Benefits of Total Quality Management

Research Hypothesis

The findings in the literature will help to come to some hypothesis which will be investigated in this research.

Effective TQM leads to improved quality. Quality improvement is linked with increased market share and higher profits (Reed et al., 1996). Organizations are able to create high quality products by having continuous improvement process and process efficiency (Reed et al., 1996). Quality products could achieve competitive advantage for an organization (Porter, 1985). As higher prices could be charged this will increase the profitability and achieve high market shares (Kumar et al., 2009). Therefore, TQM possibly will create products with high quality products, when organizations focus on process and quality improvements. This will increase the market share too. According to this information, the hypothesis would be:

H1: TQM practices leads to improved market share

H2: TQM practices generates better and improved quality products

TQM is linked to high stock market performance and increases profit margins and revenues, hence, organizations with TQM in place can achieve competitive advantage (Lemak et al., 1997). Organizations that employ TQM practices like continuous process improvement, can increase their productivity, hence, more products available to the market (Yusuf et al., 2007). Therefore, TQM improves revenues of organizations. According to this information, the hypothesis would be:

H3: TQM practices increases the revenues of an organization

Organizations that are quality driven and have built long term relationships with suppliers, are able to create quality products to meet the needs and expectations of their customers. As TQM leads to improved product quality, it increases the customer ...

... middle of paper ...

...ng, high top management commitment, etc.

It is important to follow the practices of TQM as it has a positive impact on performance which leads to competitive advantage. In this research, frequently used measures of competitive advantage were used, i.e. increase in revenues, products quality, level of customer satisfaction and increase in market share. And the findings show that TQM leads to an increase in product quality, customer satisfaction and market share. It was also found that these measures have increased and are higher than competitors, since the implementation of TQM. However, findings show that TQM does not directly increase an organization’s revenues. There are many other factors such as market developments and advertising which have an impact on revenues. Nevertheless, it can be concluded that TQM leads to a competitive advantage for organizations.