Influence of Total Quality Management and Innovation on the Performance of Higher Education Institutions: A Case of Studied Institutions in Bandung

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1 European Journal of Academic Essays, Special Issue, , 2017 ISSN (online): ISSN (print): Special Issue: 2 nd International Conference on Economics & Banking 2016 (2 nd ICEB) Influence of Total Quality Management and Innovation on the Performance of Higher Education Institutions: A Case of Studied Institutions in Bandung Deni Hamdani School of business Ekuitas, Bandung West Java Indonesia dnhamdani34@gmail.com Abstract The level of competition in education management in Bandung is quite firm. This is shown by the number of private higher education institution in Bandung which comprises 121 institutes. They manage some efforts to provide best facilities to increase the number of students. This research is aimed at finding out factors influencing TQM and Innovation On performance. Questionnaire was used in order to gain primary data from the respondend and the method was using path analysis. Probability sampling technique was chosen due to the consideration of big reasonable population amount. The result of this research is The influence of TQM and innovation towards the performance of higher education institution was simultaneously as much as 73,7%. Partially, the influence of TQM is as much as 1,6% while for innovation is 78%.This result is fit with the research conducted by Vas Prabhuet.al., concluding that there is simultaneous influence of TQM and innovation towards performance of higher education institution. Keywords: TQM, Innovation, performance Abstrak Tingkat persaingan dalam manajemen pendidikan di Bandung cukup kuat. Hal ini ditunjukkan dengan jumlah institusi pendidikan tinggi swasta di Bandung yang terdiri 121 lembaga. Mereka mengelola beberapa usaha untuk menyediakan fasilitas terbaik untuk meningkatkan jumlah siswa. Penelitian ini bertujuan untuk mengetahui faktor-faktor yang mempengaruhi TQM dan Inovasi pada kinerja. Kuesioner digunakan untuk memperoleh data primer dari responden dan metode ini menggunakan analisis jalur. Teknik probability sampling dipilih karena pertimbangan jumlah penduduk wajar besar. Hasil dari penelitian ini adalah pengaruh TQM dan inovasi terhadap kinerja institusi pendidikan tinggi secara bersamaan sebanyak 73,7%. Secara parsial pengaruh TQM adalah sebanyak 1,6% sedangkan untuk inovasi adalah 78% hasil. Hal ini sesuai dengan penelitian yang

2 dilakukan oleh Vas Prabhu et.al., Menyimpulkan bahwa ada pengaruh secara simultan TQM dan inovasi terhadap kinerja yang lebih tinggi institusi pendidikan. Kata kunci: TQM, inovasi, kinerja 1. Introduction The level of competition in education management in Bandung is quite firm. This is shown by the number of private higher education institution in Bandung which comprises 121 institutes. They manage some efforts to provide best facilities to increase the number of students. Data of private higher education institution is as follow: Table 1 : Private Higher Institution in West Java Region Form Number Dept Number Dept Number Dept Number Dept Number Dept University Institute College Academy Polytechnic Numbers Source:Kopertis IV, West Java-Banten (2013) Based on the data, the growth of private higher institutions in West Java is stable. College is at the most form especially in Economics, Engineering, and Medical. College has similar branches of science with lower level of bureaucracy that enable to manage sorts of transformation including innovation. The quality of higher education is a demand from the society, students, parents, and also the government as the official institution who is responsible for national education. This is to protect the public right to gain best education as proposed by the higher education institution. The influence of the rising competition and globalization has caused the company or organization focusing on customers satisfaction as the way to improve their competitiveness and ensure the sustainability of the company/organization itself. One of the measures used to fulfill the customers satisfaction is by applying Total Quality Management or Quality Management System ISO 9001 as well as performing service innovations. The table shows the accomplishment of higher education institutions in West Java in relation to their performances. Table 2 : West Java Higher Education Institutions Performance NO. FORM DEPT. INACTIVE USUL TUTUP* PSKGJ* 1 University Institute College Academy Polytechnic NUMBER Notes :USUL TUTUP : Proposal of Closing PSKGJ: A program of Bachelor degree of education for professional teachers The need of improving the quality is to fulfill external demands on quality management system by company/organization/higher education institution. Total Quality Management and innovation are sorts of efforts to enhance the quality in order to manage better education in a higher education institution. 121

3 Formulation of the Problem: What Total Quality Management, innovation, and performance are and how significant the influence of Total Quality Management and innovation in order to improve performance of private higher education institution in Bandung, (West Java), whether partially or simultaneously, is. Purpose of the Research: This research is aimed at finding out about Total Quality Management, innovation and performance as well as the influence of Total Quality Management and innovation in improving the performance of private higher education institution in Bandung (West Java) whether partially or simultaneously. 2. Framework And Empirical Studies Stephen Uselac, in Tjiptono (2000:3), asserts that quality is not merely covering product and service, but also process, environment, and human. Some experts and organization define quality based on different point of views. Some elements of quality, as proposed by Stephen Uselac, stated in Tjiptono (2003:3) are: 1. Performance to the standard expected the customer 2. Meeting the customer s need the first time and every time 3. Providing our customer with products and services the consistently meet their needs and expectation 4. Doing the right thing right the first time, always striving for improvement, and always satisfying the customer 5. The best product that you can produce with the material that you have to work with. 6. Continuous good product which a customer can trust. Based on the mentioned elements, Goestch and Davis (2008:4), defined quality and its wide coverage. They stated that, Quality is a dynamic condition related to product, service, human, and environment which is fulfilling or exceeding expectation. Furthermore, Besterfieldet.al., defined quality as Degree of excellence a product or service provides (Dale H. Besterfield et.al., 2003:1) Quality definition in operational management principles according to Barry Render and Jay Heizer (2001:90) is The totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs. Besides, as stated by Rudi Suardi (2001:2-3), there are four quality experts who have defined quality, i.e.: a. Philip B. Crosby Crosby stated that quality is the suitability towards requirements, like water-resistant watch, durable shoes, or medical specialist. He also stated that it is important to involve every person in all process in the organization. b. W.Edward Deming Deming put forwarded his opinion that quality means solution to achieve continuous improvement, like the application of kaizen in Toyota and quality control in Telkom. c. Joseph M.Juran Juran stated that quality means suitability of use, like shoes designed for sports or leather shoes for office-wear or party.his approach has the orientation towards fulfilling customers expectation. d. K. Ishikawa Ishikawa mentioned that quality means customer s satisfaction. Thus, every parts of process in an organization have customers. The internal customers may cause satisfaction of organization clients. TQM definition in Tjiptono (2000:4) is a combination of all functions in the company towards holistic philosophy built based on the concept of quality, team work, productivity, definition and customers satisfaction. 122

4 Furthermore, according to Santosa, stated in Tjiptono (2000:4), TQM is a management system lifting up business strategy quality and has orientation on customers satisfaction by involving all members of the organization. Based on those two definitions, thus, TQM is an approach in running the business seeking for ways to maximize company s competitiveness through continuous improvement on products, services, humans, process and its environment. Moreover, based on the Journal of MosadZineldin (1999:720), TQM is taken from the business philosophy focusing on customers satisfaction and integrating as well as coordinating all activities in the company. Along with Deming (1986), stated in the journal, TQM is built based on three basic principles: employee empowerment, continuous improvement and group of quality enhancement. While, Ramona Kay Michael and Victor Sower (1997:104) defined TQM as general management philosophy and a group of means used by the company to achieve quality definition. This means that in order to achieve quality, continuous quality improvements in service for the customers. Innovation, The company sustainability depends on how quick the response of the company in facing the existence of dynamics. Manufacture Company is demanded to produce better products which lower than its competitors. Therefore, effective competition strategies are needed by performing simultaneous improvement whether in product development or process. Druker (1999) in WawanDewanto, et.al., (2014:2), Innovation is an almost obligatory survival strategy, thus, a company which can create innovation is a company with capacity of making creativity and innovation in effective and planned ways. Moreover, the first expert who put forwarded the concept of innovation, Schumpeter (1934), stated innovation as a new combination of production factors made by entrepreneur and the idea of innovation is the strength of important booster in developing economic power. (WawanDewantoet.al., 2014:3) According to Scheider (1996), cited in a journal by Pervaiz K. Ahmed (1998:2), there are four dimensions in innovation culture: 1. Interpersonal relationship characteristics 2. Hierarchy characteristics 3. Work characteristics 4. Concern of supports and appreciation Service innovation was firstly described by Miles (1993) and had been developed in the last two decades. Cited in WawanDewanto (2014:92), he stated that service innovation concepts are as follows: 1. Innovation in services has something to do with its design and the development of new service. 2. Innovation in the process as the new ways in designing and producing service. 3. Innovation in services, organization and industry. According to Finland Innovation and Technology Institution, cited in WawanDewanto (2014:94), The Finnish Funding Agency for Innovation (2006) stated that service innovation is a new concept or significant service improvement applied in business practices. Whilst, Denmark Innovation and Technology Science Agency (2010) mentioned service innovation as development of new service concept or significant improvement of new production, delivery system, organization or new market behavior, with the purpose of producing and selling services. The concept of services contains various levels of technology use and its abstraction. Based on the opinion of Alice M. Obendhain and William Johnson (2004:91), innovation is comparing critical components to productivity and resistance to compete. Technology innovation continues wide opportunities for product innovation by introducing new products or services to external markets. Whilst, process innovation is to increase internal production process of products and services. Innovation stress in an organization depends on the organization s resources, structures, process and values to perform a change. Some organizations are obliged to possess resources, structures, process and values to develop products and services innovation. Schools and universities provide potential resources either for technology innovation demands or talent to support innovation creation. 123

5 A research by Pim Den Hertog et.al. (2000:493) resulted a description of capability to manage innovation in service company where service innovation is considered as experience in new service or solution comprising one or more dimensions: 1. New Service concept 2. New Customer Interaction 3. New Business Parnert 4. New Revenue model 5. New Delivery sytem : personel, organization, culture 6. New delivery sistem : tecnological Performance is the result of all activities/process managed in an organization. The journal by Hsin- His Lai (2012:231) cited Kasem (2010), stating that: organizational performance is the managers accomplishment of varied goal of job. The firms have expected goal when implementing new strategies. Only the measurement upon organizational performance can suggest the effective of business strategy. In higher education, performance is described as the accomplishment of the aims of a university, which generally comprise education, research and public services. In Indonesia, these three principles named as TridharmaPerguruanTinggi. (Sri Soejatminah, Dikti: 2004) Based on the elaboration, the three variables of TQM, innovation and higher education institution s performance are described in the research conceptual framework as follows: Higher Education Institution in Bandung TQM 1. Management responsibility 2. Resourcesmanagement 3. Product realization Research Hypothesis Innovation 1. New Service concept 2. New Customer Interaction 3. New Business Partner 4. New Revenue model 5. New Delivery system : personnel, organization, culture 6. New delivery system : Higher education institution performance: education, research, and public Figure services 1 : Conceptual (Sri Soejatminah, Framework 2004) Based on the research concept paradigm, the writer puts forward a hypothesis that there is influence of Total Quality Management and Innovation towards performance of private higher education institution in Bandung. 3. Methodology And Data The methods used in this research were descriptive and verificative aimed at describing the relationship of the variables by testing the hypothesis. Whilst, the data collecting technique was cross sectional. Along with the framework, the operationalization of research variables is: Total Quality Management comprisingmanagement responsibility, resources management, and product realization. Services Innovation consists of dimensions of new service concept, new customer interaction, new business partner, new revenue model, new delivery system : personnel, organization, culture, and new delivery system: technological. Organization s Performance by using the perspectives of financial, customers, internal process, growth and education. 124

6 Research population is private higher education institution in Bandung, while the observation units are the rector/head/director and lecturer. The sampling technique in this research used proportional stratified random sampling. Validity testing of the construct was managed by the use of Pearson s product moment correlation technique between scores of factor and the total scores of factors which was then compared to the r-table. For instrument reliability testing, the formulation of cronbach alpha was applied. Descriptive Analysis. In order to analyze Total Quality Management, Innovation and Organization s performance, descriptive analysis was applied to describe those variables. This was by finding out the amount of frequency of respondents answers multiplied by the scores. Thus, each score was summed up and compared to ideal scores. Finally the result scores are suited with the following ranges of category: Table 3 : Interval Scales Range Very truthfully/seriously 80 % % Truthfully/seriously 60 % - 80 % Quite Truthfully/seriously 40 % - 60 % Less truthfully/seriously 20 % - 60 % Never truthfully/seriously 0-20 % The test measures/tools in this research was the Structural Equation Model (SEM). This was due to the consideration of its ability to measure the construct by its indicators as well as to analyze the manifested and latent variables and also error in the measurement. 4. Discussion On Empirical Result The data collected by using questionnaire about TQM, innovation and performance. Based on the result of reliability and validity testing, all indicators were determined as reliable and valid. Furthermore, the data collection is described in the following table: Table4 : Recapitulation of Responses on TQM No Statement Percentage 1 Quality Objectives Determination Document Control Implementation Quality Responsibility of Employees Job Description and Instruction Management Representative Appointment Standard-based Procedure Suitability Management Review Implementation Review, Monitoring and Evaluation of Management Review Responsibility of Internal Auditing Implementation Audit Internal Forms and Notes Responsibility and Control of Evaluation Method Evaluation Method Implementation Procedures of Facilities Maintenance Implementation of Inventory and Facilities Maintenance Cleanliness and Comfort in Working Environment Curriculum Design and Development Procedure of Curriculum Design and Development Evaluation on Curriculum Design and Development Communication Process between lecturers and students Special Guidance/Guardianship for students Responsibility upon students improvement Selection on Students and Lecturers Recruitment Students achievement identification Unsuccessful Control of Students Documentation of unsuccessful students Investigation on factors causing incompatibility Availability of master list document Publication of new document Measures on students improvement Evaluation and Improvement on implementation Students Complaint Handling Average Percentage

7 Based on the average percentage i.e. 82,97%, it clearly shows that the implementation of TQM in private higher education institution is considered as excellent. The next description about innovation is shown in the following table. Table 5 : Description on Innovation No Statement Percentage 1 Quality Objectives Determination Document Control Implementation Quality Responsibility of Employees Job Description and Instruction Management Representative Appointment Standard-based Procedure Suitability Management Review Implementation Review, Monitoring and Evaluation of Management Review Responsibility of Internal Auditing Implementation Audit Internal Forms and Notes Responsibility and Control of Evaluation Method Evaluation Method Implementation Procedures of Facilities Maintenance Implementation of Inventory and Facilities Maintenance Cleanliness and Comfort in Working Environment Average Percentage According to the table, the average score is 76.45%. This shows that the implementation of innovation is regarded as good condition. Performance of Higher Education Institution.In higher education institution, performance is regarded as objectives achievement of a university. This, generally, covers TridharmaPerguruanTinggi, i.e.: education, research and public service. Table 6 : Recapitulation of Responses on Performance No Statement Percentage 1 Implementation and Provision ofonline Study Plan Card Double degree class enrollment Provision on tuition payment by bank transfer Employee class program service Online enrollment Online registration Cooperation with foreign education institution Cooperation with industries Electronic attendance machine use E-career implementation E-journal implementation AveragePercentage The average percentage is 75,89% meaning that the performance of the institution is considered as in good condition. In the writer assumption, this is regarded as important and suitable with the concept of performance in higher education institution as mentioned by Sri Soejatminah. The performance of higher education institution can be managed by improving the methods and process of learning, updating new teaching materials, and enhancing the supporting facilities. The improvement activities can be done by creating procedures and target development. The data gained in this research were in ordinal scale measurement. Further analysis of the data was done by firstly transforming the data by raising the ordinal scale into interval scales. The transformation was by the use of method of successive interval and testing on all the data collected. Based on the elaboration of the framework of the research, mathematical form/model is needed to state all the calculation in the form of Y=f( X 1, X 2, X 3 ). Total Quality Management ( X 1 ) and innovation ( X 2 ) are independent variables, while performance of higher education institution (Y) as the dependent variable. The equation model for the used path is as follow: 126

8 Where: Pyx 1 X 1 X 1 Y ˆ 1 Y = Pyx 1 X 1 + Pyx 2 X 2 + ε = Pathcoefficient = Total Quality Management X 2 = Innovation = Performance of HigherEducationInstitution = Galat Based on the result of SPSS data processing, the analysis of path equation is: Y = 0.129X X 2 + ε Furthermore, for simultaneous hypothesis testing Table Anova 1 was used: Table7 :Anova 1 Model Sum of df Mean F Sig. Squares Square 1 Regression 2644, ,462 48,674,000 Residual 941, ,109 Total 3586, a Predictors: (Constant), X1, X2 b DependentVariabel: Y Model 1 R R Square Adjusted R Square Table 8 : Model Summary Std. Error of the Estimate Change Statistics Durbin-Watson R Square Chang e F Change df1 df2 Sig. F Change,859(a),737,722 4,25551,737 48, ,000,297 a Predictors: (Constant) X1, X2 b Dependent Variable: Y The Anova and model summary tables shows that the F-counted value equals to 48,674 with the level of significance 0,000 < 0,05. Thus, this means that there is one or more independent variables influencing the dependent variable. Specifically, this is described that the performance of higher education institution (Y) is influenced together by the variable of total quality management ( X 1 ) andinnovation ( X 2 ) as much as 73.7%. Moreover, in order to find out the partial influence of the researched variable, Table Anova 2 was usedas follows. 127

9 Unstandard ized Coefficients Standardiz ed Coefficients Table 9 : Anova 2 t Sig. Correlation s Model B Std. Error Beta Zero-order Partial Part 1 (Cons -9,991 7,881-1,268,211 tant) X1,185,112,129 1,651,105,175,223,117 X2,671,076,884 8,843,000,851,775,628 a DependentVariabel: Y The influence of TQM and innovation towards the performance of higher education institution was simultaneously as much as 73,7%. Partially, the influence of TQM is as much as 1,6% while for innovation is 78%. This result is fit with the research conducted by Vas Prabhuet.al., concluding that there is simultaneous influence of TQM and innovation towards performance of higher education institution. 5. Conclusion As descriptive analysis for TQM Based on the average percentage i.e. 82,97%, it clearly shows that the implementation of TQM in private higher education institution is considered as excellent. Thus for the innovation, the average score is 76.45%. This shows that the implementation of innovation is regarded as good condition. And then for the performance The average percentage is 75,89% meaning that the performance of the institution is considered as in good condition. The influence of TQM and innovation towards the performance of higher education institution was simultaneously as much as 73,7%. Partially, the influence of TQM is as much as 1,6% while for innovation is 78%.. Refferences Besterfield H Dale, Carol Besterfield-Michna, Glen H Bersterfield, Mary Besterfield-Sacre Total Quality Management. Prentice Hall Third Edition, by Pearson Education, Inc., Upper Saddle River, New Jersey DewanPendidikanTinggi, Dikti. HELTS FandyTjiptonodan Anastasia Diana, 2001.Total Quality Management,EdisiKeempat,Andi Yogyakarta. Render Barry and Jay Heizer, Principles of Operation Management, Prentice Hall International Inc, America. Sri SoejatminahEkroman, QualityAssuranceDalamSistemPendidikanTinggi. Dikti Vas Prabhu, Alex Appleby, David Yarow& Ed Mitchell, The Impact Of ISO9000 on The best Performance. The TQM Magazine, vol 12, MCB University Pim Den Hertog, Wietze van der Aa, Mark de Jong, 2010 : Capabilities for Managing Service Innovation :Towards a Conceptual Framework. Journal of Service Management Vol 21 No 4 pp

10 Rudi Suardi, SistemManajemenMutu ISO 9000 : 2000 PenerapannyaUntukMencapai TQM.LembagaManajemen PPM, Jakarta. WawanDewantodkk, 2014 ; ManajemenInovasi, peluangsuksesmenghadapiperubahan penerbitandi Jogjakarta. 129