Alternative quality improvement practices and organization performance

Abstract

Quality improvement is a highly desired objective in the fiercely competitive international business world, yet it remains elusive to many US organizations. This study relates alternative quality improvement approaches to actual operating and financial performance. Productivity improvement approaches are also investigated and related to performance to define better the relationship between quality and productivity. In this study, multiple quality and productivity approaches are correlated to eight quality, three operating, and three financial performance measures for 187 US business firms. Results indicate a strong relationship between a quality improvement approach and performance quality. The relationship between a quality improvement approach and operating or financial performance is weaker, but significant. Productivity improvement approaches also help predict quality, operating, and financial performance — often similarly to quality improvement approaches. This study suggests that the profile of quality and productivity improvement approach should vary, depending upon whether the firm is most interested in performance quality, operating improvement, or financial performance.