Assessing relationship between quality management systems and business performance and its mediators: SEM approach

The purpose of this paper is to examine the relationship between implementation of quality management systems (QMS) and business performance, through mediating factors (operating performance, information quality, product quality, design performance, environmental performance and competitive priorities). Most of the published literature examines the direct impact of implementation of QMS on business performance, and on some of the above stated factors. However, the impact of implementation of QMS on business performance, through these mediating factors has not received much attention. Accordingly, the authors develop a theoretical framework depicting impact of implementation of QMS on business performance through the above stated factors.

The paper proposes several hypotheses linking implementation of QMS, mediating factors and business performance. The hypothesized model is empirically tested using data collected from 120 professionals working in quality engineering/management in India and North America. The collected data are analyzed with the aid of structural equation modeling (SEM) technique.

Information quality and design performance have emerged as the important factors in the research. Information quality directly effects design performance, operating performance and environmental performance. The model indicates that besides a well-designed product, managers need to focus on the operating performance to improve overall product quality. Empirical evidence is found regarding direct and indirect effect of implementation of QMS on above stated mediating factors and on business performance.

The research fills a gap in the literature by considering several mediating factors that aid in improving business performance with implementation of QMS.