High tech firms compete based on the ability to respond to dynamic environments and to quickly develop innovative new products. However, can quality management (QM) also be a source of competitive advantage for high tech firms? This study empirically investigates the relationship between the extent of quality management implementation and performance in high tech manufacturing firms. Cluster analysis was done based on three performance variables, total inventory turnover, product quality, and sales growth. Two distinct groups, one low performing and one high performing, emerged as a result of cluster analysis. The results show that high performing firms have implemented QM more extensively than low performing high tech firms. Thus, QM can be a source of competitive advantage for high tech firms.
High technology firms compete in an environment characterized by short product development life-cycles, high uncertainty, and heavy investment in research and development (Qian & Li, 2003). These firms rely on technical change and intellectual capital to attain a competitive advantage (Bruton and Wan, 1994 and Mohrman and Von Glinow, 1990). Although innovation and agility may contribute to short term competitiveness, some have argued that in the long run, high technology firms must adopt good management practices to sustain their advantage (Pfeffer, 2001). Powell (1993) suggests that firm specific skills and resources such as quality management (QM) explain performance variance among high technology firms more than low technology firms. Some studies have explored specific QM techniques such as a multi-skilled workforce in a high tech context (Hoyt & Matuszek, 2001) or quality improvement efforts in a single high tech company (Sohal & Lu, 1998). However, empirical research has not specifically explored the relationship between the broad bundle of QM practices and performance across a range of high tech industries.
Using replication research with two data sets collected at different times, we explore if the bundle of eight quality management (QM) practices differentiate high and low performing high technology firms. The eight quality management practices studied are: (1) management leadership, (2) training, (3) employee relations, (4) quality data and reporting, (5) supplier quality management, (6) product/service design, (7) process management, and (8) customer relations. Replication research, though relatively rare in business disciplines, is essential for the integrity of empirical research (Easley et al., 2000, Eden, 2002 and Hubbard and Vetter, 1996). Testing theory using more than one data set increases the confidence in the generalization of the results and is essential for building a body of knowledge (Eden, 2002 and Tsang and Kwan, 1999). The results are relevant to managers in high technology firms by providing information regarding QM implementation that can be used to improve their competitive positions.
In the next section, a theoretical foundation of this study is presented through a literature review of high tech firms, QM and organizational performance, which leads to the research hypothesis. 3 and 4 include descriptions of the research methodology for period 1 and period 2 studies, respectively. Following data analyses in Section 5, Section 6 presents the results of testing the research hypothesis, the implications of the findings for researchers and managers and further research directions.
To test the hypothesis, average scores for each QM factor were calculated to run multiple t-tests. The hypothesis leads us to expect that high performing high technology firms implement QM practices more extensively than low performing high technology firms. Period 1 and 2 group means for both clusters on QM practices are presented in Table 6, and the results of the multiple t-tests are shown in Table 7. With the exception of training in period 1 study, high performing high technology firms have implemented QM practices to a greater extent than low performing high technology firms. Overall, the t-test results support the hypothesis.
