TQM and Financial Performance: What has Empirical Research Discovered?

Abstract

Total Quality Management (TQM) is arguably one of the most pervasive management strategies of the last several decades. Given the ubiquitous nature of TQM, many attempts have been made to ascertain the impact that this strategy has had on subsequent financial performance. Key studies in the TQM–Financial Performance research stream are reviewed, including the most recent, which have generally brought increased rigor with each new project. Since the particular research stream now includes hundreds of studies, only the most relevant and important are reviewed. This review will proceed in the following order: anecdotal research, practitioner-sponsored, empirical research, individual TQM dimensions and financial performance, and the entire TQM construct and financial performance. A brief review of the major methodological limitations inherent in these studies and how future research can address them concludes this review.

Keywords:

• Total Quality Management
• financial performance
• literature review