Explore the relationship between total quality management

Explore the relationship between total quality management (TQM) and firm performance by taking TQM as an internally consistent system of practices. The paper tests the link between the two variables using the universal approach, analyzes whether the most competitive firms are those adopting TQM, and tests for an isomorphic effect on other firms. Spanish firms that have received TQM prizes at the national or regional level related to EFQM between 1997 and 2003 and a control sample for comparison. The control sample pairs each award-winning firm with a group of firms of the same size and sector, and with sufficient available financial data. As the result, the universal hypothesis states that contrasted TQM system implementation leads to an increase in global firm performance. Furthermore, firms that adopt a TQM system perform better even before implementation than those that do not adopt a TQM system. Other result for this research is firms that are early implementers of a contrasted TQM system achieve higher performance gains. Other than that, late implementers do not see the same performance gains as pioneer firms do from adopting a contrasted TQM system. The findings for this research indicate that in the absence of any evidence to confirm the universal hypothesis, TQM pioneers experience performance gains, because of the early implementation of the system; however, late adopters do not experience similar results. For the systemic approach to function effectively, the firm’s organizational culture must undergo a global change, involving the introduction of a set of principles and practices. Public institutions should control the utilization of public funds, promoting only activities that are innovative, and analyzing whether some implementations are only fads of the moment, without real repercussions. Other than that, managers should consider whether it is worth involving the company in the whole process of competing for a quality prize with the aim of increasing its performance and devise alternative methods to implement improvements through quality or other innovations.