The structural relationships between TQM factors and organizational performance

Purpose-The purpose of this paper is to determine the relationships between the total quality management (TQM) factors and organizational performance. Design/methodology/approach-A research project was carried out in 370 Greek companies, using the questionnaire method. Exploratory and Confirmatory Factor Analysis were applied to assess the measurement model reliability and validity. The relationships between the latent constructs were examined through Structural Equation Modelling. Findings-The TQM factors revealed by the study were the quality practices of the top management, employee involvement in the quality management system, customer focus, process and data quality management and quality tools and techniques implementation. According to the findings, these factors significantly affect the companies' performance with respect to their internal procedures, customers, market share and the natural and social environment. Research limitations/implications-The subjective data being dependent on the perceptions of the quality managers and the fact that the sample companies came from different sectors constitute the limitations of the present study. Practical implications-Given the increased rate of the companies that adopt quality assurance standards, the organizational performance improvement as well as the competitive advantage in the market can be obtained through a valid quality management model, as specified by the TQM principles. Originality/value-The paper describes a reliable and a valid TQM model and a way for a company to lay the foundations for business performance improvement. © 2010 Emerald Group Publishing Limited. All rights reserved.