An Empirical Investigation of the Universal Effectiveness of Quality Management Practices: A Structural Equation Modeling Approach

Abstract

Institutional theory argues that the isomorphic nature of quality management (QM) practices leads to similar QM implementation and performance among QM-embedded firms. However, contingency theory questions such 'universal effectiveness of QM practices'. Considering these conflicting arguments, this study tests samples from the U.S. and China to examine whether the 'universal effectiveness of QM practices’ across national boundaries actually exists. First, the confirmatory factor analysis was performed to examine the validity of the survey instruments developed in this study. Then, the hypotheses were tested using the structural equation modeling (SEM) analysis. The SEM test results indicated that the positive effect of behavioral QM on firm performance was more significant in the U.S. sample than in the China sample. The test results also presented that the relative effect of behavioral QM versus technical QM on firm performance was noticeably different in service firms, according to national economic maturity. The study’s findings demonstrated that a firm's contingency factors, such as national economic maturity and industry type, could result in the heterogeneous implementation of the firm’s TQM program; consequently, the findings weakened the 'universal effectiveness of QM practices'.

Keywords

• quality management
• contingency theory
• survey research
• factor analysis
• structural equation modeling