The relationship between total guality management practies and org culture

The relationship between totalquality management practicesand organizational culture

Daniel I. PrajogoDepartment of Management, Monash University, Caulfield East, Victoria,

Australia, and

Christopher M. McDermottLally School of Management and Technology, Rensselaer Polytechnic Institute,

Troy, New York, USA

Abstract

Purpose – This empirical study explores the relationship between total quality management (TQM)practices and organizational culture with the purpose of identifying the particular cultures thatdetermine the successful implementation of TQM practices. Specifically, it tests two competing viewson the relationship; the unitarist and pluralist views.

Design/methodology/approach – The empirical data was drawn from 194 organizations inAustralia. The research model employs the Malcolm Baldrige National Quality Award criteria as TQMframework and builds on the competing values model to frame organizational culture. The data wasanalysed using structural equation modelling technique.

Findings – The findings support the pluralist view, wherein different subsets of TQM practices aredetermined by different types of cultures. Interestingly, hierarchical culture was found to have asignificant relationship with certain practices of TQM. Additionally, the findings indicate thatalthough the cultural factors underpinning different elements of TQM are dissimilar, evenantagonistic, organizations can implement them in harmony.

Practical implications – The major implication of this study is that organizations need toaccommodate divergent goals by developing a system and/or structure that allows enough flexibilityfor adapting different (even contrasting) management styles, between control and flexibility andbetween internal and external orientations, so that they may gain benefits from the multipledimensions of TQM.

Originality/value – This paper provides empirical evidence on the multidimensionality of TQMpractices along with their association with different types of culture.

Keywords Total quality management, Organizational culture, Australia

Paper type Research paper

IntroductionMuch has been written on the impact of total quality management (TQM) onorganizational performance (Flynn et al., 1994; Samson and Terziovski, 1999). Thesestudies typically conclude that TQM has a positive and significant relationship withorganizational performance. However, not all TQM implementation yields thesatisfactory results promoted by its advocates (Brown, 1993; Harari, 1993; Tatikondaand Tatikonda, 1996). Literature has noted numerous stories on the problematic issuesrelating to the implementation process and how they affect its outcomes. Amongseveral factors, which have been attributed as key determinants of its success,organizational culture is often among those listed at the top. A number of studies have

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TQM andorganizational

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International Journal of Operations &Production Management

Vol. 25 No. 11, 2005pp. 1101-1122

q Emerald Group Publishing Limited0144-3577

DOI 10.1108/01443570510626916

been devoted to identify what kinds of factors are suitable for implementing TQMbased on a proposition that culture affects the extent to which TQM can beimplemented in organizations.

Closer examination of literature that explores this relationship between TQM andculture reveals two competing schools of thought (Bright and Cooper, 1993). The firstview argues that TQM is associated with a single “homogeneous” culture. Underlyingthis “unitarist” argument is a view that promotes TQM as a set of organization-widepractices that unify mindsets and perceptions among members of an organization.Within this group, the arguments typically suggest that TQM is associated with asingle culture, especially the one that is flexible and people-oriented (Tata and Prasad,1998). In short, the underlying principal in this unitarist view is that TQM thrives onlyin a single, identifiable culture. The “pluralist” view, alternatively, supports the ideasof heterogeneity of various cultural dimensions on which TQM should be built. A keydifference in this view is the argument that TQM also includes cultural elements,which can promote control and standardization, as opposed to flexibility alone (Watsonand Korukonda, 1995). As such, this pluralist view of the TQM/culture relationship ismore multi-dimensional, with different cultural characteristics in turn being associatedwith different elements of TQM. This view appears to contradict the people-centeredcultural characteristics that are commonly associated with the unitarist view.

Underlying these two opposing arguments is the contrasting view on TQM as a setof organizational practices. The first group (unitarist) views TQM as a unidimensional“package” which has to be implemented as a whole and therefore both requires andreflects a specific, single “homogeneous” culture of the organization. The opposingpluralist school of thought suggests that TQM practice is multidimensional, and isdriven by and reflects various types of practices which are driven and reflect variousdimensions of organizational culture.

These opposing views present an interesting dilemma for managers andresearchers alike, named if TQM is indeed multidimensional with respect to culture,it stands to reason that management would need to consider multiple approaches forencouraging its implementation. Alternatively, if it is unidimensional, then a singleculture and set of values might be more appropriate. The purpose of this paper is toempirically examine the validity of these two opposing views as they relate to TQMpractice. The paper is structured is follows: it starts with literature review discussingthe relationship between TQM practices and organizational culture, especially relatingto the opposing issues above, which leads to the articulation of the research questionsof this study. Following these are methodology and data collection sections, outliningdata analysis using structural equation modelling (SEM). Finally, discussion of thefindings is presented, followed by conclusion and several recommendations for futureresearch in the area.

Literature reviewThis literature review starts with a discussion of the distinction between TQM as a setof organizational practices and organizational culture. This is followed by a sectionpresenting the nature of the relationship between TQM practices and organizationalculture. It concludes with a discussion of the controversy about the relationshipbetween TQM and organizational culture, leading to the development of the researchframework and questions for this study.

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The distinction between TQM practices and organizational cultureTQM. TQM is a management model that aims to meet customer needs andexpectations within an organization through continuous improvement of the quality ofgoods and services and by integrating all functions and processes within anorganization. The TQM literature concurs that its concepts and practices have beenshaped by a number of individuals who are recognised as “quality gurus” such asDeming, Juran, Crosby, Feigenbaum, Ishikawa, and Imai (Hackman and Wageman,1995; Lau and Anderson, 1998; Plenert, 1996). These TQM gurus developed theirconcepts primarily based on their experience in industry. Grant et al. (1994) argue thatthe prescriptive approach developed by these gurus has created a perception that TQMinvolves no explicit theory, and caused business schools to dismiss TQM asintellectually insubstantial, and to consider it as but one of a number of managementfads.

Scholars argue, however, that the practical approach employed by TQM proponentsdoes not necessarily imply an absence of theory underlying it. Dean and Bowen (1994),for example, whilst arguing that there is a considerable overlap between TQM andexisting management theory, hold that TQM has its own body of knowledge. Similarly,Hackman and Wageman (1995) vigorously argue that TQM does exist as an entity andthat there is a set of theoretical assumptions underlying its principles and techniques.In particular, they maintain that TQM passes the convergent validity test in the sensethat there is substantial agreement among its founders about its key assumptions andpractices. What is emphasized here is that although TQM has been accepted asembodying a set of principles, TQM has been widely disseminated in the form ofpractices, tools, techniques, and systems. The way TQM has been defined and whathave been usually operationalised and measured in its empirical studies (Ahire et al.,1996; Flynn et al., 1994; Samson and Terziovski, 1999; Saraph et al., 1989) are practicesor behaviours of the organizations that have implemented these principles. AsWilkinson et al. (1998) argue, despite their differences, there is a strong convergenceamong concepts and practices put forward by TQM proponents, and a number ofscholars (Curkovic et al., 2000; Dean and Bowen, 1994; Gobeli and Brown, 1993; Sitkinet al., 1994) have proposed the articulation of TQM principles consisting of three coreelements as a common ground, namely customer focus, continuous improvement, andtotal involvement. As such, we adopted the definition of TQM articulated by Ross(1995, p. 1) as the integration of all functions and processes within an organization toachieve continuous improvement of the quality of goods and services with the ultimategoal being customer satisfaction.

Organizational culture. Organizational culture is defined as the general pattern ofmindsets, beliefs and values that members of the organization share in common, andwhich shape the behaviours, practices and other artefacts of the organization which areeasily observable (Sathe, 1985; Schein, 1985). Culture therefore is an explanatoryvariable that distinguishes one organization from another (Sathe, 1985; Schein, 1985).In relation to the context of this study, as mentioned earlier, there is a shift of focus onstudies in TQM from its “hard” aspects which are more observable, such as tools,techniques, and systems, to “softer” behavioural and cultural aspects of TQM whichare harder to measure and to change. This shift of emphasis has been driven by the factthat many TQM implementations have failed, preventing companies from realizingits potential benefits because of the ignorance of the cultural factors (Becker, 1993;


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Dale and Cooper, 1992; Oakland, 1995; Thomas, 1995; van Donk and Sanders, 1993;Wilkinson et al., 1998). The issue of culture in the TQM literature has also beenaugmented by a number of authors who attribute the failure of TQM implementationsin western countries as the result of cultural factors (Mak, 1999).

A common challenge in discussing TQM and culture results from the imperfectboundary between TQM as a set of management practices and TQM as anorganizational culture (Batten, 1993; Kanji, 1997; Strolle, 1991). For example, severalstudies on TQM, such as those by Samson and Terziovski (1999) and Dow et al. (1999),consider TQM practices such as customer focus and people management as “soft”elements in TQM, implying that they actually represent aspects of TQM culture. Thisleads to confusion in understanding the substance of TQM: is it a set of practices, or, isit a specific type of culture, or both? In this regard, Zeitz et al. (1997) strongly argue thatorganizational culture is “distinguishable” from TQM practices even though the twoare closely related to each other. They view TQM practices as behavioural, whereasorganizational culture refers to attitudes, beliefs, and situational interactions. Thisargument is consistent with those of theorists and scholars in the field oforganizational culture. Schein (1985), for example, asserts that although practice can bea reflection of organizational culture, it can only capture the surface level. He furtherargues that organizational culture is concerned with something deeper, particularlywhen considering such elements as mindset, values, and beliefs. Further support canbe obtained from a “ground-breaking” study by Powell (1995) which promotes theimportance of cultural aspects of TQM. In this study, Powell argued that TQMpractices had to be implemented within a suitable environment (i.e. culture) thatemphasized open communication; something which he believed did not originallybelong to TQM, but was imperative for its implementation success.

In this study, we take the position that TQM practices and organizational cultureare separate entities. Our present analysis aims to explore the extent to which TQM (asdefined earlier) is associated with a culture or set of cultures. As such, we do notassume, a priori, that there is a “TQM culture”, in the sense that no one cultureembodies TQM. In other words, TQM is not a culture. Therefore, we argue here that inorder to identify the typical organizational culture that can function as “fertile soil” forTQM, it would be better if researchers refer to the established models in the area,including:

. Hofstede’s (1980) cultural dimensions of individualism versus collectivism, highversus low power distance, high versus low uncertainty avoidance andmasculinity versus femininity;

. the organizational culture profile (OCP) developed by O’Reilly et al. (1991) whichcan be used to assess person-organization fit; and

. The competing values framework (CVF) developed by Denison and Spreitzer(1991).

We choose the CVF developed by Denison and Spreitzer (1991) as the framework fordefining organizational culture in this study. The framework is built upon twodimensions represented by two axes with each representing a superordinatecontinuum as shown in Figure 1. The first dimension is the flexibility-control axis thatdescribes two contrasting orientations, between that which reflects flexibility andspontaneity and that which reflects stability and control. The second dimension is

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the internal-external axis that also describes two orientations, with one being orientedtowards maintenance and improvement of the existing organization and the otherbeing focused on adaptation and interaction with the external environment. Thisreflects several classics of organizational theory such as Thompson (1967) andLawrence and Lorsch (1986).

The combination of the two dimensions results in four quadrants of culturaldimensions, namely group, developmental, hierarchical, and rational. Group cultureplaces emphasis on flexibility and internal organization. Organizations with emphasison this culture promote the development of human resources emphasizing openness,participation, cohesiveness and commitment to membership. Development culture alsoemphasizes flexibility but with more focus on the external environment. Theorientation is towards growth, creativity stimulation, resource acquisition, innovation,and continual adaptation to the external environment. The rational culture is alsofocused on the external environment but is control-oriented. It emphasizesproductivity, performance, goal achievement, and one of the primary motivatingfactors is competition. The hierarchical culture is both control and internal oriented. Itemphasizes rules and regulations, and standardization to achieve control and stability.

Denison and Spreitzer (1991) stress that the four cultures in their typology should beviewed as ideal types, meaning that organizations will be characterized by somecombination of these four cultures – although some types could be more dominantthan the others – rather than reflecting only one culture. Thus, as scales have beendeveloped and validated to empirically measure this, the items are allowed to varyindependently (Quinn and Spreitzer, 1991). As McDermott and Stock (1999) noted in alater study using the CVF, “As such, a high rating on one dimension (e.g. internalorientation) does not exclude high rating at the other end (e.g. external orientation)”.There is nothing relating to having a strong internal orientation that necessarilyprohibits the organization from also having elements associated with externalorientation.

Figure 1.The competing values

framework oforganizational culture

(adapted from Denisonand Spreitzer, 1991)


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The nature of the relationship between TQM practices and organizational cultureHaving established the distinction between TQM practices and organizational culture,the discussion now focuses on the relationship between the two. A review of literaturesuggests that there is a substantial disagreement on the nature of this relationshipswith one group arguing that TQM practices bring cultural change, and the other that itis organizational culture that affects TQM implementation and its results. In essence,the nature of this debate is concerned with the causal direction of the relationshipbetween TQM and organizational culture, and which one is the antecedent of the other.Several authors argue that this debate is premised on the understanding of culture assomething an organization has as opposed to something an organization is (Bright andCooper, 1993; Sinclair and Collins, 1994). In this regard, we base our study on the latterargument by suggesting that it is the organizational culture that will determine TQM.In other words, our research is based on the premise that organizational culturedetermines the results of TQM implementation rather than the TQM implementationbringing about cultural change (Maull et al., 2001; McNabb and Sepic, 1995; Westbrookand Utley, 1995). As Bright and Cooper (1993) argue, quality management oforganizations will take place inside cultural influences, that is within the context ofprevailing shared-values, beliefs, and assumptions. The few studies that haveattempted to examine the TQM-culture relationship, such as those by Chang andWiebe (1996), Zeitz et al. (1997) and Dellana and Hauser (1999) always placeorganizational culture as the antecedent of TQM practices.

The dimensionality of TQM and organizational cultureHaving discussed the nature of the relationship between TQM practices andorganizational culture, the following question is explored: what kind of culture wouldbe most suitable for implementing TQM practices? As mentioned earlier, literature hasidentified two competing arguments, the unitarist and pluralist approaches. Theunitarist approach considers TQM as a unidimensional set (or package) of practices,which needs to be supported by one specific type of culture. This can be traced back tothe fact that TQM was introduced by different gurus in the form of a set (or package) oftools and practices. Although not explicitly specifying a typical culture which would benecessary for implementing these “packages”, their strong recommendation that these“packages” need to be adopted “as a whole” implies the need of a unified culture toimplement it. In this regard, typical cultures that are considered in the literature assuitable for TQM practices are those related to a flexible, people-oriented style. In theirreview of literature that examined the influence of the company’s culture and structureon TQM implementation, Tata and Prasad (1998) conclude that people-oriented,flexible cultures are more conducive to the success of TQM implementation, comparedto the opposing types (i.e. rational control). They identify that such practices asleadership, employee involvement and empowerment, teamwork, customer focus, andcontinuous improvement are the reflection of people-centred and flexible cultures orwill be best implemented where such cultures prevail. The study by Westbrook andUtley (1995) provides further support for this argument as the result indicates thatcreating culture where employees are valued and empowered leads to successfulquality management implementation.

In conjunction with this, literature has also highlighted the critical role of leadershipin reaching a consensus among all members within an organization in embracing

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quality as the common goal of the organization. Several actions that can be taken toachieve this purpose include creating shared vision, and breaking down barriersbetween departments, typically by promoting cross-functional cooperation andteamwork. All of these efforts are directed towards unifying mindset and culture of allthe members within the organization, hence, supporting the idea of a unitaristapproach to organisational culture.

The opposing pluralist argument suggests the existence of multidimensionalcultures. More recent discussions suggest that TQM should be considered asmultidimensional, particularly in relation to the arguments that TQM incorporate bothpeople-oriented, and those that would be considered more rational, control types ofpractices, which are antagonistic to each other (Kekale and Kekale, 1995;Moreno-Luzon and Peris, 1998; Watson and Korukonda, 1995). However, as notedby Bright and Cooper (1993), this notion that there are multiple cultures that supportTQM would likely receive considerable challenges from unitarist TQM supporters.The problem in accepting the pluralist view on TQM, as mentioned earlier, is rooted inthe conventional view that TQM is unidimensional and therefore will not be able toaccommodate diversity of cultures within the organization. Specifically, Watson andKorukonda (1995) affirm that examining the juxtaposition between the disparateelements of TQM, despite its value in facilitating theoretical insights and conceptualclarity of TQM, will face serious challenges from the promoters of TQM who willoppose the idea of linking TQM to the type of cultures which are usually associatedwith rigidity and suppression of creativity. The fact that TQM also embodiesmechanistic or hierarchical culture nevertheless has been supported by severalempirical studies. The findings of the study by Germain and Spears (1999), forexample, indicate that structural and formal approaches which characterize severalTQM practices such as management by fact, strategic planning and formulation, theuse of SPC, and process documentation, positively and significantly predict qualitymanagement practices. In concluding their study, Germain and Spears (1999) suggestthe view of TQM in which formalization maybe better perceived as a mechanism for“coding and transmitting knowledge” to foster, rather than to hinder, qualitymanagement within the firm.

Two seminal works by Sitkin et al. (1994) and Spencer (1994) provide theoreticalbases in support of the multidimensionality of TQM. Sitkin et al. (1994) argue that withsimilar underlying TQM precepts, organizations can apply different goals andpractices based on different orientations, namely total quality control (TQC) and totalquality learning (TQL) with TQC being associated with a control or cyberneticapproach, and TQL being related to an innovative or learning orientation. Spencer(1994) argues that various practices under the TQM umbrella can be categorized intoseveral organizational models, including the mechanistic and the organic model, aswell as others. For example, the focus on quality as an organizational goal is associatedwith the mechanistic model, because in practice the real objective of pursuing qualitycould well shift into productivity and efficiency, something on which a mechanisticorganization focuses. On the other hand, the practices of employee empowerment andcross-functional teamwork are closely linked to the organic model. Summarising theabove arguments, Thompson (1998) affirms that in order to gain a sharper focus on theculture of TQM, organizations need to appreciate the paradoxes of TQM which areembodied in a number of principles of TQM which are contradictory to each other.


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One of the examples of these paradoxes is between encouraging creativity on the onehand and promoting control and variation reduction on the other hand. As will bediscussed below, this study explores the possibility of, but does not force, multipledimensions of TQM in the analysis.

Research framework and methodologyThe literature review section has addressed several issues on the relationship betweenTQM practices and organizational culture. First, it articulates the difference betweenTQM as a set of organizational practices, and culture as an underlying belief systemrelated to the mindsets of people within the organization. Second, it holds theproposition that it is organizational culture, which affects TQM implementation, notthe other way around. Third, it highlights the debate on the kinds of organizationalculture, which are suitable for implementing TQM practices; highlighting thedifference between unitarist and pluralist views. The conflict between these twoarguments is then extended to another debate on TQM as either unidimensional ormultidimensional. By incorporating these three key findings of the literature review,we developed a research framework examining the relationship betweenorganizational culture and TQM practices that built on previous works in the area.In essence, this study was aimed at comparing the nature of the relationship betweenorganizational culture and TQM practices in the form of two competing structuralmodels based on unitarist and pluralist views.

In developing the research framework, we built on several past studies. Our studybuilt on the work of Chang and Wiebe (1996) and Dellana and Hauser (1999), whichexamine the link between TQM practices based on Malcolm Baldrige National QualityAward (MBNQA) model and organizational culture based on the competing valuesmodel developed by Denison and Spreitzer (1991). Chang and Wiebe (1996) intervieweda panel of experts from the Conference Board Total Quality Management Centre todescribe ideal cultural characteristics that they believe will support TQM philosophybased on the four types of cultures of the competing value model, namely group,developmental, hierarchical, and rational. This finding suggests that these four typesof culture characterized the ideal organizational culture embodied by a TQMphilosophy, although group and developmental cultures appear to be dominant. Assuch, it provides empirical support for the pluralist view. Dellana and Hauser (1999)also use the MBNQA criteria to represent TQM practices and the competing valuesmodel to represent organizational cultures as their research variables. Using Pearsoncorrelation coefficients, they test the association between each of the six elements of theMBNQA criteria and the four cultural dimensions of the competing values model.Their finding concurs with that by Chang and Wiebe where both group culture anddevelopmental culture are associated with high MBNQA scores. Al-khalifa andAspinwall (2001) investigate the suitability of the national culture in Qatar and theculture required for implementing TQM. Their conclusion suggests that Qatarcompanies would find difficulties in implementing TQM since they are dominated by arational and hierarchical culture, hence, confirming the findings of the first two studies.

Our study aims to advance both studies from an analytical point of view byfollowing the work by Zeitz et al. (1997) who employ SEM. This allows us to examinethe multiple cultures and multiple TQM elements simultaneously, hence, incorporatingthe interaction amongst independent and dependent variables. The use of SEM also

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allows us to make a rigorous analysis in comparing the unitarist and pluralist model ofthe culture-TQM relationship which would contribute to knowledge in this area. Inmodelling the structural relationship between TQM and organizational culture, we alsofollow the work of Zeitz et al. (1997) by considering organizational culture as theindependent variable which determines the level of TQM practices as the dependentvariable.

This study also builds on the work by Chang and Wiebe (1996) and Dellana andHauser (1999) by examining the relationship between TQM practices andorganizational culture. In particular, the objective of this study is to examine themultidimensionality of TQM, which is a reflection of multidimensional organizationalculture with the following research questions being addressed:

RQ1. Can the multidimensionality of TQM practices be reflected inmultidimensional cultures?

RQ2. What is the nature of the relationship between sub-cultures and TQMsubgroups?

As mentioned earlier, this study defines organizational culture as the pattern of valuesin an organization that determine its artefacts and practices. As such, we follow thework by Zeitz et al. (1997) in terms of modelling the structural relationship betweenTQM and organizational culture by considering organizational culture as theindependent variable and TQM practices as the dependent variable. For confirmatorypurposes, this study also compares two competing structural models of theTQM-culture relationship; the “unitarist” model and the “pluralist” model.

Research instrumentsTQM measures. The use of constructs – a method that had been commonly used inresearch in the psychology discipline – has been accepted as a “norm” in studies onTQM. Pioneered by Saraph et al. (1989), this method has been adopted in most of thesubsequent empirical research on TQM (Ahire et al., 1996; Black and Porter, 1996;Curkovic et al., 2000; Das et al., 2000; Dow et al., 1999; Flynn et al., 1994; Grandzol andGershon, 1998; Powell, 1995; Samson and Terziovski, 1999). This, however, has createda problem because most researchers prefer to build their own TQM constructs insteadof revalidating the ones developed by their predecessors. This has resulted in a varietyof TQM constructs being developed leading to inconsistency in defining the content ofTQM constructs. Dow et al. (1999) affirmed that although there was a great deal ofoverlap and similarity in the content of TQM among its proponents and scholars, therewas still a problem in terms of the best method for grouping and characterizing such abroad selection of quality management practice. This problem could be attributed tothe fact that TQM has no clear boundary and definition, as highlighted in the literaturereview section.

Since this research was not aimed at developing or validating another TQMconstructs, we decided to select a model from the previous studies on TQM. Amongseveral available models, the MBNQA criteria were chosen to measure theimplementation of TQM practices in organisations. This award consists of sixcriteria of organizational practices and one criterion of organizational performance(business results). The organizational practices embody six criteria, namely leadership,strategy and planning, customer focus, information and analysis, people management,


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and process management. There were several key reasons that underpinned thischoice. First, the use of the Baldrige framework to articulate the content of TQMpractices has been supported by a number of scholars (Ahire et al., 1995; Capon et al.,1995; Curkovic et al., 2000; Dean and Bowen, 1994; Evans and Lindsay, 1999; Juran,1995). Curkovic et al. (2000), in particular, noted the wide adoption of MBNQA in manycountries around the world which strongly suggested that the award criteria havecomprehensively captured the major dimensions of TQM practices as envisioned by itsproponents, such as Deming, Juran, and Crosby. Second, the MBNQA criteria areapplicable to both manufacturing and non-manufacturing firms, which were the focusof this study. This is an important point to note given the fact that TQM originated inthe manufacturing area and this has raised some doubts about its application in servicesectors. It is useful to note that the use of the six organizational practice items in thismodel allows for, but does not assume, the clustering together of the two theoreticallyopposing TQM mindsets of control-oriented versus human resource-basedimplementation. By using these items, we are also able to explore the extent towhich the TQM organizational practices in our observed firms follow this (or anyother) framework. Our primary focus here is the exploration of the unitarist versuspluralist viewpoints, rather than a deep exploration into the different dimensionswithin the pluralist viewpoint itself.

Having selected the MBNQA criteria to represent the TQM measurement model, theprocess was now focused on developing a survey instrument for measuring theMBNQA criteria in the organisations. The framework developed by Samson andTerziovski (1999) was used as the core for MBNQA constructs in this study. Thisinstrument and model was used in the largest study on TQM so far conducted (using1,024 responses from manufacturing companies in Australia and New Zealand) toensure its validity. Further, Samson and Terziovski (1999), although not in an explicitmanner, distinguished “people” or “soft” factors from “system” or “hard” factorsembodied by the MBNQA criteria; something we have focused on in this paper. Theirempirical findings indicate that what we have discussed above as “soft” factors ofTQM were the strongest predictors of organisational performance.

The organizational culture measures. Since TQM practices are considered as the“effect” of organizational culture, we need to select a model of organizational culturewhich can be examined against TQM practices. Following the works by Wiebe andChang (1996) and Dellana and Hauser (1999), the competing values model was selectedas the organizational culture model for this study, and the model developed by Denisonand Spreitzer (1991) was used to operationalise the measurement of four types ofculture: group, developmental, hierarchical, and rational. The measurement approachused five-point Likert scales which is similar to the work by Chang and Wiebe (1996)and McDermott and Stock (1999).

Data collection procedureEmpirical data was obtained through a random survey of 1,000 managers, most ofwhom were senior managers who had knowledge of past and present organizationalpractices relating to quality and innovation related aspects in their organizations. Thefocus of this study was limited to one site (or plant) per organization. A total of 194managers responded, whilst 150 questionnaires were returned to the researchers withreturn to sender (RTS) messages, indicating that the addresses were no longer valid.

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By discounting the number of RTS mails, the final response rate accounted for 22.8 percent. The information needed for examining non-response bias was obtained from twosources: follow-up e-mails and follow-up phone calls. Organisations, which declined toparticipate in the survey commonly stated their reasons as lack of time, lack ofresources, and not interested. None of these reasons alluded to the possibility that therewere systematic reasons for not participating in the study. The proportion of therespondents was nearly equal between manufacturing and non-manufacturing sectors(52.5 and 47.5 per cent, respectively). The non-manufacturing sectors includeconstruction, consulting, health care, information technology, and retail/distribution. Interms of organizational size, based on the number of employees, 90 per cent of therespondents represent firms with 500 employees or less, with around 60 per cent ofthem representing firms with less than 100 employees. In terms of the position of therespondents in the organization, more than 50 per cent of the respondents were eitherquality managers or production/operations managers, followed by seniormanagers (general manager or managing director) accounting for 30 per cent. Theremainder held various positions in finance, marketing, human resources, andadministration.

Data analysisData reduction processThe data reduction process was conducted in order to bring the ten constructs – eachconsisting of four to six items – employed in this study, into ten composite scores. Sixconstructs (leadership, strategic planning, customer focus, information and analysis,people management, and process management) constituted TQM latent variables, andfour constructs (group, developmental, hierarchical, and rational) constituted theorganizational culture measures. These ten constructs were subjected to validity andreliability tests before a single composite score could be calculated to represent eachconstruct.

Confirmatory factor analysis (CFA) using LISREL 8.30 was employed forexamining construct validity of each scale by assessing how well the individual itemsmeasured the scale. We followed the method applied by Ahire et al. (1996) where eachconstruct was treated as an independent congeneric model. Among these tenconstructs, two items were deleted due to weak loading on the construct. The first itemwas “Customers are involved in product design” in the customer focus scale. Thesecond item was “Control and centralization” in the hierarchical scale, and this case issimilar to what happened in the study by McDermott and Stock (1999) where they alsoexcluded this particular variable in their analysis. With three items left, it is notpossible to obtain the goodness of fit (GFI) indices of this scale, however, the loadingpaths of the three items (.0.5) support unidimensionality and convergent validity ofthe construct. The values of GFI of the other nine constructs exceed, by a comfortablemargin, the 0.9 criterion generally suggested by Hair et al. (1998) accompanied withstrong loading paths (.0.5) between latent variables and their respective observedvariables has suggested by Dunn et al. (1994), hence, establishing theirunidimensionality and convergent validity.

The reliability analysis following the construct validity process was conducted bycalculating the Cronbach’s a for each scale. The results show that the Cronbach’s ameasures for the ten constructs well exceed the recommended critical point of 0.7


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(Nunnally, 1978), hence, establishing their reliability. The final results of constructvalidity and reliability tests of the nine constructs are reported in Table I.

Discriminant validity is aimed at examining if each item only estimates oneconstruct; in other words, every construct should be distinct from each other. Assuggested by Venkatraman (1989), discriminant validity was examined by runningCFA on each pair of the constructs in this study. For each pair, CFA was run twicewhere the first allowed the correlation between the two constructs to be estimated. Thechi-square value of this model was coded as xa (chi-a). The second CFA was run byfixing the correlation between the two constructs to 1.0, and the chi-square value of thismodel was coded as xb (chi-b). The difference between xa and xb was coded as Dx(delta chi) with the degree of freedom of 1. The discriminant validity between thepaired-constructs can be established if the value of Dx (df ¼ 1) at p , 0.01 is greaterthan 6.64. With ten constructs incorporated in this study, we conducted 45discriminant validity tests. The values of Dx are presented in Table II, and the resultsindicated that the ten constructs passed this test.

ConstructNo. of items

(final)GFI

indices MeansStandarddeviation Cronbach’s a

Leadership (lead) 4 0.980 3.756 0.825 0.8580Strategic planning (plan) 4 0.998 3.567 0.901 0.8242Customer focus (cust) 5 0.976 3.918 0.684 0.7853Information and analysis (info) 4 0.991 3.543 0.878 0.7992People management (peop) 5 0.974 3.431 0.802 0.8303Process management (proc) 6 0.978 3.601 0.707 0.7922Group culture (grou) 4 0.992 3.667 0.819 0.9060Developmental culture (deve) 4 0.987 3.613 0.692 0.7890Hierarchical culture (hier) 3 –a 3.455 0.780 0.8155Rational culture (rati) 4 0.975 3.791 0.715 0.8688

Note: aThe GFI cannot be computed because the construct only has three observed variables.However, the loading path of each observed variable was strong, hence, supporting the validity of theconstruct

Table I.Construct validity andreliability and the valuesfor composite measures

Lead Plan Cust Info Peop Proc Grou Deve Hier Rati

Leadership (lead) –Strategic planning (plan) 100.3 –Customer focus (cust) 215.2 160.4 –Information and analysis (info) 153.4 70.3 234.4 –People management (peop) 66.8 112.6 161.9 107.9 –Process management (proc) 141.8 56.4 64.5 49.7 47.1 –Group culture (grou) 101.1 224.0 267.1 192.7 58.1 230.1 –Developmental culture (deve) 76.1 186.3 98.3 213.8 103.7 113.1 73.6 –Hierarchical culture (hier) 218.4 197.3 232.5 229.5 231.1 205.8 177.3 213.9 –Rational culture (rati) 228.4 195.6 211.8 184.0 244.6 222.2 297.2 87.2 149.2 –

Table II.Discriminant validity

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The relationship between TQM practices and organizational cultureAs mentioned earlier, in terms of modelling the structural relationship between TQMpractices and organizational culture, this study positioned organizational culture as theindependent variable and TQM as the dependent variable, meaning that practices arethe results or manifestations of culture, or in a similar way, culture constrains howpractices are designed and delivered. SEM was used to test the relationship betweenTQM and organisational culture based on the two competing models. The choice ofSEM as the analytical tool for this study was based on two major reasons. First, in thisstudy TQM was considered as a construct (or a latent variable) that cannot bemeasured directly or represented by a single metric unit. To our knowledge, only SEMallows the explicit representation of a distinction between observed and latentvariables. Secondly, in the pluralist model, we examined several structuralrelationships (i.e. between the four measures of organisational culture and the threesubgroups of TQM shown in Figure 3) simultaneously, and this can be done only byusing SEM.

Unitarist model. In the unitarist model, TQM is considered as a set of practiceswhich has a particular culture that affects all of these practices; in other words, allTQM components are driven by a similar type of culture. As such, TQM is modelled asa single latent variable that is measured by six observed variables, and it is explainedby the four types of cultures as shown in Figure 2.

Overall, with respect to the values of the absolute GFI indices the model suggests alack of fit. The value of RMSEA slightly exceeds 0.08 and the value of AGFI dropsbelow 0.90, respectively, which causes some concerns for such a simple model. It is alsoevident from the result that there are three types of cultures, which have a significantrelationship with TQM practices, although group culture appears to be the dominantone, followed by rational and developmental cultures. Hierarchical culture does notshow a significant relationship although the negative sign of the estimated value of therelationship toward TQM appears to replicate the findings reported in the study byDellana and Hauser (1999).

Pluralist model. The pluralist model considers TQM as a multidimensional modelcomprising multiple subgroups (i.e. constructs) rather than a single latent construct.

Figure 2.The unitarist model of the

relationship betweenorganizational culture and

TQM practices


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These subgroups were tested against the four types of cultures in the CVF used inthe unitarist model. As a preliminary analysis, the relationship between organizationalculture and the six TQM practices was tested using Pearson correlation, and the resultis presented in Table III.

The findings suggest that the six TQM variables correlate at fairly similar degreesto group, developmental and rational culture, and less strongly with hierarchicalculture, although all correlation coefficients are still significant at 0.01. As is evidentfrom the columns of group and developmental culture, the variables leadership,customer focus, and people management show a relatively stronger correlation thanthe other four TQM practices. On the other hand, along the column of hierarchicalculture, it appears that strategic planning, information and analysis, and processmanagement have the highest correlation with hierarchical culture with nearly similarcoefficient values. Therefore, to a limited degree, we have been able to identify anantagonistic structure within TQM practices on the basis of two contrasting cultures:hierarchical that is oriented toward control and internal on the one hand and group anddevelopmental that is more oriented toward flexibility.

The next step is to develop the multidimensional model of TQM by dividing the sixTQM practices into several subgroups. In building these subgroups, we centred onseveral theoretical arguments although this process is still exploratory in nature. Basedon the content analysis of the six TQM practices, we came up with three subgroups,which we labelled as TQM1, TQM2, and TQM3. TQM1 comprises leadership andpeople management practices that mostly relate to human relations aspects in theorganization. This can be seen from the practices incorporated in these two constructs,such as sharing beliefs and values, providing role models, empowerment, participativemanagement, creating unity between departments, training and development, creatinga quality work environment, and communication. TQM2 comprises customer focusand process management practices, which could be associated with some elements ofcontrol in TQM. This is because both practices are closely related to each other as themajor components of quality assurance whose primary purpose is to achieve a highdegree of conformity and minimize variation (Sitkin et al., 1994). The study by Germainand Spears (1999) indicated that quality management positively relates to elements ofcontrol and formalization, and the result should be attributed to the content of theirquality management construct that is very similar to the content of processmanagement items used in our study. TQM3, on the other hand, comprises strategicplanning and information and analysis constructs which are also considered asrepresenting the control element of TQM. From this point of view, both strategic

Group Developmental Hierarchical Rational

Leadership 0.759 0.676 0.305 0.628Strategic planning 0.566 0.509 0.399 0.559Customer focus 0.516 0.586 0.319 0.535Information and analysis 0.569 0.493 0.398 0.549People management 0.768 0.597 0.339 0.582Process management 0.551 0.537 0.396 0.555

Note: All correlations are significant at p , 0.01

Table III.Correlation betweenTQM practices andorganizational culture

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planning as well as information and analysis practices reflect well the beginning(i.e. planning) and ending (i.e. evaluation) phases of strategic management processes.The processes commonly start with external and internal environmental scanning,formulation of the strategic choice, implementation process, and conclude with controland evaluation (Hill and Jones, 2001; Thompson and Strickland, 2003). Given that thesetwo steps are usually conducted in a formal and systematic manner (Mintzberg, 1993),it is appropriate to categorize them into the control elements of TQM although weseparate them from the TQM2 subgroup (i.e. customer focus and processmanagement). In sum, while both of these constructs have to do with control, theTQM2 elements focus on processes and might involve a more operations focus, whileTQM3 relates more to the bigger picture, with its emphasis on planning and externalelements of the strategic management process, and its orientation is more toward theentire business.

However, given that both TQM2 and TQM3 represent control elements, it isnecessary to test whether these two subgroups should be combined into one subgroupor stand as separate entities. For this purpose, two competing models ofmultidimensional TQM were tested. The first competing model comprises threeTQM subgroups as described above, whilst the second competing model comprisestwo TQM subgroups, with TQM2 and TQM3 being combined into one subgroup. Theresult of these two measurement models indicates that the first competing model has asignificantly better fit (at p , 0.05), based on the discrepancy of the chi-square value(Dx) and the degree of freedom.

The structural model to examine the relationship between the four culturaldimensions with the three TQM subgroups is shown in Figure 3. In analysing thismodel, SEM was used for model generation purposes that involve a blend ofexploratory and confirmatory, ahead of the strictly confirmatory approach. In modelgeneration applications, when an initial model does not fit the data, it can be modifiedby deleting, adding, and/or modifying paths in the model (as suggested bymodification indices), then re-tested using the same data set. The final purpose is toestablish a model that makes theoretical sense and reasonable correspondence to

Figure 3.The pluralist model of the

relationship betweenorganizational culture and

TQM practices


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the data (Joreskog, 1993; Bollen and Long, 1993; McCallum, 1995). With four by threerelationships, there were twelve paths that needed to be estimated. However, the initialfindings showed that not all of these 12 paths were significant. The non-significantpaths of the initial structural relationship were then deleted, and this resulted inimprovement of the GFI indices of the model. This process was continued until the bestcompeting model was established. The final model is shown in Figure 3, and the GFIindices suggest that the model is robust even though the number of estimatedparameters is far more complex than the first model. Eight out of twelve paths ofstructural relationship were found to be significant (at p , 0.01) as shown in Figure 3.

The findings once again suggest that group culture is the most dominant amongthese four cultural dimensions. It significantly relates to the three TQM subgroups.The other relationship provides sensible results where TQM1 is driven by a group anddevelopmental culture. Both group and developmental cultures represent theflexible-type cultures that match the characteristics of the TQM1 subgroup, whichcomprises human factors, which are leadership and people management. TQM2 isrelated to both developmental and rational cultures; meaning that this subgroup isdriven by a combination of cultures that balance the flexibility and controlorientations, which are also external-oriented. Both cultures fit the characteristics ofthe TQM2 subgroup that comprises customer focus and process management thatfocus on the external environment (i.e. customer needs) but at the same time emphasizeproductivity and performance. TQM3 as expected is more concerned with an internaland control orientation that is reflected by its relationships with rational andhierarchical culture in addition to the most dominant sub-culture, group culture.Overall, the findings of the pluralist model indicate an interesting shift of culturalemphasis between the three TQM subgroups. TQM1 is that which is “purely”flexible-oriented, followed by TQM2 which comprises both flexible and controlorientations, and finally TQM3 which is the most control-oriented.

Comparing the two models of the structural relationship between organizationalculture and TQM practices, it is obvious that the pluralist model is shown to be a bettermodel as indicated by the values of the GFI indices. The result is also more revealingparticularly in the case of hierarchical culture, which appears to have no significantrelationship with TQM in the unitarist model (Figure 2). Therefore, themultidimensional model of TQM practices and cultures is supported here.

DiscussionThe findings above provide evidence of the need for managing multidimensionalelements within TQM that reflect multidimensional cultures. In particular, althoughthey may be seen as somewhat controversial, the findings do support the existence ofthe mechanistic-type culture within TQM practices, represented by the TQM3subgroup. This finding is even more important as a counterbalance of the “bias”towards group and developmental culture which has dominated the literature on TQMas noted in the earlier section. Therefore, the findings substantiate the idea of thejuxtaposition of different elements of TQM, the control and people-centred elements,and that the coexistence of both elements does not necessarily cause a situation whereone can undermine the other. The paradoxical combinations of these cultures concurwith the findings of past studies in the area (Buenger et al., 1996; Kalliath et al., 1999;Zammuto and Krakower, 1991). This finding also supports the underlying assumption

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of the competing values model with regard to the importance of balance. This isbecause, when organizations overemphasize one culture and ignore the other, they maybecome dysfunctional and the “single” culture may turn out to be weaknesses (Denisonand Spreitzer, 1991).

The importance of this issue can also be viewed from a strategic point of view inrelation to the escalating pressure for organizations to pursue more complex, ofteninconsistent, aspects of performance. In this regard, Benner and Tushman (2003)highlight the idea of dynamic capabilities that integrate the firm’s abilities for bothexploitation – which emphasizes control – and exploration – which promotesflexibility. We believe that such integration concurs with the need to appreciate thecoexistence of control and people-centred cultures within the organization as identifiedin this study. Supporting this proposition, Denison and Spreitzer (1991) specificallyaffirm the need to incorporate and balance all four cultural types that represent thecapacity to respond to a wide set of environmental conditions.

By and large, the coexistence of the control and people-centred models implies thatTQM calls for a synthesis of these antagonistic elements within an organization. AsThompson (1998) affirms, the need for managing the cultural paradox could be one ofthe primary issues of TQM and the biggest challenge for organizations thatimplement it. The major implication of this finding is that organizations need toaccommodate divergent goals by developing a system and/or structure that allowsenough flexibility for adapting different (even contrasting) management styles, hence,swinging comfortably between control and flexibility and between internal andexternal orientations, which is known as the “ambidextrous” approach (Tushman,1996). We believe that this issue is worthy of examination for research on TQM inthe future.

ConclusionIt is our hope that the present study helps to nurture a dialog that explores these andother relationships between TQM and culture. Our results support the pluralist view,yet it still opens further debate in the area, particularly between the organizationalversus departmental the level. Intuitively, one may argue that multidimensionalcultures are applicable only at the organizational level, but once we look into specificparts of the organization we will find subgroups of culture, which are morehomogenous, according to the specific task(s) they face. For example, developmentalculture can be found to be more prevalent in the R&D function, whilst rational orhierarchical culture is more alive in the (manufacturing) production function.

Further, the implications of this research raise questions regarding the mostappropriate combination of cultures for TQM. One might posit that the answer to thisquestion hinges on variables such as industry sector and strategic goals of theorganizations. We need to examine further if our findings would be different whensuch control variables are added. Also, it would be interesting to explore if theconfiguration of TQM subgroups will vary, in contingent on these factors, assuggested by Sitkin et al. (1994) and Spencer (1994). In this regard, we may finddifferent configurations of TQM based on different levels of the three subgroups,contingent to these external and internal control variables. For example, firmsoperating in a stable industry would emphasis more the control elements of TQM (i.e.TQM2 and TQM3) compared to those operating in a dynamic environment.


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Another important issue is related to the effectiveness of these cultures indetermining organizational performance. For example, the studies by Powell (1995)and Samson and Terziovski (1999) suggest that the “soft” factors of TQM – associatedwith TQM1 in this study – were found to be the strongest predictors of organizationalperformance. On the other hand, the “hard” factors – associated with the TQM3subgroup in this study – did not show any significant relationship with organizationalperformance. Does this lead to a conclusion that the cultures supporting these practices(i.e. group and developmental cultures) are the best and therefore should be nurtured,and at the same time, hierarchical factors – which underlie TQM3 – should besuppressed? If so, under what conditions?

Finally, this study considers organizational culture as the antecedent of TQMpractices. However, as mentioned in the literature review section, there are manyarguments that promote TQM as a vehicle for organizational change, including thecultural element. We believe that the recursive effect between TQM and organizationalculture would be an interesting topic to examine although it can only be done using alongitudinal study.

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Amabile, T.M. and Grykiewicz, N.D. (1989), “The creative environment scales: work environmentinventory”, Creativity Research Journal, Vol. 2, pp. 231-53.


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