The total quality conundrum: Is the TQM initiative associated with improved logistics and financial performance in manufacturing firms

There have been many strategic management initiatives adopted and implemented by manufacturing firms throughout the world over the past several decades including Total Quality Management (TQM), Just-in-Time (JIT), Activity-Based-Costing (ABC) and Business Process Re-engineering (BPR).; This research investigates whether improved business performance is associated with Total Quality Management implementation. Previous empirical evidence has been weak and inconclusive (GAO, 1991; Wisner & Eakins, 1994; Madu, Kuei & Lin, 1995; Dixon, 1996; Grandzol & Gershon, 1997). The primary research questions in this study are: (1) Can the attributes of TQM from theoretical literature and empirical research by verified and shown to be statistically valid and reliable? (2) Do manufacturing firms that adopt the TQM initiative show improved business performance using logistics or financial performance measures? (3)  Does the length of time that a firm has significantly used TQM have a positive effect on business performance?; This study gathered information through a large-scale survey of public U.S. manufacturing firms. Data concerning the five-year change in selected financial performance measures was obtained from the Compustat database.; Confirmatory factor analysis was used to verify the hypothesized attributes of TQM and determine that they are statistically valid and reliable. Eight measures of logistics performance and five primary measures of financial performance were used as dependent measures in separate regressions to test the hypotheses. Control variables included firm size and other strategic initiatives supported by the firms, and all financial variables were adjusted for industry averages.; This research extends prior research by demonstrating a dear and convincing association between TQM implementation and improved logistics performance. The primary findings of this research are as follows: (1) The hypothesized components of TQM compiled from theoretical literature and prior empirical research are statistically valid and reliable. (2) There is strong evidence that there is a significant association between TQM and improved logistics performance in U.S. manufacturing firms. There is also convincing evidence that JIT is significantly associated with improved logistics performance. (3) There is weak evidence that duration of significant use of TQM is associated with improved logistics performance.