Total quality management: practice and outcomes in the largest US firms

Abstract

The application of TQM practices has rapidly increased in US organizations over the past six years, particularly in organizations facing severe competitive pressures. A survey of the 1,000 largest companies shows that these practices fall into two main categories: core practices and production‐oriented practices. Companies perceive benefit in three areas: improvement of work performance, company competitiveness and profitability, and employee outcomes. Service organizations experience these benefits primarily from implementing core practices more extensively. Competitiveness and profitability in manufacturing organizations are positively affected by the implementation of the production‐oriented practices. Analysis of financial outcomes suggests that core practices are positively related to market share for manufacturing companies. Production‐oriented practices are positively related to return on equity and collaboration with suppliers in quality efforts is positively related to total factor productivity index for all companies.