The relationship between quality improvement and firms' productivity in Malaysia

Abstract

This study attempts to examine whether quality improvement aspects have influence over a firm's productivity performance within two different settings: semiconductor and medical equipment manufacturers firms in Penang, Malaysia. To achieve this aim, six identified quality-improvement-related variables – cooperation (teamwork), participation in decision-making, quality awareness, suggestions towards improvement, voluntary work and training – are examined to see whether they lead to the improvement of productivity. The study also investigates the moderating role of the level of automation between productivity and quality. Interestingly, the study found that while quality awareness, suggestions towards improvement, voluntary work and training influence productivity, the other two variables, i.e., cooperation and participation in decision making, were found to have no influence on productivity improvement for both semiconductor an medical equipment manufacturers firms.