Quality management practices and their relationship with customer satisfaction and productivity improvement

Abstract

PurposeThere is considerable confusion surrounding the applied role and business value of TQM. Anecdotal evidence and empirical studies in the literature suggest considerable variability in the performance of TQM. The purpose of the paper is to test the strength of the relationship between quality management practice and two key operational performance measures: productivity improvement and customer satisfaction.Design/methodology/approachA large database consisting of 962 responses from Australian manufacturing firms and 379 responses from New Zealand manufacturing firms is used to test the hypotheses.FindingsThe major finding of the paper is that multiple quality management practices when implemented simultaneously have a significant and positive effect on productivity improvement and customer satisfaction.Research limitations/implicationsThe results presented in this paper are drawn from one industry at one point in time. Generalising the results to other industries should be done with caution. This study, therefore, aims to motivate further research on the link between quality strategies and organisational performance.Practical implicationsThe main implication that emerges from the paper is that managers in manufacturing firms should place more emphasis on “soft” quality management practices (e.g. unity of purpose/elimination of barriers between individuals and departments) and less emphasis on “hard” practices (e.g. process control).Originality/valueThe paper fulfils an identified need on the value of quality practice and offers practical implications to managers and stimulates further research on the relationship between quality practice and operational performance in non‐manufacturing industries.