International Journal of Hospitality Management 31 (2012) 119–129
Contents lists available at ScienceDirect
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,∗
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
i n f o
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: firstname.lastname@example.org (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...
References: Agus, A., Krishnan, S.K., Latifah, S., Kadir, S.A., 2000. The structural impact of total quality management on ﬁnancial performance relative to competitors through customer satisfaction: a study of Malaysian manufacturing companies. Total Quality Management 11 (4–6), 814–819. Ahire, S.L., Golhar, D.Y., Waller, M.M.A., 1996a. Development and validation of TQM implementation constructs. Decision Sciences 27 (1), 23–56. Ahire, S.L., Waller, M.A., Golhar, D., 1996b. Quality management in TQM versus non-TQM ﬁrms: an empirical investigation. International Journal of Quality & Reliability Management 13 (8), 8–27. Anderson, J.C., Rungtusanatham, M., Schroeder, R.G., Devaraj, S., 1995. A path analytic model of a theory of quality management underlying the Deming management method: preliminary empirical ﬁndings. Decision Sciences 26 (5), 637–658. Andersson, L.M., Bateman, T.S., 1997. Cynicism in the workplace: some causes and effects. Journal of Organizational Behavior 18 (5), 449–469. Anwar, A.S., 2008. A factor analytic investigation of the construct of market orientation. International Journal of Management 25 (1), 186–197. Armstrong, J.S., Overton, T.S., 1977. Estimating nonresponse bias in mail surveys. Journal of Marketing Research 14 (3), 396–402. Atuahene-Gima, K., 1995. An exploratory analysis of the impact of market orientation on new product performance: a contingency approach. Journal of Product Innovation Management 12 (4), 275–293. Aulakh, P.S., Gencturk, E.F., 2000. International principal-agent relationships: control, governance and performance. Industrial Marketing Management 29 (6), 521–538. Avlonitis, G.J., Gounaris, S.P., 1997. Marketing orientation and company performance: industrial vs. consumer goods companies. Industrial Marketing Management 26 (5), 385–402. Aziz, N.A., Yassin, N.M., 2010. How will market orientation and external environment inﬂuence the performance among SMEs in the agro-food sector in Malaysia? International Business Research 3 (3), 154–164. Bagozzi, R.P., Yi, Y., 1988. On the evaluation of structural equation models. Journal of the Academy of Marketing Science 16 (1), 74–94. Bagozzi, R.P., Yi, Y., 1991. Multitrait–multimethod matrices in consumer research. Journal of Consumer Research 17, 426–439. Banker, R.D., Potter, G., Srinivasan, D., 2000. An empirical investigation of an incentive plan that includes nonﬁnancial performance measures. The Accounting Review 75 (1), 65–92. Banker, R.D., Potter, G., Srinivasan, D., 2005. Association of nonﬁnancial performance measures with the ﬁnancial performance of a lodging chain. Cornell Hotel and Restaurant Administration Quarterly 46 (4), 394–412. Bayraktar, E., Tatoglu, E., Zaim, S., 2008. An instrument for measuring the critical factors of TQM in Turkish higher education. Total Quality Management & Business Excellence 1919 (6), 551–574, http://www.informaworld.com/smpp/ title∼db=all∼content=t713447980∼tab=issueslist∼branches=19. Boudreau, J.W., Boswell, W.R., Judge, T.A., 2001. Effects of personality on executive career success in the United States and Europe. Journal of Vocational Behavior 58 (1), 53–81. Brah, S.A., Lee, S.L., Rao, B.M., 2002. Relationship between TQM and performance of Singapore companies. International Journal of Quality and Reliability Management 19 (4), 356–379. Breiter, D., Bloomquist, P., 1998. TQM in American hotels: an analysis of application. Cornell Hotel and Restaurant Administration Quarterly 39 (1), 26–33. Claver, E., Tarí, J.J., Pereira, J., 2006. Does quality impact on hotel performance? International Journal of Contemporary Hospitality Management 18 (4), 350–358. Claver-Cortés, E., Pereira-Moliner, J., Tarí, J.J., Molina-Azorín, J.F., 2008. TQM, managerial factors and performance in the Spanish hotel industry. Industrial Management & Data Systems 108 (2), 228–244. Costa, J., 2004. The Portuguese tourism sector: key challenges for human resources management. International Journal of Contemporary Hospitality Management 16 (7), 402–407. Dale, B.G., Plunkett, J.J., 1990. Managing Quality. Philip Allan, Hemel Hempstead. Day, G.S., 1994. The capabilities of market-driven organizations. Journal of MarketingV 58 (October), 37–52. Demirbag, M., Tatoglu, E., Tekinkus, M., Zaim, S., 2006a. An analysis of the relationship between TQM implementation and organizational performance: evidence from Turkish SMEs. Journal of Manufacturing Technology Management 17 (6), 829–847. Demirbag, M., Lenny Koh, S.C., Tatoglu, E., Zaim, S., 2006b. TQM and market orientation’s impact on SMEs’ performance. Industrial Management & Data Systems 106 (8), 1206–1228. Deng, S., Dart, J., 1994. Measuring market orientation: a multi-factor, multi-item approach. Journal of Marketing Management 10 (8), 725–742. Deshpande, R., Farley, J.U., Webster Jr., F.E., 1993. Corporate culture, customer orientation, and innovativeness in Japanese ﬁrms: a quadrad analysis. Journal of Marketing 57 (January), 23–37. Dobni, C.B., Luffman, G., 2003. Determining the scope and impact of market orientation proﬁles on strategy implementation and performance. Strategic Management Journal 24 (6), 577–585. Dooley, K.J., Flor, R.F., 1998. Perceptions of success and failure in TQM initiatives. Journal of Quality Management 3 (2), 157–174. Eskildsen, J.K., Dahlgaard, J.J., 2000. A causal model for employee satisfaction. Total Quality Management 11 (8), 1081–1094.
C.-H. Wang et al. / International Journal of Hospitality Management 31 (2012) 119–129 McCabe, D., Wilkinson, A., 1998. The rise and fall of TQM: the vision, meaning and operation of change. Industrial Relations Journal 29 (1), 18–29. Menguc, B., Auh, S., 2006. Creating a ﬁrm-level dynamic capability through capitalizing on market orientation and innovativeness. Journal of the Academy of Marketing Science 34 (1), 63–73. Milliken, F.J., 1987. Three types of perceived uncertainty about environment: state, effect, and response uncertainty. Academy of Management Review 12 (1), 133–143. Mohr-Jackson, I., 1998a. Conceptualizing total quality orientation. European Journal of Marketing 32 (1/2), 13–22. Mohr-Jackson, I., 1998b. Managing a total quality orientation: factors affecting customer satisfaction. Industrial Marketing Management 27 (2), 109–125. Mokhtar, S.S.M., Yusoff, R.Z., 2009. Exploring the relationship of key strategic orientations towards sustainable organizational performance. International Journal of Business and Management Science 2 (1), 79–87. Montes, F.J.L., Jover, A.V., Fernandez, L.M.M., 2003. Factors affecting the relationship between total quality management and organizational performance. International Journal of Quality & Reliability Management 20 (2), 189–209. Moorman, C., Rust, R.T., 1999. The role of marketing. Journal of Marketing 63 (special issue), 180–197. Morgan, N.A., 1992. The marketing-quality management interface. In: Kunst, P., Lemmink, J. (Eds.), Quality Management in Services. Van Gorcum, Assen. Narver, J.D., Slater, S.F., 1990. The effect of a market orientation on business profitability. Journal of Marketing 54 (October), 20–35. Nunnally, J.C., 1978. Psychometric Theory, 2nd ed. McGraw-Hill, New York. Nwokah, N.G., 2008. Strategic market orientation and business performance: the study of food and beverages organizations in Nigeria. European Journal of Marketing 42 (3/4), 279–286. Oparanma, A.O., Hamilton, D.I., Jaja, S.A., 2009. Strategies for managing hospitality in a turbulent environment: Nigerian experience. International Journal of Management and Innovation 1 (1), 24–36. Peng, T.K., Kao, Y.T., Lin, C.C., 2006. Common method variation in management study: question essence, inﬂuence, test and remedy. Journal of Management 23 (1), 77–98. Perry, M.L., Shao, A.T., 2002. Market orientation and incumbent performance in dynamic market. European Journal of Marketing 36 (9/10), 1140–1153. Phillips, P.A., 1999. Hotel performance and competitive advantage: a contingency approach. International Journal of Contemporary Hospitality Management 11 (7), 359–365. Piercy, N.F., 1998. Marketing implementation: the implications of marketing paradigm weakness for the strategy execution process. Journal of the Academy of Marketing Science 26 (3), 222–236. Podsakoff, P.M., Organ, D.W., 1986. Self-reports in organizational research: problems and prospects. Journal of Management 12 (4), 531–544. Powell, T.C., 1995. Total quality management as competitive advantage: a review and empirical study. Strategic Management Journal 16 (1), 15–37. Qu, R., Ennew, C.T., 2003. An examination of the consequences of market orientation in China. Journal of Strategic Marketing 11 (3), 201–214. Raju, P.S., Lonial, S.C., 2002. The impact of service quality and marketing on ﬁnancial performance in the hospital industry: an empirical examination. Journal of Retailing and Consumer Services 9 (6), 335–348. Rao, S.S., Solis, L.S., Raghu-Nathan, T.S., 1999. A framework for international quality management research: development and validation of a research instrument. Total Quality Management 10 (7), 1047–1075. Rose, G.M., Shoham, A., 2002. Export performance and market orientation: establishing an empirical link. Journal of Business Research 55 (3), 217–225. Salegna, G., Fazel, F., 1995. An integrative framework for developing and evaluating a TQM implementation plan. Quality Management Journal 3 (1), 73–84. Santos-Vijande, M.L., Álvarez-González, L.I., 2009. TQM’s contribution to marketing implementation and ﬁrm’s competitiveness. Total Quality Management 20 (2), 171–196. Santos-Vijande, M.L., Sanzo-Pérez, M.J., Álvarez-González, L.I., Vázquez-Casielles, R., 2005. Organizational learning and market orientation: interface and effects on performance. Industrial Marketing Management 34 (3), 187–203. Saraph, J.V., Benson, P.G., Schroeder, R.G., 1989. An instrument for measuring the critical factors of quality management. Decision Sciences 20 (4), 457–478. Sargeant, A., Mohamad, M., 1999. Business performance in the UK hotel sector—does it pay to be market oriented? Services Industries Journal 19 (3), 42–59. Shrout, P.E., Bolger, N., 2002. Mediation in experimental and nonexperimental studies: new procedures and recommendations. Psychological Methods 7 (4), 422–445. Sin, L.Y.M., Tse, A.C.B., Heung, V.C.S., Yim, F.H.K., 2005. An analysis of the relationship between market orientation and business performance in the hotel industry. International Journal of Hospitality Management 24 (6), 555–577.
Sittimalakorn, W., Hart, S., 2004. Market orientation versus quality orientation: sources of superior business performance. Journal of Strategic Marketing 12 (December), 243–253. Slater, S.F., Narver, J.C., 1994. Does competitive environment moderate the market orientation-performance relationship? Journal of Marketing 58 (January), 46–55. Slater, S.F., Narver, J.C., 1998. Customer-led and market-oriented: let’s not confuse the two. Strategic Management Journal 19, 1001–1006. Sobel, M.E., 1982. Asymptotic conﬁdence intervals for indirect effects in structural equation models. In: Leinhart, S. (Ed.), Sociological Methodology. Jossey-Bass, San Francisco, pp. 290–312. Spector, P.E., 1987. Method variance as an artifact in self-reported affect and perceptions at work: myth or signiﬁcant problem? Journal of Applied Psychology 72 (3), 438–443. Steel, R.P., Jennings, K.R., 1992. Quality improvement technologies for the 90s: new direction for research and theory. Research in Organizational Change and Development 6, 1–36. Stoelhorst, J.W., Van Raaij, E.M., 2004. On explaining performance differential: marketing and the managerial theory of the ﬁrm. Journal of Business Research 57 (5), 462–477. Subramanian, R., Gopalakrishna, P., 2001. The market orientation-performance relationship in the context of a developing economy: an empirical analysis. Journal of Business Research 53 (1), 1–13. Subramanian, R., Kumar, K., Strandholm, K., 2009. The relationship between market orientation and performance under different environmental conditions: the moderating effect of the top management team’s risk taking behavior. Academy of Strategic Management Journal 8, 121–135. Sureshchandar, G.S., Rajendran, C., Anantharaman, R.N., 2001. A conceptual model for total quality management in service organizations. Total Quality Management 12 (3), 343–363. Tarí, J.J., Claver-Cortés, E., Pereira-Moliner, J., Molina-Azorín, J.F., 2010. Levels of quality and environmental management in the hotel industry: their joint inﬂuence on ﬁrm performance. International Journal of Hospitality Management 29 (3), 500–510. Tena, A.B.E., Llusar, J.C.B., Puig, V.R., 2001. Measuring the relationship between total quality management and sustainable competitive advantage: a resource-based view. Total Quality Management 12 (7&8), 932–938. Tihanyi, L., Ellstrand, A.E., Daily, C.M., Dalton, D.R., 2000. Composition of the top management team and ﬁrm international diversiﬁcation. Journal of Management 26 (6), 1157–1177. Van Doren, C.S., Gustke, L.D., 1982. Spatial analysis of the U.S. lodging industry. Annals of Tourism Research 9 (4), 543–563. Van Zyl, H.J.C., Mathur-Helm, B., 2007. Exploring a conceptual model, based on the combined effects of entrepreneurial leadership, market orientation and relationship marketing orientation on South Africa’s small tourism business performance. South Africa Journal of Business Management 38 (2), 17–24. Vieira, V.A., 2010. Antecedents and consequences of market orientation: a Brazilian meta-analysis and an international mega-analysis. BAR, Brazilian Administration Review 7 (1), 40–58. Voss, G.B., Voss, Z.G., 2000. Strategic orientation and ﬁrm performance in an artistic environment. Journal of Marketing 64 (January), 67–83. Walker Jr, O.C., Larreche, J.W., MullinsH.W. Jr, Boyd, J.C., 2006. Marketing Strategy: A Decision-focused Approach, 5th ed. McGraw-Hill Irwin, New York. Wang, E.T.G., Wei, H.L., 2005. The importance of market orientation, learning orientation, and quality orientation capabilities in TQM: an example from Taiwanese software industry. Total Quality Management & Business Excellence 16 (10), 1161–1177. Wassenaar, K., Stafford, E.R., 1991. The lodging index: an economic indicator for the hotel motel industry. Journal of Travel Research 30 (1), 18–21. Witcher, B., 1995. Marketing and total quality management. European Journal of Marketing 29 (5), 23–24. Yam, R.C.M., Tam, A.Y.K., Tang, E.P.Y., Mok, C.K., 2005. TQM: a change management model or market orientation. Total Quality Management & Business Excellence 16 (4), 439–461. Yeung, C.L., Chan, L.Y., 1998. Quality management system development: some implications from case studies. Computers & Industrial Engineering 35 (1–2), 221–224. Yoo, B., 2002. Cross-group comparisons: a cautionary note. Psychology and Marketing 19 (4), 357–368. Youssef, M.A., Boyd, J., Williams, E., 1996. The impact of total quality management on ﬁrms’ responsiveness: An empirical analysis. Total Quality Management 7 (1), 127–144. Zhou, K.Z., Yim, C.K., Tse, D.K., 2005. The effects of strategic orientations on technology- and market-based breakthrough innovations. Journal of Marketing 69 (2), 42–60.
Please join StudyMode to read the full document