, 2018;Calvo-Mora et al, 2014;Yunis et al, 2013). Organisations that implement TQM obtain a competitive advantage over firms that do not (Valmohammadi and Roshanzamir, 2015;Fening, 2012).…”

“…In addition, the national quality awards, such as Australian Quality Award, European Foundation for Quality Management, Malcolm Baldrige National Quality Awards (MBNQA) and the British Quality Foundation, include TQM practices. These awards are used by several studies as universal reference models for TQM implementation (Hilman et al, 2019;Ali et al, 2017;Talwar, 2011;Bou-Llusar et al, 2009). Therefore, in the current research, the criteria of the MBNQA model are used to identify six TQM practices to examine the implementation of TQM in the SMEs in KSA.…”

“…In the quality management literature, a bulk of studies have examined TQM practices and its effect on organizational performance. Nevertheless, merely few of such studies have proven that TQM significantly and positively affects performance (Hilman et al, 2019;Sahoo and Yadav, 2018;Mehralian et al, 2017;Panuwatwanich and Nguyen, 2017;Valmohammadi and Roshanzamir, 2015;Sadikoglu and Olcay, 2014;Gimenez-Espin et al, 2013;Salaheldin, 2009;Samson and Terziovski, 1999). Moreover, several organisations also report lower than optimal outcomes (Yang et al, 2009;Sila, 2007;Yeung and Chan, 1998;McCabe and Wilkinson, 1998).…”

The Nexus Between Learning Orientation, TQM Practices, Innovation Culture, and Organizational Performance of SMEs in Kuwait

“…Similarly, Hilman et al (2019) revealed that TQM practices significantly influence SMEs' performance in Riyadh, Mecca, and Eastern Saudi Arabia regions. The researchers also demonstrated that TQM practices could ensure a constant quality improvement in processes and employees' efforts to achieve the expected results.…”