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Factors affecting the relationship between total quality management and organizational performance Fco. Javier Llore ´ns Montes, Antonio Verdu ´ Jover and Luis Miguel Molina Ferna ´ndez Management Department, Universidad de Granada, Granada, Spain Keywords Total quality management, Performance, Contingency planning, Psychology, Behaviour, Learning Abstract This paper aims to provide a framework for studying the relationship between total quality management (TQM) and organizational performance. TQM contents as well as TQM elements are considered. So, from a contingency approach, TQM contents have to be consistent with business orientation and environmental uncertainty in order to be effective. On the other hand, the relationship between TQM elements and performance is developed from an industrial psychology perspective. Hence, TQM elements are considered to impact both behavioural and individuals’ learning processes. In the proposed model this relations are mediated by the TQM- driven cultural change acceptance. Moreover, TQM elements impact these individual processes both directly and mediated by systems and personal factors. Hence, both TQM contents and elements have to be considered to do the right things and to do it well. Introduction In the last few years, the core ideas of total quality management (TQM) have been generally accepted by the business community throughout the world. Within the framework of the “quality revolution”, company managers and executives have been flooded with articles, books and seminars. TQM has been described as a new model of thinking in business management (Chorn, 1991), a comprehensive style to improve organizational performance and quality (Hunt, 1993), an alternative to the “management by control” (Price, 1989), and more recently, as a change of paradigm (Broedling, 1990). Some authors consider TQM as an approach historically unique to improve the organizational effectiveness, with solid conceptual foundations which, at the same time, provides us with a strategy to enhance business performance, taking into consideration the way companies and their staff operate (Wruck and Jensen, 1994). TQM has become a global phenomenon, as it affects Japanese companies as much as US, European and Asia-Pacific ones (Chen, 1997; Corbett and Rastrick, 2000). It has been described even as an appropriate method to improve the competitiveness of companies in developing countries (Mersha and Merrick, The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/researchregister http://www.emeraldinsight.com/0265-671X.htm TQM and organizational performance 189 Received December 2001 Revised June 2002 International Journal of Quality & Reliability Management Vol. 20 No. 2, 2003 pp. 189-209 q MCB UP Limited 0265-671X DOI 10.1108/02656710310456617

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Page 1: TQM n Organizational Performance

Factors affecting therelationship between totalquality management and

organizational performanceFco. Javier Llorens Montes, Antonio Verdu Jover and

Luis Miguel Molina FernandezManagement Department, Universidad de Granada, Granada, Spain

Keywords Total quality management, Performance, Contingency planning, Psychology,Behaviour, Learning

Abstract This paper aims to provide a framework for studying the relationship between totalquality management (TQM) and organizational performance. TQM contents as well as TQMelements are considered. So, from a contingency approach, TQM contents have to be consistentwith business orientation and environmental uncertainty in order to be effective. On the otherhand, the relationship between TQM elements and performance is developed from an industrialpsychology perspective. Hence, TQM elements are considered to impact both behavioural andindividuals’ learning processes. In the proposed model this relations are mediated by the TQM-driven cultural change acceptance. Moreover, TQM elements impact these individual processesboth directly and mediated by systems and personal factors. Hence, both TQM contents andelements have to be considered to do the right things and to do it well.

IntroductionIn the last few years, the core ideas of total quality management (TQM) havebeen generally accepted by the business community throughout the world.Within the framework of the “quality revolution”, company managers andexecutives have been flooded with articles, books and seminars. TQM has beendescribed as a new model of thinking in business management (Chorn, 1991), acomprehensive style to improve organizational performance and quality (Hunt,1993), an alternative to the “management by control” (Price, 1989), and morerecently, as a change of paradigm (Broedling, 1990). Some authors considerTQM as an approach historically unique to improve the organizationaleffectiveness, with solid conceptual foundations which, at the same time,provides us with a strategy to enhance business performance, taking intoconsideration the way companies and their staff operate (Wruck and Jensen,1994).

TQM has become a global phenomenon, as it affects Japanese companies asmuch as US, European and Asia-Pacific ones (Chen, 1997; Corbett and Rastrick,2000). It has been described even as an appropriate method to improve thecompetitiveness of companies in developing countries (Mersha and Merrick,

The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at

http://www .emeraldinsight .com/researchregister http:// www.emeraldinsigh t.com/0265-671 X.htm

TQM andorganizational

performance

189

Received December 2001Revised June 2002

International Journal of Quality &Reliability Management

Vol. 20 No. 2, 2003pp. 189-209

q MCB UP Limited0265-671X

DOI 10.1108/02656710310456617

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1997). Similarly, its principles and elements have been assumed by all sectorsin the economy, from the industry (Flynn et al., 1995), where it originated, to theservices (Silvestro, 1998), the public sector (Loomba and Spencer, 1997) and theeducation (Elmuti et al., 1996).

Due to the importance of the material and human endeavours that theorganizations must carry out for the implementation of TQM, researchers havebeen concerned with its relationship with the improvement of organizationalperformance. Thus, an increasing number of studies exist trying to determinethe degree of influence of the different principles and elements of quality onorganizational performance. This relative importance is due to the existingcontroversy about the real capability of TQM to impact performance.Therefore, after a first stage where TQM was envisaged as the solution to theWestern companies problems of lost of competitiveness, the following stagebrought into light the reviling of TQM as another management fad, whoseeffects upon organizational performance were evident only in the short term(Zbaracki, 1998).

The present paper summarises the main contributions made in the field ofTQM to the study of its relationship with organizational performance. Thus, inthis paper, we propose a model that encompasses the factors affecting thesuccess of the implementation of a quality system, mainly based on industrialpsychology studies. With this purpose, the rest of the work has been organisedin the following way. First, TQM and organizational performance are definedand the main works on TQM and organizational performance are brieflyrevised. Next the proposed model is presented. The rest of the paper deals withthe propositions implicit in the model suggested. Finally, we present the mainconclusions that can be reached.

DefinitionsTQMAccording to Bemowski (1992), the expression TQM was firstly used in 1985by the Naval Air Systems Command to describe the Japanese style ofmanagement focused on quality improvements. Although a lot of controversyexists on finding a definition able to include the efforts made by the differentresearchers and professionals about TQM (Gehani, 1993), in this paper wesupport the position stated by Snell and Dean (1992), Westphal et al. (1997),Withers et al. (1997) or Yusof and Aspinwall (2000) and consider it as aphilosophy or an approach to business management.

Within the framework of the TQM, a distinction can be made betweencontent and elements or processes. The former has been known under thenames content (Reed et al., 2000), principles (Dean and Bowen, 1994), precepts(Sitkin et al., 1994), values (Hellsten and Klefsjo, 2000) or basic attributes (Deanand Evans, 1994). Although definitions do not coincide in full, all of them referto those fundamentals that make up TQM theoretical frame, without which the

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management system implemented in the organization or the philosophy onwhich it is based could not be called TQM.

Similarly, the so-called elements (Waldman, 1994), practices (Dean andBowen, 1994), techniques (Hellsten and Klefsjo, 2000), processes (Reed et al.,2000), interventions (Hackman and Wageman, 1995), principles (Sitkin et al.,1994), etc., refer to the mechanism through which the above mentionedestablished basic foundations are put into effect, by means of the effectiveimplementation of the different management processes.

Organizational performanceAlthough many authors have tried to set out a clear definition of performance,the debate continues nowadays in the academic literature, especially regardingsome aspects of terminology, analysis level, and conceptual basis forassessment (Ford and Schellenberg, 1982). Venkatraman and Ramanujan(1986) consider three different levels of performance within organizations.Thus, they distinguish among financial performance, business performanceand organization effectiveness, although the later has been subsequentlyknown as organizational performance (e.g. Chu-Hua et al., 2001; Terziovski andSamson, 1999).

The present work studies the relationship between TQM and performanceon a broad sense, and for this reason, this paper focuses on the relationshipbetween TQM and organizational performance.

TQM and organizational performance relationshipStudies designed to bring some light over this topic have shown differentresults. On the one hand, there are studies dealing with the effects of the TQMupon the business value. In this regard, Easton and Jarell (1998), Hendricks andSinghal (2001a) or Ramasesh (1998) found that companies operating in TQMenvironments performed better than average in the financial markets. Inopposition to this, Adams et al. (1999) found abnormally above market averageperformances, but to a lesser extent than the former.

On the other hand, the works of Adam et al. (1997), Hendricks and Singhal(2001b) or Maani et al. (1994) showed that TQM affects the objective measuresto monitor performance, such as the return on assets, the return on equities andthe operating income before depreciation. There is controversy as to the resultsin this case too, since works such as those of Adam (1994) or Powell (1995) didnot find a significant relation between the degree of implementation of TQMand financial performance. Nevertheless, according to these studies, TQM didprove able to capably improve the quality of the company products, accordingto the above-mentioned study. This relationship between the TQMimplementation and the quality of the organization products has beenempirically validated (e.g. Choi and Eboch, 1998; Forza, 1995). And a largenumber of studies relate a better quality of the products and services to a betterorganizational performance (Forker et al., 1996; Golhar and Deshpande, 1999;

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Kroll et al., 1999), this being one of the possible impacts of TQM uponorganizational performance.

TQM researchers, in their attempt to find an explanation for these unevenresults, have sought out the contextual factors that affect TQM effectiveness. Inthis research line, they have focused either on environmental factors (Powell,1995; Terziovski and Samson, 1999) or on the company characteristics(Hendricks and Singhal, 2001b; Terziovski and Samson, 2000). However, thesepapers did not analyse the organizational variables that really differ from onecompany to another, and that explain the uneven results of the quality systems(Douglas and Judge, 2001).

Many of the works that study the effects of TQM followed this sequence:firstly, a TQM programme is implemented, then, the company productivityand/or profitability improve, and hence it is concluded that this improvement isa consequence of the programme implementation (Gilbert, 1992; Raffio, 1992).But the improvement noticed could have actually originated as a result thefollowing:

. Other events concurrent in time with the intervention. That is, therelationship between the improvement processes and the organizationalresults could have been obscured by some exogenous shocks(environmental or market factors).

. Very likely, the Hawthorne effect could have occurred, by virtue of whichthe company staff works harder and better when they are aware of theirbeing under study.

. The time factor can also obscure the relationship between TQM and theresults achieved (Whetton and Cameron, 1994), as some conclusions canbe reached in the short term, without waiting for an analysis of theconsequences in the long run.

. The case may also have happened where the company managers hadselected organizational units for pilot testing as part of an introductorystage of the TQM programme.

When the managers and the change agents start planning the programmeimplementation, the workforce, workflow and internal organization areexamined in detail. Then, any cause of inefficiency detected at the moment ofthe implementation will be corrected. If, as a result, the organizational unitproductivity increases, the quality programme will be deemed responsible forthis improvement. Although this can actually be the case, there is also thepossibility that the improvement occurred only as a result of the paraphernaliainherent to the programme, and not as a result of the integral programme itself.This approach makes it difficult to find an explanation for the reasonsunderlying the improvements (Hackman and Wageman, 1995; Powell, 1995).

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TQM and performance relationship modelOur model – based on a revision of the state of the question both in theory andin practice – gathers the main factors that generally explain a greater variancein the TQM and performance relationship (see Figure 1). In the model, wedistinguish between TQM content and elements, as both are importantcomponents for the study of the way in which TQM affects organizationalperformance. Therefore, on the one side, the model proposes that TQM contentshould fit with the business orientation and with the environment, inagreement with the classical strategic management school of strategy-environment adjustment and with the organization school of structure-strategyadjustment (Ginsbert and Venkatraman, 1985). In this sense, a right alignmentbetween these elements will produce that actions performed by theorganization in agreement with the TQM philosophy are consistent with thegeneral orientation of the organization and with the demands of theenvironment, in such a way that the firm will accomplish the appropriate tasks,that is to say, it will be efficient.

On the other hand, TQM elements are also included. They will affect theorganizational performance on a twofold basis. On the one hand, TQM affectsthe level of learning of the organization members, and thus it also affects theknowledge applied to their tasks and the learning direction. TQM will alsoaffect behavioural factors, influencing this way the work effort level, althoughthese relationships are mediated by the acceptance of the cultural changeinherent in TQM. This relationship between TQM, learning and behavioural

Figure 1.Relationship between

TQM and performance

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factors is established directly and through the TQM effect on the existingrelationship between personal factors and system factors. That is, that TQMhas an impact on the way organization members apply their knowledge in theorganization, and therefore it affects organizational performance.

Below, the model propositions are dealt with more deeply.

TQM contents, business orientation and environmental uncertaintyA research line of growing interest is the one that has tried to set out how TQMcontents should be adapted to the objectives of the organization. Thus, Sitkinet al. (1994) consider that from the TQM common precepts arise some principlescontingent to the main objective to be reached through TQM implementation.This leads them to distinguish between a learning-focused approach, if theintention is to provide the organization with the necessary tools to solve newproblems, and a control-focused approach, if the idea is to prevent losses as aconsequence of out-of-control production processes.

On the other hand, Manz and Stewart (1996) consider that there are twoTQM forms related to the definition of quality. Thus, if quality is defined asconformance or as desirable features, then TQM will adopt some philosophicalfundamentals about a very different work reality in organizations. Thus, in theformer case, TQM tends to adopt a mechanicist, closed-system perspective,whereas if we take the second definition of quality, it approaches more to theidea of opened system. At any event, authors such as Waldman (1994) does notaccept the first TQM form as such, as they consider that one of the TQM basicprinciples, without which it cannot be considered as such, is the definition ofquality as satisfaction of customer needs.

The importance of taking into consideration the business orientation is anidea already accepted in the TQM literature (Reed et al., 1996). The idea thatbusiness can either be process-driven, or customer- or market-focused, stronglyappears in the existing literature on business management.

Although the customer focus was traditionally considered as a marketingconcept, the most recent researches and thinking suggest that it is much morethan that. For a company to be customer-driven means that it is able to capablyand positively impact on its value chain. Narver and Slater (1990) were the firstat studying the relationship between market orientation and businessprofitability. Their findings showed that the customer focus is positivelyrelated to business profitability.

The process orientation has never been defined nor measured in full. Thisconcept links to the classical theory of business management (e.g. scientificmanagement) and there underlies much of our current management theory andorganizational models dealing with the companies internal control and themanagement of their activities. Thus, for instance, Spencer (1994) studied sevenfactors (objectives, quality definition, environment role/nature, managerial role,employees’ role, structure rationality and change-oriented philosophy) that

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widely explain the management practice and found that TQM thinking and thetheory included in the machine-like, organic and cultural organizational modelssubstantially overlap. Also, Spencer pointed that business managementacademics also suggested that managers would better increase their focus onefficiency improvement and process control.

The business orientation relates to the TQM strategy contents. In the case ofthe customer focus, these contents can be further specified throughout a marketadvantage and/or product design efficiency. Alternatively, the process focuscan be specified thanks to the products reliability and/or process efficiency.Reed et al. (1996) consider that customer-focused companies should makeavailable the favourable conditions permitting them to successfully achieve anincome increase by means of a market advantage and a costs reduction,through an improvement in the products design reliability. On the other hand,companies oriented to the processes should be capable to achieve animprovement in their income by enhancing their products reliability, andreduce costs by increasing the levels of efficiency in the processes.

So if we study the real intention of organizations in promoting TQM, we findthe classical distinction between exploitation of the organization capabilitiesand exploration of new capabilities (Argyris and Schon, 1978). That is to say,as a large part of the organizational structures allowing innovation are inconflict with efficiency in current products manufacture, the firm has to chosebetween an organization completely closed in the exploitation of existingcapabilities and the exploration of new competitive capabilities. On this regard,two basic TQM orientations can be considered, relating exploration orexploitation of the existing capabilities in the organization. Similarly, these areonly two edges in the continuum of possibilities that can arise, but, as stated byConner and Prahalad (1996), edges are useful for economic studies, as theypermit to clarify basic concepts of theories. Therefore, this is what Doty et al.(1993) called a contingent hybrid types structure within configurational theory.

However, Reed and his colleagues suggest that these relationships willdepend upon the uncertainty degree perceived. Thus, for instance, when thebusiness is half driven to customers and to processes, but the environmentproduces a degree of uncertainty – be it high or low – the improvement of theresults after a TQM programme implementation will not be clear. In highlyuncertain environments, the increase in the income produced by a marketadvantage and a reduction in costs due to an improvement in the product-design efficiency, will be either limited or curbed by the increase in costs linkedto the improvement in the process efficiency and the reliability of the products.In opposition, with low levels of uncertainty, the reduction in costs produced byan improvement in the process efficiency, and the increase in the incomearising out of higher levels of reliability of the products, will both be reducedbecause of the costs incurred at trying to set forth a market advantage or animprovement in the product design.

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In the light of the above, it can be established that:

P1. Organizational performance is positively related to the fit between TQMcontents, business orientation and environmental uncertainty.

TQM elements and organizational performanceThere is no agreement between academics and practitioners as to whichelements are actually implemented in the organization when a TQM system isset up. Thus, from Saraph et al.’s (1989) works up to nowadays, many studieshave tried to establish the degree of real implementation of a quality system ina company (e.g. Ahire et al., 1996a, b; Anderson et al., 1995; Flynn et al., 1995;Grandzol and Gershon, 1998, Rao et al., 1999). The elements considered in theseworks can be classified into five large blocks:

(1) managerial leadership and commitment;

(2) human resources management;

(3) the relationship with customers and suppliers;

(4) the internal culture of the organization; and

(5) the process management.

These elements will always be the guidelines to appraise the effectiveness of aTQM programme following implementation. The company results will differdepending on the successful implementation of the said elements. Nevertheless,these elements have different importance weighs in terms of their finalcontribution to the results. Thus, Powell (1995) proved that businessperformance is influenced by the degree of implementation of the TQM basicelements. On this premise, he carried out an analysis over 54 companies inorder to study the degree of correlation between the implementation of a TQMprogramme in a company and the improvement in its financial profitability.Out of his findings, it was concluded that:

. a TQM programme has an economic value for companies, although itchanges from one company to another; and

. the success of a TQM programme seems to depend more on themanagement commitment, the openness towards the environment, theauthority to empower employees; than on benchmarking, training,flexible manufacture, process improvement and measure systems.

However, the research design was based on transverse data, whichnevertheless does not prevent us from thinking that there could be anexogenous factor explaining the profitability improvement, more powerfulthan those used in our study. In any event, a formal TQM programme is notnecessary to implement the said elements in an organization, though the fact ofimplementing them jointly under the TQM system umbrella makes them moresuccessful (Ahire et al., 1996a, b).

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Nevertheless, the effects of TQM elements in the processes of personalbehaviour can condition the success (Hackman and Wageman, 1995). Thus, forinstance, with company leaders not strongly committed in the long run,employees can be reluctant to the cultural change; they can lose motivation ifno appropriate internal communication exists, or if the company is excessivelyhierarchical; etc. Similarly, the implementation of the TQM elements mustinvolve changes in the system that increase the levels of training, technologicalupgrades, etc. (Dean and Evans, 1994; Waldman, 1994).

To reach its goals, the implementation of a TQM programme – if it is aimedat improving the staff efficiency and performance – needs to change the way inwhich employees behave at work. Several behavioural and attitudinalprocesses are necessary to achieve these goals: work motivation, worksatisfaction and organizational commitment. Nevertheless, the fact that theemployees’ behaviour and the aforementioned processes can be affected by thesystem (system factors), the individuals (personal factors), and the interactionbetween system/individual, needs to be emphasised. Dobbins et al. (1993) andWaldman (1994) all agree in this perspective, although they further suggest adirect relationship among these factors and the work performance, whereas themediation of behavioural processes as posited by Hackman and Wageman(1995) is therein neglected. This way, many authors identify a feeling thatemployees are not totally responsible for their performance. Rather, it is thesystem configuration that determines to a great extent their possibilities ofaction (Spencer, 1994; Waldman, 1994). Therefore, instead of trying to enhanceemployees’ performance by means of incentives on productivity, organizationsshould empower them and provide them with the necessary tools for enhancingthe production processes, at the same time as involve them so as they are ableto identify the organization goals as their owns (Chung, 1999). Thus, training,increasing of a team vision of their tasks, clarification of the relation of theirwork with that of their colleagues within the organization, and the contributionof their individual work to the overall organizational performance are ofparamount importance as intrinsic motivators. The ingredients that are presentin the processes will be commented below.

System factors. Several authors have described how a series of factors canaffect the work performance either directly or indirectly, through their impactupon the employees’ behaviour. These factors are consistent with Peters andO’Connor’s (1980) so-called situational constraints, with Schneider’s (1978,1980) so-called situational events, and with Brown and Mitchell’s (1993)organizational obstacles. Such constraints can put limits to the degree ofinfluence of the individuals’ qualities over the behaviour and the workperformance. In the organizational environment, we propose a work structureconsisting of sixteen factors.

For a better understanding, these factors can be split into two categories. Inthe first place, factors relating to the employee, which encompass those aspects

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linked to the cognitive appraisal of the behaviour of certain individuals in thecompany (e.g. the managers) with the employees, in the organization internalenvironment. By internal environment, we mean those elements that are withinthe limits of the organization. These factors are based on the accumulation ofexperience within the organization. These perceptions create a cognitive map ofhow the organization works, at the same time as they help to determine theappropriate behaviour to cope with a given situation. The factors chosen arethe following:

. Support/sincerity: perception of the tolerance, support and freedom todevelop an open communication among the members of an organizationand their superiors.

. Pressure: perception of the necessity of time to complete tasks andachieve the performance standards.

. Cohesion: perception of comradeship within the organizationenvironment, including the members’ wishes to provide material help.

. Innovation: perception of the fact that change and creativity areencouraged in the organization, including the risks assumption in areaswhere the members have little or no experience at all.

. Extrinsic recognition: perception of the fact that the members’contributions to the organization are economically acknowledged.

. Intrinsic recognition: perception of the fact that the members’contributions to the organization are acknowledged in ways othersthan economically.

. Impartiality: perception that the organizational practices are fair, and notarbitrary or easily changeable.

Second, factors related to the customer, comprising those aspects linked to thecognitive appraisal of the behaviour of certain individuals in the company (e.g.salespeople) with the customers, in the environment where the service takesplace. These organizational obstacles comprise a series of tangible factors ofthe work environment that are liable to restrain the staff performance. Many ofthese obstacles represent a defective working order or a technologicalconstraint. Inadequacies in matters such as information, work materials, toolsand equipment, and the physical work environment are also included. Otherobstacles are of a more social nature, as they are based on the interaction withcolleagues and on the inadequate formal empowerment for decision making. Ingeneral, researchers have showed that variables within these two categories(i.e. the technical and the social) entail obstacles for the employees, theorganization and the work satisfaction, which negatively affect performance(Brown and Mitchell, 1993; Peters and O’Connor, 1980). These factors can besummarized as follows:

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. Work information: perception of the information received by theemployees in terms of quality, rapidity and opportunity.

. Technological system problems: perception of the support provided andthe problems caused on work performance by the technological means.

. Work materials: perception of whether the material requirements forperforming each job are met or not.

. Training: perception of the training received to perform tasks in terms ofquality, rapidity and opportunity.

. Work environment: perception of the physical work conditions affectingthe performance of the tasks undertaken.

. Empowerment in decisions: perception of the clarity in the definition ofresponsibilities for decision making.

. Support by functional departments: perception of the support byfunctional departments in terms of rapidity and efficiency.

. Conflict and ambiguity of roles: the conflict of roles occurs when people areassigned tasks incompatible with their managers, colleagues orcustomers’ expectations, which can, by no means, be simultaneouslymet; the ambiguity of roles occurs when an individual’s knowledge orinformation degree is inappropriate to perform the tasks assigned tohim/her.

. Quality focus: it reflects the extent to which the employees perceive thatboth the organizational unit they belong to, and its employees are quality-aware.

Personal factors and the individual/system adjustment. The personal factorsencompass, but are not limited to, the existing differences among individuals interms of:

. knowledge, skill and capability;

. the level of efforts directed to the performance of the tasks; and

. the method and form of organising work, that is, the individual, personalapproach to work, related to the general culture and social values.

Researches in the area of the industrial psychology have extensively dealt withthese factors (e.g. Campbell, 1990).

However, these factors can be affected, restrained or strengthened by thesystem. Thus, for example, the employee’s level of knowledge can be reinforceddepending on the attention paid to training by the system. For this reason,factors arising out of the interaction individual/system must be studied. Theycan also be considered in terms of adjustment. Thus, Waldman (1994)considered the importance of each individual’s adjustment to his/her workenvironment. Lofquist and Dawis (1969) posited a work adjustment theorybased on the concept of correspondence between the individual and the work

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environment. The correspondence was defined in terms of the mutual meetingof expectations by both environment and staff. Therefore, the skillrequirements of the job and the characteristics of the individual must match,in order to create encouraging conditions at the organizational environment.

The effect of the system and/or the personal restraints upon the employeeswould negatively impact their motivation, thus affecting their worksatisfaction as a consequence of an eventual fall in their performance and,consequently, it might explain their commitment to the organization they workin. This position is further supported by other researchers (Brown and Mitchell,1993; Ostroff, 1993; Peters and O’Connor, 1980; Peters et al., 1985). Though asignificant controversy exists regarding the question of whether thesatisfaction is an antecedent of the performance or vice versa, we tend tosupport the majority position, i.e. that the employee’s performance serves toexplain the employee’s satisfaction and that both, in a synergy with theemployees’ organizational commitment, strengthen the effectiveness of theTQM programme.

Whereas it is the work motivation what provides energy, runs, channels,keeps and sustains the employees’ actions and behaviours (Steers and Porter,1987), it is also the amount of efforts that the staff is willing to carry out inorder to perform a given activity. Deming and Ishikawa identify three sourcesof human motivation at work:

(1) the intrinsic motivation determined by the individual’s growth, learningand development;

(2) the task motivation, that accounts for the fact of getting things well doneand in operation; and

(3) the social motivation, determined by the fact of sharing the activitieswith other people and being acknowledged by them (see, for example,Deming, 1986; Ishikawa, 1985).

Finally, the organizational commitment, which shows how prone an employeeis to stay within an organization or otherwise to leave it. Although somestudies suggest that the organizational commitment is an antecedent of thework satisfaction, we are rather in favour of the opposite position, which issupported by more empirical evidence (e.g. Dubinsky and Skinner, 1984).

On the other hand, in our view, the explanation of the employees’ perceptionof the effectiveness of a quality improvement programme and of the level ofquality provided by the organizational units they work in, can be found in thework motivation, satisfaction and commitment. That is to say, thoseorganizational units whose employees lack motivation, or are dissatisfied orlittle committed, on the grounds of the limitations imposed by the systemrestraints or of a poor implementation of the TQM elements, will result in apoor quality level and little effectiveness of the implementation programme.

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The studies of Brown and Mitchell (1993), Schneider et al. (1980) and Schneideret al. (1992) support this theory.

In the light of the above discussion, it can be stated that:

P2. The TQM elements implementation affects the interaction between thecharacteristics of the individual and the system demands/constraints.

P3. The interaction between the characteristics of the individual and thesystem demands/constraints impact on the behavioural processes.

P4. TQM elements implementation will impact positively on performancebecause of higher individuals’ satisfaction, motivation andcommitment.

LearningThrough the incorporation of new ideas about learning, training and processinnovation, the quality movement has been able to demonstrate the potentialcapability of the organizations to cope with the uncertain and changeablecircumstances of today’s environments (Sitkin et al., 1994). Hackman andWageman (1995) put forward three levels of learning:

(1) learning among employees by means of cross-functional teams andproblem solving;

(2) learning about the way to enhance performance and work processes; and

(3) learning about the management of collective objectives and interests.

The quality movement proponents stated that the staff within a companywants to learn and develop itself. However, this trend can weaken, sincelearning may not be a shared, common value in the company, or a lack of thenecessary tools and skills may exist. TQM practices generate idealenvironments for learning, minimising the organizational culture fears andproviding employees with a series of tools enabling them to develop.Furthermore, with different levels of continuity, TQM informs employees aboutthe performance level of their work processes, thus encouraging them to deployscientifical methods aimed at analysing and improving the said processes.

According to Barrow (1993), TQM and the organizational learning areintrinsically bounded; the later being the main reason to carry out theendeavours involved by the former. Thus, the relationship between them canbe studied on a twofold basis:

(1) the TQM itself constitutes a learning process; and

(2) TQM affects the way in which organizations learn.

On the one hand, the very TQM constitutes an organizational learning process,that involves the introduction of changes in the way organizations act. Thus,these changes in behaviour are nothing but the result of the new ways ofmaking the organization tasks have sense, once the knowledge acquired during

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the TQM processes is put into practice. In this regard, TQM has beenconsidered both as a double-loop learning process (Grant et al., 1994), and as asingle-loop learning process (Hackman and Wageman, 1995). In fact, accordingto the former consideration, the changes brought about by TQM result from alearning process incompatible with the traditional management practices, insuch a way that a change in the premises upon which these practices have beenbuilt is necessary for the success of the TQM practices. On the contrary, thosestanding for the TQM as a single-loop learning consider that in TQM, therhetoric predominates (Zbaracki, 1998), so that the main change inorganizations relates to the way in which managing processes are named,whereas the basic premises remain the same.

On the other hand, the TQM affects the staff’s knowledge-acquisitionprocesses, as it is considered that their power comes from their competence todevelop new starting points to solve existing problems in the organizations(Mukherjee et al., 1998). Thus, one of the basic principles of TQM is thecontinuous improvement, which consists in an explicit attempt to learn out ofone’s own experience (Miner and Mezias, 1996). This way, organizations focuson the study of the errors made and the seeking out of solutions. Therefore,they put into practice one of the knowledge acquisition ways that mostdecisively contributes to boost business performance in the short term, forthere is evidence that people learn more from their mistakes than from theirright decisions (Li and Rajagopalan, 1997).

Continuous improvement aspirations must be supported by the systemthrough the removal of barriers, and also favouring a learning-drivenenvironment, which includes substantial investments in training and thespreading of the statistics and cross-personal techniques designed to promotelearning, both at the individual and at the team levels. In any case, theindividual’s higher or lower level of learning will not only be subjected to thesupport of the system. Rather, it will depend upon the personal characteristicsof that given individual (capability and skill). Generally speaking:

P5. The interaction between the employee’s personal characteristics and thesystem requirements/restraints will influence the level of learning.

P6. TQM elements implementation will affect performance due to theimprovement in the individuals’ learning processes.

Cultural change acceptanceThe existing literature on TQM almost unanimously emphasises the necessityto change the organization culture, in order to adapt it to the requirements ofthe new reality that TQM practices entail (e.g. Adebanjo and Kehoe, 1999;Ahmed et al., 1999; Kanji and Yui, 1997; Manley, 1998; Vermeulen, 1997),whereas Ciampa (1991) suggests that there exists a clear risk at believing thatan organizational culture can be permanently altered by one single person or, at

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any rate, by a continuous improvement programme. As a matter of fact,Hofstede et al. (1990) found that differences among countries in the values ofthe same company were larger than among companies within the samecountry, thus illustrating that the organizations cannot – by virtue of asocialising process – change their employees’ values with regard to the valuespredominating in their societies. Nevertheless, the use of the word “culture” bysome authors as something liable to be easily changed is rather usualnowadays. However, in practice, this change cannot occur in the short term.The culture of an organization is neither something created by a single leader,nor something that can be controlled and foreseen by the organizationmanagers. Rather, the culture is something tailored up with the contribution ofevery employee in the organization. Though the cultural change is far frombeing impossible, it is a slow and hard process (Shadur, 1995).

Also, the difficult that entails any TQM-driven cultural change in theorganization must be pointed out, as it may also represent a distortion in thebehaviour of the organization members. And the bigger the penetration of thereal culture in the organization, the more difficult the change will be. Manyorganizations – in an attempt to dramatically change the companies culture,which necessarily led both managers and employees to dissatisfaction, lack ofmotivation and frustration – have encountered experiences near disaster.Indeed, Sinclair and Collins (1994) consider that the weakest point in TQM laysin the assumption that the employees will agree to adopt the new practices thatare proposed to them. Considering the above approach, it can be establishedthat:

P7. TQM elements implementation effect on individual learning andbehavioural processes will depend on the acceptation of the TQM-driven cultural change.

ConclusionsIn the last few years, most companies have scheduled topics related to qualitymanagement. Considering its importance in the administration practice, amovement has started, which defends the incorporation and development ofTQM research. This philosophy is greatly in agreement with the theory ofbusiness practice (Dean and Bowen, 1994). Although the terminology mayvary, managers who have implemented TQM systems are also familiarisedwith concepts such as leadership, strategy, competitive advantage,information, etc.

In this article, we have considered jointly TQM contents and elements, insuch a way that, according to our propositions, both of them need to be born inmind at determining TQM impact on performance. This way, TQM contentmust fit with the business strategy, and both must fit with the requirements ofthe environment. TQM elements, in turn, are related to organizationalperformance, using a perspective that is characteristic of the industrial

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psychology, by ways of the transformations produced in organizationmembers, both regarding what they do and what they are able to do, on the onehand, and the efforts made to do it, on the other.

In addition, TQM affect on behavioural and learning processes through thesystem/persons interaction. The system affects performance by interactingwith the individuals in terms of individual/system adjustment and throughorganizational obstacles and barriers. Simultaneously, the personal factors canhave an impact on the system nature and work performance. Additionally, inthe study of the factors determining performance, both the personal and thesystem factors must be simultaneously considered. Future researches shouldprobably focus, both in theory and in practice, on the combined effectsindividual/system, in order to have a better understanding of someperformance-related topics. A greater work performance will positivelyimpact TQM effectiveness. However, this relationship betweenindividual/system factors and work performance is mediated by variousbehavioural processes (motivation, satisfaction, commitment).

In this paper, therefore, we focus on the characteristics of the firm, bothregarding internal as much as external factors. This way, we analyse factorsdetermining TQM impact on organizational performance, regardless of theirbeing industrial or service organizations and of their size, and paying attentionto the differences involved by this contingent issues concerning both externaland internal factors.

Therefore, the model proposed here does not analyse if TQM modelsimplemented must be different depending on the sector or the organization size.On the contrary, it analyses those factors that really differ on the grounds ofthese contingencies. On this regard, the variables set out here should serve asguidelines prior to implementation by the organizations, with a focus on theprevious analysis of the organization characteristics and as a contribution tocustomize quality implementation, instead of choosing a previous model, whichhas proved to impact performance more positively (Westphal et al., 1997).

Although the relationship between a given intervention as TQM andperformance depends on a large number of factors, which can hardly be born inmind in a single model, our proposal may bring some light to some of thefactors that have traditionally been neglected on TQM literature. Futureresearches must focus on the study of the relationships herein proposed, andprovide empirical studies.

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