Innovation mediating relationship between TQM and performance: cases of industrial certified companies

Purpose The purpose of this research is to analyze the reciprocal relation between total quality management (TQM) and innovation (product innovation and process innovation) and their impact on operational and financial performance. Design/methodology/approach The data were obtained from a survey of 205 manufacturing companies. Structural equation modeling (SEM) was performed to evaluate the research model. Findings The results reveal that there is a reciprocal relationship between TQM and innovation. Moreover, the findings indicate a significant positive effect of product innovation and process innovation on operational performance and insignificant direct impact of TQM on operational performance. However, this effect is significant when it is mediated through product innovation and process innovation. Research limitations/implications This paper helps practitioners to understand how TQM practices support both product and process innovation and the role of the latter in promoting the implementation of TQM practices and ensuring operational performance. Originality/value This study presents an innovative approach since it is among the first research studies that provide empirical evidence to a reciprocal association between TQM and innovation. Additionally, this paper examines the dimensions studied in different aspects. It considered financial performance and operational performance, and with respect to innovation, this dimension was analyzed through two different perspectives, namely product innovation and process innovation. This study is also among the first and few research studies that have studied the mediating effect of innovation.