Quality management (QM) has received a high degree of attention in extant literature. Several research papers attribute superior firm performance to adoption of QM practices. The availability of a large number of research papers that investigate the impact of QM practices on performance provide an ideal setting for theory extension and refinement using meta-analysis techniques. In a paper that I published in 2006, performance implications of adopting QM practices are formalized and the article presents hypothesized relationship between QM practices and performance. Second, a meta-analysis of correlation approach is used to examine the empirical research in QM to determine which QM practices are positively related to improved performance. The study also examines the presence of moderating factors in the association between QM practices and performance.
The results suggest that a large variance in aggregate performance can be attributed to QM practices. This reaffirms the role of QM practices in improving performance. The results also highlight the
importance of the unit of analysis in QM practice-performance link. While for firm level data, the analysis reveals a positive relationship between QM practices and aggregate performance, the evidence of a positive association was lacking in plant level data. Management leadership was positively related to aggregate performance. It was also found to be positively related to all measures of aggregate performance except the operational performance measure. Management leadership fosters change in an organization through continuous improvement and open communication
and this potentially explains the improvement in financial performance, customer service and product quality. A possible explanation for the lack of direct positive relationship between management leadership and operational performance is that management leadership improves performance indirectly through its influence on other QM practices.
The results suggest a positive relationship of people management with aggregate performance, financial performance and operational performance. The results, however, fail to find a relationship between people management and customer service. The results also could not confirm the direct link between people management and product quality. Process management was positively associated with
aggregate performance, and with financial and customer service measures of performance. Notably, the results fail to find a relationship of process management with operational performance and product quality. This provides support to the reasoning that infrastructure practices such as management leadership, people management etc. explain much of the variation in performance as against the core practices like process management. The results fail to find a positive association of product design and management with aggregate performance.
Operational performance measure was found to have a direct positive association with product design and management practices but interestingly the study fails to find a direct relationship between product design and management and product quality. Product design and management practices are aimed at improving design quality and in ensuring design for manufacturability. Scholars have argued that almost 80% of the manufacturing costs are determined at the design stage and these manufacturing costs are an important component of a firm’s operational performance. The results in this study substantiate this important link between product design and management and operational performance. The lack of relationship between product design and management and product quality is intriguing and provides motivation for further investigations into potential contingencies, indirect associations and interaction effects.
Supplier quality management was positively associated with aggregate performance and the operational performance measure. It can be reasoned that with an increasingly supply chain oriented business environment, improvements targeted at the supplier's end such as supplier quality management are important for improved operational performance. This study however could not confirm direct relationship between supplier quality management and other performance measures. Quality data analysis involves using quality information tools such as statistical process control and cost of quality measures. The results suggest that these activities were positively associated with aggregate performance and customer service. However, the study could not find a direct relationship of quality data analysis with financial performance, operational performance and product quality. Other indirect causal paths, such as the effect through other QM practices that link quality data analysis with these performance measures need to be explored in future research.
Finally, customer focus was positively related to aggregate performance and all individual measures of performance. Customer focus relates to an organization’s commitment to determine and meet current and emerging customer requirements and expectations, to provide effective customer relationship management and to ensure customer satisfaction. It can be reasoned that investments in customer complaints evaluation and expectation monitoring systems enable better design of products and processes, thereby improving product quality and operational performance. A focus on meeting and exceeding customer expectations allows firms to achieve improved financial performance and customer satisfaction. Evidence of a direct relationship between customer focus and all performance dimensions motivates further examination of its association with other QM practices.
In the meta-analytic study we also found an overwhelming support for the presence of moderators in the relationship between quality management (QM) practices and performance. The results suggest that interaction effects and interrelationship might exist among QM practices and between the various performance dimensions. These moderating factors, perhaps, explain the lack of evidence of a significant relationship between some quality management practices and performance in large-scale empirical studies
Source: Nair, A. 2006. “Meta-Analysis of the Relationship between Quality Management Practices and Firm Performance – Implications for Quality Management Theory Development,” Journal of Operations Management, 24, 948-975.
The results suggest that a large variance in aggregate performance can be attributed to QM practices. This reaffirms the role of QM practices in improving performance. The results also highlight the
importance of the unit of analysis in QM practice-performance link. While for firm level data, the analysis reveals a positive relationship between QM practices and aggregate performance, the evidence of a positive association was lacking in plant level data. Management leadership was positively related to aggregate performance. It was also found to be positively related to all measures of aggregate performance except the operational performance measure. Management leadership fosters change in an organization through continuous improvement and open communication
and this potentially explains the improvement in financial performance, customer service and product quality. A possible explanation for the lack of direct positive relationship between management leadership and operational performance is that management leadership improves performance indirectly through its influence on other QM practices.
The results suggest a positive relationship of people management with aggregate performance, financial performance and operational performance. The results, however, fail to find a relationship between people management and customer service. The results also could not confirm the direct link between people management and product quality. Process management was positively associated with
aggregate performance, and with financial and customer service measures of performance. Notably, the results fail to find a relationship of process management with operational performance and product quality. This provides support to the reasoning that infrastructure practices such as management leadership, people management etc. explain much of the variation in performance as against the core practices like process management. The results fail to find a positive association of product design and management with aggregate performance.
Operational performance measure was found to have a direct positive association with product design and management practices but interestingly the study fails to find a direct relationship between product design and management and product quality. Product design and management practices are aimed at improving design quality and in ensuring design for manufacturability. Scholars have argued that almost 80% of the manufacturing costs are determined at the design stage and these manufacturing costs are an important component of a firm’s operational performance. The results in this study substantiate this important link between product design and management and operational performance. The lack of relationship between product design and management and product quality is intriguing and provides motivation for further investigations into potential contingencies, indirect associations and interaction effects.
Supplier quality management was positively associated with aggregate performance and the operational performance measure. It can be reasoned that with an increasingly supply chain oriented business environment, improvements targeted at the supplier's end such as supplier quality management are important for improved operational performance. This study however could not confirm direct relationship between supplier quality management and other performance measures. Quality data analysis involves using quality information tools such as statistical process control and cost of quality measures. The results suggest that these activities were positively associated with aggregate performance and customer service. However, the study could not find a direct relationship of quality data analysis with financial performance, operational performance and product quality. Other indirect causal paths, such as the effect through other QM practices that link quality data analysis with these performance measures need to be explored in future research.
Finally, customer focus was positively related to aggregate performance and all individual measures of performance. Customer focus relates to an organization’s commitment to determine and meet current and emerging customer requirements and expectations, to provide effective customer relationship management and to ensure customer satisfaction. It can be reasoned that investments in customer complaints evaluation and expectation monitoring systems enable better design of products and processes, thereby improving product quality and operational performance. A focus on meeting and exceeding customer expectations allows firms to achieve improved financial performance and customer satisfaction. Evidence of a direct relationship between customer focus and all performance dimensions motivates further examination of its association with other QM practices.
In the meta-analytic study we also found an overwhelming support for the presence of moderators in the relationship between quality management (QM) practices and performance. The results suggest that interaction effects and interrelationship might exist among QM practices and between the various performance dimensions. These moderating factors, perhaps, explain the lack of evidence of a significant relationship between some quality management practices and performance in large-scale empirical studies
Source: Nair, A. 2006. “Meta-Analysis of the Relationship between Quality Management Practices and Firm Performance – Implications for Quality Management Theory Development,” Journal of Operations Management, 24, 948-975.