The structural linkages between TQM, product quality performance, and business performance: preliminary empirical study in electronics companies.Abstract Total Quality Management (TQM (Total Quality Management) An organizational undertaking to improve the quality of manufacturing and service. It focuses on obtaining continuous feedback for making improvements and refining existing processes over the long term. See ISO 9000. ) is one of quality-oriented approaches that many organisations adopt. It is generally acknowledged that manufacturing companies need to be quality oriented o·ri·ent n. 1. Orient The countries of Asia, especially of eastern Asia. 2. a. The luster characteristic of a pearl of high quality. b. A pearl having exceptional luster. 3. in conducting their business to survive the business world. TQM is an integrated management philosophy and a set of practices that emphasise top management commitment, customer focus, supplier relationship, benchmarking, quality-oriented training, employee focus, zero-defects, process improvement, and quality measurement. This paper investigates the structural linkages between TQM, product quality performance and business performance in the electronics industry in Malaysia. Given the nature of this study, the statistical analysis technique called Structural Equation Modelling was used. This preliminary result suggests that there is insufficient statistical evidence to conclude significant simple relationships between TQM, product quality performance, and business performance. This implies that the electronics industry cannot assume direct causal causal /cau·sal/ (kaw´z'l) pertaining to, involving, or indicating a cause. causal relating to or emanating from cause. linkages between these three constructs, which might also suggest that there is a more complex relationship between TQM, product quality performance, and business performance. However, the results reveal that top management commitment, supplier relations and training in particular appear to be of primary importance for TQM practices in Malaysian electronics companies. Key Words: Total Quality Management, product quality performance, business performance, electronics companies, Structural Equation Modelling. ********** Many electronics companies in Malaysia are facing intense competition from local and multinational companies for customers in the domestic and global markets. The dramatic changes of recent decades in the Malaysian business scene arising in part from international competition, and rapid changes in technology, have forced many manufacturing companies to adopt quality-based approaches to deal with the stiff competition. In the current tougher climate and demanding global market economy, quality management cannot be ignored if a manufacturing company wants to survive and prosper into the future. There is an increasing awareness that TQM is becoming the key factor in improving productivity, efficiency, effectiveness, and increasing employee and customer satisfaction. TQM is a management philosophy that aims for continuously improving product and services as well as to increase market and business performance in a competitive world. TQM provides a vision that focuses everyone in an organisation on quality improvement. The pursuit of quality improvement is not only requested by the market but also driven by the need to survive. Achieving the highest levels of quality and competitiveness requires a well-defined and well-executed approach to continuous improvement of all operations of a company. Many studies have investigated the notion that TQM practices provide approaches to improve the economic position of manufactueres and also in the service sectors. A business firm achieves world-class status when it has successfully developed operational capabilities through TQM to support the entire company in gaining a sustained overall performance over its competitors. More than before, managers are aware of the increasing competitive pressures in the world market. These pressures are due largely to the increased performance of those firms that have successfully implemented TQM. This quality consciousness has alerted top management that quality should be treated as a primary organisational goal. However, TQM would only be successful in an organisation if employees were committed to a life-long learning process of improving continuously. This paper explores the possibility of adopting TQM as the basis for enhancing product quality performance and business performance in the electronics industry in Malaysia. Limited empirical studies Empirical studies in social sciences are when the research ends are based on evidence and not just theory. This is done to comply with the scientific method that asserts the objective discovery of knowledge based on verifiable facts of evidence. on this relationship make the process of proving more difficult. However, this paper attempts to enrich the literature review and make a contribution in this area. First, there is a brief explanation on the TQM principles. Second, it discusses the methodology adopted and the objectives of the study. Among the objectives are to empirically explore relationships between TQM, product quality performance and business performance. Third, it discusses the test conducted to obtain the reliable measures of TQM indicators. Fourth, it determines the correlations between TQM variables and performance indicators. Fifth, it highlights the hypothesis and the conceptual model of this paper. Finally, it concludes on the results and findings of the study. TQM Principles TQM is a management philosophy with the aim of achieving continuous improvement and a better overall performance. It requires the change of attitudes of the employees in accepting quality culture, willingness to improve, and continuously improve. Quality advocates have identified several critical principles for successful TQM practices which among others are: top management commitment, customer focus, supplier relationship, benchmarking, quality-oriented training, employee focus, zero-defects, process improvement and quality measurement (Saraph et al, 1989). Top management acts as the main driver for TQM implementation, creating values, goals and systems to satisfy customer expectations and to improve an organisation's performance (Ahire et al, 1996). This involves allocating budget and resources, control through visibility, monitor progress, and planning for change. Also, it cannot be denied that customer expectations have increased and they want and demand tailored or customised services (customer focus). Manufacturers are responding by placing greater emphasis on customer service and offering a broader range of "value-added" products (Daugherty, 1991). All products attributes that contribute to value which lead to customer satisfaction, and affect customer purchase preferences must be addressed appropriately in quality-oriented system. This also includes the trust and confidence in products and services that leads to customer preference and loyalty. On the other hand, benchmarking is another process in which an organisation continuously compares and measures itself against business leaders any where in the world to gain information and provide a guideline guideline Medtalk A series of recommendations by a body of experts in a particular discipline. See Cancer screening guidelines, Cardiac profile guidelines, Gatekeeper guidelines, Harvard guidelines, Transfusion guidelines. for rational performance goals (Boone and Wilkins Wil·kins , Maurice Hugh Frederick 1916-2004. British biophysicist. He shared a 1962 Nobel Prize for his contributions to the determination of the structure of DNA. , 1995). In addition, people in the organisation should be continually con·tin·u·al adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. trained and be given adequate training and education on prescriptions, methods, and the concept of quality, which usually includes TQM principles, team skills, and problem solving problem solving Process involved in finding a solution to a problem. Many animals routinely solve problems of locomotion, food finding, and shelter through trial and error. (quality related training). In the decision-making decision-making, n the process of coming to a conclusion or making a judgment. decision-making, evidence-based, n a type of informal decision-making that combines clinical expertise, patient concerns, and evidence gathered from process, all levels of workers must be trained to work together in an atmosphere that nurtures individual initiative (Cherkasky, 1992). It is often said that the most valuable resource within a company is the people that work within it (employee focus). TQM requires total management commitment to ensure workers indulge in·dulge v. in·dulged, in·dulg·ing, in·dulg·es v.tr. 1. To yield to the desires and whims of, especially to an excessive degree; humor. 2. a. in quality work culture and hence create healthy corporate image by rendering See render. (graphics, text) rendering - The conversion of a high-level object-based description into a graphical image for display. For example, ray-tracing takes a mathematical model of a three-dimensional object or scene and converts it into a bitmap image. quality services to the customers (Goodstadt and Marti, 1990). Setting a goal of zero defects "Zero Defects" is a notional quality standard developed by Phil Crosby. Although applicable to any type of enterprise, it has been primarily adopted within industry supply chains wherever large volumes of components are being purchased (common items such as nuts and bolts are good , and continuing to renew one's commitment to moving ever closer toward that goal, will lead to improvements that continue to approach absolute perfection Perfection Giotto’s O perfect circle drawn effortlessly by Giotto. [Ital. Hist.: Brewer Dictionary, 463] golden mean or section over time (Richman and Zachary, 1993). Simultaneously, process improvement requires everyone in an organisation to work towards doing things right the first time, every time. This requires process ownership, process documentation, defined customer and supplier requirements, indicators and measurement criteria, an improvement methodology and the necessary statistical methods (Anonymous, 1995). Lastly, quality measurement is a goal-orientation with constant performance measurement, often with the use of statistical analysis. The analysis process ensures that all deviations are appropriately considered, measured and responded to consistently (Shores, 1992). This paper examines relationships between TQM, product quality performance and business performance. TQM applications are broadly reported in both manufacturing and service organisation. It is said that TQM has the potential to not only increase competitiveness and organisational effectiveness but also improve product quality and organisational performance (Ahire, 1996). Specifically, Powell (1995) raised a series of questions regarding the relationship between TQM and business performance. He suggests that there are significant relationships between TQM, competitive advantage and business performance. In addition, several studies have succeeded in providing evidence that TQM has a positive impact on financial performance and/or overall performance (Schaffer and Thompson Thompson, city, Canada Thompson, city (1991 pop. 14,977), central Man., Canada, on the Burntwood River. A mining town, it developed after large nickel deposits were discovered in the area in 1956. , 1992; Opara, 1996; Cherkasky, 1992; Agus and Hassan; 2000). A study by Simmons and White (1999) involving 126 electronics companies concluded that ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9000 registered companies are more profitable than non-ISO 9000 companies. Agus (2001) found that training and top management commitment play very important roles in TQM implementations in public listed manufacturing companies. The overall results point to the significant and positive impact of TQM on competitive advantage and customer satisfaction, which, in turn, significantly improves the financial performance of these companies. Other proponents of TQM claim that well implemented TQM can offer many benefits including improved products and services, reduced costs, more satisfied customer and employees, and improved bottom line financial performance (Powell, 1995). Research Methodology This study explores the TQM implementations in the electronics industry in Malaysia. Sample companies were randomly chosen from a list of electronics companies in Klang Valley Klang Valley (Malay: Lembah Klang) is an area in Malaysia comprising Kuala Lumpur and its suburbs, and adjoining cities and towns in the state of Selangor. An alternative reference to this would be Kuala Lumpur Metropolitan Area or Greater Kuala Lumpur , Malaysia. The majority of Malaysian electronics companies are situated in Klang Valley (mostly in Kuala Lumpur Kuala Lumpur (kwä`lə l  m`pr), city (1990 est. pop. and Selangor). Fifty useable responses were received and
analysed using the SPSS A statistical package from SPSS, Inc., Chicago (www.spss.com) that runs on PCs, most mainframes and minis and is used extensively in marketing research. It provides over 50 statistical processes, including regression analysis, correlation and analysis of variance. package. The primary objective of the research
was to measure top management perception of quality management practices
and level of product quality performance in their companies, as well as
to investigate the impact of TQM practices on product quality
performance and business performance.
Face to face interviews with quality managers or production managers were carried out for checking the information accuracy, validating val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. the outcome of analysis, and developing an understanding of practical aspects of quality management principles adoption. To enable respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy. to indicate their answers, seven-point ordinal scales ordinal scale (or´d  n were
use for the questionnaire in addition to ratio and interval
measurements. A total of nine constructs of TQM, which have been widely
referred, were extracted. The purpose of this paper is to enhance
managerial understandings of product quality performance and business
performance in relation to TQM implementations by addressing the
questions:
(1) What factors correlate with TQM practices? (2) Which TQM variables have significant impact on product quality performance and business performance? With regard to these questions, the main objectives of this paper are: * To empirically explore correlates between TQM, product quality performance and business performance. * To highlight the structural effect of TQM practices on product quality performance. * To determine the structural effect of TQM practices on business performance. * To empirically assessing the importance of each TQM indicator. Nine key indicators of TQM with 40 items were extracted. To obtain reliable measures, a reliability test was conducted to determine the item analysis and internal consistency In statistics and research, internal consistency is a measure based on the correlations between different items on the same test (or the same subscale on a larger test). It measures whether several items that propose to measure the same general construct produce similar scores. and stability of the measurements (Churchill, 1979). Cronbach Alpha coefficients were computed to determine inter-item consistency reliability of the various scales of TQM. The alpha coefficients for TQM scales range between 0.9532 and 0.8435 after the alpha maximisation process was carried out (Table 1). Correlations between TQM, Product Quality Performance, and Business Performance Table 2 exhibits Pearson's correlations between TQM practices, product quality performance, and business performance. Product quality performance indicator has high correlations with quality measurement (r = 0.676) and benchmarking (r = 0.414). Next in line are customer focus (r = 0.323), zero defects (0.321), process improvement (r = 0.320), and supplier relations (r = 0.280). Business performance has the highest correlation with quality measurement (r = 0.768), followed by benchmarking (r = 0.535), process improvement (r = 0.499), zero defects (r = 0.389) and top management commitment (r = 0.377). These findings are consistent with several previous studies that proclaimed pro·claim tr.v. pro·claimed, pro·claim·ing, pro·claims 1. To announce officially and publicly; declare. See Synonyms at announce. 2. better organisational transformations as a result of TQM initiatives (Nakajo and Kono, 1989; Snell Snell , George 1903-1996. American geneticist. He shared a 1980 Nobel Prize for discoveries concerning cell structure that enhanced understanding of the immunological system, resulting in higher success rates in organ transplantation. and Dean, 1992; Ebrahimpour and Withers withers the region over the backline where the neck joins the thorax and where the dorsal margins of the scapulae lie just below the skin. fistulous withers see fistulous withers. , 1992; Bowen and Lawler, 1992). Hypotheses and Conceptual Model The propositions and hypotheses of this study can be represented in diagrammatic di·a·gram n. 1. A plan, sketch, drawing, or outline designed to demonstrate or explain how something works or to clarify the relationship between the parts of a whole. 2. form as shown in Figures 1 and 2. TQM is described as a high order factor comprising nine indicators namely top management commitment, customer focus, supplier relationships, benchmarking, training, employee focus, zero defects, process improvement, and quality measurement. The concept of product quality performance was operationalised using eight manifest manifest 1) adj., adv. completely obvious or evident. 2) n. a written list of goods in a shipment. MANIFEST, com. law. A written instrument containing a true account of the cargo of a ship or commercial vessel. 2. variables. These variables were perceived quality, conformance con·for·mance n. Conformity. Noun 1. conformance - correspondence in form or appearance conformity agreement, correspondence - compatibility of observations; "there was no agreement between theory and , performance, reliability, durability du·ra·ble adj. 1. Capable of withstanding wear and tear or decay: a durable fabric. 2. , features, serviceability (system) serviceability - The ease with which corrective maintenance or preventative maintenance can be performed on a system (e.g. by a hardware service technician). Higher serviceability improves availability and reduces service cost. Serviceability is one component of RAS. , and aesthetics aesthetics (ĕsthĕt`ĭks), the branch of philosophy that is concerned with the nature of art and the criteria of artistic judgment. (Garvin, 1984). On the other hand, performance measurement has long been studied at the operational level of organisations, particularly in the context of manufacturing (Maskell, 1991). The two most influential frameworks for organisational performance measurement are the balanced scorecard Balanced Scorecard A performance metric used in strategic management to identify and improve various internal functions and their resulting external outcomes. The balanced scorecard attempts to measure and provide feedback to organizations in order to assist in implementing (Kaplan and Norton, 1992, 1996), and the Malcom Baldrige Criteria for Performance Excellence. The original Kaplan-Norton version of the balanced scorecard consists of four perspectives: [FIGURE 1,2 OMITTED] * Financial Perspective: Measures the ultimate results that the business provides to its shareholders. This includes profitability, revenue growth, return on investment, economic value added Economic value added (EVA) A method of performance evaluation that adjusts accounting performance for investors' required return on investment. Suppose a division produces a 12% return on capital invested. (EVA Eva to marry winner of singing contest. [Ger. Opera: Wagner, Meistersinger, Westerman, 225–228] See : Prize 1. Eva - A toy ALGOL-like language used in "Formal Specification of Programming Languages: A Panoramic Primer", F.G. ), and shareholder value. * Internal Perspective: Focuses attention on the performance of the key internal processes that drive the business. This includes such measures as quality levels, productivity, cycle time, and cost. * Customer Perspective: Focuses on customer needs and satisfaction as well as market share. These include service levels, satisfactions, and repeat business. * Innovation and Learning Perspective: directs attention to the basis of a future success--the organisation's people and infrastructure. Key measures might include intellectual assets, employee satisfaction, market innovation, and skills development. On the other hand, the Malcolm Baldrige
* Customer * Financial and market * Human resource * Supplier and partner performance, and * Organisational effectiveness. In this study, the concept of business performance was operationalised using eight manifest variables namely revenue growth, sales growth, market share, profit, nigh nigh adv. nigh·er, nigh·est 1. Near in time, place, or relationship: Evening draws nigh. 2. Nearly; almost: talked for nigh onto two hours. demand, product turnover, productivity and production efficiency. The researcher believes the proposition that TQM has an influence on product quality performance and business performance in electronics industry in Malaysia. A preliminary structural model is used in this study to analyse an·a·lyse v. Chiefly British Variant of analyze. analyse or US -lyze Verb [-lysing, -lysed] or -lyzing, the structural effect of TQM on product quality performance and business performance (Figure 2). However, as the first step, this study aims to test the overall model fit of the hypothesised model. It is therefore proposed that the main null hypothesis null hypothesis, n theoretical assumption that a given therapy will have results not statistically different from another treatment. null hypothesis, n should be stated as: [H.sub.0]: The overall hypothesised model has a good fit. For structural modeling, accepting this hypothesis indicates that the model presented adequately reproduce re·pro·duce v. 1. To produce a counterpart, an image, or a copy of something. 2. To bring something to mind again. 3. To generate offspring by sexual or asexual means. the observed covariance matrix In statistics and probability theory, the covariance matrix is a matrix of covariances between elements of a vector. It is the natural generalization to higher dimensions of the concept of the variance of a scalar-valued random variable. (Bollen, 1989; Joreskog, 1989; Mueller, 1996) and suggesting that the data fit the proposed model. It also suggest there is a significant linkages between TQM, product quality performance and business performance. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. to the general assumption, this study proposes positive impact of TQM on the two main constructs, namely, product quality performance and business performance. TQM is assumed to positively enhance performance through quality practices such as quality improvement program, benchmarking against the best in the industry, training and retraining re·train tr. & intr.v. re·trained, re·train·ing, re·trains To train or undergo training again. re·train employees to fulfill ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. the organisation objectives. On the other hand, it is hoped that TQM has a positive direct effect on business performance. Also, it is important to investigate whether product quality performance has positive effect on business performance. The study therefore hypothesised that: [H.sub.2]: TQM has a positive structural effect on product quality performance [TQM [right arrow] PRODQUAL] [H.sub.3]: TQM has a positive structural effect on business performance [TQM [right arrow] BUSPERF] [H.sub.4]: Product Quality Performance has a positive structural effect on business performance. [PRODQUAL [right arrow] BUSPERF] In investigating the structural effect of TQM on product quality performance and business performance, it is pertinent PERTINENT, evidence. Those facts which tend to prove the allegations of the party offering them, are called pertinent; those which have no such tendency are called impertinent, 8 Toull. n. 22. By pertinent is also meant that which belongs. Willes, 319. to confirm that the TQM constructs were in fact related to TQM. TQM practices such as top management commitment, customer focus, supplier relationships, benchmarking, training, employee focus, zero defects, process improvement and quality measurement have been believed to have positive contributions in TQM implementations. Therefore, for these reasons it is proposed that: [H.sub.1A] : Top management commitment has a positive structural loading on TQM implementation. [H.sub.1B]: Customer focus has a positive structural loading on TQM implementation. [H.sub.1C]: Supplier Relationship has a positive structural loading on TQM implementation. [H.sub.1D]: Benchmarking has a positive structural loading on TQM implementation. [H.sub.1E]: Training has a positive structural loading on TQM implementation. [H.sub.1F]: Employee focus has a positive structural loading on TQM implementation. [H.sub.1G]: Zero Defects has a positive structural loading on TQM implementation. [H.sub.1H] Process Management has a positive structural loading on TQM implementation. [H.sub.1I]: Quality Management focus has a positive structural loading on TQM implementation. If relationships between TQM, product quality performance and business performance were found to be insignificant, it will be concluded that there are no simple linkages between product quality performance and business performance. On the other hand if these relationships were significant, we can suggest that TQM has a direct impact on product quality performance and business performance. Hence, Figures 1 and 2 exhibit the linkages between TQM, product quality performance and business performance. The model in Figure 2 consists of nine manifest variables of TQM, eight manifest variables of product quality performance, and eight manifest variables of business performance. [FIGURES 1 & 2 OMITTED] Results and Analysis As stated earlier, this study develops a preliminary theoretical framework that integrates structural linkages between TQM, product quality performance, and business performance using SEM. Figure 3 exhibits the measures of fit between the empirical data and the model. In this statistical analysis, we would like the model developed to fit the data, therefore the acceptance of the null hypothesis of the overall model is expected. Hence, in this test of goodness of fit Goodness of fit means how well a statistical model fits a set of observations. Measures of goodness of fit typically summarize the discrepancy between observed values and the values expected under the model in question. Such measures can be used in statistical hypothesis testing, e. for the structural equation modeling Structural equation modeling (SEM) is a statistical technique for testing and estimating causal relationships using a combination of statistical data and qualitative causal assumptions. , the probability should be higher than 0.05. [FIGURE 3 OMITTED] In addition, assessment of fit can be determined by structural indices such as Bentler comparative fit index (CFI CFI abbr. cost, freight, and insurance ), Bollen incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. fit index (IFI IFI International Financial Institutions (IMF, World Bank, etc.) IFI Institutt For Informatikk (Department of Informatics, University of Oslo) IFI Industrial Fasteners Institute ), Tucker and Lewis index (TLI (Transport Level Interface) A common interface for transport services (layer 4 of the OSI model). It provides a common language to a transport protocol and allows client/server applications to be used in different networking environments. ), Normed fit index (NFI NFI Nasjonal Forskningsinformasjon (Norwegian Research Database) NFI National Fisheries Institute NFI National Fatherhood Initiative NFI National Forest Inventory (Australia) NFI Nutrition Foundation of India ) and Goodness of fit index (GFI GFI Ground Fault Interrupter GFI Go For It GFI Government-Furnished Information GFI Growing Families International GFI Goodness of Fit Indices GFI Government Financial Institutions (Philippines) GFI Gross Farm Income ) to further support this proposition. Unfortunately, the result of the hypothesised model indicates that the [chi square chi square (kī), n a nonparametric statistic used with discrete data in the form of frequency count (nominal data) or percentages or proportions that can be reduced to frequencies. ] test and the probability value suggest a poor fit. The value of the Chi-square chi-square (ki´skwar) see under distribution and test. chi-square n. is equal to 567 with 272 degrees of freedom and the probability level of 0.000. On the whole, the result suggests that the proposed preliminary model has only a null A character that is all 0 bits. Also written as "NUL," it is the first character in the ASCII and EBCDIC data codes. In hex, it displays and prints as 00; in decimal, it may appear as a single zero in a chart of codes, but displays and prints as a blank space. fit and the data did not adequately fit the model. The p-value p-value, n in statistics, the probability that a random variable will be found to have a value equal to or greater than the observed value by chance alone. This value provides an objective basis from which to assess the relative change in the data. is lower than 0.05 which unable to support the proposition that the overall model fits the data. In addition, other statistical structural indices such as Bentler CFI (0.7967), Bollen IFI (0.7967), Tucker and Lewis TLI (0.7714), Normed fit index (0.6710) and Goodness of fit index (0.5393) do not support the overall model fit (Table 4). Observing the result critically, the unsatisfactory fit may be related to the high levels of random error and the many parameters that must be estimated (Bagozzi et al, 1991). Even though the result of the model suggests a null fit, the linkages between TQM, quality performance, and business performance are significant. The structural effect of TQM on product quality performance (prodqual) is significant and positive (0.36), and also associated with low standard error (0.2637), suggesting the importance of quality practices especially top management commitment, supplier relations, training and process improvement on product quality in electronics industry in Malaysia. On the other hand, the direct effect of TQM on business performance is substantial but significant (0.29) given the complex linkages. Therefore, we can suggest that TQM can enhance business performance indirectly through product quality performance. The direct effect of product quality performance on business performance is significantly high with a structural effect of 0.66. Logically, if an electronics company improves its product quality performance this would ultimately enhance its business performance. Therefore, we have enough evidence to accept the proposition that TQM has a positive structural effect on product quality performance ([H.sub.2]). In addition, we can obviously suggest that TQM practices can help electronics companies improve their business performance ([H.sub.4]). The result also suggests that product quality performance has positive association with business performance (H3). In assessing the important contribution of TQM manifest variables, further refinement is desirable through the investigation of the structural loadings of each of the indicators of TQM. Those manifest variables with critical ratios greater than 2.00 and probability value of less than 0.050 are considered significant. Looking at the loadings of the TQM variables (Table 5) on the main construct, we can see that top management commitment (structural loading = 0.8686, standard error = 0.3602 and critical ratio = 4.5098) has the highest contribution towards TQM and it is followed by supplier relations (structural loading = 0.8489, standard error = 0.2849 and probability value = 0.000), and training (structural loading = 0.8182, standard error = 0.3656 and critical ratio = 4.3526). All of these indicators have significant probability values (critical ratios [greater than or equal to] 2.00), giving statistical evidence that their contributions towards TQM latent Hidden; concealed; that which does not appear upon the face of an item. For example, a latent defect in the title to a parcel of real property is one that is not discoverable by an inspection of the title made with ordinary care. construct are significant. Therefore, in order to ensure the success of TQM implementation, electronics companies need the support and commitment of top management, secure quality raw materials or parts from reliable suppliers and invest in training especially in quality related programmes. Surprisingly, customer focus is not among top indicators of TQM in electronics industry in Malaysia. Probably the logical reason is because in electronic companies in Malaysia, most of the electric and electronics products are not custom made but are usually mass-assembled or mass-produced. So this could explain why customer focus has lower structural loadings on TQM implementations in electronics companies as compared to other types of manufacturing companies. By examining the structural loadings and their respective critical ratios and probability values, we can conclude two things. Firstly, we can say top management commitment; supplier relation and training (quality oriented) have strong structural contributions toward TQM in electronics companies in Malaysia. Secondly, the significant critical values indicate that TQM has positive effect on product quality performance and ultimately business performance of the electronics industry in Malaysia. The standardised Adj. 1. standardised - brought into conformity with a standard; "standardized education" standardized standard - conforming to or constituting a standard of measurement or value; or of the usual or regularized or accepted kind; "windows of standard width"; coefficients of product quality performance and business performance indicators associate with significant probability values (all critical ratios are well above 2.00 except for aesthetics) indicate that parameter (1) Any value passed to a program by the user or by another program in order to customize the program for a particular purpose. A parameter may be anything; for example, a file name, a coordinate, a range of values, a money amount or a code of some kind. estimates of these indicators are significant and their contributions are positive (Table 5). Hence, we are able to suggest that TQM can ultimately enhance product quality performance and business performance, resulted from integrating and implementing TQM strategies and practices. The result highlights the unique contribution of TQM practices on product quality performance and business performance. However the overall result of the analysis showed that there was no evidence that the empirical data adequately fitted the proposed model, which suggest more complex linkages than the preliminary hypothesised model proposed. Conclusion In most business environments such as manufacturing, it has been widely acknowledged that companies must engage in quality-oriented activity in conducting their businesses in order to enhance their long-term future. Most organisations in quality activities have experienced some form of successes. TQM is one of the better-known approaches with widespread acceptance. The result of the overall model indicates that relationships between TQM, product quality performance, and business performance only suggest a null fit. Viewing the result in the hypothesised model, the findings suggest a conclusion that there is no firm and direct link between TQM, product quality performance, and business performance. The model presented reflects a linear and direct linkages between TQM, product quality performance, and business performance. It could be that the TQM, product quality performance, and business performance constructs are related in a more complex way. Given that the results of this study show no empirical support for simple structural linkages, it is suggested that the constructs are related in more complex ways. In summary, the result of the empirical study is clear, and although it does not claim causality causality, in philosophy, the relationship between cause and effect. A distinction is often made between a cause that produces something new (e.g., a moth from a caterpillar) and one that produces a change in an existing substance (e.g. , suggest two things. Firstly, TQM has a significant and strong impact on product quality performance and business performance. Secondly, with reference to the TQM, product quality performance and business performance model, the overall model fit suggests that there could be more complex relationships, and leaves much unexplained unexplained Adjective strange or unclear because the reason for it is not known Adj. 1. unexplained - not explained; "accomplished by some unexplained process" variance The discrepancy between what a party to a lawsuit alleges will be proved in pleadings and what the party actually proves at trial. In Zoning law, an official permit to use property in a manner that departs from the way in which other property in the same locality in the relationships. Even with these stated results, the researcher believed that this study had gained a glimpse of the dynamics of TQM that are sometimes described vaguely in the literature.
Table 1: Descriptive Statistics of Critical Variables of TQM Practices
Variable Final Mean Std Dev Reliability
Items
Top Management Commitment 4 5.820 1.4097 0.8809
Customer Focus 5 5.540 1.2811 0.8464
Suppliers Relationships 5 5.720 1.1256 0.8435
Benchmarking 4 4.350 1.9690 0.9628
Training (Quality Related) 5 5.120 1.4658 0.8996
Employee Focus 8 4.690 1.6032 0.9532
Zero Defects 3 5.280 1.6910 0.8529
Process Improvement 3 5.040 1.8066 0.9105
Quality Measurement 3 5.346 1.5860 0.9144
Table 2: Correlations between TQM Practices, Product Quality
Performance and Business Performance Indicators
TQM Practices Product Quality Business
Performance Performance
1 Top Management Commitment 0.2710 0.377 **
2 Customer Focus 0.323 * 0.328 *
3 Supplier Relations 0.280 * 0.288
4 Benchmarking 0.414 ** 0.535 **
5 Training 0.225 0.350 *
6 Employee Focus 0.212 0.344 *
7 Zero Defects 0.321 * 0.389 **
8 Process Improvement 0.320 * 0.499 **
9 Quality Measurement 0.676 ** 0.768 **
* P< 0.05, ** P< 0.01 2. All t-tests are one-tailed
Table 3: Meanings of Acronyms in Hypothesised Model
Acronyms Meanings Acronyms Meanings
TQM Total Quality Management PRODQUAL Product Quality
Performance
mdtopmgt Top Management Commitment Proqlty Perceived Quality
mdcustfo Customer Focus pconform Product Conformance
mdssrel Supplier Relations pperform Product Performance
mdbench Benchmarking preliabl Product Reliability
mdtrain Training pdurabl Product Durability
mdemploy Employee Focus pfeature Product Features
mdzerodf Zero Defects pservice Product
Serviceability
mdproces Process Improvement paesthet Product Aesthetics
mdqmeas Quality Measurement BUSPERF Business Performance
revgrow Revenue Growth
salesgro Sales Growth
mkshare Market Share
profit Profits
hidemand High Demand
ptover Product Turnover
prodtvt Productivity
proeffic Efficiency
Table 4: Results of Overall Model Fit
Statistics Values
Chi Square 567
Degree of Freedom 272
Probability Level 0.000
Bollen (1989) Incremental Fit Index (IFI) 0.7967
Tucker & Lewis (1973) TLI 0.7714
Bentler (1988) Comparative Fit Model (CFI) 0.7967
Normed Fit Index (NFI) 0.6710
Goodness of Fit Index (GFI) 0.5393
Table 5: Measurement Results of Hypothesised Model
Constructs and Indicators Standard Standard
Loadings Errors
a. TQM
Top Management Commitment 0.8686 0.3602
Customer Focus 0.5884 0.1444
Supplier Relations 0.8489 0.2849
Benchmarking 0.6428 0.4539
Training 0.8182 0.3656
Employee Focus 0.7176 0.3818
Zero Defects 0.6838 0.3966
Process Improvement 0.7834 0.4433
Quality Measurement 0.6311 0.3636
Exogenous/Endogenous Path
a. TQM[right arrow]PRODUCT QUALITY 0.3644 0.2637
PERFORMANCE
b. P.QUALITY PERFORMANCE[right arrow] 0.6639 0.1306
BUSINESS PERF
c. TQM[right arrow]BUSINESS PERFORMANCE 0.2891 0.2280
Constructs and Indicators Critical Probability
Ratio
a. TQM
Top Management Commitment 4.5098 0.0000
Customer Focus 4.3526 0.0000
Supplier Relations 4.4502 0.0000
Benchmarking 3.7003 0.0002
Training 4.3526 0.0000
Employee Focus 3.9982 0.0000
Zero Defects 3.8673 0.0001
Process Improvement 4.2359 0.0000
Quality Measurement 3.6513 0.0000
Exogenous/Endogenous Path
a. TQM[right arrow]PRODUCT QUALITY 2.2758 0.0229
PERFORMANCE
b. P.QUALITY PERFORMANCE[right arrow] 6.1743 0.0000
BUSINESS PERF
c. TQM[right arrow]BUSINESS PERFORMANCE 2.5368 0.0112
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