The TQM Paradox: Relations among TQM practices, plant performance, and customer satisfaction

TLDR

The study tests a mediational model in which TQM practices directly influence customer satisfaction and indirectly through plant performance. Using survey data from 339 manufacturing firms, the authors validated constructs and tested the model with LISREL 8.10. Results reveal paradoxical relations: TQM practices affect customer satisfaction more than plant performance, and plant performance does not significantly influence customer satisfaction, likely due to loose coupling between customer‑focused TQM and plant‑floor activities.

Abstract

Abstract We empirically examine a mediational model of TQM, in which TQM practices have a direct impact on customer satisfaction and an indirect impact mediated through plant performance. We adopt a survey approach using the data from 339 manufacturing companies. We first establish convergent validity, discriminant validity, and reliability of the constructs. We then examine the model using LISREL 8.10. The results suggest paradoxical relations among TQM practices, plant performance, and customer satisfaction. TQM practices have a stronger impact on customer satisfaction than they do on plant performance. Further, the plant performance, as described in the mediational model, fails to show a significant impact on customer satisfaction. This observation is explained based on an institutional argument that states that loose coupling may occur between TQM practices designed for customer demands and the activities on the plant floor designed for plant performance.