Reliance on manufacturing performance measures, total quality management and organizational performance

Abstract

Over recent years there has been an increase in global competition, particularly within manufacturing. Many firms faced with increased competition from foreign firms have sought to enhance their competitiveness by employing total quality management (TQM). An important concern in the implementation of TQM is the extent to which TQM should be developed together with managerial performance evaluation systems employing measures of the manufacturing processes. It is argued in this paper that the potential for TQM to enhance the profitability of companies is enhanced when managers are evaluated by using direct measures of manufacturing. The results of a survey of 39 organizational units provided support for the proposition that enhanced performance will be associated with the interaction between well developed TQM programmes and a reliance on manufacturing performance measures. Specifically, higher performance was associated with the combination of TQM and a reliance on manufacturing performance measures compared to TQM without such measures.