The Impact of Tqm on Innovation

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IJQRM 23,9

The impact of total quality management on innovation
Findings from a developing country
Dinh Thai Hoang and Barbara Igel
School of Management, Asian Institute of Technology, Klong Luang, Pathumthani, Thailand, and

1092
Received February 2005 Revised August 2005

Tritos Laosirihongthong
Industrial Engineering Department, Faculty of Engineering, Thammasat University, Klong Luang, Pathumthani, Thailand Abstract
Purpose – The purpose of this paper is to investigate the relationship between total quality management (TQM) practices and innovation performance in the Vietnamese industry context. Design/methodology/approach – The method of confirmatory factor analysis was applied to refine TQM and innovation scales for empirical analysis in Vietnam. The structural equation modelling method was applied to test the theoretical models. Findings – This study confirms the results of previous studies that considered TQM as a set of practices. It confirms that TQM – considered as a set of practices – has a positive impact on the firm’s innovativeness. It discovers that not all TQM practices enhance firm innovativeness. Only leadership and people management, process and strategic management, and open organization showed a positive impact on the firm’s innovation performance. Research limitations/implications – The sample was not random. Future research should select different random samples to allow for more generalization of the results. The study assessed the concept of “newness” with the company boundaries. Future research should measure “newness” within the boundaries of the specific industry. The unclear evidence found in this study on the impact of the firm’s education and training policy on innovation needs to be further investigated. Practical implications – The findings are useful for business managers in developing countries such as Vietnam, who want to enhance business performance through implementing TQM practices that support their firm’s product and services innovation efforts. Originality/ value – The study has contributed to develop a measurement system of TQM practices and innovation performance that facilitates more quality management research in developing countries. It has contributed to clarifying the disputed relationship between TQM practices and the firm’s innovativeness, and shows empirical evidence in Vietnam to confirm that the TQM practice set deployed by a firm has a positive impact on its innovation performance. Keywords Vietnam, Total quality management, Developing countries, Organizational innovation Paper type Research paper

International Journal of Quality & Reliability Management Vol. 23 No. 9, 2006 pp. 1092-1117 q Emerald Group Publishing Limited 0265-671X DOI 10.1108/02656710610704230

Introduction The introduction of total quality management (TQM) has played an important role in the development of contemporary management practices. Quality is considered as a key strategic factor in acieving business success. In order to enhance the competitive position and improve business performance, companies worldwide, large and small, manufacturing and service, have applied the principles of total quality (Dean and

Evans, 1994). However, in the knowledge-based society, high quality alone is not sufficient. The basis for sustainable competitive advantage has shifted from quality to innovation as a fundamental component of entrepreneurship. In the last decade, the theme of innovation has been a major concern of both academics and practitioners (Kanter, 1985; Drazin and Schoonhoven, 1996), but the literature provides conflicting theoretical arguments about the relationship between TQM and innovation, i.e. whether the firm’s TQM practices support or hinder it in developing innovations. The contribution of TQM to innovation has not been explored sufficiently in previous research (Prajogo and...
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