The Effect of TQM Factors on Financial and Strategic Performance: An Empirical Test Using Manufacturing Firms

by Katherine J. Barker and Charles R Emery
published by Academy of Strategic Management Journal, 2006
Ref ASMJ05-03
 

TQM has been embraced by thousands of companies with the aim of continually improving organisational processes and increasing value to customers, but previous anecdotal evidence had suggested that attempts to implement it and/or achieve financial benefits were often unsuccessful for a range of reasons.

However, the authors’ study of 257 manufacturing firms provides definitive evidence that TQM is a significant predictor of customer satisfaction, and a weaker but still significant predictor of several financial variables. Other findings explored in this article include the fact that businesses which have adopted TQM continue to improve over time.

The research described in this article provides an empirically reliable framework to evaluate the effectiveness of a manufacturing organisation’s TQM implementation.

‘A management philosophy such as TQM that reduces operating costs as a percentage of sales and improves customer satisfaction should clearly be part of implementing and maintaining successful functional and operational strategies,’ write the authors. ‘The findings of this study clearly indicate that the implementation of TQM can provide improved business performance.’ 

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About the author

Katherine J. Barker is Assistant Professor – Accounting, College of Business, University of South Florida St. Petersburg, US.

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