Determinants and performance effect of TQM practices: An integrated model approach

Abstract

An integrated model approach is proposed to investigate the determinants and performance effects of total quality management (TQM) practices. Applying structural equation modelling to archival and survey data from 209 firms, the results support the expectation that firm size and degree of competition are positively associated with the implementation of TQM, and that leverage and product diversity are negatively associated with TQM implementation. We then find that TQM implementation has a positive effect on non-financial performance (NFP), and NFP and financial performance (FP) are also positively related. Our results suggest that TQM's direct effect on NFP mediates TQM's indirect effect on FP.