BIJ 15,1. The current issue and full text archive of this journal is available at

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1 The current issue and full text archive of this journal is available at wwwemeraldinsightcom/ htm BIJ 52 Developing and validating total quality management (TQM) constructs in the context of Thailand s manufacturing industry Anupam Das, Himangshu Paul and Fredric W Swierczek School of Management, Asian Institute of Technology, Pathumthani, Thailand Benchmarking: An International Journal Vol 15 No 1, 2008 pp q Emerald Group Publishing Limited DOI / Abstract Purpose To provide reliable and valid constructs of total quality management (TQM) and a measurement instrument in the context of manufacturing industries in newly industrialized countries for evaluating the TQM implementation process and to target improvement areas Design/methodology/approach Based on a review of TQM literature and expert opinions, ten TQM constructs (nine implementation constructs and one outcome construct) were identified A detailed questionnaire was developed with the items for ten TQM constructs along with the questions on quality performance and information about the respondents The questionnaire was then sent to randomly selected ISO 9000 certified manufacturing companies in Thailand Out of 1,000 questionnaires sent, 275 usable samples were returned giving a response rate of 275 percent Based on the data from the survey, exploratory factor analysis was done to ensure that items in each scale reflected sufficiently the scope of each construct Internal consistency analysis was done to ensure the reliability of the constructs Criterion-related validity and construct validity were evaluated statistically to ensure that the set of measures correctly represents the constructs, and the degree to which they are free from any systematic or non-random error Findings This paper identified ten reliable and valid TQM constructs Nine are implementation constructs and an outcome construct These constructs have a total of 52 items, fewer compared to other instruments available in the TQM literature, with higher reliability compared to them Research limitations/implications Owing to time and resource constraints, this study was conducted only in the manufacturing sector of Thailand and hence generalization is somewhat limited This study could be extended to the service sector in Thailand and the same sector in other countries Practical implications The instrument presented will provide Thailand s manufacturing companies with a practical understanding in the area of TQM implementation Moreover, researchers and practitioners from other newly industrialized countries may be able to use these constructs in future TQM research Compared to other instruments, this instrument will be easier to administer and the response rate may be better Originality/value Quality/production managers will be able to use the instrument to evaluate their TQM implementation initiatives and identify problem areas requiring improvement Researchers will be able to use this instrument to enhance understanding of the process and to develop applicable TQM theory Keywords Total quality management, Senior management, Benchmarking, Manufacturing industries, Thailand Paper type Research paper Introduction Total quality management (TQM) has become a ubiquitous practice in modern industry over the past few years Research has shown that the contents of papers on TQM differ to a considerable degree The focus of these papers varies from the

2 conceptual issues of TQM (Anderson and Schroeder, 1994; Claver et al, 2003) to the practical and empirical issues of TQM (Forza and Filippini, 1998; Juergensen, 2000) There is a consensus that by implementing TQM, the overall effectiveness and performance of an organization can be improved There is less agreement about the primary constructs of TQM, or about the overall concept of TQM No uniform view of TQM exists so far, TQM has been described differently by different people (Zhang et al, 2000) The Thai manufacturing industry has had a substantial growth in last three decades and established itself as the biggest income earner for the country In terms of TQM positioning, Thailand ranks in the middle of the developing countries of Southeast Asia Its status in TQM is higher than Indonesia or Philippines, and lower than Malaysia or Taiwan (Krasachol et al, 1998) Since, the 1980s, different TQM approaches and tools, such as just-in-time, total productive maintenance, have been applied (Tabucanon, 1993) During the 1990s, the main emphasis of Thailand s manufacturing industry was on implementing ISO 9000 standards However, a number of foreign-owned companies within the electronics sector, and few Thai-owned groups, have successfully implemented TQM (Krasachol et al, 1998) A review of the TQM practices in Thailand shows that little empirical research has been conducted in the area of TQM implementation in Thai manufacturing companies Therefore, the current situation of TQM implementation in Thai manufacturing companies still remains unclear Owing to lack of empirical studies in the area of TQM implementation, it is difficult for Thai manufacturing companies to obtain sufficient information to support their TQM implementation process As a result, Thai manufacturing companies are experiencing numerous difficulties, and even failures in implementing TQM With the intention to reduce the information gap and provide Thailand s manufacturing companies with practical assistance in the area of TQM implementation, this study is aimed at: identifying the TQM constructs; developing an instrument for measuring the TQM constructs; and empirically validating the instrument using data from Thai manufacturing companies Developing and validating TQM 53 Researchers may thus be able to use this instrument for developing quality management theory related to Thai manufacturing companies This study will also help the manufacturing industry of newly industrialized countries in evaluating their TQM implementation process, and to target improvement areas Some similar studies have proposed empirically validated scales for TQM implementation (Saraph et al, 1989; Flynn et al, 1994; Ahire et al, 1996; Anderson et al, 1995; Powell, 1995; Black and Porter, 1996; Zhang et al, 2000) However, they differ in terms of TQM constructs and measurement items used To satisfy the goal of this study and to enhance the understanding of TQM, extant instruments are not suitable for this study Therefore, a new instrument for measuring TQM implementation for Thai manufacturing companies had to be developed The paper proceeds with the development of the nine TQM implementation constructs and one outcome construct Section three contains research methodology, which includes questionnaire development and administration; and information concerning respondent companies Section four contains empirical assessment of the

3 BIJ 54 constructs including reliability; detailed item analysis; content validity; criterion-related validity; and construct validity Finally, section five concludes this paper together with some discussions Developing TQM implementation constructs Constructs are a set of latent variables and they cannot be measured directly As an example, top management commitment to quality is a construct, which is not directly measurable To measure this construct, we have to use (surrogate) variables, such as top management s encouragement for employee involvement in TQM and improvement activities, and allocation of adequate resources, etc These variables are expressions of top management s commitment To undertake a field study, each variable would be measured with an item in a scale The items in the scale should span sufficiently the scope of the construct for content validity (Lawshe, 1975) Construct identification There is a consensus view that companies should develop a number of TQM constructs in an integrated way for successful TQM implementation (Easton and Jarrell, 1998; Claver et al, 2003) Three different approaches have been used to identify these TQM constructs: contributions from quality leaders; formal evaluation models; and empirical research A generally accepted TQM theory has yet to be developed (Sila and Ebrahimpour, 2002) Literature reviewed shows that Anderson and Schroeder (1994) made the first attempt closely related with quality to synthesize a theory of TQM, from research, based on the Delphi method, carried out on academics and managers They proposed seven concepts: forward-looking leadership; internal and external cooperation; learning; administrative processes; continuous improvement; employees performance; and customer satisfaction However, this work was not universally accepted because it suffered from an absence of systematic scale development, content validity, and empirical validation (Ahire et al, 1996) Flynn et al (1994) and Ahire et al (1996) proposed two constructs for measuring quality management, assessing its validity and reliability; but was applicable only to industrial firms Saraph et al (1989), Badri et al (1995), Black and Porter (1995, 1996), Grandzol and Gershon (1998) and Quazi and Padibjo (1998) proposed a valid and reliable quality measurement instrument applicable to both industrial and services firms TQM constructs discussed in the literature vary from author to author, although there are common themes formed by the following requirements: top management commitment; supplier quality management; continuous improvement; product innovation; benchmarking; employee involvement; reward and recognition; education and training; and customer focus (Hill and Wilkinson, 1995; Dale, 1999; Claver et al, 2003, Tari, 2005) Through a prescriptive conceptual, empirical and practitioner literature review we have identified the following nine TQM implementation constructs and one outcome measurement construct Top management commitment The TQM literature portrays the visibility and support of top management as one of the major determinants for successful TQM implementation According to Grover et al (2006), no discussion on TQM is complete without considering references on top management involvement The critical role of top management commitment in

4 providing leadership has been underscored by several diverse organizations, such as Asahi Breweries Ltd, Japan; Xerox Inc, USA; Dunlop Ltd, Malaysia; and Dow-Corning Pvt Ltd, Australia (Ahire et al, 1996) Almost all the quality awards recognize the crucial role of top management leadership creating the goals, values and systems to satisfy customer expectations and to improve performance of organizations Brown et al (1994) identified that lack of top management commitment is one of the reasons for the failure of TQM adoption According to Garvin (1986) high levels of quality performance have always been accompanied by an organizational commitment to that goal and high-product quality does not exist without strong top management commitment Chapman and Hyland (1997) suggest that top management plays an important role in changing the organizational climate by providing leadership, support and also by face-to-face communication Top management should actively develop quality plans to meet business objectives; communicate company philosophy to the employees and involve them in the TQM effort and improvement activities; encourage employees to achieve their objectives; ensure adequate resources for employee education and training Developing and validating TQM 55 Supplier quality management A continuous supply of raw materials with the required quality is essential in all stages of manufacturing Poor quality of suppliers products results in extra costs for the purchaser and reduces the quality image of the ultimate products Extensive, long-term relationship with the suppliers helps minimize inspection cost of the raw materials ( Juran and Gryna, 1993) According to Garvin s (1987) findings, prioritizing the quality of raw materials rather than cost minimization is a prerequisite for manufacturing products at the highest quality Developing a long-term co-operative relationship with suppliers; regular participation in supplier quality activities and giving feedback on the performance of suppliers products are necessary to ensure the continuous supply of raw materials with the required quality (Zhang et al, 2000) Continuous improvement Continuous improvement is the philosophy of improvement initiatives that increases success and reduces failure (Juergensen, 2000) Bessant et al (1994) defined continuous improvement as a company-wide process of focused and continuous incremental innovation For effective management of quality products and internal processes without losing perspective of external factors such as competition, needs relentless effort in continuous improvement For continuous improvement, evaluation of current processes and quality management practices is necessary A formal evaluation of quality provides a starting point by establishing an understanding of the size of quality issue and the area demanding attention ( Juran and Gryna, 1993) For evaluating the performance of processes and quality management practices, companies need to collect various quality-related information of the internal operations and differing costs of quality Quality-related information can be used to ensure the process capability is known to meet the production requirement Precise documentation of various process procedures is necessary for process capability; and unambiguous instructions for equipment operation can help to reduce the likelihood of operator errors Plan-do-check-action (PDCA) cycle, quality control (QC) tools, statistical process control (SPC), sampling and inspection are methods used for continuous improvement

5 BIJ 56 Product innovation Customer pressures for cost reduction; increasing global competition and increasing competition based on overall product and service quality are the most important drivers for product innovation (Soderquist et al, 1997) Juran and Gryna (1993) advocate investment and time in product innovation Product innovation should be better than the competitors and aimed at meeting and exceeding the requirements and expectations of customers Customer requirements should be thoroughly considered for product innovation Approaches such as quality function deployment, and experimental design help companies translate customer requirements into action by cross functional product innovation teams The product innovation team should consist of design engineers with shop-floor experience, production engineers, and representatives from marketing and purchasing departments (Kumar and Gupta, 1991) New product designs should be thoroughly reviewed before production, in order to avoid problems during production Benchmarking Organizations can compare its services and practices against peers in order to enhance performance through benchmarking (Qayoumi, 2000; Goetsch and Davis, 2003; Salhieh and Singh, 2003) For meeting customer requirements continuously, companies need to benchmark their products and processes by analyzing their leading competitors in the same industry or other industries using similar processes The rapid changes in the market environment, and hence in organizations, such as the changing nature of work, increased competition, specific improvement initiatives, national and international quality awards, changing internal and external demands (stakeholders), accelerated technological advancement, changing organizational roles and the acceleration of globalization has led to changes in benchmarking of products and processes (Atkinson and Brown, 2001; Lockamy, 1998; Corrigan, 1998) Employee involvement Employees, if they fully participate in quality improvement activities, will acquire new knowledge; realize the benefits of the quality disciplines; and obtain a sense of accomplishment by solving quality problems (Zhang et al, 2000) Companies need to develop formal systems to encourage, track, and reward employee involvement Cross-functional quality improvement teams and quality circles, along with an appropriate evaluation and reward system for quality improvement projects, are helpful for improving quality (Kumar and Gupta, 1991; Ahire et al, 1996) Employees should be encouraged to submit suggestions and ideas for quality improvement Their involvement will help to change negative attitudes and make them more committed to the success of the company Reward and recognition Reward and due recognition for improved performance by any individual, section, team, department or division within the company, is an important element of a quality improvement program (Dale, 1999) Companies must develop formal compensation systems to encourage, evaluate, reward and recognize the individual or team effort for quality enhancement and improved customer satisfaction (Brown et al, 1994) Employees should be made aware of the reward and penalty system Top management

6 should encourage employees proffer suggestions and individuals or teams should be recognized and rewarded for excellent suggestions Reward and recognition systems might include working condition improvements, salary promotions, position promotions, monetary or non-monetary rewards, and financial awards for excellent suggestions Some of the TQM companies also offer profit-sharing programs to enhance employees ownership in their jobs and quality improvement activities (Stalk et al, 1992) Developing and validating TQM 57 Education and training A number of studies concluded that education and training is one of the most important factors for successful TQM implementation Education and training in the quality concepts, tools, and techniques is essential for employees to understand quality-related issues (Ahire et al, 1996) Chapman and Hyland (1997) conclude that providing training to employees in problem solving skills is one of the most important activities for organizational climate change in a company Companies should regard employees as valuable, long-term resources worthy of receiving education and training throughout their career Moreover, adequate resources should be made available for education and training The education and training costs should be viewed as investments rather than costs The participation of employees and managers in training sessions will enhance the quality of the immediate sessions and also help to reduce the gaps among the ranks This will create an atmosphere for teamwork and involvement in the quality system implementation Refresher courses in quality concepts should also be arranged to invigorate employee participation and to reinforce quality knowledge in the light of actual practice (Chapman et al, 1991) Customer focus Customer satisfaction is the ultimate measure of company performance as it predicts the future success or failure of an organization (Kanji and Asher, 1993) Understanding customers and their requirements, and providing goods and services to meet their requirements are essential for implementing TQM (Ishikawa, 1985) A close relationship with the customers is necessary to fully determine their requirements and for acquiring feedback on the extent to which those requirements are being met Customer involvement is necessary in the product design and development process Input is necessary at every stage of the process so that there is less likelihood of quality problems once full production begins (Flynn et al, 1994) Companies should be able to: respond quickly with new ideas and technologies to customers demands; produce products that satisfy or exceed customers expectations; anticipate and respond to customers evolving needs and wants to stay competitive in the market (Stalk et al, 1992) Product quality All the previously discussed constructs identify the scales of quality improvement strategies that are especially aimed at improving product quality To improve the product quality, it is necessary to measure the existing product quality and to understand the size of quality issue This will identify the areas demanding attention for enhancing and upgrading product quality Quality literature defines product quality with the following attributes: performance; features; conformance; reliability; durability; serviceability; aesthetics, and perceived quality (Garvin, 1987) However,

7 BIJ 58 dimensions of product quality vary depending on the industry, and same measures may not be relevant across all industries Among the dimensions previously discussed, four dimensions are commonly used industry-wide to reduce the defect rates and inspecting of quality of the parts before moving to the next process: specifically, durability; reliability; performance; and conformance (Ahire et al, 1996) Instrument comparison Following the recommendation of Ahire et al (1996), a combination of three instruments have been carefully examined for developing TQM constructs in this study (Saraph et al, 1989; Flynn et al, 1994; Ahire et al, 1996) Effort has been given to integrate their constructs into the new instrument The role of divisional top management and the role of the quality department (Saraph et al, 1989); and quality department leadership (Flynn et al, 1994) are integrated to represent top management commitment construct (since departmental heads are part of top management and every department in any organization should be committed to TQM) As in all manufacturing companies, it is necessary to establish long-term cooperative relationships with suppliers, the supplier quality management (Saraph et al, 1989); supplier relationship (Flynn et al, 1994); and supplier quality management and supplier performance (Ahire et al, 1996) have been considered when developing the supplier quality management construct As process management/operating and quality data and reporting (Saraph et al, 1989); process control, feedback and cleanliness and organization (Flynn et al, 1994); and SPC usage, internal quality information usage constructs (Ahire et al, 1996) are related to continuous quality improvement, all these constructs are included in the continuous improvement construct Product/service design (Saraph et al, 1989); new product quality and inter-functional design process (Flynn et al, 1994); and design quality management constructs (Ahire et al, 1996) have been integrated to form product innovation construct This study was conducted in the context of the Thai manufacturing industry, so specific characteristics of Thailand s manufacturing companies and Thai culture were taken into consideration Suggestions from Thai quality management practitioners and academics have been considered before developing TQM constructs Most Thai companies have implemented ISO 9000 as their first step towards TQM implementation, and are now benchmarking their products and processes Considering these specific characteristics of Thai manufacturing industry, the benchmarking construct of Ahire et al (1996) has been included in this study Employee relations (Saraph et al, 1989); selection for potential teamwork, teamwork (Flynn et al, 1994); employee empowerment, and employee involvement (Ahire et al, 1996) have been considered in employee involvement construct Yukongdi (2001) concludes that both financial and non-financial rewards can bring positive outcomes in quality improvement activities in Thailand Based on this conclusion, quality improvement rewards of Flynn et al (1994) have been renamed as reward and recognition construct in this study Training, as identified by Flynn et al (1994); and employee training highlighted by Ahire et al (1996) have been combined to form education and training construct

8 Customer involvement, as discussed by Flynn et al (1994); and customer focus Ahire et al (1996) have been taken as the customer focus construct Product quality construct identified by Ahire et al (1996) has been directly used as it is Based on the literature review and expert opinions, a total of 53 items have been selected for the questionnaire survey Resulting from the factor analysis, one item was deleted to gain the highest factor loadings, and measurement of variance and reliability of the constructs Finally, 52 items were included in this instrument which is less than in other instruments but will be easier to use in future TQM research Developing and validating TQM 59 Research methodology Questionnaire development Potential TQM implementation constructs were identified from the literature and vetted by experts and practitioners in the field A survey instrument (questionnaire) for measuring these constructs was then developed (see Appendix) In this study, a questionnaire with a total of 110 items were initially identified from the instruments of Saraph et al (1989), Flynn et al (1994), Ahire et al (1996) and Zhang et al (2000) This list of items were than sent to five quality management practitioners who are working in manufacturing companies in Thailand, and five academics who are undertaking research in this field in Thailand Based on their suggestions items were short-listed Most of the literature reviewed in this study was in English, so the original questionnaire was developed in English As the questionnaire survey was targeted at the Thai manufacturing industry, it was necessary to translate it into Thai by a translator experienced in translation in the operations management field To reduce any translation bias, the Thai version of the questionnaire was again translated into English by a fellow researcher who is undertaking research in quality management Finally, both the Thai version and English version were combined in the questionnaire to reduce any confusion that might arise in the respondents Following the methodology adopted in similar studies (Ahire et al, 1996), a seven-point Likert scale was used for all items to ensure higher statistical variability among survey responses Items of all the constructs were measured as: 1 strongly disagree, 2 disagree, 3 somewhat disagree, 4 neutral, 5 somewhat agree, 6 agree, 7 strongly agree Questionnaire administration For the survey, we selected ISO 9000 certified companies in the Thai manufacturing sector Thai Industrial Standards Institute maintains a database of ISO 9000 certified companies in Thailand with industrial sector-wise information on each: company name and address; scope of certification, name of certification; name of certifying body This database is available on the internet (wwwtisigoth/syscer/9000html) From this database, a list of 1,000 manufacturing companies from different industrial sectors, dispersed across Thailand were selected and questionnaires were mailed with a covering letter and a self addressed, stamped envelope The cover letter described the purpose of the survey and assured them of anonymity and confidentiality of their information The manager responsible for quality systems implementation, or quality manager, or production manager was requested to complete the questionnaire To increase the response rate, some companies were also contacted by , phone

9 BIJ 60 and fax A cut-off date was fixed of forty days from the first mailing date At the cut-off date, a total number of 275 useable responses were returned, representing a return rate of 275 percent Respondents and their company profile Among the respondents, 345 percent were ISO manager, quality management representative and TQM facilitators Among others: 196 percent were plant managers; 193 percent were quality managers; 12 percent production managers, operations manager, engineering manager; and 145 percent were working as directors in the quality management field Most of the respondents are qualified to under-graduate (47 percent) and post-graduate masters (46 percent), while 3 percent are PhD degree holders Most of the respondents (35 percent) are years of age Other age groups are over 50 years (20 percent); years (19 percent), years (16 percent) and under 30 years (10 percent) Also, 73 percent of the respondents are male and 27 percent are female Of the 275 respondent manufacturing companies, 23 percent (64) are in the Agriculture, rubber and wood products sector, 20 percent (56) chemicals sector, 18 percent (49) food products sector, 13 percent (37) are in Textiles, Wearing apparel, Leather/footwear sector, 10 percent (27) electrical machinery and communication equipment sector, 8 percent (21) paper, plastic and paper products sector, 4 percent (10) metal products and motor vehicles/transport and the remainder are from other sectors Among the respondents, 44 percent have less than 200 employees, 43 percent have 201-1,000 employees and 13 percent of them have more than 1,000 employees Also, 44 percent of the companies are 100 percent Thai private investment, 18 percent are public limited company, 11 percent are majority Thai joint venture, 6 percent are 100 percent government owned, 7 percent are Minority Thai joint ventures, and 14 percent are 100 percent foreign investment Approximately, 50 percent of the companies asset values are less than 10 million US$ 19 percent of the companies asset values are between 10 and 20 million US$ and the rest have an asset value of more than 20 million US$ About 14 percent of the respondent companies acquired ISO 9000 certification less than two years prior, 61 percent companies 3-6 years prior and the remainder for more than seven years Empirical assessment of the constructs There are many methods available for empirically assessing the reliability and validity of a measurement scale The following discusses the approach taken in our study Reliability Reliability is concerned with the dependability, stability, predictability, consistency and accuracy, and relates to the extent to which any measuring procedure yields the same results on repeated trials (Kerlinger, 1986; Carmines and Zeller, 1979) There are four methods which can be used for assessing reliability of empirical measurements Among these four methods, the first three methods are rarely used in field studies, as it is difficult to administer the instrument twice with the same group of people or using two alternate forms of measuring instrument (Saraph et al, 1989) In contrast, the internal consistency method is most commonly used in field research as it requires only one administration of the instrument As the internal consistency method is the most

10 general form of reliability estimation (Nunnally, 1978), it has been used in this study The internal consistency method assesses the equivalence, homogeneity and inter-correlation of the items used in a measure and uses various algorithms to estimate the reliability of a measurement at one point in time (Forza, 2002) The most popular test within the internal consistency method is the Cronbach coefficient a (Nunnally, 1978; Cronbach, 1951) Cronbach s a computes internal consistency reliability among a group of items combined to form a single scale It can also be computed for any subset of items Nunnally (1978) advocates that new developed measures can be accepted with Cronbach s a of more than 060, otherwise 070 should be the threshold The measure with Cronbach s a 080 or more is significant and reliable Table I summarizes the Cronbach s a for individual and overall constructs The Cronbach s a for the ten constructs ranged from to indicating a high reliability of the instrument The overall Cronbach s a confirms this instrument is highly reliable Developing and validating TQM 61 Detailed item analysis Nunnally (1978) developed a method to evaluate the assignment of items to scales This method considers the correlation of each item with each construct Specifically, the item-score to construct-score correlations are used to determine whether an item belongs to the construct as assigned, belongs to some other construct, or if it should be deleted If an item does not correlate highly with any of the constructs it should be deleted Saraph et al (1989) and Zhang et al (2000) also used this method to evaluate the assignment of items to constructs for developing the instruments For this study, item analysis was performed in order to understand whether the items had been assigned appropriately In this study, one item out of 53 items was deleted by using Nunnally s method Among the remainder, 52 items all were highly correlated with their respective constructs The correlation matrix in Table II shows that all the values are greater than 070 Some TQM literature suggested item values lower than 05 do not share enough variance with other items in that scale and should be deleted from the scale (Kemp, 1999) Hair et al (2005) suggest a correlation greater than ^030 are considered to meet the minimal level; ^040 are considered more important and ^050 or greater are considered practically significant They also suggest that a correlation greater than ^035 for a sample size of 250 should be considered statistically significant Constructs Number of items Deleted number Cronbach s a Overall 53 No Top management commitment 8 No Supplier quality management 3 No Continuous quality improvement 9 No Product innovation 5 No Benchmarking Employee involvement 4 No Reward and recognition 4 No Education and training 5 No Customer focus 5 No Product quality 6 No Table I Internal consistency analysis for the ten individual constructs and overall constructs

11 BIJ 62 Table II Item to construct correlation matrix for the constructs of TQM (Pearson correlation) Item number TQM constructs Top management commitment Supplier quality management Continuous quality improvement Product innovation Benchmarking Employee involvement Reward and recognition Education and training Customer focus Product quality Notes: Item numbers in the table are same as the item numbers in the instrument; correlation is significant at the 001 level In this study, all the items are assigned appropriately; the item scores are higher to their respective constructs compared to other constructs Validity The validity of a measure is defined as the extent to which a construct or a set of measures correctly represents the concept of study, and the degree to which it is free from any systematic or non-random error Validity is concerned with how well the concept is defined by the measure(s), whereas reliability relates to the consistency of the measure(s) Content validity or face validity, criterion-related validity, and construct validity are the three most popular methods to evaluate the validity of constructs (Carmines and Zeller, 1979) Content validity or face validity is not evaluated numerically it is judged by the researchers Criterion-related validity and construct validity are evaluated numerically The three types of validity for this study are discussed below Content validity A measure has content validity if there is a general agreement among the subjects and researchers that the instrument has measurement items that cover all aspects of the variable being measured This form of validity, also known as face validity, subjectively assesses the correspondence between the individual items and the concept through ratings by expert judges or other means The objective of the content validity is to ensure that the selection of construct items extends past empirical issues to also include theoretical and practical considerations (Robinson et al, 1991) The ten constructs for measuring TQM implementation should have content validity, as the measurement items were developed based on both an extensive review of the literature and detailed evaluations by academicians and practicing managers Moreover, the pretest subjects indicated that the content of each construct was well represented by the measurement items employed Criterion-related validity This validity is concerned with the extent to which a measurement instrument is related to an independent measure of the relevant criterion Criterion-related validity is also called a predictive validity or external validity In this study, criterion-related validity was a measure of how well the ten constructs of TQM in a manufacturing company are related to measures of quality performance Two measures of quality performance were obtained from the sample of the respondents

12 Each manager was asked to rate (on a seven-point scale, 1 not using; 7 extensively using) the quality assurance of their products and services for the last five years, and customer satisfaction with quality for the last five years These two ratings were averaged to find the single measure of quality performance Many studies use this subjective measure, as it is difficult to identify and obtain an objective measure that would be appropriate for the different types and sizes of manufacturing companies (Saraph et al, 1989) For testing criterion validity, bivariate correlation (Pearson) analysis was conducted to study the interrelationships between the TQM constructs (predictor set) and the quality performance measures (the criterion set) The bivariate correlation coefficients are shown in Table III The correlation within the ten TQM constructs, within the two quality performance measures and between the predictor set and criterion set, is significant at the 001 level Therefore, it could be concluded that this set of constructs have good criterion-related validity Construct validity A measure has construct validity, if it measures the theoretical constructs that it was intended to measure Factor analysis can be used for evaluating content validity Factor analysis helps analyze the interrelationships among a large number of variables and explains these variables in terms of their common underlying dimensions (constructs) It also helps reduce data that do not correlate with any of the underlying dimensions The general purpose of factor analysis is to find a way to condense (summarize) the information contained in a number of original variables into a smaller set of new, composite dimensions or constructs with minimum loss of information that is, to search for and define the fundamental constructs or dimensions assumed to underlie the original variables (Hair et al, 2005) Two forms of factor analysis, namely, exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) have been used for defining underlying dimensions (constructs) in a data matrix EFA can be used to uncover the underlying structure of a relatively large set of variables, establish links when the observed and latent variables are unknown or uncertain EFA determines how and what extent the observed variables are linked to their underlying constructs (Byrne, 1998) EFA is the most common form of factor analysis It is used when there is no prior theory and factor loadings are used to intuit the factor structure of the data EFA helps to identify whether selected items cluster on one or more than one constructs and thus unidimensionality of constructs is assessed Usually, three or more items are selected for a latent variable or construct (Zhang et al, 2000) CFA is used to test or confirm the relationship between the factors and the latent variables on the basis of pre-established theory and factor analysis is used to see if they load as predicted on the expected number of constructs Since, TQM theory is far from being fully developed (Ahire et al, 1996), CFA could not be employed for developing this constructs Considering the characteristics of this study, EFA would have to be employed for construct validation There are two basic models that can be utilized for EFA They are principal components analysis (PCA) and principal factor analysis (PFA) (Hair et al, 2005) PCA, the most common form of factor analysis, is used for summarizing most of the original information (variance) in a minimum number of factors for prediction purposes PCA analyzes total (common and unique) variance PCA seeks a linear combination of variables such that the maximum variance is extracted from the variables It then removes this variance and seeks a second linear combination that Developing and validating TQM 63

13 BIJ 64 Table III Bivariate correlation matrices A Within predictor set (TQM constructs) TQM constructs Mean SD Top management commitment Supplier quality management Continuous improvement Product innovation Benchmarking Employee involvement Reward and recognition Education and training Customer focus Product quality B Within criterion set (quality performance measures) Quality performance measures 1 Quality assurance Customer satisfaction C Between predictor set and criterion set Quality Average of two measures performance measures TQM Scales Top management commitment Supplier quality management Continuous improvement Product innovation Benchmarking Employee involvement Reward and recognition Education and training Customer focus Product quality Notes: Pearson correlation is significant at the 001 level; SD means Standard Deviation, Total Number 275

14 explains the maximum proportion of the remaining variance, and so on In contrast, PFA is used primarily to identify underlying factors or dimensions that reflect what the variables share in common PFA, also called as principal axis factoring; and common factor analysis; seeks the least number of factors which can account for the common variance (correlation) of a set of variables, whereas PCA seeks the set of factors which can account for all the common and unique (specific plus error) variance in a set of variables EFA was performed using PCA to identify constructs, and subsequently for each construct separately According to Hair et al (2005), factor loadings greater than 030 are considered to meet the minimal level; loadings of 040 are considered more important; if the loadings are 050 or greater, then they are considered highly significant In this study, a factor loading of 050 was used as the cut-off point Hair et al (2005) describe three techniques for factor extraction: latent root criterion or eigenvalue; percentage of variance and scree test Among the three techniques, latent root criterion or eigenvalue is the most commonly used technique for factor extraction Factors having eigenvalues greater than one are considered significant and all other factors with eigenvalues less than one are considered insignificant and are disregarded The other two techniques, percentage of variance and scree test are considered too subjective (Zhang et al, 2000) and it is not uncommon in social sciences to consider a solution that accounts for 60 percent of the total variance (and in some instances even less) as a satisfactory solution (Hair et al, 2005) The factor analysis results listed in Table IV show that all the items in ten constructs formed a single factor with eigenvalue greater than one For each of the ten constructs, the factor loadings are more than 070 and accounts for more than 70 percent of the total variance (except the construct 5, benchmarking) The item 4 in the construct 5 (benchmarking) has factor loading of less than 050 and accounts for less than 60 percent of the total variance with all the original items To explore more, factor analysis of this construct was performed with all the original items and by excluding the item 4 Table IV shows that factor analysis gives better results if item 4 is excluded The percentage of variance increased from to 76041; reliability of the construct increased from to and overall factor loadings of the other items in that construct also increased after excluding item 4 Finally, it could be concluded that the ten TQM constructs consisting of 52 items have good construct validity Developing and validating TQM 65 Discussion and conclusions Saraph et al (1989) produced the seminal work on developing reliable and empirically validated TQM constructs They identified items relevant to integrated TQM, based on the TQM constructs prescribed by the quality gurus including Deming, Crosby, Juran and Ishikawa Flynn et al (1994) used practitioner and empirical literature on TQM Ahire et al (1996) have used prescriptive conceptual, empirical and practitioner literature Saraph et al (1989) used a response sample of 162 managers that spanned both manufacturing and services sector, and included some 20 companies Flynn et al (1994) collected data on quality elements from 716 respondents in 42 manufacturing plants, including machinery, transportation components and electronics industry Ahire et al (1996) used plant managers from 371 plants in motor vehicle parts and the accessories industry In this study, we have used 275 respondents from the ISO 9000 certified manufacturing companies in Thailand The respondents are managers involved in

15 BIJ 66 Table IV Results of EFA for the ten TQM constructs Percentage of variance Item Item Factor loadings Item Item Item Item Item Item Item Number of factors Eigenvalues TQM constructs 1 Top management commitment Supplier quality management Continuous improvement Product innovation Benchmarking (with original items) Benchmarking (after deleting item 4) Employee involvement Reward and recognition Education and training Customer focus Product quality Note: An eigenvalue greater than 1 was used as criterion for factor extraction

16 quality management and production Data from all industrial sectors of Thai manufacturing industry were used for testing and validating TQM constructs This has allowed the highest external validity for manufacturing industries, in general, and particularly when describing Thai manufacturing companies This makes our work of particular importance when compared to the TQM constructs proposed by Saraph et al (1989), Flynn et al (1994) and Ahire et al (1996) The internal consistency of the constructs used in this study is less than the instruments of Flynn et al (1994) and the Ahire et al (1996), but better than the Saraph et al (1989) instrument The main strength of Saraph et al (1989) constructs are that they have the highest level of external validity for manufacturing and service industries (Ahire et al, 1996) The constructs used in this study have the second highest external validity, based on responses from many sectors in the manufacturing industry In contrast, Flynn et al (1994) and Ahire et al (1996) used responses from only three and only one industry in the manufacturing sector, respectively The data used in our study were obtained solely from ISO 9000 certified Thai manufacturing companies; and hence generalization is somewhat limited However, our work represents the first attempt to develop TQM constructs for measuring TQM implementation in Thailand Clearly, external validity could be improved by additional research and with increased sample sizes, geographical diversity and more companies from manufacturing and service sector The constructs proposed in this study are empirically based and shown to be reliable and valid The reliability coefficients (Cronbach s as) for the ten constructs ranged from 084 to 095, which are relatively high compared to the other studies; while the total number of items are less than in the other studies A literature review and comprehensive pretesting insured content validity There is sufficient empirical evidence that proved the criterion-related validity and construct validity of these constructs Moreover, researchers and practitioners from other countries will be able to use these constructs in future TQM study As the number of items is less in this instrument compared to others, our instrument will be easier to administer and the response rate will be better This empirically reliable and valid TQM implementation constructs, consisting of ten constructs (52 items) can be used in other studies and for different countries Quality/production managers will be able to use these constructs to evaluate their TQM implementation programs and identify problem areas requiring improvement Researchers will be able to use these constructs for gaining better understanding to develop applicable TQM theory Developing and validating TQM 67 References Ahire, S, Golhar, D and Waller, M (1996), Development and validation of TQM implementation constructs, Decision Sciences, Vol 27 No 1, pp Anderson, JC and Schroeder, RG (1994), A theory of quality management underlying the Deming management method, Academy of Management Review, Vol 19 No 3, pp Anderson, JC, Rungtusanatham, M, Schroeder, R and Devaraj, S (1995), A path analytic model of a theory of quality management underlying the Deming management method: preliminary empirical findings, Decision Sciences, Vol 26 No 5, pp