Factor Analysis-Das 2008

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Developing and validating totalquality management (TQM)constructs in the context of

Thailands manufacturing industryAnupam Das, Himangshu Paul and Fredric W. Swierczek

School of Management, Asian Institute of Technology, Pathumthani, Thailand

Abstract

Purpose To provide reliable and valid constructs of total quality management (TQM) and ameasurement instrument in the context of manufacturing industries in newly industrialized countriesfor evaluating the TQM implementation process and to target improvement areas.

Design/methodology/approach Based on a review of TQM literature and expert opinions, tenTQM constructs (nine implementation constructs and one outcome construct) were identified. Adetailed questionnaire was developed with the items for ten TQM constructs along with the questionson quality performance and information about the respondents. The questionnaire was then sent torandomly selected ISO 9000 certified manufacturing companies in Thailand. Out of 1,000questionnaires sent, 275 usable samples were returned giving a response rate of 27.5 percent. Basedon the data from the survey, exploratory factor analysis was done to ensure that items in each scalereflected sufficiently the scope of each construct. Internal consistency analysis was done to ensure thereliability of the constructs. Criterion-related validity and construct validity were evaluatedstatistically to ensure that the set of measures correctly represents the constructs, and the degree towhich they are free from any systematic or non-random error.

Findings This paper identified ten reliable and valid TQM constructs. Nine are implementationconstructs and an outcome construct. These constructs have a total of 52 items, fewer compared to

other instruments available in the TQM literature, with higher reliability compared to them.Research limitations/implications Owing to time and resource constraints, this study wasconducted only in the manufacturing sector of Thailand and hence generalization is somewhat limited.This study could be extended to the service sector in Thailand and the same sector in other countries.

Practical implications The instrument presented will provide Thailands manufacturingcompanies with a practical understanding in the area of TQM implementation. Moreover, researchersand practitioners from other newly industrialized countries may be able to use these constructs infuture TQM research. Compared to other instruments, this instrument will be easier to administer andthe response rate may be better.

Originality/value Quality/production managers will be able to use the instrument to evaluatetheir TQM implementation initiatives and identify problem areas requiring improvement. Researcherswill be able to use this instrument to enhance understanding of the process and to develop applicableTQM theory.

KeywordsTotal quality management, Senior management, Benchmarking, Manufacturing industries,Thailand

Paper typeResearch paper

IntroductionTotal quality management (TQM) has become a ubiquitous practice in modernindustry over the past few years. Research has shown that the contents of papers onTQM differ to a considerable degree. The focus of these papers varies from the

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conceptual issues of TQM (Anderson and Schroeder, 1994; Claver et al., 2003) to thepractical and empirical issues of TQM (Forza and Filippini, 1998; Juergensen, 2000).There is a consensus that by implementing TQM, the overall effectiveness andperformance of an organization can be improved. There is less agreement about the

primary constructs of TQM, or about the overall concept of TQM. No uniform view ofTQM exists so far, TQM has been described differently by different people (Zhanget al., 2000).

The Thai manufacturing industry has had a substantial growth in last threedecades and established itself as the biggest income earner for the country. In terms ofTQM positioning, Thailand ranks in the middle of the developing countries ofSoutheast Asia. Its status in TQM is higher than Indonesia or Philippines, and lowerthan Malaysia or Taiwan (Krasachol et al., 1998). Since, the 1980s, different TQMapproaches and tools, such as just-in-time, total productive maintenance, have beenapplied (Tabucanon, 1993). During the 1990s, the main emphasis of Thailandsmanufacturing industry was on implementing ISO 9000 standards. However, a numberof foreign-owned companies within the electronics sector, and few Thai-owned groups,

have successfully implemented TQM (Krasachol et al., 1998). A review of the TQMpractices in Thailand shows that little empirical research has been conducted in thearea of TQM implementation in Thai manufacturing companies. Therefore, the currentsituation of TQM implementation in Thai manufacturing companies still remainsunclear. Owing to lack of empirical studies in the area of TQM implementation, it isdifficult for Thai manufacturing companies to obtain sufficient information to supporttheir TQM implementation process. As a result, Thai manufacturing companies areexperiencing numerous difficulties, and even failures in implementing TQM.

With the intention to reduce the information gap and provide Thailandsmanufacturing companies with practical assistance in the area of TQMimplementation, this study is aimed at:

.

identifying the TQM constructs;. developing an instrument for measuring the TQM constructs; and. empirically validating the instrument using data from Thai manufacturing

companies.

Researchers may thus be able to use this instrument for developing qualitymanagement theory related to Thai manufacturing companies. This study will alsohelp the manufacturing industry of newly industrialized countries in evaluating theirTQM implementation process, and to target improvement areas.

Some similar studies have proposed empirically validated scales for TQMimplementation (Saraph et al., 1989; Flynn et al., 1994; Ahire et al., 1996; Anderson et al.,1995; Powell, 1995; Black and Porter, 1996; Zhang et al., 2000). However, they differ interms of TQM constructs and measurement items used. To satisfy the goal of thisstudy and to enhance the understanding of TQM, extant instruments are not suitablefor this study. Therefore, a new instrument for measuring TQM implementation forThai manufacturing companies had to be developed.

The paper proceeds with the development of the nine TQM implementationconstructs and one outcome construct. Section three contains research methodology,which includes questionnaire development and administration; and informationconcerning respondent companies. Section four contains empirical assessment of the

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constructs including reliability; detailed item analysis; content validity;criterion-related validity; and construct validity. Finally, section five concludes thispaper together with some discussions.

Developing TQM implementation constructsConstructs are a set of latent variables and they cannot be measured directly. As anexample, top management commitment to quality is a construct, which is not directlymeasurable. To measure this construct, we have to use (surrogate) variables, such astop managements encouragement for employee involvement in TQM andimprovement activities, and allocation of adequate resources, etc. These variablesare expressions of top managements commitment. To undertake a field study, eachvariable would be measured with an item in a scale. The items in the scale should spansufficiently the scope of the construct for content validity (Lawshe, 1975).

Construct identification

There is a consensus view that companies should develop a number of TQM constructsin an integrated way for successful TQM implementation (Easton and Jarrell, 1998;Claveret al., 2003). Three different approaches have been used to identify these TQMconstructs: contributions from quality leaders; formal evaluation models; and empiricalresearch. A generally accepted TQM theory has yet to be developed (Sila andEbrahimpour, 2002). Literature reviewed shows that Anderson and Schroeder (1994)made the first attempt closely related with quality to synthesize a theory of TQM, fromresearch, based on the Delphi method, carried out on academics and managers. Theyproposed seven concepts: forward-looking leadership; internal and externalcooperation; learning; administrative processes; continuous improvement; employeesperformance; and customer satisfaction. However, this work was not universallyaccepted because it suffered from an absence of systematic scale development, content

validity, and empirical validation (Ahireet al., 1996). Flynnet al.(1994) and Ahireet al.(1996) proposed two constructs for measuring quality management, assessing itsvalidity and reliability; but was applicable only to industrial firms. Saraph et al.(1989),Badri et al. (1995), Black and Porter (1995, 1996), Grandzol and Gershon (1998) andQuazi and Padibjo (1998) proposed a valid and reliable quality measurementinstrument applicable to both industrial and services firms.

TQM constructs discussed in the literature vary from author to author, althoughthere are common themes formed by the following requirements: top managementcommitment; supplier quality management; continuous improvement; productinnovation; benchmarking; employee involvement; reward and recognition;education and training; and customer focus (Hill and Wilkinson, 1995; Dale, 1999;Claver et al., 2003, Tari, 2005). Through a prescriptive conceptual, empirical and

practitioner literature review we have identified the following nine TQMimplementation constructs and one outcome measurement construct.

Top management commitmentThe TQM literature portrays the visibility and support of top management as one ofthe major determinants for successful TQM implementation. According to Groveret al.(2006), no discussion on TQM is complete without considering references on topmanagement involvement. The critical role of top management commitment in

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providing leadership has been underscored by several diverse organizations, such asAsahi Breweries Ltd, Japan; Xerox Inc., USA; Dunlop Ltd, Malaysia; and Dow-CorningPvt. Ltd, Australia (Ahire et al., 1996). Almost all the quality awards recognize thecrucial role of top management leadership creating the goals, values and systems to

satisfy customer expectations and to improve performance of organizations. Brownet al.(1994) identified that lack of top management commitment is one of the reasonsfor the failure of TQM adoption. According to Garvin (1986) high levels of qualityperformance have always been accompanied by an organizational commitment to thatgoal and high-product quality does not exist without strong top managementcommitment. Chapman and Hyland (1997) suggest that top management plays animportant role in changing the organizational climate by providing leadership, supportand also by face-to-face communication. Top management should actively developquality plans to meet business objectives; communicate company philosophy tothe employees and involve them in the TQM effort and improvement activities;encourage employees to achieve their objectives; ensure adequate resources foremployee education and training.

Supplier quality managementA continuous supply of raw materials with the required quality is essential in all stagesof manufacturing. Poor quality of suppliers products results in extra costs for thepurchaser and reduces the quality image of the ultimate products. Extensive, long-termrelationship with the suppliers helps minimize inspection cost of the raw materials( Juran and Gryna, 1993). According to Garvins (1987) findings, prioritizing the qualityof raw materials rather than cost minimization is a prerequisite for manufacturingproducts at the highest quality. Developing a long-term co-operative relationship withsuppliers; regular participation in supplier quality activities and giving feedback onthe performance of suppliers products are necessary to ensure the continuous supply

of raw materials with the required quality (Zhang et al., 2000).

Continuous improvementContinuous improvement is the philosophy of improvement initiatives that increasessuccess and reduces failure (Juergensen, 2000). Bessant et al.(1994) defined continuousimprovement as a company-wide process of focused and continuous incrementalinnovation. For effective management of quality products and internal processeswithout losing perspective of external factors such as competition, needs relentless effortin continuous improvement. For continuous improvement, evaluation of currentprocesses and quality management practices is necessary. A formal evaluation ofquality provides a starting point by establishing an understanding of the size of qualityissue and the area demanding attention ( Juran and Gryna, 1993). For evaluating the

performance of processes and quality management practices, companies need to collectvarious quality-related information of the internal operations and differing costs ofquality. Quality-related information can be used to ensure the process capability isknown to meet the production requirement. Precise documentation of various processprocedures is necessary for process capability; and unambiguous instructions forequipment operation can help to reduce the likelihood of operator errors.Plan-do-check-action (PDCA) cycle, quality control (QC) tools, statistical processcontrol (SPC), sampling and inspection are methods used for continuous improvement.


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Product innovationCustomer pressures for cost reduction; increasing global competition and increasingcompetition based on overall product and service quality are the most importantdrivers for product innovation (Soderquist et al., 1997). Juran and Gryna (1993)

advocate investment and time in product innovation. Product innovation should bebetter than the competitors and aimed at meeting and exceeding the requirementsand expectations of customers. Customer requirements should be thoroughlyconsidered for product innovation. Approaches such as quality function deployment,and experimental design help companies translate customer requirements into actionby cross functional product innovation teams. The product innovation team shouldconsist of design engineers with shop-floor experience, production engineers, andrepresentatives from marketing and purchasing departments (Kumar and Gupta,1991). New product designs should be thoroughly reviewed before production, in orderto avoid problems during production.

BenchmarkingOrganizations can compare its services and practices against peers in order to enhanceperformance through benchmarking (Qayoumi, 2000; Goetsch and Davis, 2003; Salhiehand Singh, 2003). For meeting customer requirements continuously, companies need tobenchmark their products and processes by analyzing their leading competitors in thesame industry or other industries using similar processes. The rapid changes in themarket environment, and hence in organizations, such as the changing nature of work,increased competition, specific improvement initiatives, national and internationalquality awards, changing internal and external demands (stakeholders), acceleratedtechnological advancement, changing organizational roles and the acceleration ofglobalization has led to changes in benchmarking of products and processes (Atkinsonand Brown, 2001; Lockamy, 1998; Corrigan, 1998).

Employee involvementEmployees, if they fully participate in quality improvement activities, will acquire newknowledge; realize the benefits of the quality disciplines; and obtain a sense ofaccomplishment by solving quality problems (Zhang et al., 2000). Companies need todevelop formal systems to encourage, track, and reward employee involvement.Cross-functional quality improvement teams and quality circles, along with anappropriate evaluation and reward system for quality improvement projects, arehelpful for improving quality (Kumar and Gupta, 1991; Ahire et al., 1996). Employeesshould be encouraged to submit suggestions and ideas for quality improvement. Theirinvolvement will help to change negative attitudes and make them more committed tothe success of the company.

Reward and recognitionReward and due recognition for improved performance by any individual, section,team, department or division within the company, is an important element of a qualityimprovement program (Dale, 1999). Companies must develop formal compensationsystems to encourage, evaluate, reward and recognize the individual or team effort forquality enhancement and improved customer satisfaction (Brown et al., 1994).Employees should be made aware of the reward and penalty system. Top management

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should encourage employees proffer suggestions and individuals or teams should berecognized and rewarded for excellent suggestions. Reward and recognition systemsmight include working condition improvements, salary promotions, positionpromotions, monetary or non-monetary rewards, and financial awards for excellent

suggestions. Some of the TQM companies also offer profit-sharing programs toenhance employees ownership in their jobs and quality improvement activities (Stalket al., 1992).

Education and trainingA number of studies concluded that education and training is one of the mostimportant factors for successful TQM implementation. Education and training in thequality concepts, tools, and techniques is essential for employees to understandquality-related issues (Ahire et al., 1996). Chapman and Hyland (1997) conclude thatproviding training to employees in problem solving skills is one of the most importantactivities for organizational climate change in a company. Companies should regardemployees as valuable, long-term resources worthy of receiving education and trainingthroughout their career. Moreover, adequate resources should be made available foreducation and training. The education and training costs should be viewed asinvestments rather than costs. The participation of employees and managers intraining sessions will enhance the quality of the immediate sessions and also help toreduce the gaps among the ranks. This will create an atmosphere for teamwork andinvolvement in the quality system implementation. Refresher courses in qualityconcepts should also be arranged to invigorate employee participation and to reinforcequality knowledge in the light of actual practice (Chapman et al., 1991).

Customer focusCustomer satisfaction is the ultimate measure of company performance as it predicts the

future success or failure of an organization (Kanji and Asher, 1993). Understandingcustomers and their requirements, and providing goods and services to meet theirrequirements are essential for implementing TQM (Ishikawa, 1985). A close relationshipwith the customers is necessary to fully determine their requirements and for acquiringfeedback on the extent to which those requirements are being met. Customerinvolvement is necessary in the product design and development process. Input isnecessary at every stage of the process so that there is less likelihood of quality problemsonce full production begins (Flynnet al., 1994). Companies should be able to: respondquickly with new ideas and technologies to customers demands; produce products thatsatisfy or exceed customers expectations; anticipate and respond to customersevolving needs and wants to stay competitive in the market (Stalk et al., 1992).

Product qualityAll the previously discussed constructs identify the scales of quality improvementstrategies that are especially aimed at improving product quality. To improve theproduct quality, it is necessary to measure the existing product quality and tounderstand the size of quality issue. This will identify the areas demanding attentionfor enhancing and upgrading product quality. Quality literature defines productquality with the following attributes: performance; features; conformance; reliability;durability; serviceability; aesthetics, and perceived quality (Garvin, 1987). However,


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dimensions of product quality vary depending on the industry, and same measuresmay not be relevant across all industries. Among the dimensions previously discussed,four dimensions are commonly used industry-wide to reduce the defect rates andinspecting of quality of the parts before moving to the next process: specifically,

durability; reliability; performance; and conformance (Ahire et al., 1996).

Instrument comparisonFollowing the recommendation of Ahire et al. (1996), a combination of threeinstruments have been carefully examined for developing TQM constructs in thisstudy (Saraphet al., 1989; Flynnet al., 1994; Ahireet al., 1996). Effort has been given tointegrate their constructs into the new instrument. The role of divisional topmanagement and the role of the quality department (Saraph et al., 1989); and qualitydepartment leadership (Flynnet al., 1994) are integrated to represent top managementcommitment construct (since departmental heads are part of top management andevery department in any organization should be committed to TQM).

As in all manufacturing companies, it is necessary to establish long-termcooperative relationships with suppliers, the supplier quality management (Saraphet al., 1989); supplier relationship (Flynnet al., 1994); and supplier quality managementand supplier performance (Ahireet al., 1996) have been considered when developingthe supplier quality management construct.

As process management/operating and quality data and reporting (Saraph et al.,1989); process control, feedback and cleanliness and organization (Flynnet al., 1994);and SPC usage, internal quality information usage constructs (Ahire et al., 1996) arerelated to continuous quality improvement, all these constructs are included in thecontinuous improvement construct.

Product/service design (Saraph et al ., 1989); new product quality and

inter-functional design process (Flynn et al., 1994); and design quality managementconstructs (Ahire et al., 1996) have been integrated to form product innovationconstruct.

This study was conducted in the context of the Thai manufacturing industry, sospecific characteristics of Thailands manufacturing companies and Thai culture weretaken into consideration. Suggestions from Thai quality management practitionersand academics have been considered before developing TQM constructs. Most Thaicompanies have implemented ISO 9000 as their first step towards TQMimplementation, and are now benchmarking their products and processes.Considering these specific characteristics of Thai manufacturing industry, thebenchmarking construct of Ahire et al.(1996) has been included in this study.

Employee relations (Saraphet al., 1989); selection for potential teamwork, teamwork

(Flynnet al., 1994); employee empowerment, and employee involvement (Ahireet al.,1996) have been considered in employee involvement construct.

Yukongdi (2001) concludes that both financial and non-financial rewards can bringpositive outcomes in quality improvement activities in Thailand. Based on thisconclusion, quality improvement rewards of Flynn et al.(1994) have been renamed asreward and recognition construct in this study.

Training, as identified by Flynn et al.(1994); and employee training highlighted byAhireet al.(1996) have been combined to form education and training construct.

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Customer involvement, as discussed by Flynn et al. (1994); and customer focusAhireet al.(1996) have been taken as the customer focus construct.

Product quality construct identified by Ahireet al.(1996) has been directly used asit is.

Based on the literature review and expert opinions, a total of 53 items have beenselected for the questionnaire survey. Resulting from the factor analysis, one item wasdeleted to gain the highest factor loadings, and measurement of variance and reliabilityof the constructs. Finally, 52 items were included in this instrument which is lessthan in other instruments but will be easier to use in future TQM research.

Research methodologyQuestionnaire developmentPotential TQM implementation constructs were identified from the literature andvetted by experts and practitioners in the field. A survey instrument (questionnaire) formeasuring these constructs was then developed (see Appendix). In this study, a

questionnaire with a total of 110 items were initially identified from the instruments ofSaraphet al.(1989), Flynnet al.(1994), Ahireet al.(1996) and Zhang et al.(2000). Thislist of items were than sent to five quality management practitioners who are workingin manufacturing companies in Thailand, and five academics who are undertakingresearch in this field in Thailand. Based on their suggestions items were short-listed.Most of the literature reviewed in this study was in English, so the originalquestionnaire was developed in English. As the questionnaire survey was targeted atthe Thai manufacturing industry, it was necessary to translate it into Thai by atranslator experienced in translation in the operations management field. To reduceany translation bias, the Thai version of the questionnaire was again translated intoEnglish by a fellow researcher who is undertaking research in quality management.Finally, both the Thai version and English version were combined in the

questionnaire to reduce any confusion that might arise in the respondents.Following the methodology adopted in similar studies (Ahire et al., 1996), aseven-point Likert scale was used for all items to ensure higher statistical variabilityamong survey responses. Items of all the constructs were measured as: 1 stronglydisagree, 2 disagree, 3 somewhat disagree, 4 neutral, 5 somewhat agree, 6 agree, 7 strongly agree.

Questionnaire administrationFor the survey, we selected ISO 9000 certified companies in the Thai manufacturingsector. Thai Industrial Standards Institute maintains a database of ISO 9000 certifiedcompanies in Thailand with industrial sector-wise information on each: company nameand address; scope of certification, name of certification; name of certifying body.

This database is available on the internet (www.tisi.go.th/syscer/9000.html). From thisdatabase, a list of 1,000 manufacturing companies from different industrial sectors,dispersed across Thailand were selected and questionnaires were mailed with acovering letter and a self addressed, stamped envelope. The cover letter described thepurpose of the survey and assured them of anonymity and confidentiality of theirinformation. The manager responsible for quality systems implementation, or qualitymanager, or production manager was requested to complete the questionnaire.To increase the response rate, some companies were also contacted by e-mail, phone


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and fax. A cut-off date was fixed of forty days from the first mailing date. At the cut-offdate, a total number of 275 useable responses were returned, representing a return rateof 27.5 percent.

Respondents and their company profileAmong the respondents, 34.5 percent were ISO manager, quality managementrepresentative and TQM facilitators. Among others: 19.6 percent were plant managers;19.3 percent were quality managers; 12 percent production managers, operationsmanager, engineering manager; and 14.5 percent were working as directors in thequality management field.

Most of the respondents are qualified to under-graduate (47 percent) andpost-graduate masters (46 percent), while 3 percent are PhD degree holders. Most of therespondents (35 percent) are 40-49 years of age. Other age groups are over 50 years(20 percent); 35-39 years (19 percent), 30-34 years (16 percent) and under 30 years(10 percent). Also, 73 percent of the respondents are male and 27 percent are female.

Of the 275 respondent manufacturing companies, 23 percent (64) are in theAgriculture, rubber and wood products sector, 20 percent (56) chemicals sector,18 percent (49) food products sector, 13 percent (37) are in Textiles, Wearing apparel,Leather/footwear sector, 10 percent (27) electrical machinery and communicationequipment sector, 8 percent (21) paper, plastic and paper products sector, 4 percent (10)metal products and motor vehicles/transport and the remainder are from other sectors.

Among the respondents, 44 percent have less than 200 employees, 43 percent have201-1,000 employees and 13 percent of them have more than 1,000 employees. Also,44 percent of the companies are 100 percent Thai private investment, 18 percent arepublic limited company, 11 percent are majority Thai joint venture, 6 percent are100 percent government owned, 7 percent are Minority Thai joint ventures, and 14percent are 100 percent foreign investment. Approximately, 50 percent of the

companies asset values are less than 10 million US$ 19 percent of the companies assetvalues are between 10 and 20 million US$ and the rest have an asset value of more than20 million US$. About 14 percent of the respondent companies acquired ISO 9000certification less than two years prior, 61 percent companies 3-6 years prior and theremainder for more than seven years.

Empirical assessment of the constructsThere are many methods available for empirically assessing the reliability and validityof a measurement scale. The following discusses the approach taken in our study.

ReliabilityReliability is concerned with the dependability, stability, predictability, consistency

and accuracy, and relates to the extent to which any measuring procedure yields thesame results on repeated trials (Kerlinger, 1986; Carmines and Zeller, 1979). There arefour methods which can be used for assessing reliability of empirical measurements.Among these four methods, the first three methods are rarely used in field studies, as itis difficult to administer the instrument twice with the same group of people or usingtwo alternate forms of measuring instrument (Saraph et al, 1989). In contrast, theinternal consistency method is most commonly used in field research as it requires onlyone administration of the instrument. As the internal consistency method is the most

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general form of reliability estimation (Nunnally, 1978), it has been used in this study.The internal consistency method assesses the equivalence, homogeneity andinter-correlation of the items used in a measure and uses various algorithms toestimate the reliability of a measurement at one point in time (Forza, 2002).

The most popular test within the internal consistency method is the Cronbachcoefficient a (Nunnally, 1978; Cronbach, 1951). Cronbachs a computes internalconsistency reliability among a group of items combined to form a single scale. It canalso be computed for any subset of items. Nunnally (1978) advocates that newdeveloped measures can be accepted with Cronbachs aof more than 0.60, otherwise0.70 should be the threshold. The measure with Cronbachs a 0.80 or more issignificant and reliable. Table I summarizes the Cronbachs a for individual andoverall constructs. The Cronbachs a for the ten constructs ranged from 0.8429 to0.9521 indicating a high reliability of the instrument. The overall Cronbachs a0.9846confirms this instrument is highly reliable.

Detailed item analysisNunnally (1978) developed a method to evaluate the assignment of items to scales. Thismethod considers the correlation of each item with each construct. Specifically, theitem-score to construct-score correlations are used to determine whether an itembelongs to the construct as assigned, belongs to some other construct, or if it should bedeleted. If an item does not correlate highly with any of the constructs it shouldbe deleted. Saraphet al.(1989) and Zhanget al.(2000) also used this method to evaluatethe assignment of items to constructs for developing the instruments. For this study,item analysis was performed in order to understand whether the items had beenassigned appropriately.

In this study, one item out of 53 items was deleted by using Nunnallys method.Among the remainder, 52 items all were highly correlated with their respective

constructs. The correlation matrix in Table II shows that all the values are greater than0.70. Some TQM literature suggested item values lower than 0.5 do not share enoughvariance with other items in that scale and should be deleted from the scale (Kemp,1999). Hairet al.(2005) suggest a correlation greater than ^0.30 are considered to meetthe minimal level; ^0.40 are considered more important and ^0.50 or greater areconsidered practically significant. They also suggest that a correlation greaterthan ^0.35 for a sample size of 250 should be considered statistically significant.

Constructs Number of items Deleted number Cronbachs a

Overall 53 No 0.9846Top management commitment 8 No 0.9521

Supplier quality management 3 No 0.8768Continuous quality improvement 9 No 0.9476Product innovation 5 No 0.9127Benchmarking 4 1 0.8429Employee involvement 4 No 0.8995Reward and recognition 4 No 0.8840Education and training 5 No 0.9262Customer focus 5 No 0.9131Product quality 6 No 0.9489

Table I.Internal consistencyanalysis for the ten

individual constructs andoverall constructs


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In this study, all the items are assigned appropriately; the item scores are higher totheir respective constructs compared to other constructs.

ValidityThe validity of a measure is defined as the extent to which a construct or a set of measurescorrectly represents the concept of study, and the degree to which it is free from anysystematic or non-random error. Validity is concerned with how well the concept isdefined by the measure(s), whereas reliability relates to the consistency of the measure(s).

Content validity or face validity, criterion-related validity, and construct validity arethe three most popular methods to evaluate the validity of constructs (Carmines andZeller, 1979). Content validity or face validity is not evaluated numerically it is

judged by the researchers. Criterion-related validity and construct validity areevaluated numerically. The three types of validity for this study are discussed below.

Content validity. A measure has content validity if there is a general agreementamong the subjects and researchers that the instrument has measurement items thatcover all aspects of the variable being measured. This form of validity, also known asface validity, subjectively assesses the correspondence between the individual itemsand the concept through ratings by expert judges or other means. The objective of thecontent validity is to ensure that the selection of construct items extends past empiricalissues to also include theoretical and practical considerations (Robinsonet al., 1991).

The ten constructs for measuring TQM implementation should have contentvalidity, as the measurement items were developed based on both an extensive reviewof the literature and detailed evaluations by academicians and practicing managers.

Moreover, the pretest subjects indicated that the content of each construct was wellrepresented by the measurement items employed.

Criterion-related validity. This validity is concerned with the extent to which ameasurement instrument is related to an independent measure of the relevant criterion.Criterion-related validity is also called a predictive validity or external validity.

In this study, criterion-related validity was a measure of how well the ten constructs ofTQM in a manufacturing company are related to measures of quality performance.Two measures of quality performance were obtained from the sample of the respondents.

Item numberTQM constructs 1 2 3 4 5 6 7 8 9

Top management commitment 0.834 0.857 0.902 0.811 0.866 0.856 0.890 0.886

Supplier quality management 0.905 0.881 0.901Continuous quality improvement 0.876 0.842 0.814 0.833 0.851 0.853 0.851 0.806 0.838Product innovation 0.800 0.869 0.898 0.872 0.865Benchmarking 0.913 0.895 0.806Employee involvement 0.888 0.919 0.871 0.832Reward and recognition 0.873 0.873 0.841 0.866Education and training 0.874 0.890 0.901 0.881 0.850Customer focus 0.836 0.910 0.907 0.883 0.784Product quality 0.887 0.919 0.919 0.893 0.870 0.876

Notes: Item numbers in the table are same as the item numbers in the instrument; correlation issignificant at the 0.01 level

Table II.Item to constructcorrelation matrix for theconstructs of TQM(Pearson correlation)

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Each manager was asked to rate (on a seven-point scale, 1 not using; 7 extensivelyusing) the quality assurance of their products and services for the last five years, andcustomer satisfaction with quality for the last five years. Thesetworatings were averagedto find the single measure of quality performance. Many studies use this subjective

measure, as it is difficult to identify and obtain an objective measure that would beappropriate for the different types and sizes of manufacturing companies (Saraph et al.,1989).Fortesting criterionvalidity, bivariate correlation (Pearson) analysiswas conductedto study the interrelationships between the TQM constructs (predictor set) and the qualityperformance measures (the criterion set). The bivariate correlation coefficients are shownin Table III. The correlation within the ten TQM constructs, within the two qualityperformance measures and between the predictor set and criterion set, is significant at the0.01 level. Therefore, it could be concluded that this set of constructs have goodcriterion-related validity.

Construct validity. A measure has construct validity, if it measures the theoreticalconstructs that it was intended to measure. Factor analysis can be used for evaluatingcontent validity. Factor analysis helps analyze the interrelationships among a largenumber of variables and explains these variables in terms of their common underlyingdimensions (constructs). It also helps reduce data that do not correlate with any of theunderlying dimensions. The general purpose of factor analysis is to find a way tocondense (summarize) the information contained in a number of original variables intoa smaller set of new, composite dimensions or constructs with minimum loss ofinformation that is, to search for and define the fundamental constructs ordimensions assumed to underlie the original variables (Hair et al., 2005). Two forms offactor analysis, namely, exploratory factor analysis (EFA) and confirmatory factoranalysis (CFA) have been used for defining underlying dimensions (constructs) in adata matrix.

EFA can be used to uncover the underlying structure of a relatively large set of

variables, establish links when the observed and latent variables are unknown oruncertain. EFA determines how and what extent the observed variables are linked totheir underlying constructs (Byrne, 1998). EFA is the most common form of factoranalysis. It is used when there is no prior theory and factor loadings are used to intuitthe factor structure of the data. EFA helps to identify whether selected items cluster onone or more than one constructs and thus unidimensionality of constructs is assessed.Usually, three or more items are selected for a latent variable or construct (Zhang et al.,2000). CFA is used to test or confirm the relationship between the factors and the latentvariables on the basis of pre-established theory and factor analysis is used to see if theyload as predicted on the expected number of constructs.

Since, TQM theory is far from being fully developed (Ahireet al., 1996), CFA couldnot be employed for developing this constructs. Considering the characteristics of this

study, EFA would have to be employed for construct validation.There are two basic models that can be utilized for EFA. They are principal

components analysis (PCA) and principal factor analysis (PFA) (Hair et al., 2005).PCA, the most common form of factor analysis, is used for summarizing most of theoriginal information (variance) in a minimum number of factors for predictionpurposes. PCA analyzes total (common and unique) variance. PCA seeks a linearcombination of variables such that the maximum variance is extracted from thevariables. It then removes this variance and seeks a second linear combination that


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A.Withinpredictorset(T

QMconstructs)

TQMconstructs

Mean

SD

1

2

3

4

5

6

7

8

9

10

1.

Topmanagementcom

mitment

5.3

0

1.2

5

1.0

00

2.

Supplierqualitymanagement

5.5

0

1.2

7

0.8

02

1.0

00

3.

Continuousimprovem

ent

5.3

0

1.1

7

0.8

98

0.7

63

1.0

00

4.

Productinnovation

5.0

5

1.2

5

0.7

52

0.6

66

0.7

93

1.0

00

5.

Benchmarking

4.6

5

1.3

3

0.5

16

0.4

40

0.5

52

0.5

80

1.0

00

6.

Employeeinvolvement

5.1

5

1.2

9

0.7

99

0.6

75

0.8

36

0.7

53

0.5

48

1.0

00

7.

Rewardandrecognition

4.7

1

1.4

0

0.6

41

0.5

05

0.6

37

0.6

38

0.4

99

0.7

27

1.0

00

8.

Educationandtrainin

g

5.3

2

1.2

5

0.8

19

0.6

90

0.8

43

0.7

26

0.4

82

0.8

54

0.6

56

1.0

00

9.

Customerfocus

5.5

3

1.3

1

0.8

08

0.7

71

0.8

22

0.7

51

0.4

71

0.8

07

0.5

83

0.8

55

1.0

00

10.

Productquality

5.4

8

1.2

4

0.8

17

0.7

48

0.8

29

0.7

58

0.4

83

0.8

03

0.6

10

0.8

08

0.8

43

1.0

00

B.Withincriterionset(qualityperformancemeasures)

Qualityperformancem

easures

1.

Qualityassurance

5.3

9

1.3

31

1.0

00

2.

Customersatisfaction

5.4

4

1.4

99

0.5

69

1.0

00

C.Betweenpredictorsetandcriterionset Quality

performance

measures

Avera

geof

twomeasures

TQMScales

1

2

1.

Topmanagementcom

mitment

0.3

37

0.2

62

0.3

36

2.


0.2

80

0.1

71

0.2

51

3.

Continuousimprovem

ent

0.3

18

0.2

88

0.3

41

4.

Productinnovation

0.2

79

0.2

72

0.3

11

5.

Benchmarking

0.1

85

0.1

66

0.1

98

6.

Employeeinvolvement

0.3

16

0.2

82

0.3

37

7.


0.2

66

0.3

06

0.3

23

8.

Educationandtrainin

g

0.3

02

0.2

67

0.3

19

9.

Customerfocus

0.3

00

0.2

14

0.2

87

10.

Productquality

0.2

91

0.2

46

0.3

02

Notes:Pearsoncorrelati

onissignificantatthe0.0

1level;SDmeansStandardDeviation,

TotalNum

ber275

Table III.Bivariate correlationmatrices

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explains the maximum proportion of the remaining variance, and so on. In contrast,PFA is used primarily to identify underlying factors or dimensions that reflect whatthe variables share in common. PFA, also called as principal axis factoring; andcommon factor analysis; seeks the least number of factors which can account for the

common variance (correlation) of a set of variables, whereas PCA seeks the set offactors which can account for all the common and unique (specific plus error) variancein a set of variables. EFA was performed using PCA to identify constructs, andsubsequently for each construct separately.

According to Hair et al. (2005), factor loadings greater than 0.30 are considered to meetthe minimal level; loadings of 0.40 are considered more important; if the loadings are 0.50or greater, then they are considered highly significant. In this study, a factor loading of0.50 was used as the cut-off point. Hair et al.(2005) describe three techniques for factorextraction: latent root criterion or eigenvalue; percentage of variance and scree test.Among the three techniques, latent root criterion or eigenvalue is the most commonlyused technique for factor extraction. Factors having eigenvalues greater than one areconsidered significant and all other factors with eigenvalues less than one are consideredinsignificant and are disregarded. The other two techniques, percentage of variance andscree test are considered too subjective (Zhang et al., 2000) and it is not uncommon insocial sciences to consider a solution that accounts for 60 percent of the total variance(and in some instances even less) as a satisfactory solution (Hair et al., 2005).

The factor analysis results listed in Table IV show that all the items in tenconstructs formed a single factor with eigenvalue greater than one. For each of theten constructs, the factor loadings are more than 0.70 and accounts for more than70 percent of the total variance (except the construct 5, benchmarking). The item 4 inthe construct 5 (benchmarking) has factor loading of less than 0.50 and accounts forless than 60 percent of the total variance with all the original items. To explore more,factor analysis of this construct was performed with all the original items and by

excluding the item 4.Table IV shows that factor analysis gives better results if item 4 is excluded.The percentage of variance increased from 59.757 to 76.041; reliability of the constructincreased from 0.7109 to 0.8429 and overall factor loadings of the other items in thatconstruct also increased after excluding item 4. Finally, it could be concluded that theten TQM constructs consisting of 52 items have good construct validity.

Discussion and conclusionsSaraphet al. (1989) produced the seminal work on developing reliable and empiricallyvalidated TQM constructs. They identified items relevant to integrated TQM, based onthe TQM constructs prescribed by the quality gurus including Deming, Crosby, Juranand Ishikawa. Flynn et al. (1994) used practitioner and empirical literature on TQM.

Ahire et al. (1996) have used prescriptive conceptual, empirical and practitioner literature.Saraph et al. (1989) used a response sample of 162 managers that spanned both

manufacturing and services sector, and included some 20 companies. Flynnet al. (1994)collected data on quality elements from 716 respondents in 42 manufacturing plants,including machinery, transportation components and electronics industry. Ahire et al.(1996) used plant managers from 371 plants in motor vehicle parts and the accessoriesindustry. In this study, we have used 275 respondents from the ISO 9000 certifiedmanufacturing companies in Thailand. The respondents are managers involved in


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Factorloadings

TQM

constructs

Numberof

factors

Eigenvalues

Item1

Item2

Item3

Item4

It

em5

Item6

Item7

Item8

Item9

Percentageof

v

ariance

1.

Topmanagementcom

mitment

1

5.99

9

0.8

42

0.8

66

0.9

08

0.8

150.865

0.8

60

0.8

90

0.8

77

74.9

93

2.


1

2.40

9

0.9

06

0.8

86

0.8

97

80.3

01

3.

Continuousimprovem

ent

1

6.35

9

0.8

78

0.8

39

0.8

09

0.8

300.854

0.8

57

0.8

55

0.8

06

0.8

36

70.6

51

4.

Productinnovation

1

3.71

1

0.7

92

0.8

67

0.9

00

0.8

760.868

74.2

12

5.

Benchmarking(withoriginalitems)

1

2.39

0

0.9

01

0.8

74

0.8

01

0.4

18

59.7

57

Benchmarking(after

deletingitem

4)

1

2.28

1

0.9

18

0.8

98

0.7

95

76.0

41

6.

Employeeinvolvement

1

3.08

5

0.8

87

0.9

25

0.8

71

0.8

28

77.1

31

7.


1

2.97

9

0.8

66

0.8

66

0.8

44

0.8

76

74.4

77

8.

Educationandtrainin

g

1

3.86

4

0.8

71

0.8

90

0.9

05

0.8

790.850

77.2

83

9.

Customerfocus

1

3.74

9

0.8

38

0.9

23

0.9

19

0.8

850.753

74.9

72

10.

Productquality

1

4.79

0

0.8

85

0.9

22

0.9

23

0.8

960.862

0.8

70

79.8

29

Note:Aneigenvaluegre

aterthan1wasusedascriterionfor

factorextraction

Table IV.Results of EFA for the tenTQM constructs

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quality management and production. Data from all industrial sectors of Thaimanufacturing industry were used for testing and validating TQM constructs. Thishas allowed the highest external validity for manufacturing industries, in general, andparticularly when describing Thai manufacturing companies. This makes our work of

particular importance when compared to the TQM constructs proposed by Saraph et al.(1989), Flynn et al. (1994) and Ahire et al. (1996). The internal consistency of theconstructs used in this study is less than the instruments of Flynn et al.(1994) and theAhire et al. (1996), but better than the Saraph et al. (1989) instrument. The mainstrength of Saraph et al. (1989) constructs are that they have the highest level ofexternal validity for manufacturing and service industries (Ahire et al., 1996).The constructs used in this study have the second highest external validity, based onresponses from many sectors in the manufacturing industry. In contrast, Flynn et al.(1994) and Ahireet al.(1996) used responses from only three and only one industry inthe manufacturing sector, respectively.

The data used in our study were obtained solely from ISO 9000 certified Thaimanufacturing companies; and hence generalization is somewhat limited. However,our work represents the first attempt to develop TQM constructs for measuring TQMimplementation in Thailand. Clearly, external validity could be improved by additionalresearch and with increased sample sizes, geographical diversity and more companiesfrom manufacturing and service sector.

The constructs proposed in this study are empirically based and shown to bereliable and valid. The reliability coefficients (Cronbachs as) for the ten constructsranged from 0.84 to 0.95, which are relatively high compared to the other studies; whilethe total number of items are less than in the other studies. A literature review andcomprehensive pretesting insured content validity. There is sufficient empiricalevidence that proved the criterion-related validity and construct validity of theseconstructs. Moreover, researchers and practitioners from other countries will be able to

use these constructs in future TQM study. As the number of items is less in thisinstrument compared to others, our instrument will be easier to administer and theresponse rate will be better.

This empirically reliable and valid TQM implementation constructs, consisting often constructs (52 items) can be used in other studies and for different countries.Quality/production managers will be able to use these constructs to evaluate theirTQM implementation programs and identify problem areas requiring improvement.Researchers will be able to use these constructs for gaining better understanding todevelop applicable TQM theory.

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Appendix. Integrated quality management constructsThe initial 53 items of ten constructs were used to ask respondents to describe how much theyagree with these statements and to give feedback on a seven-point Likert scale (1 stronglydisagree, 2 disagree, 3 somewhat disagree, 4 neutral, 5 somewhat agree, 6 agree,7 strongly agree). The item noted by an asterisk (*) was eventually deleted to improvereliability and construct validity of the construct.

Construct 1: top management commitment. Top management communicates the companys philosophy to the employees.. Top management actively develops one integrated quality plan to meet business objectives.. Top management strongly encourages employee involvement in quality management and

improvement activities.. Top management arranges adequate resources for employee education and training.. Our company has a clear long-term vision statement that encourages employees

commitment to quality improvement.. Our company has a clear short-term business plan.. Our company has an effective quality improvement plan.. Employees are encouraged to achieve their objectives.

Construct 2: supplier quality management. Our company has established long-term co-operative relations with suppliers.. Our company gives feedback on the performance of suppliers products.. Our company is more interested in developing a long-term relationship with these

suppliers than reducing prices.

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Construct 3: continuous improvement

. Our company has clear working instructions.

. Our company has an accurate and efficient database that provides information on internaloperation.

. Our company has an accurate and efficient database that provides information on its costsand finances.

. The aim of employee performance evaluation is for improvement, not for criticism.

. Production equipment is maintained well according to maintenance plan.

. Our company implements various inspections effectively.

. Our company uses QC tools extensively for process control and improvement.

. Ourcompanyusesstatisticalprocesscontrol extensively forprocesscontrol andimprovement.

. Our company uses PDCA cycle extensively for process control and improvement.

Construct 4: product innovation

. The customer requirements are thoroughly considered in new product design.

. Various departments participate in new product development.

. New product designs are thoroughly reviewed before production.

. Experimental design is used extensively in product design.

. Quality function deployment is used extensively in product design.

Construct 5: benchmarking

. We are engaged in extensive benchmarking of competitors products that are similar toour primary product.

. We have engaged in extensive benchmarking of other companies business processes inother industries.

. Benchmarking has helped improve our product.

. The quality system in our company is continuously improving *.

Construct 6: employee involvement. Our company has cross-functional teams or quality circles.. Employees are actively involved in quality-related activities.. Our company implements suggestion activities extensively.. Employees are very committed to the success of our company.

Construct 7: reward and recognition

. Our company has a salary promotion scheme for encouraging employee participation inquality improvement.

. Excellent suggestions are financially rewarded.

. Employees rewards and penalties are clear.

. Recognition and reward activities effectively stimulate employee commitment to qualityimprovement.


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Construct 8: education and training. Employees are encouraged to accept education and training in our company.. Resources are available for employee education and training in our company..

Most employees in our company are trained on how to use quality management methodsand tools.. Employees are regarded as valuable, long-term resources worthy of receiving education

and training throughout their career.. Most employees in our plant are interested to attend quality seminar or training program.

Construct 9: customer focus. Our company has developed a program to maintain good customer communication.. Our company collects extensive complaint information from customers.. Quality-related customer complaints are treated with top priority.. Our company conducts a customer satisfaction survey every year.. Our company always conducts market research for collecting suggestions for improving

our products.

Construct 10: product quality. The performance of your primary products is regularly monitored.. The reliability of our primary products is increasing.. The durability of our primary products is increasing.. The defect rates of our primary products are decreasing.. Our line workers inspect the quality of their own work.. Line workers are encouraged to fix problems they find.

Corresponding authorAnupam Das can be contacted at: [email protected]

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