مشخصات شرکت، مدیریت کیفیت جامع و عملکرد مالی

This paper uses a sample of quality award winners to empirically test hypotheses that relate changes in operating income associated with effective implementation of total quality management (TQM) to various firm characteristics. The characteristics examined are firm size, the degree of capital intensity, the degree of diversification, the timing of TQM implementation, and the maturity of the program. We find that smaller firms do significantly better than larger firms. Firms that have won awards from independent award (a proxy for more mature TQM implementation) do significantly better than just supplier award winners. The evidence weakly supports the hypotheses that less capital-intensive firms do better than more capital-intensive firms, and more focused firms do better than more diversified firms. Finally, we do not observe any significant differences between the performance of earlier and later implementers of effective TQM. The key implications of these results are that many organizational characteristics moderate the benefits of TQM implementation. Although not all of these characteristics are controllable by managers, managers must set realistic expectations for the degree of benefits from TQM. The results for size and capital-intensity validate the importance of TQM practices for smaller firms and environments that are more labor intensive. Investing to achieve a broader, deeper, and more mature TQM implementation (possibly by targeting an independent TQM award) should also result in higher benefits from TQM implementation. Furthermore, the results indicate that it is never too late to invest in TQM.

Recently, many researchers have examined the link between total quality management (TQM) and financial performance. Christiansen and Lee (1994), Ittner and Larcker (1996), Hendricks and Singhal, 1997 and Hendricks and Singhal, 1999 and Easton and Jarrell (1998) provide evidence to show that effective TQM implementations improve long-term profitability and stock returns. Flynn et al., 1995a and Flynn et al., 1995b) report that higher intensity of TQM practices results in improved quality performance. The conclusion from these studies is that effective implementation of TQM improves financial performance. This paper extends the existing research on TQM and financial performance by examining how the impact of TQM on financial performance is moderated by various firm characteristics. For example, the time and cost to implement TQM could vary across firms, the extent of potential gain from implementing TQM could be impacted by a firm’s technology, and the synergies in implementing TQM could be dependent on the number of different markets that a firm operates in. Furthermore, the gains from TQM could be a function of how intensely TQM is implemented, and when it is implemented relative to competitors. Since such differences do exist among firms, we expect the impact of TQM to be different across different firms. The three primary concepts of TQM — the cost of quality, total customer satisfaction, and organizational learning — also suggest that the benefits of TQM will be moderated by firm characteristics. For example, the cost of quality concept predicts that as conformance quality increases the total cost of quality decreases. Obviously, the higher the initial conformance quality, the smaller the resulting benefit from improvements. Thus, one might expect firms with already tight process controls to see lower benefits from TQM. The concept of total customer satisfaction predicts that higher customer satisfaction should lead to higher retention rates, increased market share, and higher profitability. The concept of organizational learning involves teaching an organization to use the scientific method, to create and utilize specific knowledge, and to change its performance measurement systems. The ability to successfully implement customer responsiveness and organizational learning is likely to vary by firm characteristics.

This paper provides evidence on the relation between the financial performance from effective implementation of TQM to characteristics such as firm size, the degree of capital intensity, the degree of firm diversification, the maturity of the TQM implementation, and the timing of the TQM implementation. We find that smaller firms do significantly better than larger firms. Firms that have won awards from independent award givers do better than the supplier award winners. This is consistent with our conjecture about costs and benefits associated with the comprehensiveness of the criteria used by independent award givers to judge TQM. The evidence weakly supports the hypotheses that less capital-intensive firms do better than more capital-intensive firms, and more focused firms do better than more diversified firms. We also do not observe any significant differences between the performance of earlier and later implementation of effective TQM. Finally, whichever characteristic is used to segment the full sample, individual subsamples generally do better than their respective controls. The key managerial implications of these results are that many organizational characteristics impact the benefits from effective TQM implementations. Although not all of these characteristics are controllable by managers, managers must set rational expectations for the degree of benefits from TQM based on their firm’s characteristics. The results for size and capital-intensity validate the importance of TQM practices for smaller firms and environments that are more labor intensive. Investing to achieve a broader, deeper, and more mature TQM implementation (possibly by targeting an independent TQM award) should also result in higher benefits from TQM implementation. The results also indicate that it is never too late to invest in TQM. Finally, the results imply that the positive impact of TQM is widespread across a spectrum of firms with differing characteristics.