Background: The title of this research clarifies that it is based on analyzing the impact of Total Quality Management (TQM) practices on innovation. An analysis of the TQM concept indicates that it is mainly concerned with the quality aspects within organization as it focuses on attaining higher quality and effectiveness in the processes that are carried out. TQM is basically utilized by organizations as a management philosophy with a view to provide customer with quality products and services through achieving higher effectiveness within the current business practices. The study by Ooi, Lin, Teh and Chong (2012) indicated that TQM plays an important role in allowing organizations in achieving competitive advantage over others. This is the reason leading to more and more organizations considering the application of TQM practices in performing their business processes. Total Quality Management as the name suggests is concerned with the attainment of quality in the existing business processes so that it leads to overall efficiency and better delivery of products and services to final consumers.
The role of TQM is not only identified as important in respect to manufacturing organizations, but the study as conducted by Bon and Mustafa (2013) revealed that the role of TQM is significantly higher in the context of service organizations as well. The growing importance of service sector and the increasing level of demands of high quality services among customers have necessitated businesses to focus more on the quality aspect and this has therefore increased the importance of TQM in respect to service organizations as well. The importance of TQM in service industry is similar to that of manufacturing industry as suggested by Bon and Mustafa (2013) as they have indicated that TQM allows businesses within service sector to perform the integration of organization objectives and functions in order to satisfy the customers and thereby in increasing competitive advantage. The need for quality is therefore identified as crucial for the businesses to survive and this can be positively accomplished by focusing on TQM (Bon and Mustafa, 2013).
However, as indicated by Prajogo and Sohal (2006), in today’s competitive environment, it is essential for the organizations that they should pursue more complex dimensions of performance in respect to both the innovation and quality. This suggests that apart from focusing towards quality aspect, it is also essential that businesses should focus towards attaining innovation in their existing business process, so that the customers can be served with most innovative products and services and better overall satisfaction level within them can be ensured. Businesses are increasingly seeking for attaining innovation in their production process because of higher level of competition. The companies with innovative approach in performing their processes have competitive advantage over others.
A study by Singh and Smith (2004) indicates that the globalization of businesses has resulted into intense level of competition and this leads to both the multinational and domestic companies are competing against each other for higher market share. Amidst such highly competitive business environment, these businesses have realized that providing products and services that are of higher quality is significantly important for them in surviving their business operations. By attaining higher quality in their business processes, it can be possible for them in achieving significant improvements in their profitability, productivity and competitiveness. This has resulted into many businesses paying significant level of importance in attaining higher quality in their business processes.
However, an important question in respect to TQM and the concept of innovation is whether there exist a direct linkage between TQM practices and innovation. The study by Ooi, Lin, Teh and Chong (2012) indicates that the link between TQM and innovation has stirred up huge interest among scholars in the management field and there are various forms of arguments that are noted in respect to the association between TQM and innovation. As a result, this research is mainly focused towards identifying the exact level of association between TQM practices and the innovation as performed within organization. In particular, the analysis in the given research is mainly based on TQM practices such as management commitment, employee involvement and customer focus and their impact on innovation. The ways in which these TQM practices contribute towards the attainment of higher level of innovation will therefore be the main focus of area in performing this research.
Research Aims and Objectives: The research aim is highly important as it acts as a guiding factor in performing the entire research towards the right direction. The main aim in respect to the given research is towards analyzing the impact of TQM practices such as management commitment, employee involvement and customer focus on achieving innovation within business practices. In achieving this main aim of the research, there are certain major research objectives that are considered appropriate. The successful attainment of these research objectives is likely to positively contribute towards the accomplishment of the main aim of the research. These research objectives are indicated below:
The successful attainment of these research objectives is highly important from the point of view of accomplishing the main aim of this research in an efficient manner.
Rationale in doing this Research: This research on analyzing the impact of TQM practices on innovation is highly justified because the analysis of existing literature indicates that there are various studies that have focused towards this relationship between TQM practices and innovation and their analysis revealed arguing viewpoints regarding such association between them. There are contrary views being existed in the existing literature regarding the association between TQM and innovation (Prajogo and Sohal, 2001). As a result, the conduct of this research will clarify in detail about the exact relationship that exists between TQM practices and innovation. This research therefore will contribute theoretically towards establishing the exact relationship between TQM and innovation. Further, an analysis of the existing literature above indicated that the businesses are faced with rising level of competitive business environment and in order to efficiently perform within such complex business environment condition, it is highly essential that they should be highly innovative with respect to their products and services offerings. Thus, the conduct of this research will clarify as to whether the TQM practices such as management commitment, employee involvement and customer focus contributes towards attaining higher overall innovation. The findings from this research will enable the businesses to identify the exact impact of these TQM practices on innovation, and this in turn would allow them in better undertaking such TQM practices in their daily business activities.
Structure of the Research: The research will be carried out in a structured manner with major phases of the research including a brief analysis of their content is presented below:
Chapter 2: Literature Review
Introduction: This chapter is another important chapter of the research as it is concerned with reviewing the findings of past researchers concerning the relationship that exist between TQM and innovation. Literature review is important because it acts as a framework to the researcher in carrying out the research in an efficient manner. The reviews of findings from past researches acts as a guiding factor in performing the current research, and thus, the analysis of the viewpoints of past researchers concerning the association between TQM and innovation is likely to positively contribute towards attaining better research results. In performing the analysis, the literature review is mainly focused towards areas such as the concept and importance of TQM to businesses in the 21st century, the role of innovation in performing their business processes, and finally an evaluation of the link between TQM and innovation. These aspects are critically analyzed as follows:
TQM and Its Importance in 21st Century: As this research is based on analyzing the impact of TQM practices on innovation, it is highly essential that an analysis of the concept of TQM is performed and its importance in 21st century. TQM has been defined by Pike, Barnes and Barnes (1995) as a corporate business management philosophy which implies that the business goals and customer needs are inseparable. Its application is mainly evident in respect to both industry and commerce. The concept of TQM mainly involves the attainment of quality in respect to all the processes that are carried out within organization so that it will lead to the promotion of excellence, prevent errors and ensure that each and every business activity is aligned to customer needs and the goals of the business is also advanced properly without any duplication of waste of effort. TQM is all about commitment from all levels within organization and it is mainly a continuous improvement process whereby enhancement over the quality can be attained through ensuring the total quality is integrated as a continuous process. Every department, function and process needs to be integrated and there should be active involvement of all the employees in meeting out customer needs (Pike, Barnes and Barnes, 1995).
The concept of TQM is also defined by Rawlins (2008) by indicating the concept can be better understood through considering the individual components of TQM. As for instance, Total within TQM means the inclusion of everyone within the organization in the development of final product or service for the customers. Quality component within TQM indicates that it is concerned with meeting out the requirements of the customers. For this to happen, it is essential that the quality requirements must be clearly stated, understood and quantifiable. The term management within TQM has two meanings as firstly, it implies that TQM process has to start from the top and secondly, management implies a continuous process. Implementing TQM philosophy requires management to monitor its application on continuous basis so that the goals of higher quality in the final products and services can be accomplished (Rawlins, 2008). According to Allen (2004), TQM is a philosophy that requires the involvement of the total organization in improving all aspects of the quality of service. The basis definition of TQM therefore indicates that TQM is a process of continuous improvement with a view to deliver better quality of products and services to final customers (Allen, 2004).
As far as the importance of TQM is concerned, the existing literature indicates that it is highly essential for businesses to incorporate TQM philosophy in the existing business processes. The importance to TQM to businesses is explained by Agus and Hassan (2011) in their study on enhancing production performance and customer performance through TQM. As per the findings in the study, it has been evaluated that in the past two decades, there are various important organizations that have performed the implementation of TQM, and this high quality strategy has resulted into the attainment of competitive advantage to them. The study is mainly focused towards analyzing the TQM impact on customer performance and production performance and the conduct of the study leads to conclusion that there is a positive correlation that exists between TQM and production and customer performance. This suggests that the enhancement over the organizational performance can be achieved through integrating TQM practice (Agus and Hassan, 2011). According to Kaser (2010), businesses today face a market environment whereby meeting out customer needs and requirements is vital to them. The increasing expectations of customers from products and services because of their rising income levels, technological advancements and highly saturated markets have necessitated businesses to focus more towards the quality aspect. This requires them to integrate TQM philosophy in order to efficiently manage quality in performing their business processes (Käser, 2010).
Thus, the analysis revealed that TQM is a management philosophy that aims at achieving continuous improvement in terms of overall quality of business processes, and it is highly important for businesses in the 21st century in effectively satisfying their customer requirements.
TQM Practices within Organization: There are various important ways in which TQM practices can be carried out or encouraged within organization. The important areas that need attention in successfully practicing TQM within organization include management commitment, employee involvement and customer focus. A study by Ugboro and Obeng (2000) indicates that the role of management is crucial in performing the successful implementation of TQM philosophy. It is mainly regarded as a management philosophy, and the role of top management is crucial. The top management leadership is the most significant factor towards accomplishing success in respect to TQM implementation. It is the top management leadership that determines the commitment levels on the part of employees, and overall effectiveness of the entire TQM philosophy. The findings from the study suggests that the top management should reflect higher overall level of commitment right from the implementation to management and monitoring of such TQM philosophy in achieving higher level of operational efficiency (Ugboro and Obeng, 2000).
Apart from management commitment, another important practice needed to focus in the successful implementation of TQM is the employee involvement. A study by Coyle-shapiro and Morrow (2003) indicates that the role of employee involvement is crucial from the point of view of achieving success in TQM implementation. This is mainly because the adoption of TQM by employees is crucial as they determine the overall effectiveness with which TQM principles are integrated and implemented. The study indicated that there are various organizations that performed the implementation of TQM in the past decade and the overall result from TQM implementation has been mixed. However, the major reason as cited for the failure of TQM effectiveness is the lack of overall commitment on the part of employees working in the organization. When TQM initiative does not succeed, the missing element as identified is mainly that the initiative failed to include employee empowerment, or there was lack of training in TQM techniques. This indicates that the role of employee involvement including their empowerment is crucial from the point of view of achieving success with respect to TQM implementation (Coyle-Shapiro and Morrow, 2003).
The final major element in the process of successful implementation of TQM philosophy is mainly the customer focus. It is highly essential that the main focus of TQM implementation should be customer focus. According to Chary (2009), the focus behind performing the implementation of TQM should be customer focused and the purpose behind implementing TQM should therefore be to improve the delivery of products and services to customers. An improved quality of products and services is likely to enhance the satisfaction level of customers. Complete satisfaction of customers should be the main aim, and the other aim should not confuse this main aim behind implementing TQM. The improvement in the quality of existing organizational processes and systems should therefore be aimed at achieving efficiency and the benefits of which can ultimately be transferred to final consumers. Thus, customer focus orientation of TQM is highly important from the point of view of attaining success in it (Chary, 2009).
Innovation and Its Importance in 21st Century: Innovation is another important concept that has higher level of importance within businesses in the 21st century. According to Urabe, Child and Kagono (1998), innovation can be defined as a concept of generation of new idea and followed by its implementation into a new product, process or service and the resulting impact is therefore the attainment of dynamic growth. Innovation is never regarded as a one time idea and it should therefore be practiced on continuous basis. New ideas are highly important because the preference of customers in the 21st century implies that they expect something new from the service providers. This newness in the product and services can be introduced by businesses by way of considering innovation in their processes and practices within organization. Innovation includes both major and minor changes. Extremely major change is identified as radical innovation whereas minor changes are cumulative changes and they are mainly identified as incremental innovation (Urabe, Child and Kagono, 1998).
With respect to the importance of innovation, it is indicated in the existing literature that it is highly essential to businesses in performing innovation in order to sustain their operations. According to Sarlak (2010), 21st century is identified as a turbulent era and there is higher level of complexity because of highly complex demands on the part of customers from their service providers. The technological development has also allowed them in demanding innovative and highly advanced products and services. All these necessitate the businesses to focus towards achieving innovation within their products and service delivery to their customers. As cited in the book of Sarlak (2010), Schlenker and Matcham (2005) have indicated that the major business values in the 21st century includes identity, efficiency, utilization, profitability, quality, innovation, passion, knowledge and effectiveness. This suggests that innovation is one of the key business values that businesses should consider in order to perform their business operations in a successful manner (Sarlak, 2010).
A study as conducted by Weick and Jain (2014) indicated that innovation in 21st century is important to businesses from the point of view of creating an image in the minds of its target customers. Innovation is regarded as key to their success by many companies, and as a result, they are performing significant level of investments in R&D activities. As for example, companies such as Google, Edwards, Lifesciences, Tesla Motors, and Space X are considering extensive level of investment in the bold initiatives with a view to offer innovative products, services and solutions to their customers. Innovation is identified as a crucial source of competitive advantage by businesses in the 21st century and this has particularly enhanced the overall value of innovation among them. Bold investment and research activities are considered essential from the perspective of achieving break through accomplishments and rewards, and this is the reason leading to companies making millions and billions of investments in their R&D practices with a view to come up with new and innovative products and services for their customers (Weick and Jain, 2014).
Overall, innovation is identified as highly important to businesses in the 21st century in surviving their operations and better dealing with highly competitive business environment.
Role of TQM Practices on Innovation: An analysis of existing literature indicates that the role of TQM practices on innovation has been positive. According to a study as performed by Hung, Lien, Yang, Wu and Kua (2011), it is identified that there are various important scholars that have suggested that TQM and organizational learning are effective enough in promoting higher level of innovation. The study was mainly aimed at analyzing the relationship between TQM, organizational learning and innovation, and it was carried out mainly in respect to Taiwanese high tech industry companies, and the conduct of the study revealed findings that the role of TQM is positive with respect to ensuring organizational learning and it is also highly significant in terms of allowing organizations in attaining positive innovation. Thus, the study findings imply that innovation can be positively accomplished through implementing TQM practices within organization (Hung, Lien, Yang, Wu and Kuo, 2011).
Another major study by Abrunhosa and Moura (2008) is aimed at analyzing the role of TQM principles in supporting innovation in respect to Portuguese footwear industry. The author in the study indicates that the relationship between TQM and innovation is highly complex. The analysis of the findings in the study indicates that the impact of TQM on innovation depends on the specific quality management elements under consideration and also on the type of innovation. Their study was mainly focused towards the assessment of support from TQM principles over the Portuguese footwear industry, and the research findings revealed that TQM principles have a positive innovation with the adoption of technological innovation This suggests that positive overall innovation in the delivery of products and services can be attained by businesses by way of considering the application of TQM principles in their business processes (Abrunhosa and Moura, 2008).
A study by Prajogo and Sohal (2001) is focused towards performing a critical literature search on the existence of association between TQM and innovation. In particular, their research study focused towards the relationship between the implementation of TQM and innovation performance within organization. As per the study, it is indicated that the association between these two terms has been highly complex. The performance of implementation of TQM is influenced by the external and internal environment conditions and also the strategy as adopted by the firm. The model of TQM as implemented thereafter reflects in terms of different outcomes in relation to quality performance and innovation performance. This also revealed that the association between TQM and innovation is positive, and the successful implementation of TQM allows businesses in performing innovation in a positive manner (Prajogo and Sohal, 2001).
Thus, the performance a brief review of literature indicates that the association between TQM and innovation has been positive, and businesses can achieve innovation in their products and services delivery and development process through performing the efficient implementation of TQM philosophy within their organization.
Summary of Literature Review: A critical review of existing literature is performed in respect to the impact of TQM practices on Innovation and the literature search is performed in a structured manner. The analysis of the literature revealed that TQM is a management philosophy that is focused towards achieving higher level of quality in the organization’s processes so that the efficiency as achieved can be utilized in providing high quality products and services to final consumers. The importance of TQM is identified as significantly higher to the businesses in the 21st century because of increasing level of expectations of customers concerning quality products and services. In performing the successful implementation of TQM, it is essential that the management should focus on certain major activities including management commitment, employee involvement and customer focus. It is also identified that innovation is highly essential to businesses in the 21st century, and the performance of literature search finally revealed that the impact of TQM practices on innovation has been positive and the successful innovation can therefore be achieved by businesses by way of focusing towards successful implementation of TQM philosophy within organization.