Quality‐related Action Programs: Their Impact on Quality Performance and Firm Performance

Abstract

ABSTRACT From analyses of the direct effects of 10 quality action programs on six firm performance outcomes, as well as their indirect effects through eight quality performance dimensions, two routes from action programs through quality performance to firm performance in the automotive supply industry are identified. The first is the product quality route, whose landmarks are superior quality performance on Conformance and Design Quality dimensions; the second is the relationship quality route, with superior Customer Responsiveness and Service. Both the product quality and the relationship quality routes lead to superior ROI; the former also leads to enhanced ROA, and the latter to enhanced market share performance. Associated key action programs are Committed Leadership, Cross‐Functional Quality Teams, Employee Empowerment, Supplier Development, and Closer Customer Relationships. The first three are internally focused, while the latter two are boundary‐spanning supply chain programs.