Soft TQM, hard TQM and innovation performance: An empirical study

Transcription

1 Soft TQM, hard TQM and innovation performance: An empirical study UEB International Seminar on Enhancing quality of Vietnamese products and services Jing Zeng 1, Phan Chi Anh 2 and Yoshiki Matsui 1 1 Yokohama National University, Japan 2 University of Economics and Business - Vietnam National University, Hanoi, Vietnam

2 Motivation Both quality and innovation are playing crucial roles in securing a sustainable competitive advantage An inquiry from practical management: Does TQM foster or hinder innovation? Conflicting arguments pertaining to the relationship between TQM and innovation exist in the literature (Prajogo and Sohal, 2001)

3 Table 1 Conflicting arguments about TQM-innovation relationship Arguments in support of a positive relationship Arguments in support of a negative relationship Cusotmers focus: encourages organizations to search consistently for new cusomter needs and expectations Consinuous improvement: encourages change and creative thinking in how work is organized and conducted. Empowerment: involvement and teamwork TQM can trap organizations in improvement or incremental innovations. TQM can lead organizations to be narrow-minded. They define the tyranny of the served market as only seeing the world through current customer eyes Based on the issue of risk avoidance and adaptive approach, TQM could strategically lead organizations to be imitatiors or followers rather than innovators or leaders. TQM could hinder creativity due to the enforcement of standardization or formalization TQM promotes single-loop learning rather than doubleloop learning Source: Prajogo and Sohal (2001) From a strategic point of view, TQM foucuses on cost efficiency that could limit the capacity and opportunity for innovation

4 Literature Review A few empirical attempts to test this relationship (Flynn,1994; Prajogo and Sohal, 2003; Feng et al., 2006; Perdomo-Ortiz et al., 2006; Santos- Vijande and Álvarez-González, 2007; Martínez- Costa and Martínez-Lorente, 2008; Sadikoglu and Zehir, 2010) Mixed results: Prajogo and Sohal (2003): Australia sample; positive Singh and Smith (2004): wider Australia sample; no firm link

5 Literature Review Shortcomings of extant empirical studies on this issue: 1. Integrated approach for TQM: Prajogo and Sohal, 2003; Santos-Vijande and Álvarez- González, 2007; Sadikoglu and Zehir, 2010 Call for multidimensional view for TQM (Prajogo and Sohal, 2004; Perdomo-Ortiz, 2006; Martínez-Costa and Martínez-Lorente, 2008 ) 2. Restricted scope of a specific region: Flynn (1994) US; Prajogo and Sohal, 2003 Australia; Santos-Vijande and Álvarez-González (2007) Asturias, Spain; Martínez-Costa and Martínez-Lorente (2008) southeast of Spain; Sadikoglu and Zehir (2010) Turkey; Perdomo-Ortiz (2006) Spain; Feng et al. (2006) Singapore

6 Purpose Empirically examines how multidimensional relationship of TQM with quality and innovation performance on a global basis Multidimensionality of TQM: (Rahman and Bullock, 2005; Ho et al., 2001; Flynn et al., 1995; Forza, 1995; etc.) Hard TQM: more technique and tool oriented. e.g. process management, product design process, quality information. Soft TQM: essentially relating to human resource. e.g. employee suggestion, small group problem solving, employee training.

7 Research Questions 1. Does soft TQM influence innovation performance directly or indirectly? 2. Does hard TQM influence innovation performance directly or indirectly?

8 Research Framework H2 H1 H3 H5 H4 Figure 1 The conceptual model

9 Data Collection High Performance Manufacturing (HPM) Project Database 238 plants in 8 countries: Austria (21), Finland (30), Germany (41), Italy (27), Japan (35), Korea (31), Sweden (24), and the United States (29) after 2003 Electric & Electronics (79) Machinery (78) Transportation equipment(81)

10 Measurement Hard TQM: Process management: Process control; Preventive maintenance; Housekeeping Product design process Quality information Soft TQM: Employee suggestion Small group problem solving Task-related Training for Employees Quality performance Conformance to specification Innovation performance Speed of new product introduction Product innovativeness

11 Testing reliability and validity Reliability Cronbach s alpha > 0.6 Content validity Construct validity factor analysis Eigenvalue>1.0 Factor loadings >0.4

12 Table 2 Summary of measurement analysis Measure Name Mean S.D. Cronbach Alpha Eigenvalue (% variance) Process control (59) Preventive maintenance (44) Housekeeping (57) Process management (63) Product design process (41) Quality information (55) Employee suggestion (60) Small group problem solving (54) Task-related training for employees (62) Innovation performance (75)

13 Figure 2 The revised model

14 Table 3 Fit measures of overall model Fit index Chi-square test statistic Degrees of freedom Normed chisquare Hypothesized structural model Revised structural model Desirable range RMSEA CFI PNFI

15 Table 4 Analysis of the measurement model Construct name Measure variable Standardized coefficient p-value Hard TQM Process Management Product Design Process Quality Information Soft TQM Employee Suggestion Small Group Problem Solving Task-related Training for Employees

16 Table 5 Analysis of the structural model Causing construct Caused construct Hypothesis Standardized coefficient p-value Soft TQM Hard TQM H Hard TQM Quality Performance H Soft TQM Quality Performance H3 Not supported Soft TQM Innovation Performance H Quality Performance Innovation Performance H

17 Table 6 Total effect of soft/hard TQM on quality/innovation performance Independent variable Quality performance Dependent variable Innovation performance Hard TQM Direct effect Indirect effect Total effect Soft TQM Direct effect Indirect effect Total effect

18 Findings In general, TQM can provide a fertile environment to foster innovation. Complete mediation regarding the relationships among soft/hard TQM and quality performance Different dimensions of TQM have different paths to affect innovation: Path 1: Direct path from soft TQM; Path 2: Indirect path from hard TQM with quality performance as mediating factor Path 1 would be more effective

19 Findings Cumulative relationship among competitive priorities (versus Trade-off relationship (Skinner, 1996) ) Cost Efficiency Speed Dependability Quality Source: Ferdows and De Meyer, 1990

20 Discussion Considering organizational contexts: e.g. organizational culture, organizational strategy, business environment Would some individual TQM practice be more or less effective to influence innovation in specific context?

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