Impact of process quality management on firm's operational performance: a mediation analysis of firm's absorptive capacity

Abstract

PurposeThe purpose of this study is to assess the effect of process quality management (PQM) activities on firm's operational performance (OP) through the mediation of firm's absorptive capacity (AC).Design/methodology/approachThis research builds on the theory of knowledge-based view to conduct a survey of 294 manufacturing companies in India. With the use of Hayes' PROCESS Macro in SPSS, the collected data were used to analyze the proposed mediating effect of firm's AC and moderating effects of leadership commitment (LC).FindingsStudy results suggest that both PQM and firm's AC contribute to improved OP and should be promoted. The firm's AC was found to partially mediate the impact of PQM on the firm's OP. Results also show that improved firm's AC can have a substantial effect on improvement in OP by stronger support of LC.Research limitations/implicationsThe results may lack generalizability due to the selected cross-sectional nature of the current study. Researchers are also encouraged to further test the proposed ideas using a longitudinal design approach.Practical implicationsTo translate PQM initiatives into core strategic competencies, manufacturing firms need to develop their AC. Senior managers in the manufacturing sector should concentrate strongly on developing a knowledge-driven working culture to enhance operational efficiency and manufacturing productivity.Originality/valueCurrent research study can be considered as one of the very few empirical analyses that investigated the mediating impact of the firm's AC on the PQM-firm's OP relationship. In the operations management (OM) literature, the investigation of the moderating effect of LC on the mediation of the firm's AC between the PQM and OP metrics can be considered to be a noteworthy theoretical addition.