An integrated structural model of QMPs, QMS and firm’s performance for competitive positioning in MSMEs

Abstract

The study investigates the relationship between quality management practices (QMPs), quality management system (QMS), firm performance and competitive positioning in the context of micro, small and medium enterprises (MSMEs). We build a structural model showing how QMS mediate the relationship between QMPs and firm performance and further integrate the model to investigate the effect of firm performance on competitive positioning. We found a significant direct relation (0.15 < β < 0.45) between strategic, tactical and operational QMPs and firm performance and observed that their relationship is stronger (0.64 < β < 0.69) in the presence of QMS. Results further imply that although QMS does not directly influence competitive positioning (β = 0.05, p > 0.05), it does so indirectly by improving firm performance (0.43 < β < 0.55). Thus, implementing QMPs, along with obtaining QMS certification provide most privileges concerning firm performance. Further, emphasis on cost, quality, flexibility and delivery to delight customers seems to provide a medium by which MSMEs can sustain competitive advantage.