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The impact of total quality

management on service
company
performance: evidence from
Spain
Zainab Ghaddar
200902569

Introduction
Nowadays, as competition increases in the new
global
economy. There is a need to understand the
term quality
better where it is fundamental factor for
companies to
create competitive advantage to be successful
and become
profitability leaders.
Understanding and applying quality
philosophies by top

Introduction to Total Quality


Management
Total quality management (TQM) is a leading force in
shaping
and spreading quality management ideology and
practices in
modern business management.
Effective TQM practices in the modern era should go
beyond
meeting requirements to engage additional dimensions of
customer satisfaction focus such as :
Training
Education
Empowerment of Employees
Continuously improve performance

The Trend of TQM


The trend of TQM is strong in Europe, Japan, the
USA,
Australia and elsewhere and its influence has
been
remarkable.
For example, service industries in Spain have
lead it to
be third in the world (behind China and Italy) in
the
number of ISO 9001 quality management
certifications
by implementing ISO 9001 standards and
winning quality

The quality management


phenomenon
TQM research studies has been conducted worldwide
and
in different sectors has been the subject of much debate
concerning the linkage of TQM factors to other business
dimensions such as improved financial performance and
service quality.
Despite that, there was a need to continue studying the
Relationships between TQM critical factors and the
results
that the companies obtain from the quality perspective
of
Services industry to achieve customer satisfaction

TQM in the Service Sector


TQM in service company is a network of
interdependent
elements .What varies is the number and the
priority of
Quality principles , practices, and techniques.
However, if there was a consensus among
experts regarding
what constitutes TQM, it would include the
following
components:
Management commitment and strategic
quality planning
Training, employee empowerment ,and

Spanish Service Companies


The service companies operating in northern Spain
including education, healthcare, banking/finance,
consultancy, communications, insurance, food and
beverage catering have been implementing
improvement methodologies in an effort to achieve
the business excellence level .
Noting that these companies that employ quality
managers with either university degrees or extensive
experience in service sector have been certified
according to ISO 9001, ISO 14001, ISO 18001.
These factors contribute to consider the Spanish
service companies an important sample to study the
effect of TQM practices on Companies performance

Service company performance


from TQM implementation
The aim of a business implementing quality
management is long-term profitability and cost
effectiveness.
The performance benefits of companies can be broadly
categorized into four main groups :
1. Financial and market benefits: profitability, sales
growth and market share.
2. Organizational effectiveness: productivity,
innovation, and cost and waste reduction.
3. Customer satisfaction and loyalty : defects rate and
competitive price.
4. Employee satisfaction: management-employee
relation.

The impact of TQM on service


company performance
TQM impact on the organizations overall
performance cannot be underestimated. the proper
implementation of TQM principles/elements
positively influences company performance in
many dimensions concerning organizational

performance, quality performance, market


performance, operational performance, financial
performance, competitive performance.
However , different TQM practices affect
company performance in different levels of
influence

The impact of the TQM factors


on the performance
dimensions
According to the results, operational
performance is affected by two TQM factors,
namely:
Employee knowledge and Education:
The employees have knowledge and know-how
The employees are educated in subjects with
regard to their specialty and daily work
Customer focus:
Customers needs, requirements, desires are
recorded and analyzed
Customers are encouraged to submit complaints
and proposals for quality improvement

The findings also showed that customer focus,


employee knowledge and education, and
operational performance affects product/service
quality performance :
Quality data are taken into consideration from
employees during their daily work.

Process quality data are recorded and analyzed


The critical processes are determinedevaluated
Data are collected from employees regarding
their
satisfaction and suggestions for improvements
Customers complaints, satisfaction level and
proposals for quality improvement are selected

Moreover customer satisfaction is significantly


affected by the following factors:
Product/service quality performance :
The quality policy is taken into consideration in
strategic planning
The quality objectives are being set based on
customer needs and requirements
Quality practices of top management:
Top management sets the quality issues on the
agenda of the managers meetings .
Top management gives the authority to
employees
to manage quality problems
Customer focus

Finally, financial performance is


significantly affected by operational
performance and employee quality
management that is reflected in companys
profitability ,the companys cash flow from
operations, and its ability to access foreign
markets.
Its worth noting that there are indirect TQM
benefits concerning the external
environment with regard to society welfare.

:Conclusion
From the above discussion it is apparent that
some TQM factors are more significant than
others in improving a performance dimension
of a service company such as:
employees education, knowledge and
management, customer orientation.
However, each performance dimension is
affected by specific TQM factor, which can help
a service company concentrate its efforts on
specific quality initiatives in order to enhance
the benefits derived from TQM implementation.

Reference
International Journal of Quality &
Reliability
Management, Vol. 33 Iss 3 pp. 380 - 398