One recurrent theme within the literature on total quality management (TQM) is the study of its effect on organizational performance. Nonetheless, most research has focused on analyzing the relationships between the implementation of different elements and several types of performance. This paper incorporates the effect of organizational environment as a variable for explaining the impact of TQM on business results. The model is tested using structural equations, employing a survey of quality managers in 273 Spanish firms. The causal analysis results show that dynamism, munificence and complexity influence the degree of implementation of the main TQM principles. The most relevant effects emerge as a result of the environmental dynamism, and the least effects are due to munificence. Similarly, the dimensions of TQM have an impact on different types of performance. The model can be used by organizations to assess their level of TQM success depending on specific environmental characteristics.
One of the keys to the popularization of total quality management (TQM) is that it is deemed to be a historically unique approach to improve organizational effectiveness [1]. In fact, many studies have highlighted the benefits that may be obtained through its proper implementation [2], [3] and [4]. Nonetheless, the introduction of TQM has produced uneven results and in numerous cases it has been a failure [5], [6], [7], [8], [9] and [10].
The relationship between performance and TQM has been analyzed according to the degree of implementation of its elements (leadership, quality-oriented culture, reward system, employee participation, etc.). So, for example, the studies by Chapman et al. [11], Easton and Jarrell [12], Kaynak [13] and Powell [14] evaluate performance using financial indicators, and other studies (e.g., [15], [16], [17], [18], [19], [20], [21], [22], [23], [24], [25], [26] and [27]) also evaluate aspects such as customer satisfaction, employee satisfaction or the quality of the products and services offered.
However, till recently, few works have considered how the existence of factors external to the implementation of TQM might affect performance (e.g., [14], [28], [29], [30], [31] and [32]). Shin et al. [33] suggest that one of the factors for the TQM success is its fit with firms’ strategic priorities, the competitive environment and the organization's goals. A firm that definitely intends to implement TQM as a fundamental strategy for its activities should not forget that it is part of an environment that has certain characteristics that might favor or be detrimental to achieve its targets. Assuming that proper implementation is essential for obtaining profits, the variability of the latter in firms that have introduced TQM might be justified by its interaction with the environment.
The causal model posed allows us to analyze which dimensions of the environment are those that exercise the greatest influence on the implementation of the basic principles of TQM, and how they contribute to organizational effectiveness. In general terms, the results indicate support for the relationship between organizational characteristics, TQM principles, and performance. Dynamism, munificence and complexity directly or indirectly influence the three principles of TQM. Likewise, the dimensions of TQM have an impact on the different types of performance. In particular the results indicate that:
1.Dynamism and munificence directly influence customer focus that points to customer satisfaction as the most important requirement for long-term organizational success. Higher levels of customer focus are associated with more frequent changes in environment. However, when environment is not very competitive and present few difficulties for the firm's development or growth, TQM firms respond by placing less emphasis on customer focus activities. In munificent environments organizations accumulate scant resources that are necessary for their survival [109], therefore, the firm can focus on a small group of customers that will guarantee a minimum income for it.
2.The results do not support that dynamism, munificence and complexity directly affect continuous improvement. Nevertheless, such effects have an indirect effect on continuous improvement, through the mediating effect of teamwork. These findings suggest that environmental characteristics are not associated with high levels of continuous improvement, which involves an attempt to enhance firm products and processes as a means for satisfying the customer.
3. Teamwork is directly and positively related to dynamism, munificence and complexity. In environments with a high level of instability, with diversity in the activities for satisfying the customers, but with resources favorable for growth, the collaboration between the firm members in different scopes will be greater. This cooperation is important given its influence on customer focus and continuous improvement.
