TQM practices and performance outcomes in Pakistani organizations

Introduction

The business environment is changing promptly due to globalization, and easy for customers to access international markets; thus, it’s difficult to continue and contest with competitors having old management philosophies, hence organizations are focusing on different perspectives, that include six sigma, Lean management, Total productivity maintenance and Total quality management, to enhance their performance outcomes, therefore from all these evolving concepts, the emphases of this study is on implementation of TQM and his effects on organization’s performance outcomes. Organizations from all over the world have implemented total quality management. Moreover, various organizations have concluded that implementing TQM effectively can increase their abilities to compete and offer strategic rewards in the market (Anderson et al., 1994). Several research works have provided evidence of implementing effective TQM practices, allowing the organization to contest worldwide (Womack et al., 1990; Handfield, 1993; Easton, 1993; Hendricks and Singhal, 1997).

Therefore total quality management (TQM) philosophies have gained attention worldwide and in Pakistan. Total quality management (TQM) appeared in the U.S.A. in 1980, giving the arrangement to react competitively against the increasing Japanese manufacturing control in the manufacturing sector. Though many suggestions in the research literature are being conducted in established economies, it is found that in developing countries minimum amount of research is shown related to total quality management (TQM). Gosen et al. (2005) indicated in their research work:

“Many gaps are identified in the literature on quality management in developing countries along with significant challenges including differing perceptions of quality.”

Moreover, in 2002 Sila and Ebrahimpour conducted several analytical research work in numerous countries and concluded that the information regarding the TQM application phases and nature is deficient in the world that covers the Middle East, Africa, South Asia, and South America. Thus this research work provides improved information about the field that establishes new viewpoints connected with the previously un-researched situation of Pakistan’s manufacturing and service sector, also providing broader TQM literature.

Though TQM has acquired continuous attention in the developed part of the world that basis on countries like European countries, the U.S.A. and Japan, on the other hand, many scholars have started analyzing quality practices in the last thirteen years in developing countries (Shafiq et al., 2017; Dr. Masood ul Hassan et al. 2012, Al-Swidi and Mahmood, 2012, Satish and Srinivasan 2010, Das et al.2008, Hoang et al.2006, Temtime 2003). Developing countries face many obstacles to introducing their Goods to the international market. Still, the critical factor that makes attention to TQM practices in these countries is to remove the traditional business hurdle and take a step to look at the speculating developments in quality (Crosby, 1989). In developing countries, quality is a primary job for the existence of the economy stated by Solomon and Temtime (2002) in the first international convention on quality. Gregory Watson (the president of the international academy for quality) highlighted the importance of TQM platform development in an effective way to secure 500 billion rupees that the organizations waste due to nonconformance of manufacturing and low quality of service supply operations; it is said in the 12th international convention on quality improvement in Pakistan which has the theme of “Quality Competitiveness and performance,” (http://www.meqa.org), so that Pakistan government started prime minister quality award in 2011, in this award professional assessments are taken into consideration grounded on TQM requirements those are relevant to the supported international standards for performance brilliance. In addition, 1n 2011, the Government of Pakistan structured a national organizational strategy and application outline having a dream to improve competitiveness, lead Pakistani organizations into the world’s industrial competition rather than domestic competition, and increase Pakistani manufacturing worth adding by 100% (www.moip.gov.pk). Therefore Total quality management gives the way to improve the product’s quality so that they can compete in global competition and the performance outcomes of the Pakistani organization can be improved.

Literature on TQM has been investigated in a significant quantity. There have been found contradictory findings revealed by the empirical studies, like considerable research work gives practical indications that implementation of TQM practices and organizational performance outcomes has a positive relationship (Easton & Jarrel, 1998; Douglas & Judge, 2001; Kaynak, 2003; Tari et al., 2007; Bou-Llusar et al., 2009; Garci’a-Bernal & Ramirez-Aleson, 2015; Shafiq et al., 2017). In contrast, much research work pointed out that TQM practices and organizational performance outcomes have no or weak correlation, particularly in terms of financial (Dow et al., 1999; Samson & Terziovski, 1999; Macinati, 2008; Benner & Veloso, 2008; Corredor & Goni, 2010; Psomas & Jaca, 2016).

Moreover, TQM literature related to performance outcomes shows that an extensive and changing range of measures is used to identify the performance outcomes. Many researchers only focused on the financial indicator to measure the performance outcomes, e.g., profit rate of return and share market value (Easton & Jarrel,1998; Corredor & Goni, 2010; Nicolau & Sellers, 2010). These authors did not examine the non-financial results like employee satisfaction, process improvement, society results or process improvement. In addition, it is theorized that these traditional financial accounting measures, e.g., earnings per share and rate of return, may provide unreliable signals related to organizational performance outcomes (Kaplan and Norton 1992). On the other hand, many researchers noted this issue and took non-financial and financial performance measurements to identify the organization’s performance outcomes (Curkovic et al., 2000; Martinez-Costa et al., 2009; Bou-Llusar et al., 2009). Therefore, this issue should be considered in future studies, and authors should use both signals non-financial and financials in their research to measure accurate organizational performance outcomes (M.Shafiq et al., 2017). This research work is done in Pakistan and considers financial and non-financial indicators to identify organizational performance outcomes.

Literature review

Evolution of TQM

Flood, 1993 indicated that quality awareness had been about for many centuries. In the 1920s, Walter Shewhart’s made efforts in (S.P.C.) statistical process control in the United States at the bell laboratories, and the origin of the TQM concept can be seen in his work. Moreover, he wants to produce a method to measure the variable during production. The PDCA cycle (Plan, Do, Check and act) was also formatted by him, which is applied to increase the scientific process (Evans and Lindsay, 2001).

The quality management system’s fourth phase is Total quality management (TQM), and first of all, The United States defense department introduced TQM as a term (Evans and Lindsay, 2001).In the early 1980s, the United States manufacturing products did not have enough standards compared to the Japanese competitors; hence TQM was adopted as a fresh managerial perception and implemented in place of old philosophies in the United States (Talha, 2004).

TQM depends on the execution of Quality management system principles containing customer focus, continuous improvement, sincerity, honesty and care for whole business aspects comprising supplier and customer. Individual procedures, systems and requirements cannot be greater than the quality assurance height of quality management; however, they would permeate each one, action and purpose of the organization. Though, quality assurance height requires lengthening viewpoint and abilities and developing procreative activities. From the extant TQM viewpoint, it is predicted that greater sophistication was found in applying TQM tools and techniques. A greater emphasis was seen on people; partnering with the organizations, customers, and suppliers will also extend. The activities will focus on external and internal customers (Dale, 1994).

In 1994 Dale specified that the TQM philosophy is the shared cooperation for everyone in an organization and related professional procedures and manufacturing of goods that meet the consumer’s needs and expectations. TQM is a combination of philosophy and a package of principles to manage the organization.

TQM Concept

TQM description and recognition as a concept is not a simple procedure. Authors related to this era have their descriptions representing the biasness, academic experience, beliefs and business; thus, it might be assumed that TQM could not be adequately described.   In 1998 Lau and Anderson said that TQM has no specific description; moreover, they also indicated that in July 1995, thirteen articles related to TQM were published in a special edition of quality progress magazine, and twelve of them provided a dissimilar description of TQM by which it could be assumed that there is no standard description of TQM.

TQM is a combination of exercises and a united management philosophy that emphasizes other things, meeting customer requirements, continual improvement, long-ranging thinking, decreasing rework, process redesign, enhancing employee participation and collaboration, benchmarking, continuous results in measurement, problem-solving by a team making and nearer connections with suppliers (Ross, 1999).

Talha (2004) said that TQM demonstrates a comprehensive combination of management and controller for the processes that outline the emphasis on the whole industry and its entire workers on offering goods or facilities that ensure the most acceptable feasible employment to sustain the consumer. In addition, Dale (2003, p.26) described TQM as:

 “A management approach that ensures cooperation of everyone in an organization and associated business processes to produce products and services that meet and, hopefully, exceed the needs and expectations of customers”

In conclusion, Many Scholars from the TQM philosophy area sketch the important TQM principles: top management commitment, employee empowerment; continuous improvements in the organizational processes; employee motivation, and delivering workers’ training and development. Moreover, quality should be evaluated using benchmarking tackles and practices, and the corporate culture should encourage quality. The business suppliers and management are also significant features of TQM. Meeting the end customer’s needs and expectations to attain satisfaction by delivering quality goods is one of the core purposes of the TQM.

TQM practices and performance outcomes

TQM is considered a struggle for the whole organization that involves top managers, everyone from employees, all suppliers and the consumers who collectively struggle to enhance the product’s quality continuously and also improve the processes to meet consumer’s “needs” and “expectations” (Dean & Bowen, 1994; Martinez-Costa & Jimenez-Jimenez, 2009, Jaca and Psomas 2015, Shafiq et al. 2017). According to Chowdhury (2014), TQM cannot be assumed as a management method or described combination of processes; in contrast, it can be defined as a concept that depends on the implementation of principles of quality throughout whole departments of any organization TQM gained worldwide attention in the recent year related to academia, mainly associated with TQM practices and elements (Lam et al. 2011; Vijande & Gonzalez, 2009) The vital way to get TQM awareness to rely on the enhancement of effective and reliable trails which copy the fundamental TQM components which organizations implement in a precise manner. These measures must be consistent throughout a particular study and between numerous works (Jitpaiboon & Rao, 2007).    

The current research is conducted in Pakistan and targeted organizations, services and manufacturing. According to Voon et al. (2014), TQM components to enhance the quality of any organization includes the involvement of all employees, improvement in a continuous way, training continuously, empowerment of the employees, teamwork, commitment of top management, management in a democratic way, focus on customer satisfaction and culture of quality. Talib et al. (2013), reviewing TQM application in Indian service organizations, focus on features such as “top management commitment, customer focus, training and education, continuous improvement and innovation, supplier management, employee involvement, information and analysis, process management, quality systems, benchmarking, quality culture, human resource management, strategic planning, employee encouragement, teamwork, communication, and product and service design.” In 2012 Lam et al. took their study in Malaysia and focused on the service industry. They focused on six elements from TQM as named “top management leadership, strategic planning, process management, information and analysis, customer focus and human resource management. Delic et al. (2014) researched ISO 9001 certification related to the service sector in Serbian organizations. They took the following factors: “leadership, quality planning, employee management, learning, supplier management, customer focus, process management and continuous improvement.”

In 2007 Gryna et al. researched the combined manufacturing and service sector and discussed the obtained results of their study based on the “Profit Impact of Market Strategies database.” Moreover, many other authors researched services and manufacturing organization collectively; some of them are mentioned as follow: Bou-Llusaretal. (2009), Tarietal (2007) and Garcı’ a-Bernaland Ramı’ rez-Aleso ‘n (2015) all proceed with their research in Spain.

The recent research on TQM practices and related performance outcomes is supported by the empirical evidence collected from the manufacturing organizations involved in textile production. This research was conducted by Dr. Muhammad Shafiq et al. in 2017. They took the TQM elements “Leadership, strategy, partnership and resources, process and people.”

Whenever TQM researchers analyzed the TQM about the performance outcomes, every researcher took performance outcomes in their views like some researchers discussed the performance outcome in terms of operating level only as Samson and Terziovski (1999) did; on the other hand, Hendricks and Singhal (2001) or York and Miree (2004) only considered performance outcome as financial manner. Some writers discussed the organizational performance outcomes from the implementation of quality system in three phases; from them, Kaynak (2003) is mentioned who researched and validated the three angles of organizational performance outcome that are TQM related: “financial and market performance, quality performance and inventory management performance.” Moreover, Calvo-Mora et al. (2014) stated that the results from TQM practices are generally measured in three types: “quality, operational and economic-financial.”  

In contrast, Mensah et al. (2012) indicated that organizational performance outcomes mostly affected by TQM factors are divided into four major types: “financial and market performance, organizational effectiveness, customer satisfaction and employee satisfaction.” Moreover, Bolboli and Reiche (2013) extended the performance outcomes from the TQM, including “reduced operational cost, higher productivity, efficiency and growth, increased market share and profits, and innovation development.” Shafiq et al. (2017) categorized the performance outcomes from the TQM practices into two major divisions: financial and non-financial. 

Concerning the performance outcomes dimensions of any organization, some researchers evaluated the operational and financial outcomes influenced by TQM practices (Brah et at., 2000; Kaynak, 2003). Customer satisfaction is another dimension related to performance outcomes and has been evaluated by many authors (Agus et al., 2000; Brah et al., 2002; Sit et al., 2009).In other researchers, service or product quality performance is considered a performance outcome (Brah & Lim, 2006; Hasan & Kerr, 2003; Kumar et al., 2009).

 While Karimi et al. (2014) studied the classic combination of TQM performance outcomes related to service organizations: “product and service outcomes, customer-focused outcomes, financial and market outcomes, human resource outcomes, organizational effectiveness outcomes and social responsibility outcomes.” In the current research, the performance outcomes affected by the TQM practices are as follows: “financial performance, customer satisfaction, product/service quality performance and operational performance.”

Individual context (Employee job satisfaction)

Individual context refers to the individual employee in an organization Satisfaction from a job is described as the progressive influence in the direction of engagement in any organization (Mueller & McCloskey, 1990). Moreover, this description can be evaluated relatively on how much the job encounters the employee’s “needs” and wants. And as related to the research perspective, employee job satisfaction was assessed by considering worldwide features and multiple faces like “salary, career progression, supervisor, etc. ” (Fisher, 2003).

Fisher (2003) and Petty et al. (1984) stated that job satisfaction had played a prominent part in research related to management, specifically related to the “job satisfaction-job performance relationship.” Weiss and Copranzano (1996) indicated that the research related to “job satisfaction and job performance” is discussed as a “holy grill” in the study of the behavior of an organization.

Employee satisfaction will help them to do work efficiently and is the foundation of many theories related to performance, leadership, design of a job and reward (Shipton et al. 2006). Fisher (2003) claimed that untrained people and managers should trust the “happy–productive worker hypothesis.”

Researchers would have stressed the link between performance and employee job satisfaction, irrespective of success; moreover, the character stays the most noticeable variable in business science studies and the organization’s behavior (Spagnoli et al., 2012). It is an essential point of view for managers, workers, and researchers. Moreover, this is looking more suitable for researchers who are attracted towards the subjective evaluation concerning work situations, for researchers and also managers concerning outcomes from organizations, for example (commitment towards organization and behavior related to extra-role) for employees, Employee satisfaction about the job had associations with independent comfort (Judge and Hulin, 1993), satisfaction about life (Judge and Watanabe, 1993); moreover, this was expected to have essential suggestions because it has a usual concept that covers all occupations, jobs, context and work (Spagnoli et al., 2012). In addition, job satisfaction can be defined as a behavior reflected by the whole attitude toward life or satisfaction from life (Spagnoli et al., 2012).

The above literature shows the importance of employee job satisfaction with the performance outcome, and this employee job satisfaction was only tested in phycology but not in TQM studies; this study work will show the correlation between employee job satisfaction and performance outcomes of the organization, but it is interesting also the first time this is taken into consideration as a moderator between the TQM practices and performance outcomes of the organization. 

Organizational context (Industry type, TQM age, Organization size)

Industry type

Organization type is relevant for analysis, though it is demonstrated that this philosophy’s principles can be implemented through every organization claimed by the leaders in TQM; in contrast, it is not valid, and they only constructed these assumptions relying on their manufacturing organizational knowledge (Woon, 2000). It is also noticeable that TQM principles application in the service sector may be needed an altered method. The Woon defines manufacturing organizations as those mainly involved in producing tangible products, moreover, dedicate their operations to creating these products. On the other hand, service organizations invest in intangible products. 

The main difference between the organizations involved in services and manufacturing is related to the intangibility of end products, which creates more difficulty in the service sector to analyze consumer satisfaction. In reference, a close supplier relationship can influence a manufacturing organization’s performance; however, in service organizations, it has little influence (Thomas, 1995). In 2000 Woon claimed that a lot of authors had characterized service organizations differently as compared to manufacturing organizations: “(a) intangibility, (b) inseparability, (c) heterogeneity, and (d) perishability.” The nature of the service organizations is intangible, and it is noticed that services are produced and used at the same place; it is a fact referred to in the service sector; moreover, perishability point out the inventory of the services is not possible.

  The literature mentioned earlier shows the importance of the type of organization. It is also noticed that many researchers find that TQM implementation refers to manufacturing organizations, not service organizations. So, the basis for this research work is found, and it is tried to identify the relationship between organization type and performance outcomes and introduce the organization as a moderator in the relationship between TQM practices and performance outcomes.  

TQM age

Brah et al. (2000) claimed that the assessment of TQM age effect on the relationship between TQM practices and performance outcomes has diversified support. AS the TQM age goes longer, organizations gain up gradation effect on benchmarking, improvement in process end consumer focus, and final goods performance empowerment. Still, it’s not the organization’s final performance Powell (1995). The TQM success is more dependent on the implementation of TQM practices rather than the age of the TQM practices. So, it is suggested that several methods play roles in the implementation of TQM levels that influence the performance outcomes of Brah et al. (2000). Saravanan and Rao (2007) claimed that organizations having three years of successful application of TQM practices in their organizations have been enjoying more performance related to operational and also happy with better quality.

As the TQM age of the organization grows, the organization can understand the consumer needs and the change in the requirements in a better way (Khanna et al. 2004). The organizations can be categorized based on their learning momentum; the initial efforts with TQM must be consumed in forming a system design that helps the organization learn. Further, a significant time frame must be given at the next level of the quality structure to identify and conclude the causes contributing to system performance variation (Anderson et al. 1995).   

The current research work uses the principles related to the learning perspective of the organization in terms of TQM age that are discussed in the literature review to construct the hypothesis associated with the correlation between the TQM age and the performance outcome of the organization and also introduce TQM age as a moderator in the correlation of TQM practices and performance outcomes of the organization.  

Organization size

The variable that researchers used to differentiate the large organization from the small organization is based on the employee strength in the organization. Madu, Kuei, & Lin (1995); Powell (1995); Ghobadian & Gallear (1996); Yusof & Aspinwall (2000); these all researchers are aligned at numbers that make a difference, varying from 250 to 500 workers. There are four stages in the distribution of organizations into sizes (a) small organizations having less than 100 employees, (b) small to medium organizations having employees between 100 to 250, (c) medium to large organizations having employees greater than 250 and less than 500 (d) large organizations having employees greater than 500 employees.

There is a structural difference between small and large organizations, and it might affect the organization’s TQM philosophy implementation and planning. Small organizations could not operate according to the big organization concepts because there is a difference between both organizations according to the following elements: structure, implementation procedure of policies and the usage of resources (Ghobadian & Gallear, 1996). 

Organization size may moderate the correlation between the performance outcomes and TQM practices because small organizations operate on flatter configurations which are faster and have an informal communication channel that enables the quality system elements: named “process quality management and design management” that is more powerful than the large organizations (McAdam and Mc Keown, 1999). According to Germain and Spears (1999); and Shah and Ward (2003), a larger market share belongs to the large organizations having more capital and being an expert in TQM.  

On behalf of these two distinguished drivers, the correlation between TQM practices and the organization’s performance outcomes is disturbed. Shah and Ward (2003) indicated that plant size hurts the correlation between TQM practices and performance outcomes. Sila (2007) found that organization size does not affect the correlation between TQM practices and performance outcomes. The researcher constructs the hypotheses below because mixed evidence is located in the literature review related to the organization’s size.  

Hypothesis formation

The literature review discussed above is used to construct the independent, dependent, and moderators. Research work is found on the TQM practices and performance outcomes in Pakistan by Dr. Muhammad Shafiq, and he focused only on textile industries in Pakistan. Still, the current study focuses on Pakistan’s manufacturing and services organizations. He also mentioned this gap in his research; moreover, the literature review shows a lot of gaps in the moderators introduced in this research work. Regarding these gaps, the hypotheses below are presented regarding current research work.

H1: Industry type correlates with organizational performance outcomes.

H2: TQM age correlates with organizational performance outcomes.

H3:  Organization size correlates with organizational performance outcomes.

H4: Total quality management (TQM) practices enhance the organization’s performance outcomes.

H5:  Employee job satisfaction correlates with organizational performance outcomes.

H: 6 TQM age moderates the relationship between TQM practices and organizational performance outcomes.

H7: Employee job satisfaction moderates the relationship between TQM practices and organizational performance outcomes.

H8: organization type moderates the relationship between TQM practices and organizational performance outcomes.

H9: Organizational size moderates the relationship between TQM practices and organizational performance outcomes.

Conceptual framework

Methodology

Research strategy

Saunders et al. (2007) defined research strategy as a “general plan of how the researcher will go about answering the research question(s).” Moreover, they introduced six types of research strategy: “experiment; action research; survey; grounded theory; case study; and ethnography.” A survey strategy is employed in this research work. Individuals are focused on gathering data for a survey strategy. This data may be described as the opinion, lifestyle, belief or behavior of the individual who participated in the survey. Moreover, this data may be related to age, education, gender or salary; on the other hand, the organization’s related data, such as organization size or revenue (Hair et al., 2003). Saunders et al. (2007) claimed that data should be collected from a healthy population and structured in a survey strategy.

Population and Respondent

A research population is the individuals, organizations, events, or goods that can help the researcher (Cavana et al., 2001; Collis and Hussey, 2003). This research is conducted in Pakistani organizations in both sectors, manufacturing and services and 300 organizations are selected for the population. The industries listed on Lahore and Karachi stock exchanges are taken as sample sizes. Moreover, asking questions about ISO or Pakistan standards further restricts this sample size.

In this research, the targeted respondents are top managers, middle managers, and front-line managers who gather data from the organization using a self-administrated questionnaire. In the below reasons are mentioned to do so.

The top management has sound knowledge regarding their organization’s business and is involved in the research as a respondent. The authentic data collection sources are broad views, strong opinions and valuable knowledge (Sekaran, 2003).     

Middle managers from any organization are a more powerful group in the organization, and they are the source of the success of TQM implementation; their contribution in terms of commitment and support can help the organization to maintain TQM practices fruitfully. They have sound knowledge of all organization activities and are taken as respondents in this research.

Front-line managers are also involved, as they are the persons in any organization who knows better than anyone else about the problems involved in TQM practices performing and other aspects related to this research study. They can answer all the questions related to this research work. 

Data Collection instrument

Sekaran (2003) defined a questionnaire as “a reformulated written set of questions to which respondents record their answers, usually within rather closely defined alternatives.” The well-reputed method for data collection in business or management studies is known as a questionnaire (Ghauri et al. 1995). Moreover, the method that contains a questionnaire is the most suitable structure for collecting information from the organization’s managers and staff (Bryman, 2004).

Questionnaires are divided into two types, interviewed-administrated or self-administrated. Self-administrated questionnaires are delivered and collected from respondents by using three methods, number one, make an online questionnaire and send the link to the respondent, and the response will be collected automatically in your e-mail account; number two, mail or post the questionnaire to the respondent, and he will do same after completing the questionnaire, thirdly visit the respondent and hand over the questionnaire to the respondent and then collect the questionnaire after some days by hand. Respondents fill out the self-administrated questionnaires themselves. To collect data using an interview-administrated questionnaire, a researcher must conduct a structured interview or telephone conversation with the respondent. The questionnaire is filled on behalf of the answers given by respondents. Still, there is a problem associated with the interviewer-administrated questionnaire finding an appropriate time that suits the respondent (Saunders et al. 2007).

Oppenheim (1992) stated that the selection of questionnaire forms can be disturbed for three reasons: “research strategy; time is taken to complete collection; size of sample and likely response rate characteristics of respondents.” In this research, a self-administered questionnaire is employed utilizing a data collection instrument. 

Data analysis Applied

Selecting a suitable statistical research method depends on the nature of collected data and the research objectives with the technique used. Hence, the statistical methods ideal for the study framework and research questions are used in the current research study. Firstly, descriptive data analysis and reliability tests are used as a statistical method to identify the collected data’s reliability and provide respondents summary in terms of characteristics of demography, Cronbach’s alpha, frequencies, means and standard deviations are reported based on data collection from respondents. Sekran (2003) explained reliability related to measurement as the degree of error-free or without biasness, so it confirms measurement consistency throughout the scale of time and other things related to the instrument. Moreover, he claimed that descriptive statistics are said to be exploratory statistics. It includes converting collected data in raw form into a specified format, which will then deliver information that will help define factors related to the condition.

Correlation in the form of Pearson is also used as a statistical technique. This statistical technique is used to specify the direction and strength between the connections of internal variable pairs (Cohen and Cohen, 1983; Bryman and Cramer, 2001). The rank related to the analysis of Pearson’s correlation fluctuates in the values of +1 to -1; hence the relationship between two elements varies between +1 to -1 then is said to be the finest correlation (Bryman and Cramer, 2001). The criterion used for tolerant differences for statistically significant remains in the range of 0.01 to 0.05. Cohen and Holliday (1982) explained the correlations as follows: “0.19 and below is very low; 0.20 to 0.39 is low; 0.40 to 0.69 is modest; 0.70 to 0.89 is high; 0.90 to 1 is very high”.   

The statistical method that is used finally in this research study is known as the multiple regression technique. Hair et al. (1998) recommended that to analyze the correlation of a “single dependent variable” with the “continuous independent variables,” the statistical technique that can be employed is “multiple regression analysis”; moreover, the fundamental purpose for the usage of multiple regression analysis is to utilize the numerous independent variables to estimate the single dependent variable, which researcher selected. Hence to test the hypothesis that is formed in chapter 2, multiple regression analysis is used as a statistical technique, and the following values are reported for the easiness of the reader: beta, t, sig, R², R² change and sig F change.

Results of structural Model

Reliability

The researcher introduced several measures to make an error-free data collection method and instrument bias reduction. The researcher conducted discussions with participants to ensure that the respondents must complete the questionnaire. The questionnaire’s different parts show the various issues of the research work. The Cronbach’s alpha values related to the dependent and independent variables are shown in table 4.1.    

Table 4.1 variable’s Cronbach’s alpha results

Descriptive statistics

The options given in the questionnaire are based on the Likert scale having five points, and are named as: “1= strongly disagree, 2= disagree, 3= neither agree nor disagree, 4= agree, 5= strongly agree”. Moreover, the respondents are communicated through a statement that they can mark any option according to their opinion that is close to their belief. They are asked to report best in their experience related to TQM practices, employee job satisfaction and performance outcomes concerning competitors. The Likert scale average is assumed to be three as ((1+2+3+4+5)/5), so an average value greater than 3 will be considered statement agreement. In contrast, an average of less than 3 will lead to disagreement with the statement.

Table 4.2 Descriptive statistics of variables

Table 4.2 displays the TQM practices adoption degree in Pakistani organizations’ services and manufacturing at a moderately high rank. Employees are evidently and openly satisfied with their jobs. In contrast, in organizational performance outcomes concerning their competitors, 4.0213 is the highest mean associated with performance outcomes, which shows that organization’s performance outcomes are extraordinary.

Correlation

The rank of correlation between the dependent variable (Performance outcomes) and independent variables (TQM practices, employee job satisfaction, TQM age, firm size and industry type) shows the fitness of the model. After that, Pearson’s correlation analysis is used and the degree of relationship between whole independent variables and dependent variable, performance outcomes, is assessed and reported in table 4.3.

Table 4.3 Correlation

The values gained from Pearson’s correlation technique are shown in table 4.3; the table shows a correlation between all variable pairs. After that, the significance of the 2-tailed for every relationship is revealed. Table 4.3 indicate the number of respondents (N=100) who contributed to the correlation; moreover, it also gives the value of the relationship between independent variables (TQM practices, employee job satisfaction, TQM age, firm size and industry type) and the dependent variable (performance outcomes).

The dependent variable (performance outcomes) is positively correlated with all independent variables with a 1% significance level except for organization type, which showed the result of Pearson’s correlation in table 4.6.

TQM practices (66.6%), employee job satisfaction (58.8%) and TQM age (42.6%). These independent variables positively correlate with the dependent variable (performance outcomes) at a moderate level. Organization size (39.4%) is correlated with performance outcomes at a small but definite level. Still, organization type (-.7%) negatively correlates with performance outcomes in a Slight, almost negligible (refer to table 4.5). 

Regression analysis

This research is conducted to check the effect of TQM practices and various organizational (size, type and TQM) and individual (employee job satisfaction) factors on performance outcomes. This relationship was tested by hierarchical regression analysis. For this purpose following regression equation is used.

The above equation shows the whole study model. Moreover, this equation briefly described below shows all the independent variables and their moderate effects.

Where Y stands for dependent variable (performance outcomes), “a” is a constant, β1 shows the regression constant for TQM practice, x1 stands for independent variable (TQM practices), β2 is the regression constant for industry type, x2 indicates the second independent variable industry type, β3 displays the regression constant for TQM age, x3 represents the third independent variable TQM age, β4 symbolizes  the regression constant for organization size, x4 indicates the fourth independent variable organization size, β5 regression constant for employee job satisfaction and x5 shows the final independent variable employee job satisfaction whereas β1β2 is the  moderator regression constant for the product x1x2 independent variable TQM practices and moderator variable TQM age respectively, β1β3 indicates the regression constant for the product of independent variable x1 TQM practices and x3 moderator employee job satisfaction (x1x3), β1β4 shows the regression constant for independent variable TQM practices (x1) and moderator industry type (x4) and the final regression constant is β1β5 stands for the product of independent variable TQM practices (x1) and moderator organization size (x5).

  Table 4.4 Regression results

Hypothesis testing

H1: organization type correlates with organizational performance outcomes

From empirical results (table 4.4), it is shown that the significance level for industry type is more than 0.1 and less than 0.5, which tells that the industry type and performance outcome’s correlation is not significant. Whereas β2 (from the equation above mentioned) value for industry type is -.072 and the t value is -.847, which shows that the manufacturing industries’ performance outcomes are better than the services sector industries while both implement the TQM practices as 1 is given to the manufacturing sector and 2 is assigned to the services sector during analysis in SPSS. Based on this analysis, the H1 is rejected.

H2: TQM age correlates with organizational performance outcomes.

The empirical results (table 4.4) of TQM age with the performance outcomes also showed no importance as the significance level, for it is more than 0.5, which communicates that the relationship between the independent variable (TQM age) and the dependent variable (performance outcomes) is weak. While β3 (from the abovementioned equation) value for TQM age is .051, and the t value for TQM age is .542. Based on these results, the H2 is rejected.

H3:  Organization size correlates with organizational performance outcomes.

The third independent variable is tested to explore the correlation between organization size and the performance outcomes of an organization.

The statistical results (table 4.4) indicate that the organization size and performance outcomes do not correlate. Moreover, the significance level of the organization is more than the o.1, β4 (from the equation above mentioned) value for it is .096, and the t value is 1.125. Based on these results, the H3 is rejected.

H4: Total quality management (TQM) practices enhance performance outcomes.

The empirical data (table 4.4) indicates that the significance level for TQM practices with performance outcomes is less than 0.01, which shows that this independent variable has a positive and strong correlation with the performance outcomes, β1 (from the equation above mentioned) value for this factor is .475 and t value is 4.762. The regression gives an R2 change value of 44.3%, which is also significant. Moreover, the results showed that the +1 increase in standard deviation 0.475 times would enhance the organization’s performance outcomes. Based on this discussion, H4 is firmly accepted.

H5:  Employee job satisfaction correlates with organizational performance outcomes.

The regression analysis results (table 4.4) show that employee job satisfaction and performance outcomes have a positive and strong relationship; the significance level for this expression is less than 0.01, β5 (from the abovementioned equation) value is ..293 and the t value for it is 3.222. Moreover, the R2 change for this factor is 44.3% which tells that the introduction of employee job satisfaction in the analysis shows a significant variation. Additionally, the result indicates that the +1 increase in standard deviation 0.293 times will enhance the performance outcomes of an organization. Based on this discussion, H5 is also firmly accepted.

H: 6 TQM age moderates the relationship between TQM practices and organizational performance outcomes.

The intermediate multiple regression analysis results, table 4.4, give the significance level value is less than 0.1, β1β2 (from the equation above mentioned) regression constant value for this moderator is 1.018, t value for it, is 1.766 and R2 change is 1.5% which communicates that the TQM age week but definite moderate the relationship of TQM practices and the performance outcomes. Based on these results, the H6 is accepted.

H7: Employee job satisfaction moderates the relationship between TQM practices and organizational performance outcomes.

The intermediate multiple regression analysis results, table 4.4, give the significance level value is less than 0.01, β1β3 (from the equation mentioned above), the regression constant for this factor is .778, and the t value is 4.498. Moreover, R2 change is 3.4%, demonstrating that employee job satisfaction moderates the relationship between TQM practices and performance outcomes. Moreover, high TQM practices implementation will produce the organization’s high performance, resulting in increased employee job satisfaction. Based on these results, the H7 is accepted.

H8: organization type moderates the relationship between TQM practices and organizational performance outcomes.

The intermediate multiple regression analysis results, table 4.4, give the significance level value is less than 0.01, the value of regression constant (β1β4 from the equation mentioned above) is -1.708, the t value is -2.687, and the R2 change is 3.3% which demonstrate that industry type moderate the correlation between TQM practices and performance outcomes. The negative sign with β and t value indicates that applying TQM practices in the manufacturing sector gives higher performance outcomes than in the service sector. Based on this discussion, H8 is accepted.

H9: Organizational size moderates the relationship between TQM practices and organizational performance outcomes.

The intermediate multiple regression analysis results, table 4.4, give the significance level value is more significant than 0.1, the regression constant (β1β5 from the abovementioned equation) is -.715, and the t value is -1.462. Moreover, R2 change is 1% which determines that organization size does not moderate the relationship between TQM practices and performance outcomes. Based on this discussion, H9 is rejected.

Discussion on results and findings

How do TQM practices enhance performance outcomes

These outcomes are grounded on the questionnaire results that the “top management commitment by setting the quality objectives for the managers and employees” and similarly by showing their participation in quality improvement efforts with a score of 4.21 and 4.20 (Likert scale 1-5) respectively moreover “Top management sets the quality issues in the agenda of the manager’s meetings” is the factor of top management commitment. It scored 4.16, indicating the top management’s commitment to the quality culture to enhance the organization’s performance outcomes. “the employee’s participation in decision making and setting quality objectives,” and “Top management gives the authority to the employee to manage the quality problems” both have the minimum score of 3.25 and 3.27 respectively. Furthermore, the questionnaire results show that all statements from a questionnaire placed in the TQM section give a value greater than 3, which shows the midpoint of the Likert scale divided into 5 points; this displays that implementation of TQM practices in Pakistani organizations is suitable.

Similarly, top management and workers responsible for the inner business setting and the customers from outside the organization are responsible for launching and sustaining the TQM practices in the organization. In other words, it can be said that the focus point of TQM practices management is based on the organization’s whole employees, from top to bottom. These practices must be centered on them, e.g., information and analysis, planning strategically, continuous improvement, supplier management, education and development, and processes founded on employees’ and top management’s capability, power, knowledge, and expertise. Likewise, Lau and Tang (2009) supported that commitment of whole employees from the organization leads to attaining and sustaining brilliance in the business Consumer must have importance and must be focused on managing the organization system. The TQM practices must show the reputation to the consumer to get his attention towards the organization. Furthermore, the feature related to the customer’s “needs, desires, requirements, and expectations” must be found by the organization’s nominated persons. All the employees must plan to fulfill these features for customer satisfaction.

The current research work findings argued overhead are in line with the findings of the study by Shafiq et al. (2017), O’Neill et al. (2016) and Bou-Llusar et al. (2009). They argued that TQM practices strongly correlate with the organization’s performance outcomes. Furthermore, Jaca and Psomas (2015) and Calvo-Mora et al. (2014) indicated that if any organization wants to become perfect in its business, then it’s all departments must prove their contribution and must prove that they are familiar with the concept of continuous improvement, learning and quality culture. This collection of TQM factors exposed through the current research resembles social factors in the literature on TQM. In the same way, Alvarez and Za’ rraga-Rodrı ‘guez (2013) interviewed the winner of the “Basque Country Quality award” and diagnosed the features that are based on human management, named: “leadership, teamwork, communication, and involvement” are the base for the organizational culture belief towards quality that guides the effective organizational information management. The significance of human traits in founding a strong TQM practices model is also established by Tarı’ (2005), who concluded a research work on ISO 9001 certified organizations in Spain. He determines that organizations that want to move outside of ISO 9001 on the road to TQM should increase human traits if they’re going to improve their competitiveness.

How does organizational context (organization type, TQM age and organization size) moderate the relationship between TQM practices and performance outcomes?

 How does organizational context (organization type, TQM age and organization size) relate to performance outcomes?

Organization type

The results show no correlation between the organization type and performance outcomes, but the organization type is a moderator in the correlation of TQM practices and performance outcomes. The study indicated that manufacturing organizations perform TQM practices better and get more performance outcomes than service organizations.

The relationship between organization type and performance outcomes was not explored before. This research is the first to explore the correlation between industry type and performance outcomes. But on the other hand, the relationship between industry type and TQM practices is analyzed by different researchers, and it is also explored how industry type moderates the relationship between TQM practices and performance outcomes. Huq and Stolen (1998), Woon (2000), and Ricardo M. Pino (2008) explored the relationship between TQM practices and organization type. They considered different TQM principles and their implementation in the services and manufacturing sectors.

In contrast, the moderator effect of organization type on the relationship between TQM practices and performance outcomes is significant, as TQM practices in the manufacturing industry enhance performance outcomes compared to the service industry. Although different scholars perform research work on different industry types like discrete industry and process industries Schmenner (1986); Funk (1995); Swamidass and Kotha (1998); Shah and ward (2003); and Jayaram et al. (2010), organization types of this research is not similar to the work of old researchers, and hence results are also different from previous research.

TQM age

This research results show that TQM age has no correlation with performance outcomes but moderates the relationship between TQM practices and performance outcomes. This research expresses that the implementation duration of TQM practices in any organization gives more effective and efficient performance outcomes than was purposed for this research.

This research is the first to explore the correlation between TQM age and performance outcomes. It is noticed that the implementation duration of TQM practices cannot assess an organization’s performance outcomes. TQM age as a moderator between the TQM practices and performance outcomes correlation is explored by J. Jayaram et al. (2010). The result of this research work is aligned with J. Jayaram et al. (2010). He suggested that industries with a wide duration of TQM application focus more on implementing top management commitment in routine programs that deliver better process performance and product quality. He proposed that his research results initiated new discussion into the organizational-learning theory. His outcomes related to TQM age explain benefits in terms of the duration of TQM practices in the organization in both senses, long and short time duration. Moreover, this statement is only about the organization-learning perspective and does not give any idea about TQM’s age as a moderator.

Organization size

To explore the relationship between organization size and performance outcomes

To analyze the moderating effect of organization size on the correlation of TQM practices and performance outcomes.

This research work’s results indicate that organization size has no relationship with performance outcomes and no moderating effect on the correlation between TQM practices and performance outcomes. This research work is the first one in which organization size is correlated with the whole organizational performance outcome. Some researchers explored organizational size with customer satisfaction or other performance outcomes like operational. Wiele and Brown (1998) stated that large organizations could not enhance their quality of services, goods and processes except if their suppliers also produce a greater quality development.

On the other hand, Ahire et al. (1996) indicated that the larger organizations that implement TQM programs build more thoroughly; they have enhanced product quality compared to those that have not. Terziovski and Samson (2000) determined that larger organizations achieve superior profits from TQM than small organizations. Brah et al. (2002, pp. 357-377) also selected the same outcomes, and they stated that:  

“The success and the eventual benefits of TQM depend on organizational context, including the firm’s size, the nature of its products and industry characteristics…..Larger firms achieve better quality performance them smaller firms.”

Sousa (2003) and J.Jayaram et al. (2010) also found that customer focus affects all outcomes; moreover, small organizations enjoy better outcomes as compared to large organizations, but their marginal benefits are agility as compared to the large organizations, but these outcomes are not matching with the present study work results. This means that the relationship between performance outcomes and the organization size and the moderating effect of the organization size on the relationship between TQM practices and performance outcomes is still problematic and debatable.

How do individual contexts (Employee satisfaction) relate to performance outcomes?

How do individual contexts (Employee job satisfaction) moderate the relationship between TQM practices and performance outcomes?

Employee job satisfaction

Employee job satisfaction is difficult to define because many factors collectively disturb an employee’s satisfaction. Due to this reason, researchers provide inconsistent results related to the correlation of employee job satisfaction with any other concept. Notably, the time when they were involved in exploring the correlation of organizational performance outcomes with employee job satisfaction.

In this study, employee job satisfaction is separate from the internal customer (employee) taken in TQM practices. Moreover, employee job satisfaction is not tested in TQM studies, but in other fields like economics and psychological studies, employee job satisfaction is explored. The participants consider the value of employee job satisfaction in Pakistani organizations as a severe factor for the enhancement of the organizational performance outcomes and the relationship between TQM practices and performance outcomes of the organizations. moreover, the respondents gave importance to all aspects of employee job satisfaction equally. Many middle and front-line managers from Pakistani organizations know the importance of employee job satisfaction in improving performance outcomes.

The results of this research work are aligned with Ostroff, 1992; Huselid, 1995; Ryan et al., 1996; Chan et al., 2000; Daily & Near, 2000; Koys, 2001; Ellinger et al., 2002; Harter et al., 2002; Evans & Jack, 2003; Gould-Williams, 2003; Schneider et al., 2003; Mohr & Puck, 2007; Zohir, 2007; and Chandrasekar, 2011; These researchers explored the relation of employee job satisfaction and organizational performance outcomes in both ways, and they concluded that correlation of employee job satisfaction with organization performance outcomes was more influential as compared to the correlation between the organizational performance outcomes with employee job satisfaction. In other words, it can be said that organizational performance outcomes can be concluded powerfully by employee job satisfaction rather than employee job satisfaction defined by organizational performance outcomes. In support of the current statement, this research results indicated that employee job satisfaction influences organizational performance outcomes. On the other hand, employee job satisfaction as a moderator in the correlation of TQM practices and performance outcomes was not tested before. This research is the first in which employee job satisfaction is tested as a moderator.

Conclusion

Considering the earlier research work carried out worldwide and encouraged by the literature gap and the recommendations for upcoming research made by professionals in the field, the current study donates to the existing literature by exploring TQM practices in the manufacturing and service sector of Pakistani organizations. More categorically, the study devotes to the literature by defining specific TQM components on which any organization can support their TQM approach. These components, which are directed towards the human aspect of a company (top management team, employees and customers), are the quality practices of top management, employee quality management, process management, employee knowledge and education, and customer focus.

The TQM theory is interpreted to find the basic configuration of the TQM practices applied by Pakistani organizations. This results in the TQM concept being more simply understood and applied in the manufacturing and services business environment. In doing so, a means is also provided to quality-mature organizations to sustain a quality management system that aligns with the TQM viewpoint. Likewise, non-quality-mature organizations are delivered with a tool for quickly changing their old-style management structure to TQM. Furthermore, in defining the fundamental structure of the most shaped performance outcomes, a strong view is delivered to manufacturing and service organizations concerning the interests derived through executing TQM practices. Awareness of what is to be hunted from TQM practices can encourage manufacturing and service organizations as they go down the path to business brilliance.

This research work results have applied value to managers. First of all, the research projected model offers a valuable audit instrument to ensure whether organizations are missing in the initial ancestor conditions of constructing the authentic quality culture or whether the weakness lies beyond the cultural features in the plan of the quality method. For example, organizations can use this research work’s operationalization of measures for top management commitment, employee knowledge and education and customer focus levels to understand if there are breaks that must be filled. Likewise, for those organizations beyond the first step, an inspection of the quality organism design would expose weaknesses in system features such as process management, design management, or the usage of quality information data. Secondly, executives can benchmark their TQM source deployment stages with competitors on process design constructs. For example, is the organization spending abundant on forming distinctive quality information databases that will offer information that timely pointer decision-making and proactive thinking? Along this track, executives might ask if their quality information database is used on a stationary basis purely to produce reports of previous defect performance or if the database is used to make new foolproof procedures that prevent future faults from happening in the first place. Key organizational contextual features like resemblance in size, TQM duration and organization type should be examined to generate a comparable outline of similarity in contexts to determine a benchmark with competitors. This should stop an organization from blindly replicating success stories from a completely different context.

This research study studies the relationship between employee job satisfaction & organizational performance outcomes and employee job satisfaction moderating effect on the relationship between TQM practices and organizational performance outcomes. Employee job satisfaction in policy & support, supervision, pay, training & development, and teamwork is tested. Fundamentally, this research proposes that employee job satisfaction is one of the most significant determinants of organizational performance outcomes and that the relationship between TQM practices and performance outcomes affects employee job satisfaction. So, to enhance performance outcomes, employees must be satisfied with their jobs.