External Environmental Factors

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International Journal of Hospitality Management 31 (2012) 119–129

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International Journal of Hospitality Management
journal homepage: www.elsevier.com/locate/ijhosman

Total quality management, market orientation and hotel performance: The moderating effects of external environmental factors Cheng-Hua Wang a , Kuan-Yu Chen b , Shiu-Chun Chen a,∗
a b

Graduate School of Business and Operations Management, Chang Jung Christian University, Taiwan, ROC Department of Recreation Sport and Health Promotion, National Pingtung University of Science and Technology, Taiwan, ROC

a r t i c l e

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a b s t r a c t
With the market competition of hotel industry being heated, it is critical that hotels have a breadth of resource and more flexible forms to meet the needs of a changing marketplace. In the past, the relation of total quality management (TQM), market orientation, and performance are equivocal. These mixed results may be due to some factors or not to include the environmental factors. This study adopts the InputProcessing-Output (IPO) concept model to construct all variables research model. The research surveyed samples of 588 and used Structural Equation Model and discriminate analysis for analysis and testing. The results show that TQM positively affects hotel performance. Market orientation positively affects hotel performance. Market orientation has the mediating effect between TQM and hotel performance. External environment factors truly play a moderator between TQM, market orientation and hotel performance, especially when external environment factors greater changes are going to help to build relationship with customer, to enhance hotel performance and further to gain chance of hotel’s survival. Crown Copyright © 2011 Published by Elsevier Ltd. All rights reserved.

Keywords: Total quality management Market orientation Hotel performance External environmental factors Structural Equation Model

1. Introduction Total quality management (TQM) is a widely recognized management philosophy, and has become the key slogan as organizations strive for competitive advantage in markets (Sureshchandar et al., 2001). TQM focuses on continuous process improvement within organizations to provide superior customer value and meet customer needs. Meeting customer needs involves company operations focused on understanding, sharing, and responding to customers through marketing concept. Firms adopting and implementing the marketing concept are said to display a market orientation (Lamb et al., 2005). Market-oriented firms have been demonstrated to be successful at maintaining a strong competitive position (Walker et al., 2006). Therefore, TQM and market orientation can constitute a valuable firm strategy and provide a competitive advantage to respond to the competitive business environment. Studies have claimed that marketing and TQM are complementary business philosophies (Longbottom et al., 2000; Mohr-Jackson, 1998a,b). However, departments responsible for implementing TQM policy may consider increasing sales through higher quality products or service needs rather than marketing. Poor coordination among departments, or even rivalries and distrust, are not

∗ Corresponding author at: 396 Chang Jung Rd., Sec. 1, Kway Jen, Tainan 71101, Taiwan, ROC. Tel.: +886 8 7338241. E-mail address: c000687@ems.pthg.gov.tw (S.-C. Chen).

unusual. Moreover, partial enterprises that have conducted TQM have not considered their attributes or properly used them in marketing, preventing top managers from understanding marketing topics. Therefore one-third of TQM-adopting enterprises continue to exhibit prejudice (Witcher, 1995), or have failed in TQM implementation. These factors cause many organizations to have little or no to complement to TQM and market orientation together. However, even when both are linked in hotel performance effect, the empirical findings are mixed, and homogeneous...
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