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QUALITY PAPER

Convergence theory in quality management: evidence from the petroleum industry

Mahour Mellat-Parast
Department of Management, North Carolina A&T State University, Greensboro, North Carolina, USA
Abstract
Purpose The purpose of this paper is to investigate the effect of top management support for quality and human resource management practices on quality results in the petroleum industry. Design/methodology/approach A survey was used to collect data from managers in the petroleum industry. Structural equation modeling was used to examine the hypotheses. Findings Consistent with previous studies, the results provide support for the importance of top management commitment to quality in emphasizing other quality practices. The relationship between top management support and employee involvement was also signicant. Research limitations/implications A larger sample is needed to validate the ndings of this study. Future studies should address the impact of other quality management practices on quality outcomes. Originality/value The ndings provide support for the convergence theory and contingency theory in quality management. Keywords Quality management, Convergence theory, Quality results, Human resource management Paper type Research paper

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Received 26 April 2012 Revised 1 July 2012 Accepted 17 July 2012

1. Introduction The development of practices associated with quality management (QM) has been instrumental in shaping management thinking and improving organizational processes (Sanchez-Rodriguez and Martinez-Lorente, 2004; Sila, 2007; Kristal et al., 2010; Phan et al., 2011). Several empirical studies suggest that rms achieve higher levels of protability and organizational performance through successful implementation of QM (Douglas and Judge, 2001; Kaynak, 2003; Yeung et al., 2006; Carter et al., 2010; Kull and Narasimhan, 2010). A review of the literature suggests that QM practices have been criticized for their inability in creating a long-term competitive advantage (Sultani et al., 2008; Asif et al., 2009). In addition, the effect of practices associated with QM on rm performance is not very clear. For example, while process management has a positive impact on protability in the auto industry, it has a negative effect on protability in the computer industry (Ittner and Larcker, 1997). Several authors have emphasized the role of industry structure and competition on strategic planning quality of rms (Das et al., 2000; Lai and Cheng, 2003; Zhao et al., 2004). These observations suggest that contextual, environmental, and social variables might have a signicant impact on

International Journal of Quality & Reliability Management Vol. 30 No. 2, 2013 pp. 177-196 q Emerald Group Publishing Limited 0265-671X DOI 10.1108/02656711311293580

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implementation of QM and its impact on business results (Prasad and Tata, 2003; Fuentes-Fuentes et al., 2011; Zhang et al., 2012). To address these inconsistencies and provide a much clear picture on the effectiveness of QM programs, more industry-specic and cross-cultural research in QM is needed (Sila and Ebrahimpour, 2003). According to Rousseau and Fried (2001, p. 2) focus on a specic context makes our models more accurate and our interpretation of results more robust. This allows the consumers of the research to have a better assessment of the applicability of the theory (Bamberger, 2008). A review of the literature shows that there is lack of industry-specic research in QM. This study seeks to determine the effect of practices associated with human resource management (employee training and employee involvement) on internal and external quality results in the petroleum industry. Several studies have pointed to the importance of human resource management practices and their role on effective implementation of quality programs (Asrilhant et al., 2007; Mellat-Parast et al., 2007; Sadikoglu and Zehir, 2010). Therefore, the purpose of this paper is to determine whether emphasis on practices associated with human resource management enhances rm performance in a single industry. Accordingly, the study contributes to theory validation and development in QM by investigating the effect of quality practices on organizational quality performance. This study also contributes to the existing body of knowledge on QM in process industries. The paper is organized as follows: rst, the theoretical perspectives to the implementation of QM are provided. The discussion is continued by developing the hypotheses. Later, the methodology section including the sample and the instrument development and validation is explained. Next, the analysis and ndings of the study are presented. Finally, the implications of the ndings to theory and practice and future research have been outlined. 2. Theoretical background The conventional QM models and frameworks have been proposed based on the ndings of rms in the developed nations; therefore their applicability and generalizability should be limited to those countries ( Jun et al., 2006). As such, researchers have raised questions regarding the generalizability of QM and its implementation across industries and nations (Sousa and Voss, 2001; Rungtusanatham et al., 2005; Power et al., 2011). To address the generalizability of QM practices, researchers have used the convergence theory of management arguing that the trend towards outsourcing and globalization facilitates implementation of QM across nations and industries (Mellat-Parast et al., 2006; Schniederjans et al., 2006). The convergence theory asserts that learning will lead managers from different cultures to adopt the same efcient management practices (Form, 1979). Due to the cultural and contextual variables rms would be less or more enthusiastic about pursuing certain management practices. While it is expected that rms may adopt or emphasize different management practices, these practices tend to converge over time to resemble the best industry practices. The convergence theory of the rm incorporates both the culture-free and culture-specic perspectives in the evolution and development of management practices (Ralston et al., 1997; Rao et al., 1999). This perspective to management of quality provides an appropriate theoretical framework to explain differences in management practices due to cultural and contextual factors

(at their early stage of implementation) while addresses the convergence of these practices over time as the result of market forces and competition. Implementation of QM across industries and nations could be also explained through the lenses of the institutional theory of the rm. According to the institutional theory, to be more adaptive and exible to environmental uncertainty and complexity rms tend to imitate the structure, processes, norms, rules, and practices of a dominant institution. The outcome of such adaptive processes will lead to organizational isomorphism (Deephouse, 1996). From this perspective, rms which share common norms and practices will become similar over time. The above discussion suggests that QM practices converge over time across industries and nations, especially in industries that have a track record of competing in the international markets. QM principles and practices have been transferred within the petroleum industry and across nations due to the long-term presence of multi-national corporations in the petroleum industry. Therefore, it is expected that the ndings of this study should be consistent with previous studies on QM, while being examined in an entirely new context and within a specic industry. 2.1 Top management, human resource management and rm performance The importance and centrality of top management support and executive commitment in effective implementation of quality systems has been addressed in the literature (Pannirselvam and Ferguson, 2001; Sharma and Gadenne, 2008; Ogden et al., 2010). In quality models such as the Malcolm Baldrige leadership is the driver of quality systems (Wilson and Collier, 2000; Lee et al., 2003, 2006; Stephens et al., 2005). Quality improvement can be enhanced by increasing knowledge about quality, customer focus, and management involvement. Previous studies indicate that top management support is the most signicant factor affecting other QM practices. Management leadership in quality is directly related to training and employee relations (Kaynak, 2003). Accordingly, it is proposed that: H1a. Top management support is signicantly related with employee training. H1b. Top management support is signicantly related with employee involvement. Through supporting, implementing and reinforcing quality practices, top management has a signicant effect on improving organizational quality performance (Wilson and Collier, 2000; Kaynak, 2003). There is evidence in the literature that supports the signicant role of top management in improving organizational performance. Empirical studies suggest a positive link between senior management involvement and nancial performance (Adam et al., 1997). Ramaswamy et al. (1994) discussed the important role of top managers in driving protability in a regulated industry (the US domestic airline industry). In capital-intensive industries, improvement in productivity is directly inuenced by managers (Krishnan and Srinivasan, 1997). Due to the high degree of automation and standardization, there is limited opportunity for process improvement programs in capital-intensive industries (Hendricks and Singhal, 2001). This suggests that managers should have a critical role in improving productivity and enhancing protability in the regulated and capital-intensive industries (such as the petroleum industry). Based on the above it is hypothesized that: H1c. Top management support is signicantly related with internal quality results.

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H1d. Top management support is signicantly related with external quality results. The literature acknowledges the importance of human resource management practices nez-Costa et al., and employee satisfaction as one of the crucial elements of QM (Mart 2009; Levine and Toffel, 2010). Human resource management practices are reported to be signicant predictors of operational performance (De Ceiro, 2003). Employees knowledge about quality along with education and training in quality tools ensure the effectiveness of quality programs and process improvement initiatives (Phan et al., 2011). Employee training and recognition has a signicant impact on reducing cost of quality and improving operational performance and productivity (Adam et al., 1997; Ahire and Dreyfus, 2000; Kaynak, 2003). In addition, focus on training and learning is critical in capital-intensive industries (Pineld et al., 1987; Hales and Chakravorty, 2006). Therefore, it is hypothesized that: H 2. H 3. Employee training is signicantly related with internal quality results. Employee involvement is signicantly related with internal quality results.

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The link between internal and external quality results has been established in the literature. Kaynak (2003) showed that improvement in operational performance leads to increased sales and market share. In capital-intensive industries (e.g. the airline industry) productivity and operational improvement are the determinants of protability (Tsikriktsis, 2007). Therefore, it is hypothesized that: H 4. Internal quality results is signicantly related with external quality results.

2.2 Variables and measures Based on the review of the literature on QM and after careful review of the existing instruments on QM, the instrument developed by Rao et al. (1999) was considered for this study. The information about the measures and constructs are provided below: . Top management support (tms). It emphasizes the role of top managers and key decision makers in supporting and implementing QM practices (Rao et al., 1999; Yeung et al., 2005; Sadikoglu and Zehir, 2010). . Employee training (et). It addresses the level and scope of employee training as an essential part of QM (Rao et al., 1999; Phan et al., 2011). . Employee involvement (ei). It describes the involvement of employees in decision making and problem solving at all levels in the organization (Rao et al., 1999; Soltani et al., 2008; Ogden et al., 2010). . Internal quality results (iqr). It determines how much QM practices have improved internal quality measures, such as defect rates, reprocessing rate, production lead time, and productivity (Rao et al., 1999; De Ceiro, 2003). . External quality results (eqr). It refers to the improvement of external performance of the rm, which is measured by competitive market position and protability (Rao et al., 1999; Kaynak, 2003; Carter et al., 2010; Sadikoglu and Zehir, 2010).

3. Petroleum industry: an overview The petroleum industry is the driving force of the global economy. In the USA, the petroleum industry supports more than 9.2 million jobs, and accounts for 7.5 percent of the GDP. According to the American Petroleum Institute, the petroleum industry has created about 2 million jobs during 2004-2007 (American Petroleum Institute, 2010). Future investments in the petroleum industry are also signicant. The International Energy Administration (IEA) forecasts $9.6 trillion investment in the petroleum industry (out of the total $22 trillion investment in the energy section) during 2006-2030. From operations management perspective, the petroleum industry has several unique characteristics (Varma et al., 2008): . Suppliers. The number of suppliers in the petroleum industry is rather limited. From this aspect, it is a sellers market. . Raw material. While the price of raw material is pretty stable in other industries, the price of the crude oil uctuates signicantly. . Reverse production system. In most industries, several components/parts are assembled in order to develop a new product. In contrast, in the petroleum industry, the creation of new products starts from downstream, i.e. several products (e.g. gasoline and diesel) are created from crude oil. . High-transportation cost. Petroleum industry has a relatively high-transportation cost compared to other industries. It is estimated that the transportation cost would be about 20 percent of the production cost in the petroleum industry. . Production process. Petroleum industry uses continuous operations. Therefore, it enjoys relatively low-unit cost (due to the standardization of the processes and high rate of output). It uses rigid and standard operations; therefore, it is less exible. Another challenge is capacity planning and utilization. In order to get the lowest unit price, oil and gas companies need to operate constantly. There is little room to make any changes to the capacity. As the result of this, it would be difcult to make scheduling change (due to high set-up cost). Therefore, product postponement is not applicable in this situation. . Sources of protability. Due to the lack of product variety, cost reduction and efciency are the major sources of competitiveness. . Information sharing. Despite some efforts to integrate business processes, there is not much emphasis on information sharing within the petroleum industry. As the result of this, visibility across the supply chain in the petroleum industry is low. The importance of operations, high level of standardization, and emphasis on efciency makes the petroleum industry a suitable industry to test a verity of operations and production management theories. In addition, due to the importance of the petroleum industry to the global economy, any improvement in operational processes and cost reduction has signicant effect on the regional, national, and global economy. 4. Methodology 4.1 Instrument development and validation The following steps were taken to develop and validate the measurement instrument. The theoretical dimensions underlying QM practices were conceptualized

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and a questionnaire was developed to measure them. Data was collected in multiple countries. The sample was divided randomly in half. Testing and purication of the constructs were done using the rst half, while the second half was used as a hold-out sample to conrm the validity of the constructs. Structural equation modeling (LISREL) was used in the analysis and validation. The instrument has been administrated to multiple industries in multiple countries, and it has the highest external validity (Rao et al., 1999). For this study, the original questionnaire was translated to Persian using the following process: rst, the researcher, who has sufcient knowledge of the subject and command of both English and Persian languages, translated the English version of the questionnaire into Persian. Another native of Iran, who has sufcient knowledge of both English and Persian, also translated the English version into Persian. The two Persian versions of the questionnaire were compared to each other. More than 95 percent of translation in the two versions was the same. Finally, a third person, who was a professor at a university, whose area of research was QM and has good command of both English and Persian, evaluated the translation and provided comments on the translation. The nal version was used for this study. 4.2 Sample Iran was selected as the representative country in the Middle East because of its major role in the petroleum industry in the world. Iran is the fourth oil producer in the world, has the second largest reserves of oil and gas in the world and is a major power in the international oil and gas market. A list of companies in the production and exploration section of the petroleum industry was solicited through contact with the Ministry of Petroleum. A total number of 61 organizations were identied. Because of the focus of the research on production and exploration segment of the petroleum industry, it was important to identify organizations that are within production and exploration. A list of managers was obtained by contacting the advisor to the Ministry of Petroleum. A total number of 31 usable surveys were received indicating a response rate of 52 percent. Focus on a single industry enables the researcher to better understand the processes and practices which facilitates comparison among rms (Tsikriktsis, 2007). By focusing on a single industry the determinants of performance can be precisely identied (Garvin, 1988). Therefore, it is believed this approach is appropriate to study the research questions. 4.3 Non-response, common method, and single respondent bias Non-respondents could be a concern in survey research. They may indicate a bias among the sampled population away from those hypothesized. As the initial step to minimize non-response bias proper channels of communications were established with the Ministry of the Petroleum. A representative was assigned to work with the companies. Through sending formal letters, frequent visits to the companies, follow-up phone calls, and the support from the Ministry of Petroleum the importance of the study was explained. This was helpful in minimizing non-response bias (Lambert and Harrington, 1990). For estimating non-response bias the procedure suggested in the literature was used (Armstrong and Overton, 1977). It compares parameter estimated between groups of respondents based on the timing of the receipt of their replies. If there is no signicant difference in estimates between early and late respondents, the non-respondents do not

inuence the results. No signicant differences between the early and late respondents were found. Common method bias is related to the deviation in survey responses due to the implementation of a common method for data collection (Podsakoff et al., 2003). To address this concern, the survey instrument has been carefully selected and translated to minimize the respondents ambiguity, lack of interest and other similar biases. 5. Analysis 5.1 Demographic information In the sample 100 percent of the participants were male. This gender homogeneity was not unusual since most managers and consultants at that level in Iran are male. The average age for the respondents was 49 years. All respondents have been in the oil/gas industry for at least ve years. The lowest educational level of the participants was a Bachelors degree. 5.2 Descriptive statistics The mean and standard deviation for each variable has been calculated and the results are provided in Table I. As an alternative test the Kolmogorov-Smirnov test of normality was used. The result showed that all constructs met the requirement of normality. Overall, it was concluded that the requirement for normality has been satised. 5.3 Empirical validation of the measures According to Churchill (1979) construct validity measures the correspondence between a concept and the set of items used to measure the construct. This process starts with the assessment of content validity (OLeary-Kelly and Vokurka, 1998). Content validity refers to the extent to which a measure represents all aspects of a given concept (Nunally and Bernstein, 1994). One of the approaches to ensure content validity is through reviewing the literature and using experts opinion on the given construct (Churchill, 1979). Content validity was ensured since: . the instrument has been developed based on review of the literature; and . it has been reviewed by scholars and practitioners in QM. This procedure for assessing content validity has been used in previous studies in QM (Dow et al., 1999). To establish the unidimensionality of the constructs the validity of the measurement model for each construct was separately examined. Few items were dropped due to their small factor loadings. Table II shows the result of the conrmatory factor analysis (CFA) for each construct.
Variables Top management support Employee training Employee involvement Internal quality results External quality results Mean 2.58 2.65 2.52 2.92 2.84 SD 0.46 0.52 0.52 0.54 0.53 Skewness 2 0.71 0.2 0.27 2 0.2 2 0.46 Kurtosis 0.68 2 0.47 0.12 1.17 0.54

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Table I. Descriptive statistics

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The goodness-of-t (GFI) index compares the theory to the reality through assessing the similarities of the proposed model to the estimated covariance matrix. GFI values close to 0.9 or higher indicate a good model t. In addition to GFI, the x 2 statistic is used to assess the t between the proposed model and the estimated model. In using x 2 to assess perfect model t, two conditions should be considered: a small x 2 and a p-value . 0.05. Relatively small x 2 supports the proposed model (Hair et al., 2009). The x 2 is generally sensitive to the sample size; therefore alternative GFI measures have been recommended (Hair et al., 2009). The Normed x 2 (x 2/df ) ratio has been also recommended as another measure of model t where a ratio less than three is considered as a good model t (Carmines and McIver, 1981; Bollen, 1989; Hair et al., 2009). Another measure of model t is the root mean-square residual (RMR); relatively small RMR is an indication of a good model t. Overall, it was concluded that the requirement of validity of each construct has been established. As an alternative diagnostic test, the average error variance of indicators, known as communality, was calculated. Communalities refer to the average amount of variation among the indicators explained by the measurement model (Hair et al., 2009). A larger sample size is required when communalities are below 0.5 (Enders and Bandalos, 2001). All communalities were above 0.5. This suggests that the sample size does not inuence the results. 5.4 CFA for the full model Following the recommendation provided by Hair et al. (2009) the validity of the full measurement model was examined. The result is provided in Table III. Through reviewing the modication indices, standardized residuals and the GFI statistics the validity of the measurement model was examined. Hair et al. (2009)
Construct Top management support Employee training Employee involvement Internal quality results External quality results Items 4 4 5 5 4 GFI 0.990 0.854 0.910 0.855 0.966

x2
0.613 16.165 7.743 11.483 2.300

df 2 2 5 5 2

x 2/df
0.306 8.083 1.549 2.300 1.150

p-value 0.736 0.001 0.171 0.043 0.323

Table II. Conrmatory factor analysis

GFI statistics

Measurement model 1.21 0.05 0.08 273.78 532.08 316.09 0.49 0.47 0.89

Recommended range , 3.0 , 0.05 , 0.08 , Saturated model and independent model . 0.5 . 0.5 . 0.9

x /df Root mean-square residual (RMR) Root mean square error of approximation (RMSEA) Akaikes information criterion (CAIC)
CAIC for saturated model CAIC for independent model Parsimony goodness-of-t index (PGFI) Parsimony normed t index (PNFI) Comparative t index (CFI)

Table III. GFI statistics of the measurement model

recommend examination of a variety of GFI statistics to determine the overall t of the model. An examination of the GFI statistics shows that most of the t indices are within or close the recommended range, an indication of an acceptable measurement model. An examination of the standardized loadings shows that they are all signicant which provides an initial evidence of convergent validity. Next, the reliability for each construct was calculated. A reliability value of 0.7 or higher is an acceptable value for survey research (Nunally and Bernstein, 1994; Streiner, 2003). A reliability of 0.6-0.7 is considered acceptable when the rest of the constructs have reliability over 0.7 (Hair et al., 2009). With the exception of employee training all reliabilities were within the acceptable range (Table IV). Convergent validity was assessed through calculating average variance extracted (AVE) where it calculates the mean variance extracted for the items loadings on a construct and is used as an indicator for convergence (Fornell and Larcker, 1981). A value of 0.5 or higher is an indication of good convergence (Hair et al., 2009). The results have been shown in Table IV. To establish discriminant validity of the constructs, the AVE values for any of the two constructs with the square of the correlation estimate between the two constructs were compared (Fornell and Larcker, 1981). If the AVE estimates are greater than the squared correlation between the constructs we can conclude that discriminant validity of the two constructs has been supported. The correlation estimates are provided in Table V. An examination of AVE values and the correlation estimates of constructs suggested the existence of discriminant validity. 5.5 Structural model and testing the hypotheses The structural model for the relationship among quality practices is shown in Figure 1. These relationships were developed based on the discussion on Section 2.1. As it is shown in Table VI most of the GFI statistics are within (or close to) the recommended range. Overall, with the result from Tables III and VI it was concluded that the validity of the measurement model and the structural model has been established.
Scale Top management support Employee training Employee involvement Internal quality results External quality results Reliability 0.77 0.69 0.70 0.73 0.75 Indicators tms1 tms2 tms3 et1 et2 et3 ei1 ei2 ei3 iqr1 iqr2 iqr3 eqr1 eqr2 eqr3 Loadings 0.98 0.71 0.53 0.49 0.88 0.65 0.68 0.74 0.53 0.52 0.75 0.82 0.84 0.65 0.67 AVE 0.58 0.48 0.43 0.50 0.51

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Table IV. Properties of the model

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tms et

tms 1

et 0.412 * * 0.021 1

ei 0.426 * * 0.017 0.287 0.118 1

iqr 0.477 * * * 0.007 0.519 * * * 0.003 0.405 * * 0.024 1

eqr 0.461 * * * 0.009 0.223 0.228 2 0.055 0.768 0.405 * * 0.024 1

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ei iqr

Table V. Correlations

eqr Note: Signicance at: *p , 0.1, * *p , 0.05 and * * *p , 0.01

Employee Training

H2

Internal quality results

H1a Top Management Support H1b

H1c

H1d

H3

H4 External quality results

Figure 1. Structural model

Employee Involvement

Table VII presents the estimate for each path (regression coefcient) and the corresponding p-value for the structural model. The results have been presented the level of signicance of 0.1 (a 0.10). There is a signicant relationship between top management support and employee involvement (b 0.207, p , 0.1), and top management support and external quality results (b 0.458, p , 0.1). The effect of top management support on employee training (b 0.146, p . 0.1) and top management support on internal quality results (b 0.090, p . 0.1) is not statistically signicant. Employee training does not have a signicant impact on internal quality results (b 0.614, p . 0.1). The effect of employee involvement on internal quality results is not signicant as well (b 0.288, p . 0.1). Finally, no signicant relationship between internal quality results and external quality results was observed (b 0.299, p . 0.1). Overall, the results suggest that top management support is the signicant predictor of external quality results. The result also suggests the effect of top management support on employee involvement.

GFI statistics

Structural model 1.27 0.06 0.09 269.57 532.08 316.09 0.49 0.46 0.84

Recommended range , 3.0 , 0.05 , 0.08 , Saturated model and independent model . 0.5 . 0.5 . 0.9

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x /df Root mean-square residual (RMR) Root mean square error of approximation (RMSEA) Akaikes information criterion (CAIC)
CAIC for saturated model CAIC for independent model Parsimony goodness-of-t index (PGFI) Parsimony normed t index (PNFI) Comparative t index (CFI)

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Table VI. GFI statistics of the structural model

Path Top management support ! employee training Top management support ! employee involvement Top management support ! internal quality results Top management support ! external quality results Employee training ! internal quality results Employee involvement ! internal quality results Internal quality results ! external quality results

Estimate 0.146 0.207 0.090 0.458 0.614 0.200 0.299

Sig. 0.112 0.095 0.345 0.013 0.108 0.288 0.457

Hypothesis H1a H1b H1c H1d H2 H3 H4

Hypothesis supported? No Yes No Yes No No No

Table VII. Standardized regression estimates

6. Discussion This study contributes to our understanding of the effect of top management in improving quality results in the petroleum industry, a highly regulated, efciency-oriented and capital-intensive industry. The primary objective of this study was to examine the convergence theory of QM. A review of the ndings suggest that top management support for quality is the most signicant predictor of external quality results. Employee training and employee involvement do not appear to have a signicant impact on external quality results. While the correlation between internal and external quality results is statistically signicant, the effect of internal quality results on external quality results was not statistically signicant in the structural model. This could be partially due to the small sample size. Based on the signicant correlation between internal and external quality results, it is expected that a larger sample could provide a signicant relationship between internal and external quality results. The results from the structural model reveal that top management support for quality is signicantly related with external quality results. This shows that top management plays a very critical role in promoting QM and its successful implementation in the petroleum industry. Previous studies have shown the indirect link between top management and organizational performance (Wilson and Collier, 2000; Kaynak, 2003). Similar results have been reported on the role of top management in the US domestic airline industry. Within the US airline industry it has been argued that in the regulatory

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environment the protability of an air carrier was ultimately determined by organizational leaders (Ramaswamy et al., 1994). Iranian petroleum industry is highly regulated, and companies should do business according to the rules and policies set by the government. While there are structural and contextual differences between the US airline industry and the Iranian petroleum industry, they are both capital-intensive, efciency driven, and have some level of regulation. This may suggest that in highly regulated environments and within capital-intensive industries top management plays a very important role on the effectiveness of quality programs and organizational performance. The regression coefcient between top management support and employee training was barely below the level of signicance (a 0.1) and was found to be statistically insignicant. The relationship between top management support and employee involvement was statistically signicant but very close to the threshold of 0.1 level of signicance ( p 0.095). One expects a very strong relationship between leadership support and improvement in human resource management practices such as employee training and employee involvement. QM literature argues that it is managements responsibility and commitment to empower employees and involve them in the organization-wide decision making process (Rao et al., 1999). There are several explanations for these ndings in this study. This could be related to the conservative mindset of managers in capital-intensive industries and their unwillingness for change. Previous studies assert that in such conservative (mature) industries managers do not have much interest in promoting innovation and change. They pay little attention to fundamental operations management thinking (Shaw et al., 2005). Another possible argument is that managers in the oil and gas industry have developed an illusion for control (Kahneman and Lovallo, 1993). They tend to be less exible and do not emphasize practices such as employee involvement (Asrilhant et al., 2007). Due to the characteristics of capital-intensive industries QM practices such as employee involvement cannot be fully implemented (Hendricks and Singhal, 2001). Our nding is also consistent with the argument that a process approach to quality does not usually emphasize human resource practices in their quality programs. This may cause some difculties in integrating human resource management practices with their quality programs (Kidu and Vouzas, 1998). Additionally, one can argue that the level and nature of employee involvement in the petroleum industry is limited and less emphasized due to the standardization of processes and operations, lack of attention to operations management thinking, and the regulatory structure of the petroleum industry. As Asrilhant et al. (2007) indicated the petroleum industry:
[. . .] appears to be attached to nancially orientated decisions, focuses on nancial and environmental (green) issues, seeks to control the efciency of tangible assets, resists changing current routines and overemphasizes short term interests such as those of shareholders, sometimes at the expense of customers and employees.

This suggests that managers in the petroleum industry have not fully implemented quality programs. Looking from the lenses of convergence theory, it could be argued that while the importance of top management support in achieving higher level of organizational performance has been established, practices such as employee training and employee involvement have not been fully addressed by managers, at least in the context of the petroleum industry in Iran.

The ndings also support the contingency theory of QM. According to the contingency theory, some management practices may or may not be effective in certain organizational contexts (Doty et al., 1993; Damanpour, 1996; Gresov and Drazin, 1997). The validity of the contingency theory has been empirically examined in QM where organizations operating in different contexts can achieve similar effective business results by emphasizing different QM practices (Zhao et al., 2004). One could argue that practices such as employee training and employee involvement are less emphasized in the context of the petroleum industry due to the nature of processes in this industry. Is the convergence theory of QM valid in the international context? The empirical analysis supports the signicance of top management support for quality in leading and directing quality programs. A review of the correlation analysis (Table V) indicates that top management support is signicantly related to other quality practices. However, some of the linkages in the structural model are not statistically signicant. One could argue that some of the regression coefcients (such as the link between top management and employee training or employee training with internal quality results) could be statistically signicant if a larger sample size was available. This is a valid argument since a larger sample size provides a smaller coefcient standard deviation and thereby increases the t-value. As such, with a larger sample these two regression coefcients could be statistically signicant. Nevertheless, the ndings of this study supports previous studies in QM where it underlines the importance of top management support in leading quality programs and promoting human resource management practices such as employee training and employee involvement. In addition, with a relatively large regression coefcient between employee training and internal quality results (b 0.614) it would be argued that employee training is directly related to improving internal quality results. Overall, the signicance of the linkages among several QM practices has been validated in this study. This provides supports for the convergence theory of management and its relevance to management of quality. 6.1 Implications for managers The study provides some insight for managers in the petroleum industry. Previous studies have pointed to the low level of understanding of quality, lack of information, education, and training, and lack of understanding of QM know-how in the Middle East (Al-Khalifa and Aspinwall, 2000; Curry and Kadasah, 2002). The ndings of this study provide some support for the link between employee training and internal quality results. Therefore, the above ndings as well as the existing literature suggest that managers in the petroleum industry should focus on employee training to improve operational performance (internal quality results). 7. Limitations and future research There are some limitations in this study that must be mentioned. Above all, the sample size was relatively small. The sample size must be adequate to represent the population (Hair et al., 2009). From this perspective, the sample size represents more than 50 percent of the population. In terms of the methodology, the maximum likelihood estimation procedure used in this study provides valid results with small samples (Hart and Clark, 1999; Hair et al., 2009). Furthermore, through focusing on a single industry and using a relatively homogeneous sample, the impact of sample size in the analysis has

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been minimized. Nevertheless, to further validate the ndings of this study a larger sample size should be used in future studies. It should be noted that conducting surveys could be a challenge in the petroleum industry due to the relatively small number of organizations. To overcome this problem, researchers have used alternative research designs such as case study (Grant, 2003). Taking into account these challenges, it is recommended that future studies utilize alternative research designs. In this study the importance of human resource management and its effect on internal/external quality results have been addressed. Future studies should incorporate other elements of QM such as information systems, process management, supplier quality and customer satisfaction so that a comprehensive understanding of the role of QM practices in the petroleum industry can be obtained. Such an analysis provides insight on the effectiveness of QM practices on organizational quality performance while enables the researchers to better understand the similarities and differences of the effect of QM across industries.
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Appendix. Survey questions Instructions. Please respond to the following questions by circling one of the numbers 1-5 or x to the right of the question. The numbers represent the strength or degree of your assessment, agreement, perception or opinion, as the case may be, to the question item. Scale. x unable to respond; 5 very high; 4 high; 3 medium; 2 low; 1 very low.

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Top management support Extent to which the top company executive assumes responsibility for quality performance Acceptance of responsibility for quality by major department heads within the company Degree of participation by top management in the quality improvement process Extent to which the top management has objectives for quality performance Extent to which quality goals are made specific within the company Importance attached to quality by the top management in relation to cost and schedule objectives Amount of review of quality issues in the top management meetings Employee training Extent to which quality-related training is given to hourly employees through the company/division Extent to which training in the basic statistical technique (such as histograms and Control charts) is provided in the company/division as a whole Availability of resources for employee training in the company/division Extent to which training in specific work skills (technical and vocational) is given to employees throughout the company Employee involvement Effectiveness of employee involvement program in the company/division Extent to which hourly/non-supervisory employee participate in quality decisions Extent to which employee are held responsible for the output of their process Extent to which quality awareness building among employee is ongoing Extent to which the company/division measure employee morale x54321 x54321 x54321 x54321 x54321 (continued) x54321 x54321 x54321 x54321 x54321 x54321 x54321 x54321 x54321 x54321 x54321

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Internal quality results Extent to which scrap levels have been reduced by quality management Extent to which rework levels have been reduced by quality management Extent to which your companys manufacturing throughput times has been x54321 x54321 x54321

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reduced by quality management Extent which productivity of your company has been increased by quality management Extent to which costs of your company have been reduced by quality management External quality results Extent to which customer complaints have been reduced by quality management Extent to which the competitive position of your company/division has been enhanced by quality management Extent to which quality management has contributed to keeping your company/division in business Extent to which profits of your company/division have been increased by quality Management x54321 x54321 x54321 x54321 x54321 x54321

Corresponding author Mahour Mellat-Parast can be contacted at: mahour@ncat.edu

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