The relationship between total quality management and quality performance in the service industry: a theoretical model

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1 MultiCraft International Journal of Business, Management and Social Sciences Vol. 1, No. 1, 2010, pp INTERNATIONAL JOURNAL OF BUSINESS, MANAGEMENT AND SOCIAL SCIENCES MultiCraft Limited. All rights reserved The relationship between total quality management and quality performance in the service industry: a theoretical model Faisal Talib 1*, Zillur Rahman 2, M.N. Qureshi 3 1 Mechanical Engineering Section, University Polytechnic, F/O Engineering and Technology, Aligarh Muslim University, Aligarh, U.P., INDIA 2 Department of Management Studies, Indian Institute of Technology, Roorkee, U.Kh., INDIA 3 Department of Mechanical Engineering, Faculty of Technology and Engineering, M.S. University of Baroda, Vadodara, Gujarat, INDIA * Corresponding Author: ftalib77@yahoo.co.in, Tel , Fax , , Abstract Total quality management (TQM) has been widely considered as the strategic, tactical and operational tool in the quality management research field. It is one of the most applied and well accepted approaches for business excellence besides Continuous Quality Improvement (CQI), Six Sigma, Just-in-Time (JIT), and Supply Chain Management (SCM) approaches. There is a great enthusiasm among manufacturing and service industries in adopting and implementing this strategy in order to maintain their sustainable competitive advantage. The aim of this study is to develop and propose the conceptual framework and research model of TQM implementation in relation to company performance particularly in context with the Indian service companies. It examines the relationships between TQM and company s performance by measuring the quality performance as performance indicator. A comprehensive review of literature on TQM and quality performance was carried out to accomplish the objectives of this study and a research model and hypotheses were generated. Two research questions and 34 hypotheses were proposed to re-validate the TQM practices. The adoption of such a theoretical model on TQM and company s quality performance would help managers, decision makers, and practitioners of TQM in better understanding of the TQM practices and to focus on the identified practices while implementing TQM in their companies. Further, the scope for future study is to test and validate the theoretical model by collecting the primary data from the Indian service companies and using Structural Equation Modeling (SEM) approach for hypotheses testing. Keywords: total quality management (TQM); quality performance; service industry; company performance; performance indicator. 1. Introduction Over the past two decades, total quality management (TQM) has become most widely used management acronym and is considered as the buzz word in the management practices. It has been well accepted by managers and quality practitioners as a change management quality approach (Arumugam et al., 2009). It plays a vital role in the development of management practices (Prajogo and Sohal, 2003; Hoang et al., 2006). Many researchers asserted TQM as an approach to improve effectiveness, flexibility, and competitiveness of a business to meet customers requirements (Oakland, 1993), as the source of sustainable competitive advantage for business organizations (Terziovski, 2006), as a source of attaining excellence, creating a right first-time attitude, acquiring efficient business solutions, delighting customers and suppliers etc. (Mohanty and Behera, 1996) and above all as a source of enhancing organizational performance through continuous improvement in organization s activities (Claver-Cortes et al., 2008; Teh et al., 2009). In recent decades, the level of awareness towards TQM has increased drastically and has gone to its peak to become a well-established field of research (Arumugam et al., 2008; Yusof and Aspinwall, 1999) due to intense global competition, increasing consumer consciousness of quality, rapid technology transfer, and towards achieving world-class status. In response to these challenges and to facilitate the organizations in achieving higher quality levels, many companies are implementing TQM approach and quality initiatives for achieving sustainable competitive advantage and enhanced company performance. Past studies on the relationships between TQM practices and quality performance have showed significant and positive results (Arumugam et al., 2008; Prajogo and Sohal, 2003; 2004; Terziovski and Samson, 1999; Ahire et al., 1996; Flynn

2 114 et al., 1994; 1995). Though there is considerable literature available that have evolved to examine the link between TQM and quality performance across the globe, but still little is known about the effect of TQM practices on company s quality performance from India, particularly within the context of Indian service industry. The Indian service industry represents about 57.3 percent of India s Gross Domestic Product (GDP) and therefore, considered to be one of the vital components of its economy (i 3, CMIE, 2010). Thus, studying the relationships between TQM and quality performance is necessary as it provides a theoretical as well as a practical platform to the service industries in the efforts to gain sustainable competitive advantage. In order to bridge the gap and provide service industries with practical assistance in correctly managing and implementing the TQM practices to achieve quality performance, this study proposes a conceptual model of TQM implementation in relation to company performance (quality performance) particularly for Indian service sector to examine whether the implementation of TQM practices result in an improvement of company s quality performance. Thus, the scope of this study is in finding out the association between the TQM practices and quality performance in the service industry and more precisely, the Indian service industry. Given the above reasons, the objectives of this study are two fold: To explore the relationships between TQM and quality performance; and To develop a conceptual framework and research model of TQM implementation in relation to company performance. The remaining of this study is structured as follows. In the second section, the theories laid down in the literatures of key TQM practices, performance measures indicators, and relationships between TQM and quality performance are reviewed. In the next section, development of conceptual framework and research model is presented followed by formulation of proposed research questions and hypotheses. Finally, conclusions of this study are discussed, which is followed by managerial implications and recommendation for future research. 2. Literature review 2.1 Key practices of TQM An extensive literature review of the previous studies on TQM have examined what constitutes TQM and what are the key practices for the success of TQM (Sila and Ebrahimpour, 2002; Saraph et al., 1989; Antony et al., 2002; Sureshchandar et al., 2002; Al-Marri et al., 2007; Zhang et al., 2000). These studies have provided different sets of practices considered essential to the success of TQM implementation. This leads to inconsistencies in previous research which made it difficult to reach a conclusion on the practices of TQM (Ooi et al., 2008; Hoang et al., 2006). As such no study has identified a common set of practices for successful implementation of TQM. Though there are some Quality Award models such as Malcolm Baldrige National Quality Award (MBNQA, 2005); European Quality Award (EQA, 1994); The Deming Prize (1996); Kanji Business Excellence Model, which provide a useful benchmark framework for industries and help in implementing TQM as well as evaluating their business performance results. According to Bayraktar et al. (2008) study, the following critical success factors (CSFs) of TQM were identified: leadership, vision, measurement and evaluation, process control and improvement, program design, quality system improvement, employee involvement, recognition and award, education and training, student focus, and other stake holder s focus. Kanji and Wallace (2000) go on to identify ten TQM practices: top-management commitment, customer focus and satisfaction, quality information and performance measurement, human resource management, employee involvement, teamwork, process management, quality assurance, zero defects, and communication. In Brah s et al. (2000) study, the following 11 constructs of TQM were identified: top management support, customer focus, employee involvement, employee training, employee empowerment, supplier quality management, process improvement, service design, quality improvement rewards, benchmarking, and cleanliness and organization. Through the comprehensive review of the TQM literature, the present study identified a set of 17 TQM practices. They are: topmanagement commitment (TMC), customer focus (CF), training and education (TE), continuous improvement and innovation (CII), supplier management (SM), employee involvement (EI), information and analysis (IA), process management (PM), quality systems (QS), benchmarking (BM), quality culture (QC), human resource management (HRM), strategic planning (SP), employee encouragement (EE), teamwork (TW), communication (COM), and product and service design (PSD). The reasons for selecting these practices are: Have been used frequently (highest frequency of occurrences) by different researchers in the service industries. Have been identified as the key practices in TQM implementation in both manufacturing and service industries (example Saraph et al., 1989; Antony et al., 2002; Zhang et al., 2000; Khamalah and Lingaraj, 2007). Constitute practices that represent the hard and soft components of TQM. Significantly associated in services and in the promotion of service quality (Ueno, 2008; Lakhal et al., 2006; Wali et al., 2003; Behara and Gundersen, 2001). Hence, it is believed that these practices are suitable to be used in the Indian service sector context. 2.2 Performance measures indicators: Numerous studies have examined the positive and negative (or non-significant) relationships or correlations between TQM practices and various performance measures. This section presents an overview of different performance measures indicators. An extent review of previous TQM studies on organizational performance suggests that

3 115 there are various performance measures indicators (Sadikoglu and Zehir, 2010; Monge et al., 2006; Zakuan et al., 2010). Different indicators used for measuring organizational performance have been identified from the literature and summarized in Table 1. Arumugam et al. (2008) measured organizational performance from quality performance (example quality of product and service, customer relations, customer satisfaction with products quality, and level of quality performance relative to industry norms). Zakuan et al. (2010) in their study measured organizational performance through two categories which are satisfaction level (example employee satisfaction and customer satisfaction) and business results (example productivity, number of successful new products, cost performance, and profitability). In this study, company performance will be measured through quality performance (example reliability, performance, durability, and conformance to specification). The reasons for choosing quality performance as an indicator for measuring company s performance are: It can be measured and reflected into number of ways as articulated in past empirical studies on TQM (Ahire et al., 1996; Flynn et al., 1994; Su et al., 2001; Yang, 2006; Arumugam et al., 2008; Prajogo and Sohal, 2003; 2004). It has been used by Malcolm Baldrige National Quality Award (MBNQA) model under the quality results, the only criterion used for organizational performance measurement. MBNQA model that represent TQM practices is accepted by several researchers across the world (Ahire et al., 1995; Dean and Bowen, 1994; Juran, 1995; Prajogo and Sohal, 2003; 2004). Several past research studies on TQM and organizational performance have taken quality performance as indicator for measuring the performance (Ahire et al., 1996; Zhang et al., 2000; Arumugam et al., 2008; Dow et al., 1999; Flynn et al., 1994; Saravanan and Rao, 2007; Cua et al., 2001; Prajogo and Brown, 2004) and the results were obtained. These studies investigated the relationships between TQM practices and quality performance in different sectors and countries. Table 1: Performance measures proposed by different authors Author(s) Measure Indicators Prajogo and Sohal (2004) Organization performance Quality performance Innovation performance Lin et al. (2005) Organization performance Satisfaction level Business results Fuentes et al. (2006) Organization performance Operational performance Market and financial performance Employee performance Sit et al.(2009) Organization performance Customer satisfaction Shieh and Wu (2002) Organization performance Project performance Feng et al. (2006) Organization performance Quality performance Innovation performance Ooi et al. (2008) Organization performance Job satisfaction Zakuan et al. (2010) Organization performance Employee satisfaction Customer satisfaction Business results 2.3 Relationship between TQM practices and quality performance: A considerable body of empirical evidence suggests that TQM implementation improves quality performance of the company. It has been measured in various ways and found that the quality management model and specific practices, which best predict performance varies across the world (Adam et al., 1997; Prajogo and Sohal, 2004; Arumugam et al., 2008). The research framework for quality management proposed by Flynn et al. (1994) suggested that the inputs of this framework are the quality management (QM) practices while quality performance represents outcomes. Further, product design process, process flow management, and top-management support have significant correlation with quality performance (Flynn et al., 1995). Parzinger and Nath (2000) examined the link between TQM and software quality and found that TQM implementation improves the software quality and performance, and thus, increases customer satisfaction. Hasan and Kerr (2003) studied the relationship between TQM practices and organization performance in service organizations and discovered that TQM practices like top-management commitment; employee involvement; training; supplier quality; quality costs; service design; quality techniques, benchmarking; and customer satisfaction leads to higher productivity and quality performance. Prajogo and Brown (2004) conducted an empirical study within Australian organizations to investigate the relationship between TQM practices and quality performance, and the results indicated a strong and positive linkage. A study on ISO9000 certified organizations of Taiwan performed by Jeng (1998) examined linkage between six QM practices and quality performance.

4 116 He found customer focus as the most powerful discriminated practice of quality performance while remaining five practices showed low discriminating powers. Brah and Tee (2002) examined the relationship between TQM constructs and organization performance by measuring quality performance of Singapore companies. They found that implementation of TQM leads to quality performance and have positive correlation. Another study based on the comparative analysis of TQM practices and quality performance between Australian manufacturing and service firms, Prajogo (2005) reported that there exist no significant differences in the level of most of the TQM practices and quality performance between two sectors. A study utilizing structural equation modeling (SEM) approach by Sanchez-Rodriguez et al., (2006) provided the insights into the current information technology (IT) and TQM theory and practice on operational and quality performance. They found TQM initiatives generate significant positive gains in operational and quality performance. In line to this, Prajogo and Sohal (2004) also employed SEM approach to examine the multidimensionality of TQM in association with organization performance. Using empirical data collected form 194 Australian firms the finding support the proposition in pairing the mechanistic elements of TQM with quality performance and the organic elements with innovation performance. A recent empirical study conducted by Arumugam et al. (2008) explored the relationship between TQM practices and quality performance on ISO9001:2000 certified manufacturing organizations in Malaysia. Analyzing empirical data drawn from 122 Malaysian organizations through correlation and multiple regression analyses, the finding revealed that TQM practices were found to be partially correlated with quality performance. They further found that customer focus and continuous improvement were perceived as dominant TQM practices in quality performance. Summary of different studies using quality performance as a measure for evaluating company performance is presented in Table 2. Table 2: Quality performance measure proposed by different authors Author(s) Measure Performance indicator(s) Zhang (2000) Organization performance Quality performance Ahire et al. (1996) Organization performance Quality performance Lakhal et al. (2006) Organization performance Financial performance Operational performance Product quality performance Hermann et al. (2006) Company performance Product quality performance Reduction in costs Shorter R & D time Samson and Terziovski (1999) Organization performance Quality performance Operational performance Business performance Dow et al. (1999) Company performance Quality performance Prajogo and Sohal (2003) Organization performance Quality performance Innovation performance Flynn et al. (1994) Organization performance Quality performance Arumugam et al. (2008) Company performance Quality performance Yang (2006) Quality performance Employee satisfaction Employee quality awareness Customer satisfaction Company s image Su et al. (2001) Quality performance Defect rate Rework rate Delay rate of delivery Quality performance Prajogo and Sohal (2006) Organization performance Quality performance Innovation performance Cua et al. (2001) Organization performance Quality performance Operational performance Sadikoglu (2008) Organization performance Employee satisfaction Innovation performance Operating performance Quality performance

5 117 Customer satisfaction Financial performance Saravanan and Rao (2007) Organization performance Quality performance Operational performance Prajogo and Hong (2008) R and D performance Product quality performance Product innovation performance 3. Proposed research model and questions Based on the above literature review, a conceptual framework is developed and a research model has been proposed to examine the extent to which the 17 TQM practices are practiced and implemented in the Indian service companies and to explore the relationships between identified TQM practices and company s performance by measuring the Quality Performance as a performance indicator. The proposed TQM research framework is depicted in Figure 1 as above. This research model suggests that the greater the extent to which these TQM practices are present, the quality performance of Indian service companies will be higher. In this theoretical research framework, the independent variables are TQM practices and a dependent variable is quality performance respectively. The main objective of the study is to establish the TQM implementation and evaluation model for Indian service companies. The two research question of this study can be articulated as follows: RQ1: To what extent the identified TQM practices are practiced or implemented in the Indian service companies? RQ2: Do the identified TQM practices have relationship with company s performance? Thus, a comprehensive review of literature suggests the extent of implementation of 17 TQM practices in the service industries. Though, there exist a number of TQM practices but the identified 17 practices are frequently used and implemented in service industries for better quality oriented results. This leads to the following hypotheses: H1: There should not be any significant difference in the 17 TQM practices as practiced or implemented by Indian service companies. More specifically: H1 1 : Top-management commitment in Indian service companies is significantly practiced or implemented. H1 2 : Customer focus in Indian service companies is significantly practiced or implemented. H1 3 : Training and education in Indian service companies is significantly practiced or implemented. H1 4 : Continuous improvement and innovation in Indian service companies is significantly practiced or implemented. H1 5 : Supplier management in Indian service companies is significantly practiced or implemented. H1 6 : Employee involvement in Indian service companies is significantly practiced or implemented. H1 7 : Information and analysis in Indian service companies is significantly practiced or implemented. H1 8 : Process management in Indian service companies is significantly practiced or implemented. H1 9 : Quality systems in Indian service companies is significantly practiced or implemented. H1 10 : Benchmarking in Indian service companies is significantly practiced or implemented. H1 11 : Quality culture in Indian service companies is significantly practiced or implemented. H1 12 : Human resource management in Indian service companies is significantly practiced or implemented. H1 13 : Strategic planning in Indian service companies is significantly practiced or implemented. H1 14 : Employee encouragement in Indian service companies is significantly practiced or implemented. H1 15 : Teamwork in Indian service companies is significantly practiced or implemented. H1 16 : Communication in Indian service companies is significantly practiced or implemented. H1 17 : Product and service design in Indian service companies is significantly practiced or implemented The framework for above hypotheses is presented in Figure 2.

6 118 TQM Evaluation Model TQM Implementation Model TQM Practices H1 1 TMC H2 1 H1 2 CF H2 2 H1 3 TE H2 3 H1 4 CII H2 4 H1 5 SM H2 5 H1 6 EI H2 6 H1 7 IA H2 7 TQM H1 H1 8 H1 9 PM QS H2 8 H2 9 H2 Quality Performance Figure 1: A Proposed TQM Research Framework for the Service Industries H1 10 H1 11 H1 12 H1 13 H1 14 H1 15 H1 16 H1 17 BM QC HRM SP EE TW COM PSD H2 10 H2 11 H2 12 H2 13 H2 14 H2 15 H2 16 H2 17 Top-management commitment (TMC), customer focus (CF), training and education (TE), continuous improvement and innovation (CII), supplier management (SM), employee involvement (EI), information and analysis (IA), process management (PM), quality systems (QS), benchmarking (BM), quality culture (QC), human resource management (HRM), strategic planning (SP), employee encouragement (EE), teamwork (TW), communication (COM), and product and service design (PSD)

7 119 Similarly, based on the extensive review of literature presented in previous section on the relationships between TQM practices and quality performance, the research framework is developed as shown in Figure 3. The literature review indicates a significant positive relationship between TQM practices and quality performance. This leads to the following hypothesis: H2: There is a significant positive relationship between identified TQM practices an quality performance of Indian service companies. To understand the relationship of each TQM practice on quality performance in Indian service companies, the following hypotheses will be used and tested. Top-management commitment Previous research in TQM practices emphasizes the critical role of top-management commitment in driving overall TQM implementation in the organizations (Zakuan et al., 2010; Flynn et al., 1994; Teh et al., 2008; de Jong and den Hartog, 2007). Teh et al. (2008) noted that senior leaders and management guide the organization and assess the organizational performance. Kanji (2001) asserted that top-management commitment is the fundamental driver of business excellence. Further, studies showed that top-management commitment significantly affects the quality performance (Arumugam et al., 2008; Prajogo and Brown, 2004). Accordingly, it is proposed that: H2 1 : Top-management commitment for TQM practices is positively correlated with quality performance. Customer focus Organizations must be knowledgeable in customer requirements and responsive to customer demands, and measure customer satisfaction through TQM implementation (Zakuan et al., 2010; Raghunathan et al., 1997; Zhang, 2000). According to the review results from Hackman and Wageman (1995), obtaining information about customer is one of the most widely used TQM implementation practices to improve quality performance of the organization. Therefore, the next hypothesis relate to customer focus and quality performance. H2 2 : Customer focus for TQM practices is positively correlated with quality performance. Training and education Training and education spread the knowledge of continuous improvement and innovation in service process to attain full benefits and business excellence. Talib and Rahman (2010) reported the critical role of training and education in maintaining high quality level within the service industry. Further, the research on TQM also found a positive correlation between training and education, and organization performance (Reed et al., 2000; Vermeulen and Crous, 2000). Therefore, the next hypothesis attempts to find a relationship between training and education and quality performance. H2 3 : Training and education for TQM practices is positively correlated with quality performance. Continuous improvement and innovation Continuous improvement and innovation, which is the most important part of services, means searching for never-ending improvements and developing processes to find new or improved methods in the process of converting inputs into useful outputs (Sadikoglu and Zehir, 2010). It helps in reducing the process variability thereby continuously improving the output performance (Hyland et al., 2000; Sadikoglu and Zehir, 2010). Corbett and Rastrick (2000) asserted that in TQM, the best way to improve organizational performance is to continuously improve the performance activities. Thus, the following hypothesis is proposed: H2 4 : Continuous improvement and innovation for TQM practices is positively correlated with quality performance. Supplier management According to Zakuan et al. (2010), effective supplier quality management can be achieved by cooperation and long term relationship with the suppliers. This argument is also supported by Zineldin and Fonsson (2000), who found that developing supplier partnership and long-term relationships can increase the organization competitiveness and thus, improve performance. Therefore, a hypothesis to test this relationship is as follows: H2 5 : Supplier management for TQM practices is positively correlated with quality performance. Employee involvement Deming claimed that involvement and participation of employees at all level is must to improve the quality of the current and future product or service. Even non-managerial employees can make significant contributions when they are involved in quality improvement processes, decision making processes, and policy making issues (Sadikoglu and Zehir, 2010; Ooi et al., 2007a). Organizations should utilize all employees skill and abilities to gain business performance. Accordingly, the hypothesis is as follows: H2 6 : Employee involvement for TQM practices is positively correlated with quality performance.

8 120 TQM Practices TMC CF TE CII H1 1 H1 2 H1 3 H1 4 SM EI H1 5 H1 6 IA H1 7 PM QS BM H1 8 H1 9 H1 10 H1 11 TQM Implementation QC H1 12 HRM SP EE TW COM PSD H1 13 H1 14 H1 15 H1 16 H1 17 Top-management commitment (TMC), customer focus (CF), training and education (TE), continuous improvement and innovation (CII), supplier management (SM), employee involvement (EI), information and analysis (IA), process management (PM), quality systems (QS), benchmarking (BM), quality culture (QC), human resource management (HRM), strategic planning (SP), employee encouragement (EE), teamwork (TW), communication (COM), and product and service design (PSD) Figure 2: A research model of the successful TQM implementation in service companies

9 121 TQM Practices TMC H2 1 CF TE H2 2 H2 3 CII H2 4 SM H2 5 EI H2 6 IA H2 7 PM H2 8 QS H2 9 Quality Performance BM H2 10 QC HRM SP EE TW COM PSD H2 11 H2 12 H2 13 H2 14 H2 15 H2 16 H2 17 Top-management commitment (TMC), customer focus (CF), training and education (TE), continuous improvement and innovation (CII), supplier management (SM), employee involvement (EI), information and analysis (IA), process management (PM), quality systems (QS), benchmarking (BM), quality culture (QC), human resource management (HRM), strategic planning (SP), employee encouragement (EE), teamwork (TW), communication (COM), and product and service design (PSD) Figure 3: A research model of the relationship between TQM practices and quality performance

10 122 Information and analysis Fulfilling customer needs and expectations are considered to be baseline of any kind of businesses. When customers needs and expectations are achieved, quality performance is improved and thus, satisfaction is established. Prajogo (2005) revealed the importance of information and analysis TQM practice on quality performance. Similarly Sit et al. (2009) also indicated that information and analysis have a significant effect on customer satisfaction. Information and analysis also helps an organization to ensure the availability of high quality, timely data and information for all users like employees, suppliers, and customers (Teh et al., 2009; Lee et al., 2003). Therefore, the following hypothesis is put forward: H2 7 : Information and analysis for TQM practices is positively correlated with quality performance. Process management Process management is a systematic approach in which all the resources of an organization are used in most efficient and effective manner to achieve desired performance (Sit et al., 2009; Zairi, 1997). The relatively new areas of such improvements are knowledge management behaviors (Ooi, 2009), business process management (Elzinga et al., 1995), employee and innovation performance (Sadikoglu and Zehir, 2010). Motwani (2001) commented that process management stresses the value adding to a process, increasing the productivity of every employee and improving the quality of the organization. In many empirical studies, Prajogo and Sohal (2004); Flynn et al. (1995); Cua et al. (2001); Feng et al. (2006) systematically investigated the relationships between process management and quality performance. The results of these studies showed positive correlation between them. Hence, the following hypothesis is proposed: H2 8 : Process management for TQM practices is positively correlated with quality performance. Quality systems Quality systems such as ISO9000 standards, SPC and other supportive qualitative tools and techniques create an environment for quality improvement and implementing TQM in an organization (Curry and Kadash, 2002; Sila and Ebrahimpour, 2003). Lakhal et al. (2006) claimed that there is a significant relationship between use of statistical quality techniques and organizational performance. This argument was also supported by Schevermann et al. (1997). Therefore, the next hypothesis attempts to find a relationship between quality systems and quality performance. H2 9 : Quality system for TQM practices is positively correlated with quality performance. Benchmarking Benchmarking is the process of comparing performance information, within the organization as well as outside the organization. It also aims to measure organization s operations or processes against the best-in-class performers from inside or outside its industry (Sit et al., 2009). The study by Yusuf et al. (2007) highlighted the usefulness of dynamic benchmarking for improving the performance of the organization and to achieve competitive advantage. Similarly, the study by Min et al. (2002) reported that benchmarking help in continuous service improvements and establishment of customer satisfaction. Accordingly, the next hypothesis relates to benchmarking and quality performance. H2 10 : Benchmarking for TQM practices is positively correlated with quality performance. Quality culture Gore Jr. (1999) emphasized that the quality culture of an organization is the strong basis for enhancing organization s success. Generally, the culture of an organization could impact individual behavior (Bose, 2004), knowledge sharing (Ooi et al., 2010), job satisfaction (Ooi et al., 2007b). Beside this, quality culture significantly contributes in improving the performance of the organization as well as influencing the thought, feeling and interaction among members of the organization (Yusof and Ali, 2000). Thus, quality culture is linked to the quality performance and a hypothesis is formed. H2 11 : Quality culture for TQM practices is positively correlated with quality performance. Human resource management Deros et al. (2006) reported that human resource management is one of the critical practices for improving business and management processes. Another study by Sanchez-Rodriguez et al. (2006) noted that management of people was positively associated with purchasing operational performance. Yang (2006) further concluded that human resource management as TQM practice significantly correlated with customer satisfaction which is also supported by Sit et al. (2009). Teh et al. (2009) focused on employee empowerment for successful TQM oriented human resource management. Further, Teh et al. (2008) found a positive relationship between empowerment and role conflict. Based on the above comprehensive review of the association between human resource management and different performance measurement indicators, the following hypothesis is proposed. H2 12 : Human resource management for TQM practices is positively correlated with quality performance.

11 123 Strategic planning Strategic planning incorporates the development and deployment of plans (Lee et al., 2003), improve relationships with customers, suppliers, and business partners (Prybutok et al., 2008) and helps in achieving long and short term goals through participative planning (Teh et al., 2009). Particularly, there is lack of empirical studies that examines the effects of strategic planning on quality performance or any other performance measure. Indeed, a significant link is found between strategic planning and quality performance (Prajogo and Brown, 2004), knowledge management behavior (Ooi et al., 2009), role conflict (Teh et al., 2009), and customer satisfaction (Sit et al., 2009). Also, Feng et al. (2006) in there comparative study revealed that strategic planning in TQM practice is strongly associated with organization performance. Therefore, the next hypothesis attempts to find a relationship between strategic planning and quality performance. H2 13 : Strategic planning for TQM practices is positively correlated with quality performance. Employee encouragement Employee encouragement such as rewards and recognition motivates employees to perform which in turn influence customer satisfaction (Das et al., 2006; Zhang et al., 2000; Tari, 2005). In line with this, the findings of Yusuf et al. (2007) reported that employee encouragement is positively related with organization performance and employee satisfaction. It has also been found that employee encouragement gives the right direction to work force and is an essential practice in customer/public dealing industries (Schneider and Bowen, 1995). Thus, the following hypothesis is proposed: H2 14 : Employee encouragement for TQM practices is positively correlated with quality performance. Teamwork Teamwork refers to an increase in employees control over their work and allows them to work as a group (Ooi et al., 2007b). This practice provides an atmosphere of mutual relationship, involvement, and participation through out the organization. According to Ooi et al. (2007b), teamwork as a TQM practice is positively associated with employees job satisfaction. They further found that, where teamwork was perceived as a dominant TQM practice, improvements in job satisfaction levels were significant. Yang (2006) commented that entire organization should work for improving quality and support for quality improvement activities by implementing teamwork practice. Formation of teams within an organization is critical to an organization s TQM success. Further, Silos (1999) suggested that teamwork will result in more committed and involved employees with the organization. Thus, the following hypothesis is suggested: H2 15 : Teamwork for TQM practices is positively correlated with quality performance. Communication Communication refers to information sharing process between individual/employees of the organization (Ooi et al., 2007a). It is critical within organizations for connecting employees and permits organizations to function as well as an essential element to the implementation of TQM (Ooi et al., 2007a; Gray and Laidlaw, 2002). Managers and practitioners use effective communication to enlist the support of other employees towards achieving organization s objectives. Several studies noted that effective communication influence the organization to move systematically towards employees involvement and customer satisfaction and improves organization performance (Ooi et al., 2007a; Yusuf et al., 2007; Goris et al., 2000). Based on the above literature review, the following hypothesis was proposed: H2 16 : Communication for TQM practices is positively correlated with quality performance. Product and service design Product and service design examines an organization s quality and service delivery performance in terms of timeliness, errors, costs of quality, responsiveness, and customer satisfaction (Brah et al., 2000). These indicators are used for measuring the product and service design quality. Bhatt and Emdad (2010) empirically investigated the relationships between information technology (IT) infrastructure, product and service innovation, and business advantages and found that product and service innovation is positively related with business advantages beside the two factors like IT infrastructure and customer responsiveness. Therefore, the next hypothesis attempts to find a relationship between product and service design and quality performance. H2 17 : Product and service design for TQM practices is positively correlated with quality performance. All the above hypotheses to be tested are summarized in Figure Conclusions The primary objective of this study is to develop a TQM implementation and evaluation research framework that can be used as a guide in the formulation of an effective TQM implementation approach to Indian service sector. Although, past studies on TQM have undertaken the identification and implementation of TQM practices successfully but still the literature on the investigation of linkage between TQM practices and organizational performance in context with the Indian service sector is in

12 124 nascent stage. In line to this, the present study attempts to bridge this gap and contribute to the development of conceptual framework and research model particularly for Indian service companies. To carry out this study, the key TQM practices, organization performance measures indicators, and quality performance have been extensively investigated as presented earlier. Based on this review, a research model of TQM implementation in relation to company performance by measuring quality performance has been proposed. Two research questions and 34 hypotheses were formulated from this model (17 hypotheses for assessing the extent of implementation of TQM practices and another 17 hypotheses for evaluating the perceived quality performance of the service companies). Moreover, in developing such a framework on TQM, the present study can help in: Understanding the awareness of TQM or any other quality program in Indian service sector. Investigating the TQM implementation experiences in Indian service sector. Identification of the key TQM practices for effective TQM implementation in Indian service sector. Assessing the company s performance with the adoption of TQM program. Some of the managerial implications of this study are: This research will provide valuable knowledge in TQM regarding the implementing practices and relationships between TQM practices and quality performance. Management must focus on the identified TQM practices to achieve higher levels of satisfaction in the industry which can provide an advantage over other industries in retaining the competitive environment. The results will determine the significant TQM practices and their impact on organizational performance in the Indian service companies. The proposed research model will allow practitioners and managers to assess the level of company s quality management against other models proposed by quality gurus. The model can also provide a baseline measure for the extent of TQM practices that is in place at a company. Thus, knowledge of this baseline can help in gaining continuous improvement in the company performance. Managers can further enhance their knowledge in driving the identified key TQM practices from the study and maximize the potential of the formal quality system. Finally, the study will provide a significant contribution in developing a better understanding of the TQM practices and quality performance in service industries. Future research involves data collection and empirical analysis where the hypotheses about the extent of implementation and relationships will be tested in the Indian service companies. The results will hopefully prove that the greater the extent to which these TQM practices are present, the quality performance of the organizations will be higher. At the end, it would be interesting to test and validate the proposed theoretical model using different approaches, one of them is the Structural Equation Modeling (SEM) approach which has the capability of testing and validating such a theoretical model. Statistical software like Amos 16.0, LISREL 8.8 etc can be used in future to build correlation matrix, confirmatory factor analysis (CFA), and diagramming to validate the relationships. Further, this study is limited to the Indian service sector but in future it can be extended to other south Asian countries as well as an exhaustive research in various aspects of TQM such as sustainability, knowledge management, organization strategy, TQM role stressors, and many more can be undertaken to incorporate the flexibility in TQM. Acknowledgement The authors would like to thanks the anonymous referees for their helpful and invaluable comments which helped to improve the presentation of the paper considerably. References Adam, E.E., Corbett, M.L., Flores, E.B., Harrison, J.N., Lee, T.S., Rho, B.H., Ribera, J., Samson, D. and Westbrook, R An international study of quality management approach and firm performance. International Journal of Operations and Production Management, Vol.17, No. 9, pp Ahire, S.L., Golhar, D.Y. and Waller, M.W Development and validation of TQM implementation constructs, Decision Sciences, Vol. 27, No. 1, pp Ahire, S.L., Landeros, R. and Golhar, D.Y Total quality management: a literature review and an agenda for future research. Production and Operations Management, Vol. 4, No. 3, pp Al-Marri, K., Ahmed, A.M.M.B. and Zairi, M Excellence in service: an empirical study of the UAE banking sector. International Journal of Quality and Reliability Management, Vol. 24, No. 2, pp Antony, J. Leung, K., Knowles, G. and Gosh, S Critical success factors of TQM implementation in Hong Kong industries. International Journal of Quality and Reliability Management, Vol.19, No. 5, pp

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16 128 Zakuan, N.M., Yusof, S.M., Laosirihongthong, T. and Shaharoun, A.M Proposed relationship of TQM and organizational performance using structured equation modeling. Total Quality Management, Vol.21, No.2, pp Zhang, Z. H Implementation of total quality management: An empirical study of Chinese manufacturing firms. Unpublished Doctoral thesis, University of Groningen, Groningen, The Netherlands. Zineldin, M. and Fonsson, P An examination of the main factors affecting trust/commitment in supplier dealer relationships: an empirical study of the Swedish wood industry. The TQM Magazine, Vol.12, No.4, pp Biographical notes Faisal Talib is an Assistant Professor at Mechanical Engineering Section, University Polytechnic, Aligarh Muslim University, Aligarh, (U.P.), India. He holds Masters in Industrial and Production Engineering and currently pursuing Ph.D. in Total Quality Management in Service Sector from Indian Institute of Technology Roorkee, (U.Kh.), India. He has more than 12 years of teaching experience and has more than 30 publications to his credit in national/international journals and conferences. His special interest includes Quality Engineering, TQM, Service Quality, Quality Concepts Taguchi Methods, and Quality Management in Service Industries. Dr. Zillur Rahman is an Associate Professor at Department of Management Studies, IIT Roorkee. He is a recipient of the Emerald Literati Club Highly Commended Award and one of his papers was The Science Direct Top 25 Hottest Article. His work has been published and cited in various journals including Management Decision, Managing Service Quality, International Journal of Information Management, Industrial Management and Data Systems, The TQM Magazine, Business Process Management Journal, International Journal of Service Industry Management, Information Systems Journal, Decision Support Systems, Journal of Business and Industrial Marketing, and International Journal of Computer Integrated Manufacturing, to name a few. Dr. M. N Qureshi is an Associate Professor at Mechanical Engineering Department, Faculty of Tech. & Engg., The M S University of Baroda, Gujarat, India. He obtained his bachelor s degree (Hons) in Mechanical Engineering with Specialization in Production Management from M.S. University of Baroda, India in year Subsequently, he obtained his Masters in Production Management from the same university. He received PhD degree in Mechanical Engineering from Indian Institute of Technology Roorkee, Roorkee, India. He has published more than 70 papers in International and National Journals and conference proceedings. His areas of interest are Supply Chain Management & Logistics, Production Management, Quality management, Marketing Management etc. Received November 2010 Accepted December 2010 Final acceptance in revised form December 2010