An empirical investigation of

relationship between total quality

management practices and
quality performance in Indian
service companies
Faisal Talib
Mechanical Engineering Section, Aligarh Muslim University,
Aligarh, India
Zillur Rahman
Department of Management Studies, Indian Institute of Technology Roorkee,
Roorkee, India, and
M.N. Qureshi
Department of Mechanical Engineering, MS University of Baroda,
Vadodara, India
Abstract
Purpose The purpose of this paper is to investigate the relationship between total quality
management (TQM) practices and quality performance in Indian service companies.
Design/methodology/approach The empirical data was collected using a self-administered
instrument that was distributed to 600 Indian service companies. Of the 600 instrument e-mailed,
172
usable instrument were returned, yielding a response rate of 28.6 per cent. A stratified sampling
procedure was utilized to obtain the minimum sample size of 600 from the four chosen service
industries
(i.e. Healthcare, Banking, Information and Communication Technology (ICT), and Hospitality).
The data was analyzed using factor, Pearsons correlation, and multiple regression analyses.
Findings The findings revealed that TQM practices were found to be partially correlated with
quality performance of the Indian service companies. It was also found that quality culture was
perceived as the dominant TQM practice in quality performance. The other practices such as
quality
systems, training and education, teamwork, and benchmarking showed a positive relationship
with
quality performance.
Research limitations/implications The research paper was limited by including only four
industries in the selection of service companies in India, making this a possibly biased selection
and it
may not be adequate to generalize the results for the entire Indian service companies.
Originality/value The study has contributed to the TQM literature with a better understanding
of
the 17 TQM practices and their association with a companys quality performance that will
provide
valuable knowledge to top-management of service companies, to refine their current TQM
practices
and subsequently improve quality performance.

the objectives of this study are:

(1) to investigate the relationships between TQM practices and quality
performance within Indian service companies; and
(2) to assess the extent of association of TQM practices with quality performance.

The key TQM factors and quality performance measure were validated through
exploratory factor analysis (EFA), while the relationships between them were
examined through bivariate correlation and multiple regression analyses.

The study investigates Indian service companies that have either implemented or are
in the process of implementing TQM. Quality is crucially important for Indian service
companies, faced with increasing competitiveness on international market. The Indian
service sector represents about 57.3 percent of Indias gross domestic product (GDP) and
therefore, considered to be one of the vital components of its economy (Information
Infrastructure for Institutions, Centre for Monitoring Indian Economy Private Limited,
India (i3, CMIE, 2010)). As world markets are becoming increasingly integrated, Indian
service companies are coming under strong pressures to ensure that their quality
performance is up to date and matches with the leaders of quality like the USA,
Australia; the UK and other competitors. Increased globalization and tough business
conditions have brought challenges and opportunities for Indian service companies
and made them to promote quality in their products and services, and has become a
national imperative for Indian companies to stand and compete in the present market
condition.

Through the
comprehensive review of the TQM literature, the present study utilizes 17 TQM
practices identified by Talib et al. (2011a, b) for service industries which are frequently
occurring in the TQM literature. They are: top-management commitment, customer
focus, training and education, continuous improvement and innovation, supplier
management, employee involvement, information and analysis, process management,
quality systems, benchmarking, quality culture, human resource management, strategic
planning, employee encouragement, teamwork, communication, and product and
service design.
The reasons for selecting these practices are:
. Have been used frequently (highest frequency of occurrences) by different
researchers in the service industries.
. Have been identified as the key practices in TQM implementation in both
manufacturing and service industries (Saraph et al., 1989; Antony et al., 2002;
Zhang et al., 2000).
. Constitute practices that represent the hard and soft components of TQM.
. Significantly associated in services and in the promotion of service quality (Ueno,
2008; Lakhal et al., 2006; Behara and Gundersen, 2001).
Hence, it is believed that these practices are suitable to be used in the Indian service
sector context.
The two research questions of this study can be articulated as follows:
RQ1. Do the identified TQM practices have relationship with companys quality
performance?
RQ2. Which TQM practices are more associated with the companys quality
performance?

TQM Practices
Top-management commitment
Customer focus
Training and education
Continuous improvement
and innovation
Supplier management
Human resource management
Information and analysis
Process management
Teamwork
Quality culture
Strategic planning
Product and service design
Quality systems
Employee encouragement
Benchmarking
Communication
H11
H12
H13
H14
H15
H16
H17
H18
H19
H110
H111
H112
H113
H114
H115
H116
H117

H1. There is a significant positive relationship between identified TQM practices

and quality performance of Indian service companies.

H11. Top-management commitment for TQM practices is positively associated

with quality performance.

H12. Customer focus for TQM practices is positively correlated with quality
performance.

H13. Training and education for TQM practices is positively correlated with
quality performance.

H14. Continuous improvement and innovation for TQM practices is positively

correlated with quality performance.

H15. Supplier management for TQM practices is positively correlated with quality
performance.

H16. Employee involvement for TQM practices is positively correlated with

quality performance.
H17. Information and analysis for TQM practices is positively correlated with
quality performance.

H18. Process management for TQM practices is positively correlated with quality
performance.

H19. Quality system for TQM practices is positively correlated with quality
performance.

H110. Benchmarking for TQM practices is positively correlated with quality

performance.

H111. Quality culture for TQM practices is positively correlated with quality
performance.

H112.Human resource management for TQM practices is positively correlated with

quality performance.

H113. Strategic planning for TQM practices is positively correlated with quality
performance.

H114. Employee encouragement for TQM practices is positively correlated with

quality performance.

H115. Teamwork for TQM practices is positively correlated with quality

performance.

H116.Communication for TQM practices is positively correlated with quality

Performance

H117. Product and service design for TQM practices is positively correlated with
quality performance.

In order to accomplish the objective of this research

study, a questionnaire survey methodology was adopted and was carried out in select
Indian service companies.

Research design

The present research uses a descriptive cross-sectional study design. It is concerned with
analysis of phenomenon, situation, problem, opinions, and demographic information, or
issue. In
addition to this, the study also employed the survey method, which makes use of a
research instrument. This study utilizes electronic mail (e-mail) survey method as the
means of data collectionwhich iscommonly used in similar kind of research

Sampling frame

The sampling frame used for this study is the list of select Indian service companies
published by the i-cube (

The four service industries mainly included in this study are healthcare, banking,
hospitality (hotel and tourism), and information and communication technology (ICT)
which includes telecommunication services, information technology enabled services
(ITeS) and computer software services
The reasons for choosing these four industries
are their high GDP share in Indian economy (about 56 percent

highly
labor intensive industries and provides substantial employment (

there ever increasing net annual income to the Indian service sector

The list contains a total of 1,781 companies at the time of research period
covering all the four categories. These companies are frequently up-dated and
published by prominent and reliable source. The study was conducted between
February and May, 2011.

Sampling method

A stratified sampling method (a probability sampling technique) was used in this

study. This study divides the target population (N) into
four strata. These four strata were: healthcare {120}, banking {200}, hospitality {350},
and ICT {1111}

Sample size

The minimum sample size needed for this study comes out to be 591. This sample
was increased to 600 to reduce the probability of Type II error (Burgess et al., 2006).
The sample size of 600 is above the minimum requirement and is within the acceptable
range as per the guidelines proposed by the researchers. This minimum sample size
was stratified into four strata. The sample size drawn from each stratum, i.e. healthcare,
banking, hospitality, and ICT industries based on proportionate stratified sampling
technique were found to be 40, 67, 118, and 375, respectively. These samples were
drawn using a simple random sample approach.

Research instrument
A self-administered structured instrument was designed in this research based on the
service as well as manufacturing and service TQM literature specifically,

There was a significant positive relationship between quality culture and quality
performance (r 0.699, p , 0.01). It was followed by top-management commitment
(r 0.637, p , 0.01); customer focus (r 0.657, p , 0.01); training and education
(r 0.686, p , 0.01); continuous improvement and innovation (r 0.659, p , 0.01);
employee involvement (r 0.431, p , 0.01); information and analysis (r 0.466, p , 0.01); process
management (r 0.491, p , 0.01); quality systems
(r 0.658, p , 0.01); benchmarking (r 0.409, p , 0.01); human resource
management (r 0.311, p , 0.01); strategic planning (r 0.524, p , 0.01);
employee encouragement (r 0.436, p , 0.01); teamwork (r 0.608, p , 0.01);
communication (r 0.535, p , 0.01); and product and service design (r 0.598,
p , 0.01). The weakest correlation was for supplier management and quality
performance (r 0.297, p , 0.01). It was found that all the TQM practices had
significant positive correlation ( p , 0.01) with quality performance. The results also
indicate that respondents had high levels of companys quality performance. Out of 153
correlations, all correlation coefficient are larger than 0.20. The highest coefficient of
correlation in this research however, is 0.816 which is below the cut-off of 0.90 for the
collinearity problem. Further, the correlation coefficient between the independent
variables and dependent variable were less than 0.90, indicating that the data was not
affected by a collinearity problem

R2
between 1.0 and 5.9 percent is considered as small, between 5.9 and 13.8 percent
is medium, and above 13.8 percent is large. From Table VIII, it can be observed that
coefficient of determination (R 2) was 0.646, representing that 64.6 percent of quality
performance can be explained by the 17 independent variables. This expresses that
TQM can significantly account for 64.6 percent in quality performance. Thus, the effect
size for this study is large and H1 was partially supported. The proposed model was
Unstandardized
coefficients
Standardized
coefficients
Quality
performance
Collinearity
statistics
Model
Independent
variable(s) B SE b t-value Sig. Tolerance VIF Results
1 (Constant) 0.724 0.202 3.592 0.000
Topmanagement
commitment
0.071 0.071 0.094 1.000 0.319 0.262 3.814 Reject
(H11)
Customer focus 0.021 0.074 0.026 0.278 0.782 0.260 3.852 Reject
(H12)
Training and
education
0.131 0.069 0.172 1.914 0.057 * * * 0.285 3.511 Accept
(H13)
Continuous
improvement
and innovation
20.043 0.094 20.050 20.454 0.650 0.192 5.220 Reject
(H14)
Supplier
management
20.042 0.069 20.052 20.611 0.542 0.315 3.177 Reject
(H15)
Employee
involvement
0.028 0.068 0.033 0.412 0.681 0.361 2.774 Reject
(H16)
Information and
analysis
0.006 0.063 0.007 0.089 0.929 0.429 2.331 Reject
(H17)
Process
management
0.040 0.056 0.047 0.721 0.472 0.533 1.877 Reject
(H18)
Quality systems 0.135 0.058 0.177 2.316 0.022 * * 0.392 2.554 Accept
(H19)
Benchmarking 20.076 0.060 20.192 20.963 0.090 * * * 0.434 2.304 Accept
(H110)
Quality culture 0.268 0.086 0.306 3.115 0.002 * 0.239 4.192 Accept
(H111)
Human resource
management
0.047 0.064 0.058 0.724 0.470 0.362 2.761 Reject
(H112)
Strategic
planning
0.090 0.070 0.108 1.278 0.203 0.323 3.094 Reject
(H113)
Employee
encouragement
0.007 0.068 0.009 0.103 0.918 0.312 3.203 Reject
(H114)
Teamwork 0.075 0.068 0.184 1.951 0.080 * * * 0.313 3.196 Accept
(H115)
Product and
service design
0.008 0.077 0.009 0.100 0.920 0.277 3.610 Reject
(H116)
Communication 0.037 0.066 0.048 0.559 0.577 0.315 3.178 Reject
(H117)
Notes: Significant at: *p , 0.01, * *p , 0.05 and * * *p , 0.1 levels (two-tailed); n 172
Table IX.
Multiple regression
analysis of TQM
practices on quality
performance
TQM and quality
performance
307
Downloaded by Ambedkar University At 01:38 13 November 2017 (PT)
adequate as the F-statistics {F(17,154) 16.538} was significant at 1 percent level
( p , 0.01). This indicated that the overall model was statistically significant and
positive relationship between TQM practices and quality performance (Table VIII).

The results of multiple regression analysis, include the standardized b coefficients

and t-value significant level, are tabulated and presented in Table IX. The results also
indicated that there are five practices of TQM, namely: training and education; quality
systems; benchmarking; quality culture; and teamwork which are positively associated
with quality performance. The individual model variable revealed that training and
education (b 0.172, p , 0.1); quality systems (b 0.177, p , 0.05); benchmarking
(b 20.192, p , 0.1); quality culture (b 0.306, p , 0.01); and teamwork (b 0.184,
p , 0.1) are all directly involved in the improvement of quality performance. Therefore,
H13, H19-H111, and H115 were supported. Meanwhile, top-management commitment;
customer focus; continuous improvement and innovation; supplier management;
employee involvement; information and analysis; process management; human resource
management; strategic process; employee encouragement; product and service design;
and communication had no significant effect on quality performance. Hence, H11, H12,
H14-H18, H112-H114, H116, and H117 were not supported. However, these practices
have provided long-term (strategic), operational, and tactical (supportive) as well as
infrastructural benefits necessary for the continuous improvement over time but with an
indirect relationship towards quality performance.

Discussion
The overall objective of this section was to examine the nature of TQM practices and
its relationship towards quality performance within Indian service sector. Overall, the
outcome of this study indicated that the TQM practices were found to be partially
correlated with quality performance of the Indian service companies.
The determinants of TQM practices in quality performance were training and
education; quality systems; benchmarking; quality culture; and teamwork. The study
further revealed that where quality culture was perceived as a dominant TQM practice,
there was strong association with quality performance. The result implies that TQM
recognizes and emphasizes the importance of quality culture to monitor organizational
culture and to evolve better TQM practices so that quality performance and other
quality-related outcomes are maintained at a high level. The result provide supporting
evidence from the views of Yusof and Ali (2000) which states that organizational
culture is not only able to change, guide, and display behavior of the individual but
also give significant contribution by influencing the thoughts, feelings, satisfaction,
interactions, and affective reactions within the company. Further, the study by Ooi et al.
(2007b) also provided the supporting evidence that there is a significant relationship
between quality culture and employees job satisfaction. According to Saravanan and
Rao (2007), deployment of quality culture within the organization is the major factor for
organization to be successful and to achieve quality products and services.
The next dominant TQM practice found in this study which has strong and positive
association with quality performance is quality systems. The result indicates that
TQM recognizes and emphasizes the importance of quality systems as a process
approach in deploying, implementing, and improving the effectiveness of companys
QM system. The study further revealed that the service companies must better utilize
processes in their QM system. The processes may be properly aligned and measured
against key objectives to identify opportunity for improvement. This finding was also
supported by Zhang (2000). Schevermann et al. (1997) further reported that use of
quality systems like quality tools and techniques in service organizations are beneficial
for its business performance. However, the results are in contrast with an earlier work
of Arumugam et al. (2008).
Training and education was discovered to be significant and positively related to
quality performance. However, this result is inconsistent with the outcomes of Zhang
(2000) and Ooi et al. (2008). Training and education is important and management should
understand that there activities lead to long-term commitment, as the outcome of TQM
implementation are not realized immediately. It was also discovered that training and
education has more positive effects on service industries workers rather than
manufacturing industries workers (Zhang, 2000). As per Cherrington (1995), in order to
minimize TQM barriers like employee absenteeism and high-turnover rate, and when
employees are not satisfied, top-management proposes a company-wide training
program. Study by Karia and Asaari (2006) also emphasized the use of training and
education practice within an organization to increase business performance.
Teamwork was found to be significant and positively related to quality performance.
The positive influence of teamwork on quality performance was concurred with prior
findings (Ooi et al., 2007b, 2008; Yang, 2006). Teamwork leads to facilitate employees
ability to work together as a team and with full participation (Karia and Asaari, 2006;
Yang, 2006). It was also found that working together as a unit improves employees
attitudes (Osland, 1997). According to Anschutz (1995), participation in teamwork was
the major factor for a successful organization to achieve collaboration between
employees and management.
Similarly, benchmarking was found significant and positively associated with
quality performance. In order to compete in the market, benchmarking helps in
improving the performance of the company (Yusuf et al., 2007). Benchmarking discovers
the best practices, sets target, and adopt them in the company to achieve competitive
advantages. Hence, benchmarking leads to meeting customers need (Yusuf et al., 2007).
Conversely, top-management commitment was found not significantly associated
with quality performance. It showed that the level of management involvement still not
intensive enough to influence quality performance. The finding supported the work of
Arumugam et al. (2008) and Sit et al. (2009).
Supplier management was found not significant enough to influence quality
performance. The finding suggested that the level of performance and relationship in
products, processes, and service development was relatively poor. As a result, supplier
management as aTQMpractice does not affect quality performance. This finding was in
line with prior research (Zhang, 2000; Arumugam et al., 2008; Talib and Rahman, 2012).
It was also discovered that strategic planning is insignificant to quality
performance. This implies that strategic planning in the service companies of India
failed to induce it, which contradicts with the previous study of Terziovski (2006).
Further, the service industries must have clear mission and vision statement in order to
improve quality performance of the company. From the TQM perspective, a quality
policy is usually communicated via a quality vision statement (Sit et al., 2009).
Finally, process management was also found to be insignificant to quality
performance. This result is consistent with the findings of Sit et al. (2009).
Also, information and analysis; human resource management; and customer focus were
also discovered to be insignificant to quality performance. The result of this study is
in contrast with Sit et al. (2009) and Ott and van Dijk (2005).
Furthermore, the results of bivariate and multiple regression analyses confirmed
that the quality performance variable was significantly related to perceptions of TQM
practices and thus, implementing TQM does payoff.

Conclusions
This research paper has accomplished the stated objectives of the study successfully
and analyzed the relationship between the TQM practices and quality performance in
the Indian service companies.
The study found 12 TQM practices (top-management commitment, customer focus,
continuous improvement and innovation, supplier management, employee involvement,
information and analysis, process management, human resource management, strategic
planning, employee encouragement, product and service design, and communication) to
be partially influencing the companys quality performance. In response to RQ1, the
findings presented empirical evidence that TQM have significant and positive
association with quality performance. In response to RQ2, the findings indicated that
where quality culture was perceived as a dominant TQM practice, it has strong
association with companys quality performance. However, the findings also indicated
the importance of quality systems, training and education, teamwork and
benchmarking for predicting companys quality performance. Thus, the results of the
study reported five practices of TQM that are more significantly associated with
the improvement in companys quality performance and provides evidence of the
positive impact of TQM on companys quality performance.
Furthermore, the study provided a useful framework for evaluation of TQM
implementation in Indian service companies as measured by the survey instrument
and identified 17 TQM practices for its successful implementation. These practices
relate to perception of quality performance. All the 17 TQM practices were found to
correlate with quality performance, regardless of the nature and type of the company.
This study provided the impact of TQM on company performance in both qualitative
and quantitative terms.
Managerial implications and future research
With regard to the managerial contributions, the findings prescribe potential
implications for top-management to review their TQM practices and focus first on
companys quality culture. The importance of quality culture in the company is essential
for the TQM to be successful. It uses teams, promotes pride in workmanship, drives out
fear, allows participative management, promotes leadership in place of supervision,
and promotes long-term orientation among the employees of the company. Hence, it is
concluded that the successful implementation of TQM is reliant upon the prevailing
company culture and there is a need to change the companys culture and attitudes of the
workforce for TQM to be effective. In addition, the usage or application of different
quality tools and techniques in the company to up date their quality systems, provide
training to employees, emphasize on working as a team with a common goal to achieve,
and benchmarking the practices of other emerging companies to have a competitive
edge in the marketplace. Further, this study assumes that superior quality
performance in the implementation of TQM practices requires companys focus
IJQRM
30,3
310
Downloaded by Ambedkar University At 01:38 13 November 2017 (PT)
on customer satisfaction. Survey techniques like customer review and feedback,
complaint analysis should be undertaken at regular interval to ensure the fulfillment of
customer needs and expectations which will enhance the level of quality performance.
Also, the findings of this study serve as a valuable guideline or yardstick for both
researchers and managers to review their TQM programs and conduct it on a priority
basis in order to facilitate quality performance within their companies. Another lesson to
be learned is that the remaining practices of TQM which are indirectly related to the
companys performance, are provider of long-term (strategic), operational, and tactical
(supportive) as well as infrastructural benefits necessary for the continuous
improvement over time, but with a less significant relationship with quality
performance should not be overseen. Finally, the findings support the argument that
the practices should be implemented holistically rather than on a piecemeal basis to get
the full potential of the identified TQM practices.
To the best of the knowledge, this is the first study undertaken within Indian
service companies to examine the relationship between TQM practices and quality
performance. Thus, the findings of this study provide valuable knowledge in QM from
Indian service sector perspective. The findings can help academics, consultant, policy
makers, quality practitioners, and companies that would like to support and promote
TQM in India.
However, a similar study may be undertaken to other emerging and newly
developed service industries which have not been covered in this study to understand
whether these TQM practices also influence quality performance and hence, may be a
better area for further research. Also, application of structure model analysis can be
another area to develop structural relationship between TQM practices and quality
performance, and test the hypotheses.