The effect of TQM on organisational performance: empirical evidence from the textile sector of a developing country using SEM

Total quality management (TQM) is a widely used management philosophy across many sectors. Organisations implement TQM in order to gain competitive advantage in terms of quality, productivity, customer satisfaction, and profitability. However, the literature seems inconclusive about the positive effect of TQM on organisational performance. The effect of national culture on TQM implementation is gaining importance; thus, several studies argue that the effect of TQM practices on organisational performance needs to be evaluated in different social, cultural, and economic settings. Furthermore, this study also contributes in the important debate in the operations management literature related to convergence versus divergence argument in TQM implementation. Therefore, this study provides empirical evidence from a developing country in South Asia. Data were collected from the member companies of All Pakistan Textile Mills Association by using a questionnaire. The questionnaires were sent to 210 textile companies and the respondents were quality or production managers. Structural equation modelling was used to investigate the effect of TQM practices on organisational performance. The findings of this study indicate that TQM has a highly positive effect on organisational performance. These findings support the divergence argument, which indicates that the positive effect of TQM on organisational performance is not limited only to companies located in developed nations, but can also be equally achieved in other parts of the world.