A structural equation model of TQM, market orientation and service quality

Abstract

PurposeThe purpose of this paper is to examine the relationship between total quality management (TQM), market orientation and service quality in the Malaysian service industry.Design/methodology/approachData from 150 service firms were collected. Structural equation modeling was employed in this study to examine the associations between TQM, market orientation and service quality.FindingsThis study provides empirical evidence and confirms findings obtained from previous studies that TQM has a positive and significant relationship with both market orientation and service quality. Moreover, it was discovered that market orientation is also significantly related to service quality.Research limitations/implicationsThis research study implies that if firms are not able to comprehend the importance of TQM dimensions, by which the different dimensions of it can influence a firm's performance, they may not succeed in harvesting the full value of market orientation and service quality. Meanwhile, the findings may guide the service practitioners to understand the importance of TQM in their managerial actions in enhancing market orientation and service quality, which serves as a sound foundation for building a distinguished point of differentiation in their services.Originality/valuePast researchers have not looked into the tri‐dimensional relationship between TQM, market orientation and service quality and hence research is to be called for in this area. The paper provides practitioners with useful guidelines on the appropriate TQM practices to be implemented so that market orientation and the quality of service can be enhanced, creating superior value to the customers in a unique way, which subsequently improves a firm's competitiveness.