Unraveling Contradictions in Quality Management Implementation: An Empirical Study of TQM and ISO Certification in SMEs
JEL Classification: L15, L25, L60, M11, M21, O14, O33, O53, C38
Abstract
In an environment marked by escalating competition, critical customer scrutiny, and evolving supply chain expectations, quality management has become indispensable, particularly for small and medium-sized enterprises (SMEs). A review of existing literature reveals that adopting formal systems like Total Quality Management (TQM) and ISO certification often fails to yield significant performance benefits. This study therefore probes a more fundamental issue: to what extent is quality performance driven by the mere existence of these systems versus their level of implementation within managerial processes? Drawing on empirical research involving 120 manufacturing SMEs in Makassar City, analyzed through structural equation modelling (SEM), this paper investigates the interdependencies among top management support, infrastructure, stakeholder participation, process management, and quality performance. Findings indicate that only process management exerts a direct influence on quality performance, while leadership, infrastructure, and stakeholder involvement exert indirect, residual effects constrained by how quality processes are configured. Consequently, this study posits that SMEs should embed quality as an integral, internalized practice, rigorously implement it, and continually pursue improvements. High performance in these firms appears less contingent on external certification or formal policy adoption and more on the strategic integration of quality within their process systems and routines. This insight underscores the need for SMEs to shift focus from compliance-driven approaches to cultivating deeply ingrained quality-centric operational cultures, thereby ensuring sustained competitive advantage and responsiveness to dynamic market demands.
References
Ahire, S. L., Golhar, D. Y., & Waller, M. A. (1996). Development and validation of TQM implementation constructs. Decision Sciences, 27(1), 23–56. https://doi.org/10.1111/j.1540-5915.1996.tb00842.x
Anderson, J. C., Rungtusanatham, M., & Schroeder, R. G. (1994). A theory of quality management underlying the Deming management method. Academy of Management Review, 19(3), 472–509. https://doi.org/10.5465/amr.1994.9412271808
Barney, J. (1991). Special theory forum the resource-based model of the firm: Origins, implications, and prospects. Journal of Management, 17(1), 97–98. https://doi.org/10.1177/014920639101700107
Bateman, N., & David, A. (2002). Process improvement programmes: A model for assessing sustainability. International Journal of Operations & Production Management, 22(5), 515–526. https://doi.org/10.1108/01443570210425161
Bititci, U. S., Martinez, V., Albores, P., & Parung, J. (2004). Creating and managing value in collaborative networks. International Journal of Physical Distribution & Logistics Management, 34(3/4), 251–268. https://doi.org/10.1108/09600030410533588
Boiral, O. (2003). ISO 9000: Outside the iron cage. Organization Science, 14(6), 720–737. https://doi.org/10.1287/orsc.14.6.720.24866
Cairó Battistutti, O., & Bork, D. (2017). Tacit to explicit knowledge conversion. Cognitive Processing, 18, 461–477. https://doi.org/10.1007/s10339-017-0802-6
Choo, A. S., Linderman, K. W., & Schroeder, R. G. (2007). Method and context perspectives on learning and knowledge creation in quality management. Journal of Operations Management, 25(4), 918–931. https://doi.org/10.1016/j.jom.2006.08.002
Corbett, C. J., Montes-Sancho, M. J., & Kirsch, D. A. (2005). The financial impact of ISO 9000 certification in the United States: An empirical analysis. Management Science, 51(7), 1046–1059. https://doi.org/10.1287/mnsc.1050.0378
Dölarslan, E. Ş. (2009). A review of post-modern management techniques as currently applied to Turkish forestry. Journal of Environmental Management, 90(1), 25–35. https://doi.org/10.1016/j.jenvman.2007.08.007
Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: What are they? Strategic Management Journal, 21(10‐11), 1105–1121. https://doi.org/10.1002/1097-0266(200010/11)21:10/11<1105::AID-SMJ133>3.0.CO;2-E
Feldman, M. S., & Orlikowski, W. J. (2011). Theorizing practice and practicing theory. Organization Science, 22(5), 1240–1253. https://doi.org/10.1287/orsc.1100.0612
Flynn, B. B., Sakakibara, S., & Schroeder, R. G. (1995). Relationship between JIT and TQM: Practices and performance. Academy of Management Journal, 38(5), 1325–1360. https://doi.org/10.5465/256860
Fotopoulos, C. B., & Psomas, E. L. (2009). The impact of “soft” and “hard” TQM elements on quality management results. International Journal of Quality & Reliability Management, 26(2), 150–163. https://doi.org/10.1108/02656710910928798
Gallego, J. M., & Gutiérrez Ramírez, L. H. (2023). Quality certification and firm performance: The mediation of human capital. International Journal of Productivity and Performance Management, 72(3), 710–729. https://doi.org/10.1108/IJPPM-01-2022-0025
Grant, K. (2024). A phenomenological study: Sensemaking practices toward e-government adoption in the public sector (Doctoral dissertation, California Southern University).
Juran, J. M. (1992). Juran on quality by design: The new steps for planning quality into goods and services. Simon and Schuster.
Karuppusami, G., & Gandhinathan, R. (2006). Pareto analysis of critical success factors of total quality management: A literature review and analysis. The TQM Magazine, 18(4), 372–385. https://doi.org/10.1108/09544780610671048
Kaynak, H. (2003). The relationship between total quality management practices and their effects on firm performance. Journal of Operations Management, 21(4), 405–435. https://doi.org/10.1016/S0272-6963(03)00004-4
Lima, A. B. S. D., Becerra, C. E. T., Feitosa, A. D., Albuquerque, A. P. G. D., Melo, F. J. C. D., & Medeiros, D. D. D. (2025). Effective practices for implementing quality control circles aligned with ISO quality standards: Insights from employees and managers in the food industry. Standards, 5(1), 6. https://doi.org/10.3390/standards5010006
McAdam, R. (2000). Quality models in an SME context: A critical perspective using a grounded approach. International Journal of Quality & Reliability Management, 17(3), 305–323. https://doi.org/10.1108/02656710010306166
McAdam, R., & Armstrong, G. (2001). A symbiosis of quality and innovation in SMEs: A multiple case study analysis. Managerial Auditing Journal, 16(7), 394–399. https://doi.org/10.1108/EUM0000000006042
Nair, A. (2006). Meta-analysis of the relationship between quality management practices and firm performance—Implications for quality management theory development. Journal of Operations Management, 24(6), 948–975. https://doi.org/10.1016/j.jom.2005.11.005
Naveh, E., & Marcus, A. (2005). Achieving competitive advantage through implementing a replicable management standard: Installing and using ISO 9000. Journal of Operations Management, 24(1), 1–26. https://doi.org/10.1016/j.jom.2004.02.005
Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance. Free Press.
Prajogo, D. I., & Sohal, A. S. (2006). The relationship between organization strategy, total quality management (TQM), and organization performance––The mediating role of TQM. European Journal of Operational Research, 168(1), 35–50. https://doi.org/10.1016/j.ejor.2004.03.033
Psomas, E. L., & Jaca, C. (2016). The impact of total quality management on service company performance: Evidence from Spain. International Journal of Quality & Reliability Management, 33(3), 380–398. https://doi.org/10.1108/IJQRM-07-2014-0080
Psomas, E. L., Fotopoulos, C. V., & Kafetzopoulos, D. P. (2010). Critical factors for effective implementation of ISO 9001 in SME service companies. Managing Service Quality: An International Journal, 20(5), 440–457. https://doi.org/10.1108/09604521011073731
Psomas, E. L., Pantouvakis, A., & Kafetzopoulos, D. P. (2013). The impact of ISO 9001 effectiveness on the performance of service companies. Managing Service Quality: An International Journal, 23(2), 149–164. https://doi.org/10.1108/09604521311303426
Rahman, S. U., & Bullock, P. (2005). Soft TQM, hard TQM, and organisational performance relationships: An empirical investigation. Omega, 33(1), 73–83. https://doi.org/10.1016/j.omega.2004.03.008
Rahman, S. U., & Bullock, P. (2005). Soft TQM, hard TQM, and organisational performance relationships: An empirical investigation. Omega, 33(1), 73–83. https://doi.org/10.1016/j.omega.2004.03.008
Samson, D., & Terziovski, M. (1999). The relationship between total quality management practices and operational performance. Journal of Operations Management, 17(4), 393–409. https://doi.org/10.1016/S0272-6963(98)00046-1
Saraph, J. V., Benson, P. G., & Schroeder, R. G. (1989). An instrument for measuring the critical factors of quality management. Decision Sciences, 20(4), 810–829. https://doi.org/10.1111/j.1540-5915.1989.tb01421.x
Shewhart, W. A., & Deming, W. E. (1986). Statistical method from the viewpoint of quality control. Courier Corporation.
Sila, I., & Ebrahimpour, M. (2005). Critical linkages among TQM factors and business results. International Journal of Operations & Production Management, 25(11), 1123–1155. https://doi.org/10.1108/01443570510626925
Sitkin, S. B., Sutcliffe, K. M., & Schroeder, R. G. (1994). Distinguishing control from learning in total quality management: A contingency perspective. Academy of Management Review, 19(3), 537–564. https://doi.org/10.5465/amr.1994.9412271803
Sousa, R., & Voss, C. A. (2002). Quality management re-visited: A reflective review and agenda for future research. Journal of Operations Management, 20(1), 91–109. https://doi.org/10.1016/S0272-6963(01)00088-2
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533. https://doi.org/10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z
Trist, E. (1979). New directions of hope: Recent innovations interconnecting organizational, industrial, community and personal development. Regional Studies, 13(5), 439–451. https://doi.org/10.1080/09595237900185491
Wernerfelt, B. (1984). A resource‐based view of the firm. Strategic Management Journal, 5(2), 171–180. https://doi.org/10.1002/smj.4250050207
Wilkinson, A. (1998). Empowerment: Theory and practice. Personnel Review, 27(1), 40–56. https://doi.org/10.1108/00483489810368549
Yusof, S. R. M., & Aspinwall, E. (2000). Total quality management implementation frameworks: Comparison and review. Total Quality Management, 11(3), 281–294. https://doi.org/10.1080/09544120050007878
Zollo, M., & Winter, S. G. (2002). Deliberate learning and the evolution of dynamic capabilities. Organization Science, 13(3), 339–351. https://doi.org/10.1287/orsc.13.3.339.2780
Zu, X., Robbins, T. L., & Fredendall, L. D. (2010). Mapping the critical links between organizational culture and TQM/Six Sigma practices. International Journal of Production Economics, 123(1), 86–106. https://doi.org/10.1016/j.ijpe.2009.06.007
Copyright (c) 2025 Journal La Bisecoman
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
