The relationship between total guality management practies and org culture

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The relationship between total guality management practies and org culture

  1. 1. The relationship between total quality management practices and organizational culture Daniel I. Prajogo Department of Management, Monash University, Caulfield East, Victoria, Australia, and Christopher M. McDermott Lally School of Management and Technology, Rensselaer Polytechnic Institute, Troy, New York, USA Abstract Purpose – This empirical study explores the relationship between total quality management (TQM) practices and organizational culture with the purpose of identifying the particular cultures that determine the successful implementation of TQM practices. Specifically, it tests two competing views on the relationship; the unitarist and pluralist views. Design/methodology/approach – The empirical data was drawn from 194 organizations in Australia. The research model employs the Malcolm Baldrige National Quality Award criteria as TQM framework and builds on the competing values model to frame organizational culture. The data was analysed using structural equation modelling technique. Findings – The findings support the pluralist view, wherein different subsets of TQM practices are determined by different types of cultures. Interestingly, hierarchical culture was found to have a significant relationship with certain practices of TQM. Additionally, the findings indicate that although the cultural factors underpinning different elements of TQM are dissimilar, even antagonistic, organizations can implement them in harmony. Practical implications – The major implication of this study is that organizations need to accommodate divergent goals by developing a system and/or structure that allows enough flexibility for adapting different (even contrasting) management styles, between control and flexibility and between internal and external orientations, so that they may gain benefits from the multiple dimensions of TQM. Originality/value – This paper provides empirical evidence on the multidimensionality of TQM practices along with their association with different types of culture. Keywords Total quality management, Organizational culture, Australia Paper type Research paper Introduction Much has been written on the impact of total quality management (TQM) on organizational performance (Flynn et al., 1994; Samson and Terziovski, 1999). These studies typically conclude that TQM has a positive and significant relationship with organizational performance. However, not all TQM implementation yields the satisfactory results promoted by its advocates (Brown, 1993; Harari, 1993; Tatikonda and Tatikonda, 1996). Literature has noted numerous stories on the problematic issues relating to the implementation process and how they affect its outcomes. Among several factors, which have been attributed as key determinants of its success, organizational culture is often among those listed at the top. A number of studies have The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at www.emeraldinsight.com/researchregister www.emeraldinsight.com/0144-3577.htm TQM and organizational culture 1101 International Journal of Operations & Production Management Vol. 25 No. 11, 2005 pp. 1101-1122 q Emerald Group Publishing Limited 0144-3577 DOI 10.1108/01443570510626916
  2. 2. been devoted to identify what kinds of factors are suitable for implementing TQM based on a proposition that culture affects the extent to which TQM can be implemented in organizations. Closer examination of literature that explores this relationship between TQM and culture reveals two competing schools of thought (Bright and Cooper, 1993). The first view argues that TQM is associated with a single “homogeneous” culture. Underlying this “unitarist” argument is a view that promotes TQM as a set of organization-wide practices that unify mindsets and perceptions among members of an organization. Within this group, the arguments typically suggest that TQM is associated with a single culture, especially the one that is flexible and people-oriented (Tata and Prasad, 1998). In short, the underlying principal in this unitarist view is that TQM thrives only in a single, identifiable culture. The “pluralist” view, alternatively, supports the ideas of heterogeneity of various cultural dimensions on which TQM should be built. A key difference in this view is the argument that TQM also includes cultural elements, which can promote control and standardization, as opposed to flexibility alone (Watson and Korukonda, 1995). As such, this pluralist view of the TQM/culture relationship is more multi-dimensional, with different cultural characteristics in turn being associated with different elements of TQM. This view appears to contradict the people-centered cultural characteristics that are commonly associated with the unitarist view. Underlying these two opposing arguments is the contrasting view on TQM as a set of organizational practices. The first group (unitarist) views TQM as a unidimensional “package” which has to be implemented as a whole and therefore both requires and reflects a specific, single “homogeneous” culture of the organization. The opposing pluralist school of thought suggests that TQM practice is multidimensional, and is driven by and reflects various types of practices which are driven and reflect various dimensions of organizational culture. These opposing views present an interesting dilemma for managers and researchers alike, named if TQM is indeed multidimensional with respect to culture, it stands to reason that management would need to consider multiple approaches for encouraging its implementation. Alternatively, if it is unidimensional, then a single culture and set of values might be more appropriate. The purpose of this paper is to empirically examine the validity of these two opposing views as they relate to TQM practice. The paper is structured is follows: it starts with literature review discussing the relationship between TQM practices and organizational culture, especially relating to the opposing issues above, which leads to the articulation of the research questions of this study. Following these are methodology and data collection sections, outlining data analysis using structural equation modelling (SEM). Finally, discussion of the findings is presented, followed by conclusion and several recommendations for future research in the area. Literature review This literature review starts with a discussion of the distinction between TQM as a set of organizational practices and organizational culture. This is followed by a section presenting the nature of the relationship between TQM practices and organizational culture. It concludes with a discussion of the controversy about the relationship between TQM and organizational culture, leading to the development of the research framework and questions for this study. IJOPM 25,11 1102
  3. 3. The distinction between TQM practices and organizational culture TQM. TQM is a management model that aims to meet customer needs and expectations within an organization through continuous improvement of the quality of goods and services and by integrating all functions and processes within an organization. The TQM literature concurs that its concepts and practices have been shaped by a number of individuals who are recognised as “quality gurus” such as Deming, Juran, Crosby, Feigenbaum, Ishikawa, and Imai (Hackman and Wageman, 1995; Lau and Anderson, 1998; Plenert, 1996). These TQM gurus developed their concepts primarily based on their experience in industry. Grant et al. (1994) argue that the prescriptive approach developed by these gurus has created a perception that TQM involves no explicit theory, and caused business schools to dismiss TQM as intellectually insubstantial, and to consider it as but one of a number of management fads. Scholars argue, however, that the practical approach employed by TQM proponents does not necessarily imply an absence of theory underlying it. Dean and Bowen (1994), for example, whilst arguing that there is a considerable overlap between TQM and existing management theory, hold that TQM has its own body of knowledge. Similarly, Hackman and Wageman (1995) vigorously argue that TQM does exist as an entity and that there is a set of theoretical assumptions underlying its principles and techniques. In particular, they maintain that TQM passes the convergent validity test in the sense that there is substantial agreement among its founders about its key assumptions and practices. What is emphasized here is that although TQM has been accepted as embodying a set of principles, TQM has been widely disseminated in the form of practices, tools, techniques, and systems. The way TQM has been defined and what have been usually operationalised and measured in its empirical studies (Ahire et al., 1996; Flynn et al., 1994; Samson and Terziovski, 1999; Saraph et al., 1989) are practices or behaviours of the organizations that have implemented these principles. As Wilkinson et al. (1998) argue, despite their differences, there is a strong convergence among concepts and practices put forward by TQM proponents, and a number of scholars (Curkovic et al., 2000; Dean and Bowen, 1994; Gobeli and Brown, 1993; Sitkin et al., 1994) have proposed the articulation of TQM principles consisting of three core elements as a common ground, namely customer focus, continuous improvement, and total involvement. As such, we adopted the definition of TQM articulated by Ross (1995, p. 1) as the integration of all functions and processes within an organization to achieve continuous improvement of the quality of goods and services with the ultimate goal being customer satisfaction. Organizational culture. Organizational culture is defined as the general pattern of mindsets, beliefs and values that members of the organization share in common, and which shape the behaviours, practices and other artefacts of the organization which are easily observable (Sathe, 1985; Schein, 1985). Culture therefore is an explanatory variable that distinguishes one organization from another (Sathe, 1985; Schein, 1985). In relation to the context of this study, as mentioned earlier, there is a shift of focus on studies in TQM from its “hard” aspects which are more observable, such as tools, techniques, and systems, to “softer” behavioural and cultural aspects of TQM which are harder to measure and to change. This shift of emphasis has been driven by the fact that many TQM implementations have failed, preventing companies from realizing its potential benefits because of the ignorance of the cultural factors (Becker, 1993; TQM and organizational culture 1103
  4. 4. Dale and Cooper, 1992; Oakland, 1995; Thomas, 1995; van Donk and Sanders, 1993; Wilkinson et al., 1998). The issue of culture in the TQM literature has also been augmented by a number of authors who attribute the failure of TQM implementations in western countries as the result of cultural factors (Mak, 1999). A common challenge in discussing TQM and culture results from the imperfect boundary between TQM as a set of management practices and TQM as an organizational culture (Batten, 1993; Kanji, 1997; Strolle, 1991). For example, several studies on TQM, such as those by Samson and Terziovski (1999) and Dow et al. (1999), consider TQM practices such as customer focus and people management as “soft” elements in TQM, implying that they actually represent aspects of TQM culture. This leads to confusion in understanding the substance of TQM: is it a set of practices, or, is it a specific type of culture, or both? In this regard, Zeitz et al. (1997) strongly argue that organizational culture is “distinguishable” from TQM practices even though the two are closely related to each other. They view TQM practices as behavioural, whereas organizational culture refers to attitudes, beliefs, and situational interactions. This argument is consistent with those of theorists and scholars in the field of organizational culture. Schein (1985), for example, asserts that although practice can be a reflection of organizational culture, it can only capture the surface level. He further argues that organizational culture is concerned with something deeper, particularly when considering such elements as mindset, values, and beliefs. Further support can be obtained from a “ground-breaking” study by Powell (1995) which promotes the importance of cultural aspects of TQM. In this study, Powell argued that TQM practices had to be implemented within a suitable environment (i.e. culture) that emphasized open communication; something which he believed did not originally belong to TQM, but was imperative for its implementation success. In this study, we take the position that TQM practices and organizational culture are separate entities. Our present analysis aims to explore the extent to which TQM (as defined earlier) is associated with a culture or set of cultures. As such, we do not assume, a priori, that there is a “TQM culture”, in the sense that no one culture embodies TQM. In other words, TQM is not a culture. Therefore, we argue here that in order to identify the typical organizational culture that can function as “fertile soil” for TQM, it would be better if researchers refer to the established models in the area, including: . Hofstede’s (1980) cultural dimensions of individualism versus collectivism, high versus low power distance, high versus low uncertainty avoidance and masculinity versus femininity; . the organizational culture profile (OCP) developed by O’Reilly et al. (1991) which can be used to assess person-organization fit; and . The competing values framework (CVF) developed by Denison and Spreitzer (1991). We choose the CVF developed by Denison and Spreitzer (1991) as the framework for defining organizational culture in this study. The framework is built upon two dimensions represented by two axes with each representing a superordinate continuum as shown in Figure 1. The first dimension is the flexibility-control axis that describes two contrasting orientations, between that which reflects flexibility and spontaneity and that which reflects stability and control. The second dimension is IJOPM 25,11 1104
  5. 5. the internal-external axis that also describes two orientations, with one being oriented towards maintenance and improvement of the existing organization and the other being focused on adaptation and interaction with the external environment. This reflects several classics of organizational theory such as Thompson (1967) and Lawrence and Lorsch (1986). The combination of the two dimensions results in four quadrants of cultural dimensions, namely group, developmental, hierarchical, and rational. Group culture places emphasis on flexibility and internal organization. Organizations with emphasis on this culture promote the development of human resources emphasizing openness, participation, cohesiveness and commitment to membership. Development culture also emphasizes flexibility but with more focus on the external environment. The orientation is towards growth, creativity stimulation, resource acquisition, innovation, and continual adaptation to the external environment. The rational culture is also focused on the external environment but is control-oriented. It emphasizes productivity, performance, goal achievement, and one of the primary motivating factors is competition. The hierarchical culture is both control and internal oriented. It emphasizes rules and regulations, and standardization to achieve control and stability. Denison and Spreitzer (1991) stress that the four cultures in their typology should be viewed as ideal types, meaning that organizations will be characterized by some combination of these four cultures – although some types could be more dominant than the others – rather than reflecting only one culture. Thus, as scales have been developed and validated to empirically measure this, the items are allowed to vary independently (Quinn and Spreitzer, 1991). As McDermott and Stock (1999) noted in a later study using the CVF, “As such, a high rating on one dimension (e.g. internal orientation) does not exclude high rating at the other end (e.g. external orientation)”. There is nothing relating to having a strong internal orientation that necessarily prohibits the organization from also having elements associated with external orientation. Figure 1. The competing values framework of organizational culture (adapted from Denison and Spreitzer, 1991) TQM and organizational culture 1105
  6. 6. The nature of the relationship between TQM practices and organizational culture Having established the distinction between TQM practices and organizational culture, the discussion now focuses on the relationship between the two. A review of literature suggests that there is a substantial disagreement on the nature of this relationships with one group arguing that TQM practices bring cultural change, and the other that it is organizational culture that affects TQM implementation and its results. In essence, the nature of this debate is concerned with the causal direction of the relationship between TQM and organizational culture, and which one is the antecedent of the other. Several authors argue that this debate is premised on the understanding of culture as something an organization has as opposed to something an organization is (Bright and Cooper, 1993; Sinclair and Collins, 1994). In this regard, we base our study on the latter argument by suggesting that it is the organizational culture that will determine TQM. In other words, our research is based on the premise that organizational culture determines the results of TQM implementation rather than the TQM implementation bringing about cultural change (Maull et al., 2001; McNabb and Sepic, 1995; Westbrook and Utley, 1995). As Bright and Cooper (1993) argue, quality management of organizations will take place inside cultural influences, that is within the context of prevailing shared-values, beliefs, and assumptions. The few studies that have attempted to examine the TQM-culture relationship, such as those by Chang and Wiebe (1996), Zeitz et al. (1997) and Dellana and Hauser (1999) always place organizational culture as the antecedent of TQM practices. The dimensionality of TQM and organizational culture Having discussed the nature of the relationship between TQM practices and organizational culture, the following question is explored: what kind of culture would be most suitable for implementing TQM practices? As mentioned earlier, literature has identified two competing arguments, the unitarist and pluralist approaches. The unitarist approach considers TQM as a unidimensional set (or package) of practices, which needs to be supported by one specific type of culture. This can be traced back to the fact that TQM was introduced by different gurus in the form of a set (or package) of tools and practices. Although not explicitly specifying a typical culture which would be necessary for implementing these “packages”, their strong recommendation that these “packages” need to be adopted “as a whole” implies the need of a unified culture to implement it. In this regard, typical cultures that are considered in the literature as suitable for TQM practices are those related to a flexible, people-oriented style. In their review of literature that examined the influence of the company’s culture and structure on TQM implementation, Tata and Prasad (1998) conclude that people-oriented, flexible cultures are more conducive to the success of TQM implementation, compared to the opposing types (i.e. rational control). They identify that such practices as leadership, employee involvement and empowerment, teamwork, customer focus, and continuous improvement are the reflection of people-centred and flexible cultures or will be best implemented where such cultures prevail. The study by Westbrook and Utley (1995) provides further support for this argument as the result indicates that creating culture where employees are valued and empowered leads to successful quality management implementation. In conjunction with this, literature has also highlighted the critical role of leadership in reaching a consensus among all members within an organization in embracing IJOPM 25,11 1106
  7. 7. quality as the common goal of the organization. Several actions that can be taken to achieve this purpose include creating shared vision, and breaking down barriers between departments, typically by promoting cross-functional cooperation and teamwork. All of these efforts are directed towards unifying mindset and culture of all the members within the organization, hence, supporting the idea of a unitarist approach to organisational culture. The opposing pluralist argument suggests the existence of multidimensional cultures. More recent discussions suggest that TQM should be considered as multidimensional, particularly in relation to the arguments that TQM incorporate both people-oriented, and those that would be considered more rational, control types of practices, which are antagonistic to each other (Kekale and Kekale, 1995; Moreno-Luzon and Peris, 1998; Watson and Korukonda, 1995). However, as noted by Bright and Cooper (1993), this notion that there are multiple cultures that support TQM would likely receive considerable challenges from unitarist TQM supporters. The problem in accepting the pluralist view on TQM, as mentioned earlier, is rooted in the conventional view that TQM is unidimensional and therefore will not be able to accommodate diversity of cultures within the organization. Specifically, Watson and Korukonda (1995) affirm that examining the juxtaposition between the disparate elements of TQM, despite its value in facilitating theoretical insights and conceptual clarity of TQM, will face serious challenges from the promoters of TQM who will oppose the idea of linking TQM to the type of cultures which are usually associated with rigidity and suppression of creativity. The fact that TQM also embodies mechanistic or hierarchical culture nevertheless has been supported by several empirical studies. The findings of the study by Germain and Spears (1999), for example, indicate that structural and formal approaches which characterize several TQM practices such as management by fact, strategic planning and formulation, the use of SPC, and process documentation, positively and significantly predict quality management practices. In concluding their study, Germain and Spears (1999) suggest the view of TQM in which formalization maybe better perceived as a mechanism for “coding and transmitting knowledge” to foster, rather than to hinder, quality management within the firm. Two seminal works by Sitkin et al. (1994) and Spencer (1994) provide theoretical bases in support of the multidimensionality of TQM. Sitkin et al. (1994) argue that with similar underlying TQM precepts, organizations can apply different goals and practices based on different orientations, namely total quality control (TQC) and total quality learning (TQL) with TQC being associated with a control or cybernetic approach, and TQL being related to an innovative or learning orientation. Spencer (1994) argues that various practices under the TQM umbrella can be categorized into several organizational models, including the mechanistic and the organic model, as well as others. For example, the focus on quality as an organizational goal is associated with the mechanistic model, because in practice the real objective of pursuing quality could well shift into productivity and efficiency, something on which a mechanistic organization focuses. On the other hand, the practices of employee empowerment and cross-functional teamwork are closely linked to the organic model. Summarising the above arguments, Thompson (1998) affirms that in order to gain a sharper focus on the culture of TQM, organizations need to appreciate the paradoxes of TQM which are embodied in a number of principles of TQM which are contradictory to each other. TQM and organizational culture 1107
  8. 8. One of the examples of these paradoxes is between encouraging creativity on the one hand and promoting control and variation reduction on the other hand. As will be discussed below, this study explores the possibility of, but does not force, multiple dimensions of TQM in the analysis. Research framework and methodology The literature review section has addressed several issues on the relationship between TQM practices and organizational culture. First, it articulates the difference between TQM as a set of organizational practices, and culture as an underlying belief system related to the mindsets of people within the organization. Second, it holds the proposition that it is organizational culture, which affects TQM implementation, not the other way around. Third, it highlights the debate on the kinds of organizational culture, which are suitable for implementing TQM practices; highlighting the difference between unitarist and pluralist views. The conflict between these two arguments is then extended to another debate on TQM as either unidimensional or multidimensional. By incorporating these three key findings of the literature review, we developed a research framework examining the relationship between organizational culture and TQM practices that built on previous works in the area. In essence, this study was aimed at comparing the nature of the relationship between organizational culture and TQM practices in the form of two competing structural models based on unitarist and pluralist views. In developing the research framework, we built on several past studies. Our study built on the work of Chang and Wiebe (1996) and Dellana and Hauser (1999), which examine the link between TQM practices based on Malcolm Baldrige National Quality Award (MBNQA) model and organizational culture based on the competing values model developed by Denison and Spreitzer (1991). Chang and Wiebe (1996) interviewed a panel of experts from the Conference Board Total Quality Management Centre to describe ideal cultural characteristics that they believe will support TQM philosophy based on the four types of cultures of the competing value model, namely group, developmental, hierarchical, and rational. This finding suggests that these four types of culture characterized the ideal organizational culture embodied by a TQM philosophy, although group and developmental cultures appear to be dominant. As such, it provides empirical support for the pluralist view. Dellana and Hauser (1999) also use the MBNQA criteria to represent TQM practices and the competing values model to represent organizational cultures as their research variables. Using Pearson correlation coefficients, they test the association between each of the six elements of the MBNQA criteria and the four cultural dimensions of the competing values model. Their finding concurs with that by Chang and Wiebe where both group culture and developmental culture are associated with high MBNQA scores. Al-khalifa and Aspinwall (2001) investigate the suitability of the national culture in Qatar and the culture required for implementing TQM. Their conclusion suggests that Qatar companies would find difficulties in implementing TQM since they are dominated by a rational and hierarchical culture, hence, confirming the findings of the first two studies. Our study aims to advance both studies from an analytical point of view by following the work by Zeitz et al. (1997) who employ SEM. This allows us to examine the multiple cultures and multiple TQM elements simultaneously, hence, incorporating the interaction amongst independent and dependent variables. The use of SEM also IJOPM 25,11 1108
  9. 9. allows us to make a rigorous analysis in comparing the unitarist and pluralist model of the culture-TQM relationship which would contribute to knowledge in this area. In modelling the structural relationship between TQM and organizational culture, we also follow the work of Zeitz et al. (1997) by considering organizational culture as the independent variable which determines the level of TQM practices as the dependent variable. This study also builds on the work by Chang and Wiebe (1996) and Dellana and Hauser (1999) by examining the relationship between TQM practices and organizational culture. In particular, the objective of this study is to examine the multidimensionality of TQM, which is a reflection of multidimensional organizational culture with the following research questions being addressed: RQ1. Can the multidimensionality of TQM practices be reflected in multidimensional cultures? RQ2. What is the nature of the relationship between sub-cultures and TQM subgroups? As mentioned earlier, this study defines organizational culture as the pattern of values in an organization that determine its artefacts and practices. As such, we follow the work by Zeitz et al. (1997) in terms of modelling the structural relationship between TQM and organizational culture by considering organizational culture as the independent variable and TQM practices as the dependent variable. For confirmatory purposes, this study also compares two competing structural models of the TQM-culture relationship; the “unitarist” model and the “pluralist” model. Research instruments TQM measures. The use of constructs – a method that had been commonly used in research in the psychology discipline – has been accepted as a “norm” in studies on TQM. Pioneered by Saraph et al. (1989), this method has been adopted in most of the subsequent empirical research on TQM (Ahire et al., 1996; Black and Porter, 1996; Curkovic et al., 2000; Das et al., 2000; Dow et al., 1999; Flynn et al., 1994; Grandzol and Gershon, 1998; Powell, 1995; Samson and Terziovski, 1999). This, however, has created a problem because most researchers prefer to build their own TQM constructs instead of revalidating the ones developed by their predecessors. This has resulted in a variety of TQM constructs being developed leading to inconsistency in defining the content of TQM constructs. Dow et al. (1999) affirmed that although there was a great deal of overlap and similarity in the content of TQM among its proponents and scholars, there was still a problem in terms of the best method for grouping and characterizing such a broad selection of quality management practice. This problem could be attributed to the fact that TQM has no clear boundary and definition, as highlighted in the literature review section. Since this research was not aimed at developing or validating another TQM constructs, we decided to select a model from the previous studies on TQM. Among several available models, the MBNQA criteria were chosen to measure the implementation of TQM practices in organisations. This award consists of six criteria of organizational practices and one criterion of organizational performance (business results). The organizational practices embody six criteria, namely leadership, strategy and planning, customer focus, information and analysis, people management, TQM and organizational culture 1109
  10. 10. and process management. There were several key reasons that underpinned this choice. First, the use of the Baldrige framework to articulate the content of TQM practices has been supported by a number of scholars (Ahire et al., 1995; Capon et al., 1995; Curkovic et al., 2000; Dean and Bowen, 1994; Evans and Lindsay, 1999; Juran, 1995). Curkovic et al. (2000), in particular, noted the wide adoption of MBNQA in many countries around the world which strongly suggested that the award criteria have comprehensively captured the major dimensions of TQM practices as envisioned by its proponents, such as Deming, Juran, and Crosby. Second, the MBNQA criteria are applicable to both manufacturing and non-manufacturing firms, which were the focus of this study. This is an important point to note given the fact that TQM originated in the manufacturing area and this has raised some doubts about its application in service sectors. It is useful to note that the use of the six organizational practice items in this model allows for, but does not assume, the clustering together of the two theoretically opposing TQM mindsets of control-oriented versus human resource-based implementation. By using these items, we are also able to explore the extent to which the TQM organizational practices in our observed firms follow this (or any other) framework. Our primary focus here is the exploration of the unitarist versus pluralist viewpoints, rather than a deep exploration into the different dimensions within the pluralist viewpoint itself. Having selected the MBNQA criteria to represent the TQM measurement model, the process was now focused on developing a survey instrument for measuring the MBNQA criteria in the organisations. The framework developed by Samson and Terziovski (1999) was used as the core for MBNQA constructs in this study. This instrument and model was used in the largest study on TQM so far conducted (using 1,024 responses from manufacturing companies in Australia and New Zealand) to ensure its validity. Further, Samson and Terziovski (1999), although not in an explicit manner, distinguished “people” or “soft” factors from “system” or “hard” factors embodied by the MBNQA criteria; something we have focused on in this paper. Their empirical findings indicate that what we have discussed above as “soft” factors of TQM were the strongest predictors of organisational performance. The organizational culture measures. Since TQM practices are considered as the “effect” of organizational culture, we need to select a model of organizational culture which can be examined against TQM practices. Following the works by Wiebe and Chang (1996) and Dellana and Hauser (1999), the competing values model was selected as the organizational culture model for this study, and the model developed by Denison and Spreitzer (1991) was used to operationalise the measurement of four types of culture: group, developmental, hierarchical, and rational. The measurement approach used five-point Likert scales which is similar to the work by Chang and Wiebe (1996) and McDermott and Stock (1999). Data collection procedure Empirical data was obtained through a random survey of 1,000 managers, most of whom were senior managers who had knowledge of past and present organizational practices relating to quality and innovation related aspects in their organizations. The focus of this study was limited to one site (or plant) per organization. A total of 194 managers responded, whilst 150 questionnaires were returned to the researchers with return to sender (RTS) messages, indicating that the addresses were no longer valid. IJOPM 25,11 1110
  11. 11. By discounting the number of RTS mails, the final response rate accounted for 22.8 per cent. The information needed for examining non-response bias was obtained from two sources: follow-up e-mails and follow-up phone calls. Organisations, which declined to participate in the survey commonly stated their reasons as lack of time, lack of resources, and not interested. None of these reasons alluded to the possibility that there were systematic reasons for not participating in the study. The proportion of the respondents was nearly equal between manufacturing and non-manufacturing sectors (52.5 and 47.5 per cent, respectively). The non-manufacturing sectors include construction, consulting, health care, information technology, and retail/distribution. In terms of organizational size, based on the number of employees, 90 per cent of the respondents represent firms with 500 employees or less, with around 60 per cent of them representing firms with less than 100 employees. In terms of the position of the respondents in the organization, more than 50 per cent of the respondents were either quality managers or production/operations managers, followed by senior managers (general manager or managing director) accounting for 30 per cent. The remainder held various positions in finance, marketing, human resources, and administration. Data analysis Data reduction process The data reduction process was conducted in order to bring the ten constructs – each consisting of four to six items – employed in this study, into ten composite scores. Six constructs (leadership, strategic planning, customer focus, information and analysis, people management, and process management) constituted TQM latent variables, and four constructs (group, developmental, hierarchical, and rational) constituted the organizational culture measures. These ten constructs were subjected to validity and reliability tests before a single composite score could be calculated to represent each construct. Confirmatory factor analysis (CFA) using LISREL 8.30 was employed for examining construct validity of each scale by assessing how well the individual items measured the scale. We followed the method applied by Ahire et al. (1996) where each construct was treated as an independent congeneric model. Among these ten constructs, two items were deleted due to weak loading on the construct. The first item was “Customers are involved in product design” in the customer focus scale. The second item was “Control and centralization” in the hierarchical scale, and this case is similar to what happened in the study by McDermott and Stock (1999) where they also excluded this particular variable in their analysis. With three items left, it is not possible to obtain the goodness of fit (GFI) indices of this scale, however, the loading paths of the three items (.0.5) support unidimensionality and convergent validity of the construct. The values of GFI of the other nine constructs exceed, by a comfortable margin, the 0.9 criterion generally suggested by Hair et al. (1998) accompanied with strong loading paths (.0.5) between latent variables and their respective observed variables has suggested by Dunn et al. (1994), hence, establishing their unidimensionality and convergent validity. The reliability analysis following the construct validity process was conducted by calculating the Cronbach’s a for each scale. The results show that the Cronbach’s a measures for the ten constructs well exceed the recommended critical point of 0.7 TQM and organizational culture 1111
  12. 12. (Nunnally, 1978), hence, establishing their reliability. The final results of construct validity and reliability tests of the nine constructs are reported in Table I. Discriminant validity is aimed at examining if each item only estimates one construct; in other words, every construct should be distinct from each other. As suggested by Venkatraman (1989), discriminant validity was examined by running CFA on each pair of the constructs in this study. For each pair, CFA was run twice where the first allowed the correlation between the two constructs to be estimated. The chi-square value of this model was coded as xa (chi-a). The second CFA was run by fixing the correlation between the two constructs to 1.0, and the chi-square value of this model was coded as xb (chi-b). The difference between xa and xb was coded as Dx (delta chi) with the degree of freedom of 1. The discriminant validity between the paired-constructs can be established if the value of Dx (df ¼ 1) at p , 0.01 is greater than 6.64. With ten constructs incorporated in this study, we conducted 45 discriminant validity tests. The values of Dx are presented in Table II, and the results indicated that the ten constructs passed this test. Construct No. of items (final) GFI indices Means Standard deviation Cronbach’s a Leadership (lead) 4 0.980 3.756 0.825 0.8580 Strategic planning (plan) 4 0.998 3.567 0.901 0.8242 Customer focus (cust) 5 0.976 3.918 0.684 0.7853 Information and analysis (info) 4 0.991 3.543 0.878 0.7992 People management (peop) 5 0.974 3.431 0.802 0.8303 Process management (proc) 6 0.978 3.601 0.707 0.7922 Group culture (grou) 4 0.992 3.667 0.819 0.9060 Developmental culture (deve) 4 0.987 3.613 0.692 0.7890 Hierarchical culture (hier) 3 –a 3.455 0.780 0.8155 Rational culture (rati) 4 0.975 3.791 0.715 0.8688 Note: a The GFI cannot be computed because the construct only has three observed variables. However, the loading path of each observed variable was strong, hence, supporting the validity of the construct Table I. Construct validity and reliability and the values for composite measures Lead Plan Cust Info Peop Proc Grou Deve Hier Rati Leadership (lead) – Strategic planning (plan) 100.3 – Customer focus (cust) 215.2 160.4 – Information and analysis (info) 153.4 70.3 234.4 – People management (peop) 66.8 112.6 161.9 107.9 – Process management (proc) 141.8 56.4 64.5 49.7 47.1 – Group culture (grou) 101.1 224.0 267.1 192.7 58.1 230.1 – Developmental culture (deve) 76.1 186.3 98.3 213.8 103.7 113.1 73.6 – Hierarchical culture (hier) 218.4 197.3 232.5 229.5 231.1 205.8 177.3 213.9 – Rational culture (rati) 228.4 195.6 211.8 184.0 244.6 222.2 297.2 87.2 149.2 – Table II. Discriminant validity IJOPM 25,11 1112
  13. 13. The relationship between TQM practices and organizational culture As mentioned earlier, in terms of modelling the structural relationship between TQM practices and organizational culture, this study positioned organizational culture as the independent variable and TQM as the dependent variable, meaning that practices are the results or manifestations of culture, or in a similar way, culture constrains how practices are designed and delivered. SEM was used to test the relationship between TQM and organisational culture based on the two competing models. The choice of SEM as the analytical tool for this study was based on two major reasons. First, in this study TQM was considered as a construct (or a latent variable) that cannot be measured directly or represented by a single metric unit. To our knowledge, only SEM allows the explicit representation of a distinction between observed and latent variables. Secondly, in the pluralist model, we examined several structural relationships (i.e. between the four measures of organisational culture and the three subgroups of TQM shown in Figure 3) simultaneously, and this can be done only by using SEM. Unitarist model. In the unitarist model, TQM is considered as a set of practices which has a particular culture that affects all of these practices; in other words, all TQM components are driven by a similar type of culture. As such, TQM is modelled as a single latent variable that is measured by six observed variables, and it is explained by the four types of cultures as shown in Figure 2. Overall, with respect to the values of the absolute GFI indices the model suggests a lack of fit. The value of RMSEA slightly exceeds 0.08 and the value of AGFI drops below 0.90, respectively, which causes some concerns for such a simple model. It is also evident from the result that there are three types of cultures, which have a significant relationship with TQM practices, although group culture appears to be the dominant one, followed by rational and developmental cultures. Hierarchical culture does not show a significant relationship although the negative sign of the estimated value of the relationship toward TQM appears to replicate the findings reported in the study by Dellana and Hauser (1999). Pluralist model. The pluralist model considers TQM as a multidimensional model comprising multiple subgroups (i.e. constructs) rather than a single latent construct. Figure 2. The unitarist model of the relationship between organizational culture and TQM practices TQM and organizational culture 1113
  14. 14. These subgroups were tested against the four types of cultures in the CVF used in the unitarist model. As a preliminary analysis, the relationship between organizational culture and the six TQM practices was tested using Pearson correlation, and the result is presented in Table III. The findings suggest that the six TQM variables correlate at fairly similar degrees to group, developmental and rational culture, and less strongly with hierarchical culture, although all correlation coefficients are still significant at 0.01. As is evident from the columns of group and developmental culture, the variables leadership, customer focus, and people management show a relatively stronger correlation than the other four TQM practices. On the other hand, along the column of hierarchical culture, it appears that strategic planning, information and analysis, and process management have the highest correlation with hierarchical culture with nearly similar coefficient values. Therefore, to a limited degree, we have been able to identify an antagonistic structure within TQM practices on the basis of two contrasting cultures: hierarchical that is oriented toward control and internal on the one hand and group and developmental that is more oriented toward flexibility. The next step is to develop the multidimensional model of TQM by dividing the six TQM practices into several subgroups. In building these subgroups, we centred on several theoretical arguments although this process is still exploratory in nature. Based on the content analysis of the six TQM practices, we came up with three subgroups, which we labelled as TQM1, TQM2, and TQM3. TQM1 comprises leadership and people management practices that mostly relate to human relations aspects in the organization. This can be seen from the practices incorporated in these two constructs, such as sharing beliefs and values, providing role models, empowerment, participative management, creating unity between departments, training and development, creating a quality work environment, and communication. TQM2 comprises customer focus and process management practices, which could be associated with some elements of control in TQM. This is because both practices are closely related to each other as the major components of quality assurance whose primary purpose is to achieve a high degree of conformity and minimize variation (Sitkin et al., 1994). The study by Germain and Spears (1999) indicated that quality management positively relates to elements of control and formalization, and the result should be attributed to the content of their quality management construct that is very similar to the content of process management items used in our study. TQM3, on the other hand, comprises strategic planning and information and analysis constructs which are also considered as representing the control element of TQM. From this point of view, both strategic Group Developmental Hierarchical Rational Leadership 0.759 0.676 0.305 0.628 Strategic planning 0.566 0.509 0.399 0.559 Customer focus 0.516 0.586 0.319 0.535 Information and analysis 0.569 0.493 0.398 0.549 People management 0.768 0.597 0.339 0.582 Process management 0.551 0.537 0.396 0.555 Note: All correlations are significant at p , 0.01 Table III. Correlation between TQM practices and organizational culture IJOPM 25,11 1114
  15. 15. planning as well as information and analysis practices reflect well the beginning (i.e. planning) and ending (i.e. evaluation) phases of strategic management processes. The processes commonly start with external and internal environmental scanning, formulation of the strategic choice, implementation process, and conclude with control and evaluation (Hill and Jones, 2001; Thompson and Strickland, 2003). Given that these two steps are usually conducted in a formal and systematic manner (Mintzberg, 1993), it is appropriate to categorize them into the control elements of TQM although we separate them from the TQM2 subgroup (i.e. customer focus and process management). In sum, while both of these constructs have to do with control, the TQM2 elements focus on processes and might involve a more operations focus, while TQM3 relates more to the bigger picture, with its emphasis on planning and external elements of the strategic management process, and its orientation is more toward the entire business. However, given that both TQM2 and TQM3 represent control elements, it is necessary to test whether these two subgroups should be combined into one subgroup or stand as separate entities. For this purpose, two competing models of multidimensional TQM were tested. The first competing model comprises three TQM subgroups as described above, whilst the second competing model comprises two TQM subgroups, with TQM2 and TQM3 being combined into one subgroup. The result of these two measurement models indicates that the first competing model has a significantly better fit (at p , 0.05), based on the discrepancy of the chi-square value (Dx) and the degree of freedom. The structural model to examine the relationship between the four cultural dimensions with the three TQM subgroups is shown in Figure 3. In analysing this model, SEM was used for model generation purposes that involve a blend of exploratory and confirmatory, ahead of the strictly confirmatory approach. In model generation applications, when an initial model does not fit the data, it can be modified by deleting, adding, and/or modifying paths in the model (as suggested by modification indices), then re-tested using the same data set. The final purpose is to establish a model that makes theoretical sense and reasonable correspondence to Figure 3. The pluralist model of the relationship between organizational culture and TQM practices TQM and organizational culture 1115
  16. 16. the data (Joreskog, 1993; Bollen and Long, 1993; McCallum, 1995). With four by three relationships, there were twelve paths that needed to be estimated. However, the initial findings showed that not all of these 12 paths were significant. The non-significant paths of the initial structural relationship were then deleted, and this resulted in improvement of the GFI indices of the model. This process was continued until the best competing model was established. The final model is shown in Figure 3, and the GFI indices suggest that the model is robust even though the number of estimated parameters is far more complex than the first model. Eight out of twelve paths of structural relationship were found to be significant (at p , 0.01) as shown in Figure 3. The findings once again suggest that group culture is the most dominant among these four cultural dimensions. It significantly relates to the three TQM subgroups. The other relationship provides sensible results where TQM1 is driven by a group and developmental culture. Both group and developmental cultures represent the flexible-type cultures that match the characteristics of the TQM1 subgroup, which comprises human factors, which are leadership and people management. TQM2 is related to both developmental and rational cultures; meaning that this subgroup is driven by a combination of cultures that balance the flexibility and control orientations, which are also external-oriented. Both cultures fit the characteristics of the TQM2 subgroup that comprises customer focus and process management that focus on the external environment (i.e. customer needs) but at the same time emphasize productivity and performance. TQM3 as expected is more concerned with an internal and control orientation that is reflected by its relationships with rational and hierarchical culture in addition to the most dominant sub-culture, group culture. Overall, the findings of the pluralist model indicate an interesting shift of cultural emphasis between the three TQM subgroups. TQM1 is that which is “purely” flexible-oriented, followed by TQM2 which comprises both flexible and control orientations, and finally TQM3 which is the most control-oriented. Comparing the two models of the structural relationship between organizational culture and TQM practices, it is obvious that the pluralist model is shown to be a better model as indicated by the values of the GFI indices. The result is also more revealing particularly in the case of hierarchical culture, which appears to have no significant relationship with TQM in the unitarist model (Figure 2). Therefore, the multidimensional model of TQM practices and cultures is supported here. Discussion The findings above provide evidence of the need for managing multidimensional elements within TQM that reflect multidimensional cultures. In particular, although they may be seen as somewhat controversial, the findings do support the existence of the mechanistic-type culture within TQM practices, represented by the TQM3 subgroup. This finding is even more important as a counterbalance of the “bias” towards group and developmental culture which has dominated the literature on TQM as noted in the earlier section. Therefore, the findings substantiate the idea of the juxtaposition of different elements of TQM, the control and people-centred elements, and that the coexistence of both elements does not necessarily cause a situation where one can undermine the other. The paradoxical combinations of these cultures concur with the findings of past studies in the area (Buenger et al., 1996; Kalliath et al., 1999; Zammuto and Krakower, 1991). This finding also supports the underlying assumption IJOPM 25,11 1116
  17. 17. of the competing values model with regard to the importance of balance. This is because, when organizations overemphasize one culture and ignore the other, they may become dysfunctional and the “single” culture may turn out to be weaknesses (Denison and Spreitzer, 1991). The importance of this issue can also be viewed from a strategic point of view in relation to the escalating pressure for organizations to pursue more complex, often inconsistent, aspects of performance. In this regard, Benner and Tushman (2003) highlight the idea of dynamic capabilities that integrate the firm’s abilities for both exploitation – which emphasizes control – and exploration – which promotes flexibility. We believe that such integration concurs with the need to appreciate the coexistence of control and people-centred cultures within the organization as identified in this study. Supporting this proposition, Denison and Spreitzer (1991) specifically affirm the need to incorporate and balance all four cultural types that represent the capacity to respond to a wide set of environmental conditions. By and large, the coexistence of the control and people-centred models implies that TQM calls for a synthesis of these antagonistic elements within an organization. As Thompson (1998) affirms, the need for managing the cultural paradox could be one of the primary issues of TQM and the biggest challenge for organizations that implement it. The major implication of this finding is that organizations need to accommodate divergent goals by developing a system and/or structure that allows enough flexibility for adapting different (even contrasting) management styles, hence, swinging comfortably between control and flexibility and between internal and external orientations, which is known as the “ambidextrous” approach (Tushman, 1996). We believe that this issue is worthy of examination for research on TQM in the future. Conclusion It is our hope that the present study helps to nurture a dialog that explores these and other relationships between TQM and culture. Our results support the pluralist view, yet it still opens further debate in the area, particularly between the organizational versus departmental the level. Intuitively, one may argue that multidimensional cultures are applicable only at the organizational level, but once we look into specific parts of the organization we will find subgroups of culture, which are more homogenous, according to the specific task(s) they face. For example, developmental culture can be found to be more prevalent in the R&D function, whilst rational or hierarchical culture is more alive in the (manufacturing) production function. Further, the implications of this research raise questions regarding the most appropriate combination of cultures for TQM. One might posit that the answer to this question hinges on variables such as industry sector and strategic goals of the organizations. We need to examine further if our findings would be different when such control variables are added. Also, it would be interesting to explore if the configuration of TQM subgroups will vary, in contingent on these factors, as suggested by Sitkin et al. (1994) and Spencer (1994). In this regard, we may find different configurations of TQM based on different levels of the three subgroups, contingent to these external and internal control variables. For example, firms operating in a stable industry would emphasis more the control elements of TQM (i.e. TQM2 and TQM3) compared to those operating in a dynamic environment. TQM and organizational culture 1117
  18. 18. Another important issue is related to the effectiveness of these cultures in determining organizational performance. For example, the studies by Powell (1995) and Samson and Terziovski (1999) suggest that the “soft” factors of TQM – associated with TQM1 in this study – were found to be the strongest predictors of organizational performance. On the other hand, the “hard” factors – associated with the TQM3 subgroup in this study – did not show any significant relationship with organizational performance. Does this lead to a conclusion that the cultures supporting these practices (i.e. group and developmental cultures) are the best and therefore should be nurtured, and at the same time, hierarchical factors – which underlie TQM3 – should be suppressed? If so, under what conditions? Finally, this study considers organizational culture as the antecedent of TQM practices. However, as mentioned in the literature review section, there are many arguments that promote TQM as a vehicle for organizational change, including the cultural element. We believe that the recursive effect between TQM and organizational culture would be an interesting topic to examine although it can only be done using a longitudinal study. References Ahire, S.L., Landeros, R. and Golhar, D.Y. (1995), “Total quality management: a literature review and an agenda for future research”, Production and Operations Management, Vol. 4 No. 3, pp. 277-306. Ahire, S.L., Golhar, D.Y. and Waller, M.W. (1996), “Development and validation of TQM implementation constructs”, Decision Sciences, Vol. 27 No. 1, pp. 23-56. Al-khalifa, K.M. and Aspinwall, E.M. (2001), “Using the competing values framework to investigate the culture of Qatar industries”, Total Quality Management, Vol. 12 No. 4, pp. 417-28. Batten, J. (1993), “A total quality culture”, Management Review, Vol. 83 No. 5, p. 61. Becker, S.W. (1993), “TQM does work: ten reasons why misguided attempts fail”, Management Review, Vol. 82 No. 5, pp. 30-2. Benner, M.J. and Tushman, M.L. (2003), “Exploitation, exploration, and process management: the productivity dillema revisited”, Academy of Management Review, Vol. 28 No. 2, pp. 238-56. Black, S.A. and Porter, L.J. (1996), “Identification of the critical factors of TQM”, Decision Sciences, Vol. 17 No. 1, pp. 1-21. Bollen, K.A. and Long, J.S. (Eds) (1993), Testing Structural Equation Modelling, Sage, Newbury Park, CA. Bright, K. and Cooper, C.L. (1993), “Organizational culture and the management of quality”, Journal of Managerial Psychology, Vol. 8 No. 6, pp. 21-7. Brown, M.G. (1993), “Why does total quality fail in two out of three tries?”, Journal for Quality and Participation, Vol. 16 No. 2, pp. 80-9. Buenger, V., Daft, R.L., Conlon, E.J. and Austin, J. (1996), “Competing values in organizations: contextual influences and structural consequences”, Organization Science, Vol. 7 No. 5, pp. 557-76. Capon, N., Kaye, M.M. and Wood, M. (1995), “Measuring the success of a TQM programme”, International Journal of Quality & Reliability Management, Vol. 12 No. 8, pp. 8-22. Chang, F.S. and Wiebe, H.A. (1996), “The ideal culture profile for total quality management: a competing values perspective”, Engineering Management Journal, Vol. 8 No. 2, pp. 19-26. IJOPM 25,11 1118
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