1. The relationship between total
quality management practices
and organizational culture
Daniel I. Prajogo
Department of Management, Monash University, Caulfield East, Victoria,
Australia, and
Christopher M. McDermott
Lally School of Management and Technology, Rensselaer Polytechnic Institute,
Troy, New York, USA
Abstract
Purpose – This empirical study explores the relationship between total quality management (TQM)
practices and organizational culture with the purpose of identifying the particular cultures that
determine the successful implementation of TQM practices. Specifically, it tests two competing views
on the relationship; the unitarist and pluralist views.
Design/methodology/approach – The empirical data was drawn from 194 organizations in
Australia. The research model employs the Malcolm Baldrige National Quality Award criteria as TQM
framework and builds on the competing values model to frame organizational culture. The data was
analysed using structural equation modelling technique.
Findings – The findings support the pluralist view, wherein different subsets of TQM practices are
determined by different types of cultures. Interestingly, hierarchical culture was found to have a
significant relationship with certain practices of TQM. Additionally, the findings indicate that
although the cultural factors underpinning different elements of TQM are dissimilar, even
antagonistic, organizations can implement them in harmony.
Practical implications – The major implication of this study is that organizations need to
accommodate divergent goals by developing a system and/or structure that allows enough flexibility
for adapting different (even contrasting) management styles, between control and flexibility and
between internal and external orientations, so that they may gain benefits from the multiple
dimensions of TQM.
Originality/value – This paper provides empirical evidence on the multidimensionality of TQM
practices along with their association with different types of culture.
Keywords Total quality management, Organizational culture, Australia
Paper type Research paper
Introduction
Much has been written on the impact of total quality management (TQM) on
organizational performance (Flynn et al., 1994; Samson and Terziovski, 1999). These
studies typically conclude that TQM has a positive and significant relationship with
organizational performance. However, not all TQM implementation yields the
satisfactory results promoted by its advocates (Brown, 1993; Harari, 1993; Tatikonda
and Tatikonda, 1996). Literature has noted numerous stories on the problematic issues
relating to the implementation process and how they affect its outcomes. Among
several factors, which have been attributed as key determinants of its success,
organizational culture is often among those listed at the top. A number of studies have
The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at
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TQM and
organizational
culture
1101
International Journal of Operations &
Production Management
Vol. 25 No. 11, 2005
pp. 1101-1122
q Emerald Group Publishing Limited
0144-3577
DOI 10.1108/01443570510626916

2. been devoted to identify what kinds of factors are suitable for implementing TQM
based on a proposition that culture affects the extent to which TQM can be
implemented in organizations.
Closer examination of literature that explores this relationship between TQM and
culture reveals two competing schools of thought (Bright and Cooper, 1993). The first
view argues that TQM is associated with a single “homogeneous” culture. Underlying
this “unitarist” argument is a view that promotes TQM as a set of organization-wide
practices that unify mindsets and perceptions among members of an organization.
Within this group, the arguments typically suggest that TQM is associated with a
single culture, especially the one that is flexible and people-oriented (Tata and Prasad,
1998). In short, the underlying principal in this unitarist view is that TQM thrives only
in a single, identifiable culture. The “pluralist” view, alternatively, supports the ideas
of heterogeneity of various cultural dimensions on which TQM should be built. A key
difference in this view is the argument that TQM also includes cultural elements,
which can promote control and standardization, as opposed to flexibility alone (Watson
and Korukonda, 1995). As such, this pluralist view of the TQM/culture relationship is
more multi-dimensional, with different cultural characteristics in turn being associated
with different elements of TQM. This view appears to contradict the people-centered
cultural characteristics that are commonly associated with the unitarist view.
Underlying these two opposing arguments is the contrasting view on TQM as a set
of organizational practices. The first group (unitarist) views TQM as a unidimensional
“package” which has to be implemented as a whole and therefore both requires and
reflects a specific, single “homogeneous” culture of the organization. The opposing
pluralist school of thought suggests that TQM practice is multidimensional, and is
driven by and reflects various types of practices which are driven and reflect various
dimensions of organizational culture.
These opposing views present an interesting dilemma for managers and
researchers alike, named if TQM is indeed multidimensional with respect to culture,
it stands to reason that management would need to consider multiple approaches for
encouraging its implementation. Alternatively, if it is unidimensional, then a single
culture and set of values might be more appropriate. The purpose of this paper is to
empirically examine the validity of these two opposing views as they relate to TQM
practice. The paper is structured is follows: it starts with literature review discussing
the relationship between TQM practices and organizational culture, especially relating
to the opposing issues above, which leads to the articulation of the research questions
of this study. Following these are methodology and data collection sections, outlining
data analysis using structural equation modelling (SEM). Finally, discussion of the
findings is presented, followed by conclusion and several recommendations for future
research in the area.
Literature review
This literature review starts with a discussion of the distinction between TQM as a set
of organizational practices and organizational culture. This is followed by a section
presenting the nature of the relationship between TQM practices and organizational
culture. It concludes with a discussion of the controversy about the relationship
between TQM and organizational culture, leading to the development of the research
framework and questions for this study.
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3. The distinction between TQM practices and organizational culture
TQM. TQM is a management model that aims to meet customer needs and
expectations within an organization through continuous improvement of the quality of
goods and services and by integrating all functions and processes within an
organization. The TQM literature concurs that its concepts and practices have been
shaped by a number of individuals who are recognised as “quality gurus” such as
Deming, Juran, Crosby, Feigenbaum, Ishikawa, and Imai (Hackman and Wageman,
1995; Lau and Anderson, 1998; Plenert, 1996). These TQM gurus developed their
concepts primarily based on their experience in industry. Grant et al. (1994) argue that
the prescriptive approach developed by these gurus has created a perception that TQM
involves no explicit theory, and caused business schools to dismiss TQM as
intellectually insubstantial, and to consider it as but one of a number of management
fads.
Scholars argue, however, that the practical approach employed by TQM proponents
does not necessarily imply an absence of theory underlying it. Dean and Bowen (1994),
for example, whilst arguing that there is a considerable overlap between TQM and
existing management theory, hold that TQM has its own body of knowledge. Similarly,
Hackman and Wageman (1995) vigorously argue that TQM does exist as an entity and
that there is a set of theoretical assumptions underlying its principles and techniques.
In particular, they maintain that TQM passes the convergent validity test in the sense
that there is substantial agreement among its founders about its key assumptions and
practices. What is emphasized here is that although TQM has been accepted as
embodying a set of principles, TQM has been widely disseminated in the form of
practices, tools, techniques, and systems. The way TQM has been defined and what
have been usually operationalised and measured in its empirical studies (Ahire et al.,
1996; Flynn et al., 1994; Samson and Terziovski, 1999; Saraph et al., 1989) are practices
or behaviours of the organizations that have implemented these principles. As
Wilkinson et al. (1998) argue, despite their differences, there is a strong convergence
among concepts and practices put forward by TQM proponents, and a number of
scholars (Curkovic et al., 2000; Dean and Bowen, 1994; Gobeli and Brown, 1993; Sitkin
et al., 1994) have proposed the articulation of TQM principles consisting of three core
elements as a common ground, namely customer focus, continuous improvement, and
total involvement. As such, we adopted the definition of TQM articulated by Ross
(1995, p. 1) as the integration of all functions and processes within an organization to
achieve continuous improvement of the quality of goods and services with the ultimate
goal being customer satisfaction.
Organizational culture. Organizational culture is defined as the general pattern of
mindsets, beliefs and values that members of the organization share in common, and
which shape the behaviours, practices and other artefacts of the organization which are
easily observable (Sathe, 1985; Schein, 1985). Culture therefore is an explanatory
variable that distinguishes one organization from another (Sathe, 1985; Schein, 1985).
In relation to the context of this study, as mentioned earlier, there is a shift of focus on
studies in TQM from its “hard” aspects which are more observable, such as tools,
techniques, and systems, to “softer” behavioural and cultural aspects of TQM which
are harder to measure and to change. This shift of emphasis has been driven by the fact
that many TQM implementations have failed, preventing companies from realizing
its potential benefits because of the ignorance of the cultural factors (Becker, 1993;
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4. Dale and Cooper, 1992; Oakland, 1995; Thomas, 1995; van Donk and Sanders, 1993;
Wilkinson et al., 1998). The issue of culture in the TQM literature has also been
augmented by a number of authors who attribute the failure of TQM implementations
in western countries as the result of cultural factors (Mak, 1999).
A common challenge in discussing TQM and culture results from the imperfect
boundary between TQM as a set of management practices and TQM as an
organizational culture (Batten, 1993; Kanji, 1997; Strolle, 1991). For example, several
studies on TQM, such as those by Samson and Terziovski (1999) and Dow et al. (1999),
consider TQM practices such as customer focus and people management as “soft”
elements in TQM, implying that they actually represent aspects of TQM culture. This
leads to confusion in understanding the substance of TQM: is it a set of practices, or, is
it a specific type of culture, or both? In this regard, Zeitz et al. (1997) strongly argue that
organizational culture is “distinguishable” from TQM practices even though the two
are closely related to each other. They view TQM practices as behavioural, whereas
organizational culture refers to attitudes, beliefs, and situational interactions. This
argument is consistent with those of theorists and scholars in the field of
organizational culture. Schein (1985), for example, asserts that although practice can be
a reflection of organizational culture, it can only capture the surface level. He further
argues that organizational culture is concerned with something deeper, particularly
when considering such elements as mindset, values, and beliefs. Further support can
be obtained from a “ground-breaking” study by Powell (1995) which promotes the
importance of cultural aspects of TQM. In this study, Powell argued that TQM
practices had to be implemented within a suitable environment (i.e. culture) that
emphasized open communication; something which he believed did not originally
belong to TQM, but was imperative for its implementation success.
In this study, we take the position that TQM practices and organizational culture
are separate entities. Our present analysis aims to explore the extent to which TQM (as
defined earlier) is associated with a culture or set of cultures. As such, we do not
assume, a priori, that there is a “TQM culture”, in the sense that no one culture
embodies TQM. In other words, TQM is not a culture. Therefore, we argue here that in
order to identify the typical organizational culture that can function as “fertile soil” for
TQM, it would be better if researchers refer to the established models in the area,
including:
.
Hofstede’s (1980) cultural dimensions of individualism versus collectivism, high
versus low power distance, high versus low uncertainty avoidance and
masculinity versus femininity;
.
the organizational culture profile (OCP) developed by O’Reilly et al. (1991) which
can be used to assess person-organization fit; and
.
The competing values framework (CVF) developed by Denison and Spreitzer
(1991).
We choose the CVF developed by Denison and Spreitzer (1991) as the framework for
defining organizational culture in this study. The framework is built upon two
dimensions represented by two axes with each representing a superordinate
continuum as shown in Figure 1. The first dimension is the flexibility-control axis that
describes two contrasting orientations, between that which reflects flexibility and
spontaneity and that which reflects stability and control. The second dimension is
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5. the internal-external axis that also describes two orientations, with one being oriented
towards maintenance and improvement of the existing organization and the other
being focused on adaptation and interaction with the external environment. This
reflects several classics of organizational theory such as Thompson (1967) and
Lawrence and Lorsch (1986).
The combination of the two dimensions results in four quadrants of cultural
dimensions, namely group, developmental, hierarchical, and rational. Group culture
places emphasis on flexibility and internal organization. Organizations with emphasis
on this culture promote the development of human resources emphasizing openness,
participation, cohesiveness and commitment to membership. Development culture also
emphasizes flexibility but with more focus on the external environment. The
orientation is towards growth, creativity stimulation, resource acquisition, innovation,
and continual adaptation to the external environment. The rational culture is also
focused on the external environment but is control-oriented. It emphasizes
productivity, performance, goal achievement, and one of the primary motivating
factors is competition. The hierarchical culture is both control and internal oriented. It
emphasizes rules and regulations, and standardization to achieve control and stability.
Denison and Spreitzer (1991) stress that the four cultures in their typology should be
viewed as ideal types, meaning that organizations will be characterized by some
combination of these four cultures – although some types could be more dominant
than the others – rather than reflecting only one culture. Thus, as scales have been
developed and validated to empirically measure this, the items are allowed to vary
independently (Quinn and Spreitzer, 1991). As McDermott and Stock (1999) noted in a
later study using the CVF, “As such, a high rating on one dimension (e.g. internal
orientation) does not exclude high rating at the other end (e.g. external orientation)”.
There is nothing relating to having a strong internal orientation that necessarily
prohibits the organization from also having elements associated with external
orientation.
Figure 1.
The competing values
framework of
organizational culture
(adapted from Denison
and Spreitzer, 1991)
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6. The nature of the relationship between TQM practices and organizational culture
Having established the distinction between TQM practices and organizational culture,
the discussion now focuses on the relationship between the two. A review of literature
suggests that there is a substantial disagreement on the nature of this relationships
with one group arguing that TQM practices bring cultural change, and the other that it
is organizational culture that affects TQM implementation and its results. In essence,
the nature of this debate is concerned with the causal direction of the relationship
between TQM and organizational culture, and which one is the antecedent of the other.
Several authors argue that this debate is premised on the understanding of culture as
something an organization has as opposed to something an organization is (Bright and
Cooper, 1993; Sinclair and Collins, 1994). In this regard, we base our study on the latter
argument by suggesting that it is the organizational culture that will determine TQM.
In other words, our research is based on the premise that organizational culture
determines the results of TQM implementation rather than the TQM implementation
bringing about cultural change (Maull et al., 2001; McNabb and Sepic, 1995; Westbrook
and Utley, 1995). As Bright and Cooper (1993) argue, quality management of
organizations will take place inside cultural influences, that is within the context of
prevailing shared-values, beliefs, and assumptions. The few studies that have
attempted to examine the TQM-culture relationship, such as those by Chang and
Wiebe (1996), Zeitz et al. (1997) and Dellana and Hauser (1999) always place
organizational culture as the antecedent of TQM practices.
The dimensionality of TQM and organizational culture
Having discussed the nature of the relationship between TQM practices and
organizational culture, the following question is explored: what kind of culture would
be most suitable for implementing TQM practices? As mentioned earlier, literature has
identified two competing arguments, the unitarist and pluralist approaches. The
unitarist approach considers TQM as a unidimensional set (or package) of practices,
which needs to be supported by one specific type of culture. This can be traced back to
the fact that TQM was introduced by different gurus in the form of a set (or package) of
tools and practices. Although not explicitly specifying a typical culture which would be
necessary for implementing these “packages”, their strong recommendation that these
“packages” need to be adopted “as a whole” implies the need of a unified culture to
implement it. In this regard, typical cultures that are considered in the literature as
suitable for TQM practices are those related to a flexible, people-oriented style. In their
review of literature that examined the influence of the company’s culture and structure
on TQM implementation, Tata and Prasad (1998) conclude that people-oriented,
flexible cultures are more conducive to the success of TQM implementation, compared
to the opposing types (i.e. rational control). They identify that such practices as
leadership, employee involvement and empowerment, teamwork, customer focus, and
continuous improvement are the reflection of people-centred and flexible cultures or
will be best implemented where such cultures prevail. The study by Westbrook and
Utley (1995) provides further support for this argument as the result indicates that
creating culture where employees are valued and empowered leads to successful
quality management implementation.
In conjunction with this, literature has also highlighted the critical role of leadership
in reaching a consensus among all members within an organization in embracing
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7. quality as the common goal of the organization. Several actions that can be taken to
achieve this purpose include creating shared vision, and breaking down barriers
between departments, typically by promoting cross-functional cooperation and
teamwork. All of these efforts are directed towards unifying mindset and culture of all
the members within the organization, hence, supporting the idea of a unitarist
approach to organisational culture.
The opposing pluralist argument suggests the existence of multidimensional
cultures. More recent discussions suggest that TQM should be considered as
multidimensional, particularly in relation to the arguments that TQM incorporate both
people-oriented, and those that would be considered more rational, control types of
practices, which are antagonistic to each other (Kekale and Kekale, 1995;
Moreno-Luzon and Peris, 1998; Watson and Korukonda, 1995). However, as noted
by Bright and Cooper (1993), this notion that there are multiple cultures that support
TQM would likely receive considerable challenges from unitarist TQM supporters.
The problem in accepting the pluralist view on TQM, as mentioned earlier, is rooted in
the conventional view that TQM is unidimensional and therefore will not be able to
accommodate diversity of cultures within the organization. Specifically, Watson and
Korukonda (1995) affirm that examining the juxtaposition between the disparate
elements of TQM, despite its value in facilitating theoretical insights and conceptual
clarity of TQM, will face serious challenges from the promoters of TQM who will
oppose the idea of linking TQM to the type of cultures which are usually associated
with rigidity and suppression of creativity. The fact that TQM also embodies
mechanistic or hierarchical culture nevertheless has been supported by several
empirical studies. The findings of the study by Germain and Spears (1999), for
example, indicate that structural and formal approaches which characterize several
TQM practices such as management by fact, strategic planning and formulation, the
use of SPC, and process documentation, positively and significantly predict quality
management practices. In concluding their study, Germain and Spears (1999) suggest
the view of TQM in which formalization maybe better perceived as a mechanism for
“coding and transmitting knowledge” to foster, rather than to hinder, quality
management within the firm.
Two seminal works by Sitkin et al. (1994) and Spencer (1994) provide theoretical
bases in support of the multidimensionality of TQM. Sitkin et al. (1994) argue that with
similar underlying TQM precepts, organizations can apply different goals and
practices based on different orientations, namely total quality control (TQC) and total
quality learning (TQL) with TQC being associated with a control or cybernetic
approach, and TQL being related to an innovative or learning orientation. Spencer
(1994) argues that various practices under the TQM umbrella can be categorized into
several organizational models, including the mechanistic and the organic model, as
well as others. For example, the focus on quality as an organizational goal is associated
with the mechanistic model, because in practice the real objective of pursuing quality
could well shift into productivity and efficiency, something on which a mechanistic
organization focuses. On the other hand, the practices of employee empowerment and
cross-functional teamwork are closely linked to the organic model. Summarising the
above arguments, Thompson (1998) affirms that in order to gain a sharper focus on the
culture of TQM, organizations need to appreciate the paradoxes of TQM which are
embodied in a number of principles of TQM which are contradictory to each other.
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8. One of the examples of these paradoxes is between encouraging creativity on the one
hand and promoting control and variation reduction on the other hand. As will be
discussed below, this study explores the possibility of, but does not force, multiple
dimensions of TQM in the analysis.
Research framework and methodology
The literature review section has addressed several issues on the relationship between
TQM practices and organizational culture. First, it articulates the difference between
TQM as a set of organizational practices, and culture as an underlying belief system
related to the mindsets of people within the organization. Second, it holds the
proposition that it is organizational culture, which affects TQM implementation, not
the other way around. Third, it highlights the debate on the kinds of organizational
culture, which are suitable for implementing TQM practices; highlighting the
difference between unitarist and pluralist views. The conflict between these two
arguments is then extended to another debate on TQM as either unidimensional or
multidimensional. By incorporating these three key findings of the literature review,
we developed a research framework examining the relationship between
organizational culture and TQM practices that built on previous works in the area.
In essence, this study was aimed at comparing the nature of the relationship between
organizational culture and TQM practices in the form of two competing structural
models based on unitarist and pluralist views.
In developing the research framework, we built on several past studies. Our study
built on the work of Chang and Wiebe (1996) and Dellana and Hauser (1999), which
examine the link between TQM practices based on Malcolm Baldrige National Quality
Award (MBNQA) model and organizational culture based on the competing values
model developed by Denison and Spreitzer (1991). Chang and Wiebe (1996) interviewed
a panel of experts from the Conference Board Total Quality Management Centre to
describe ideal cultural characteristics that they believe will support TQM philosophy
based on the four types of cultures of the competing value model, namely group,
developmental, hierarchical, and rational. This finding suggests that these four types
of culture characterized the ideal organizational culture embodied by a TQM
philosophy, although group and developmental cultures appear to be dominant. As
such, it provides empirical support for the pluralist view. Dellana and Hauser (1999)
also use the MBNQA criteria to represent TQM practices and the competing values
model to represent organizational cultures as their research variables. Using Pearson
correlation coefficients, they test the association between each of the six elements of the
MBNQA criteria and the four cultural dimensions of the competing values model.
Their finding concurs with that by Chang and Wiebe where both group culture and
developmental culture are associated with high MBNQA scores. Al-khalifa and
Aspinwall (2001) investigate the suitability of the national culture in Qatar and the
culture required for implementing TQM. Their conclusion suggests that Qatar
companies would find difficulties in implementing TQM since they are dominated by a
rational and hierarchical culture, hence, confirming the findings of the first two studies.
Our study aims to advance both studies from an analytical point of view by
following the work by Zeitz et al. (1997) who employ SEM. This allows us to examine
the multiple cultures and multiple TQM elements simultaneously, hence, incorporating
the interaction amongst independent and dependent variables. The use of SEM also
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9. allows us to make a rigorous analysis in comparing the unitarist and pluralist model of
the culture-TQM relationship which would contribute to knowledge in this area. In
modelling the structural relationship between TQM and organizational culture, we also
follow the work of Zeitz et al. (1997) by considering organizational culture as the
independent variable which determines the level of TQM practices as the dependent
variable.
This study also builds on the work by Chang and Wiebe (1996) and Dellana and
Hauser (1999) by examining the relationship between TQM practices and
organizational culture. In particular, the objective of this study is to examine the
multidimensionality of TQM, which is a reflection of multidimensional organizational
culture with the following research questions being addressed:
RQ1. Can the multidimensionality of TQM practices be reflected in
multidimensional cultures?
RQ2. What is the nature of the relationship between sub-cultures and TQM
subgroups?
As mentioned earlier, this study defines organizational culture as the pattern of values
in an organization that determine its artefacts and practices. As such, we follow the
work by Zeitz et al. (1997) in terms of modelling the structural relationship between
TQM and organizational culture by considering organizational culture as the
independent variable and TQM practices as the dependent variable. For confirmatory
purposes, this study also compares two competing structural models of the
TQM-culture relationship; the “unitarist” model and the “pluralist” model.
Research instruments
TQM measures. The use of constructs – a method that had been commonly used in
research in the psychology discipline – has been accepted as a “norm” in studies on
TQM. Pioneered by Saraph et al. (1989), this method has been adopted in most of the
subsequent empirical research on TQM (Ahire et al., 1996; Black and Porter, 1996;
Curkovic et al., 2000; Das et al., 2000; Dow et al., 1999; Flynn et al., 1994; Grandzol and
Gershon, 1998; Powell, 1995; Samson and Terziovski, 1999). This, however, has created
a problem because most researchers prefer to build their own TQM constructs instead
of revalidating the ones developed by their predecessors. This has resulted in a variety
of TQM constructs being developed leading to inconsistency in defining the content of
TQM constructs. Dow et al. (1999) affirmed that although there was a great deal of
overlap and similarity in the content of TQM among its proponents and scholars, there
was still a problem in terms of the best method for grouping and characterizing such a
broad selection of quality management practice. This problem could be attributed to
the fact that TQM has no clear boundary and definition, as highlighted in the literature
review section.
Since this research was not aimed at developing or validating another TQM
constructs, we decided to select a model from the previous studies on TQM. Among
several available models, the MBNQA criteria were chosen to measure the
implementation of TQM practices in organisations. This award consists of six
criteria of organizational practices and one criterion of organizational performance
(business results). The organizational practices embody six criteria, namely leadership,
strategy and planning, customer focus, information and analysis, people management,
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10. and process management. There were several key reasons that underpinned this
choice. First, the use of the Baldrige framework to articulate the content of TQM
practices has been supported by a number of scholars (Ahire et al., 1995; Capon et al.,
1995; Curkovic et al., 2000; Dean and Bowen, 1994; Evans and Lindsay, 1999; Juran,
1995). Curkovic et al. (2000), in particular, noted the wide adoption of MBNQA in many
countries around the world which strongly suggested that the award criteria have
comprehensively captured the major dimensions of TQM practices as envisioned by its
proponents, such as Deming, Juran, and Crosby. Second, the MBNQA criteria are
applicable to both manufacturing and non-manufacturing firms, which were the focus
of this study. This is an important point to note given the fact that TQM originated in
the manufacturing area and this has raised some doubts about its application in service
sectors. It is useful to note that the use of the six organizational practice items in this
model allows for, but does not assume, the clustering together of the two theoretically
opposing TQM mindsets of control-oriented versus human resource-based
implementation. By using these items, we are also able to explore the extent to
which the TQM organizational practices in our observed firms follow this (or any
other) framework. Our primary focus here is the exploration of the unitarist versus
pluralist viewpoints, rather than a deep exploration into the different dimensions
within the pluralist viewpoint itself.
Having selected the MBNQA criteria to represent the TQM measurement model, the
process was now focused on developing a survey instrument for measuring the
MBNQA criteria in the organisations. The framework developed by Samson and
Terziovski (1999) was used as the core for MBNQA constructs in this study. This
instrument and model was used in the largest study on TQM so far conducted (using
1,024 responses from manufacturing companies in Australia and New Zealand) to
ensure its validity. Further, Samson and Terziovski (1999), although not in an explicit
manner, distinguished “people” or “soft” factors from “system” or “hard” factors
embodied by the MBNQA criteria; something we have focused on in this paper. Their
empirical findings indicate that what we have discussed above as “soft” factors of
TQM were the strongest predictors of organisational performance.
The organizational culture measures. Since TQM practices are considered as the
“effect” of organizational culture, we need to select a model of organizational culture
which can be examined against TQM practices. Following the works by Wiebe and
Chang (1996) and Dellana and Hauser (1999), the competing values model was selected
as the organizational culture model for this study, and the model developed by Denison
and Spreitzer (1991) was used to operationalise the measurement of four types of
culture: group, developmental, hierarchical, and rational. The measurement approach
used five-point Likert scales which is similar to the work by Chang and Wiebe (1996)
and McDermott and Stock (1999).
Data collection procedure
Empirical data was obtained through a random survey of 1,000 managers, most of
whom were senior managers who had knowledge of past and present organizational
practices relating to quality and innovation related aspects in their organizations. The
focus of this study was limited to one site (or plant) per organization. A total of 194
managers responded, whilst 150 questionnaires were returned to the researchers with
return to sender (RTS) messages, indicating that the addresses were no longer valid.
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11. By discounting the number of RTS mails, the final response rate accounted for 22.8 per
cent. The information needed for examining non-response bias was obtained from two
sources: follow-up e-mails and follow-up phone calls. Organisations, which declined to
participate in the survey commonly stated their reasons as lack of time, lack of
resources, and not interested. None of these reasons alluded to the possibility that there
were systematic reasons for not participating in the study. The proportion of the
respondents was nearly equal between manufacturing and non-manufacturing sectors
(52.5 and 47.5 per cent, respectively). The non-manufacturing sectors include
construction, consulting, health care, information technology, and retail/distribution. In
terms of organizational size, based on the number of employees, 90 per cent of the
respondents represent firms with 500 employees or less, with around 60 per cent of
them representing firms with less than 100 employees. In terms of the position of the
respondents in the organization, more than 50 per cent of the respondents were either
quality managers or production/operations managers, followed by senior
managers (general manager or managing director) accounting for 30 per cent. The
remainder held various positions in finance, marketing, human resources, and
administration.
Data analysis
Data reduction process
The data reduction process was conducted in order to bring the ten constructs – each
consisting of four to six items – employed in this study, into ten composite scores. Six
constructs (leadership, strategic planning, customer focus, information and analysis,
people management, and process management) constituted TQM latent variables, and
four constructs (group, developmental, hierarchical, and rational) constituted the
organizational culture measures. These ten constructs were subjected to validity and
reliability tests before a single composite score could be calculated to represent each
construct.
Confirmatory factor analysis (CFA) using LISREL 8.30 was employed for
examining construct validity of each scale by assessing how well the individual items
measured the scale. We followed the method applied by Ahire et al. (1996) where each
construct was treated as an independent congeneric model. Among these ten
constructs, two items were deleted due to weak loading on the construct. The first item
was “Customers are involved in product design” in the customer focus scale. The
second item was “Control and centralization” in the hierarchical scale, and this case is
similar to what happened in the study by McDermott and Stock (1999) where they also
excluded this particular variable in their analysis. With three items left, it is not
possible to obtain the goodness of fit (GFI) indices of this scale, however, the loading
paths of the three items (.0.5) support unidimensionality and convergent validity of
the construct. The values of GFI of the other nine constructs exceed, by a comfortable
margin, the 0.9 criterion generally suggested by Hair et al. (1998) accompanied with
strong loading paths (.0.5) between latent variables and their respective observed
variables has suggested by Dunn et al. (1994), hence, establishing their
unidimensionality and convergent validity.
The reliability analysis following the construct validity process was conducted by
calculating the Cronbach’s a for each scale. The results show that the Cronbach’s a
measures for the ten constructs well exceed the recommended critical point of 0.7
TQM and
organizational
culture
1111

12. (Nunnally, 1978), hence, establishing their reliability. The final results of construct
validity and reliability tests of the nine constructs are reported in Table I.
Discriminant validity is aimed at examining if each item only estimates one
construct; in other words, every construct should be distinct from each other. As
suggested by Venkatraman (1989), discriminant validity was examined by running
CFA on each pair of the constructs in this study. For each pair, CFA was run twice
where the first allowed the correlation between the two constructs to be estimated. The
chi-square value of this model was coded as xa (chi-a). The second CFA was run by
fixing the correlation between the two constructs to 1.0, and the chi-square value of this
model was coded as xb (chi-b). The difference between xa and xb was coded as Dx
(delta chi) with the degree of freedom of 1. The discriminant validity between the
paired-constructs can be established if the value of Dx (df ¼ 1) at p , 0.01 is greater
than 6.64. With ten constructs incorporated in this study, we conducted 45
discriminant validity tests. The values of Dx are presented in Table II, and the results
indicated that the ten constructs passed this test.
Construct
No. of items
(final)
GFI
indices Means
Standard
deviation Cronbach’s a
Leadership (lead) 4 0.980 3.756 0.825 0.8580
Strategic planning (plan) 4 0.998 3.567 0.901 0.8242
Customer focus (cust) 5 0.976 3.918 0.684 0.7853
Information and analysis (info) 4 0.991 3.543 0.878 0.7992
People management (peop) 5 0.974 3.431 0.802 0.8303
Process management (proc) 6 0.978 3.601 0.707 0.7922
Group culture (grou) 4 0.992 3.667 0.819 0.9060
Developmental culture (deve) 4 0.987 3.613 0.692 0.7890
Hierarchical culture (hier) 3 –a
3.455 0.780 0.8155
Rational culture (rati) 4 0.975 3.791 0.715 0.8688
Note: a
The GFI cannot be computed because the construct only has three observed variables.
However, the loading path of each observed variable was strong, hence, supporting the validity of the
construct
Table I.
Construct validity and
reliability and the values
for composite measures
Lead Plan Cust Info Peop Proc Grou Deve Hier Rati
Leadership (lead) –
Strategic planning (plan) 100.3 –
Customer focus (cust) 215.2 160.4 –
Information and analysis (info) 153.4 70.3 234.4 –
People management (peop) 66.8 112.6 161.9 107.9 –
Process management (proc) 141.8 56.4 64.5 49.7 47.1 –
Group culture (grou) 101.1 224.0 267.1 192.7 58.1 230.1 –
Developmental culture (deve) 76.1 186.3 98.3 213.8 103.7 113.1 73.6 –
Hierarchical culture (hier) 218.4 197.3 232.5 229.5 231.1 205.8 177.3 213.9 –
Rational culture (rati) 228.4 195.6 211.8 184.0 244.6 222.2 297.2 87.2 149.2 –
Table II.
Discriminant validity
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13. The relationship between TQM practices and organizational culture
As mentioned earlier, in terms of modelling the structural relationship between TQM
practices and organizational culture, this study positioned organizational culture as the
independent variable and TQM as the dependent variable, meaning that practices are
the results or manifestations of culture, or in a similar way, culture constrains how
practices are designed and delivered. SEM was used to test the relationship between
TQM and organisational culture based on the two competing models. The choice of
SEM as the analytical tool for this study was based on two major reasons. First, in this
study TQM was considered as a construct (or a latent variable) that cannot be
measured directly or represented by a single metric unit. To our knowledge, only SEM
allows the explicit representation of a distinction between observed and latent
variables. Secondly, in the pluralist model, we examined several structural
relationships (i.e. between the four measures of organisational culture and the three
subgroups of TQM shown in Figure 3) simultaneously, and this can be done only by
using SEM.
Unitarist model. In the unitarist model, TQM is considered as a set of practices
which has a particular culture that affects all of these practices; in other words, all
TQM components are driven by a similar type of culture. As such, TQM is modelled as
a single latent variable that is measured by six observed variables, and it is explained
by the four types of cultures as shown in Figure 2.
Overall, with respect to the values of the absolute GFI indices the model suggests a
lack of fit. The value of RMSEA slightly exceeds 0.08 and the value of AGFI drops
below 0.90, respectively, which causes some concerns for such a simple model. It is also
evident from the result that there are three types of cultures, which have a significant
relationship with TQM practices, although group culture appears to be the dominant
one, followed by rational and developmental cultures. Hierarchical culture does not
show a significant relationship although the negative sign of the estimated value of the
relationship toward TQM appears to replicate the findings reported in the study by
Dellana and Hauser (1999).
Pluralist model. The pluralist model considers TQM as a multidimensional model
comprising multiple subgroups (i.e. constructs) rather than a single latent construct.
Figure 2.
The unitarist model of the
relationship between
organizational culture and
TQM practices
TQM and
organizational
culture
1113

14. These subgroups were tested against the four types of cultures in the CVF used in
the unitarist model. As a preliminary analysis, the relationship between organizational
culture and the six TQM practices was tested using Pearson correlation, and the result
is presented in Table III.
The findings suggest that the six TQM variables correlate at fairly similar degrees
to group, developmental and rational culture, and less strongly with hierarchical
culture, although all correlation coefficients are still significant at 0.01. As is evident
from the columns of group and developmental culture, the variables leadership,
customer focus, and people management show a relatively stronger correlation than
the other four TQM practices. On the other hand, along the column of hierarchical
culture, it appears that strategic planning, information and analysis, and process
management have the highest correlation with hierarchical culture with nearly similar
coefficient values. Therefore, to a limited degree, we have been able to identify an
antagonistic structure within TQM practices on the basis of two contrasting cultures:
hierarchical that is oriented toward control and internal on the one hand and group and
developmental that is more oriented toward flexibility.
The next step is to develop the multidimensional model of TQM by dividing the six
TQM practices into several subgroups. In building these subgroups, we centred on
several theoretical arguments although this process is still exploratory in nature. Based
on the content analysis of the six TQM practices, we came up with three subgroups,
which we labelled as TQM1, TQM2, and TQM3. TQM1 comprises leadership and
people management practices that mostly relate to human relations aspects in the
organization. This can be seen from the practices incorporated in these two constructs,
such as sharing beliefs and values, providing role models, empowerment, participative
management, creating unity between departments, training and development, creating
a quality work environment, and communication. TQM2 comprises customer focus
and process management practices, which could be associated with some elements of
control in TQM. This is because both practices are closely related to each other as the
major components of quality assurance whose primary purpose is to achieve a high
degree of conformity and minimize variation (Sitkin et al., 1994). The study by Germain
and Spears (1999) indicated that quality management positively relates to elements of
control and formalization, and the result should be attributed to the content of their
quality management construct that is very similar to the content of process
management items used in our study. TQM3, on the other hand, comprises strategic
planning and information and analysis constructs which are also considered as
representing the control element of TQM. From this point of view, both strategic
Group Developmental Hierarchical Rational
Leadership 0.759 0.676 0.305 0.628
Strategic planning 0.566 0.509 0.399 0.559
Customer focus 0.516 0.586 0.319 0.535
Information and analysis 0.569 0.493 0.398 0.549
People management 0.768 0.597 0.339 0.582
Process management 0.551 0.537 0.396 0.555
Note: All correlations are significant at p , 0.01
Table III.
Correlation between
TQM practices and
organizational culture
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15. planning as well as information and analysis practices reflect well the beginning
(i.e. planning) and ending (i.e. evaluation) phases of strategic management processes.
The processes commonly start with external and internal environmental scanning,
formulation of the strategic choice, implementation process, and conclude with control
and evaluation (Hill and Jones, 2001; Thompson and Strickland, 2003). Given that these
two steps are usually conducted in a formal and systematic manner (Mintzberg, 1993),
it is appropriate to categorize them into the control elements of TQM although we
separate them from the TQM2 subgroup (i.e. customer focus and process
management). In sum, while both of these constructs have to do with control, the
TQM2 elements focus on processes and might involve a more operations focus, while
TQM3 relates more to the bigger picture, with its emphasis on planning and external
elements of the strategic management process, and its orientation is more toward the
entire business.
However, given that both TQM2 and TQM3 represent control elements, it is
necessary to test whether these two subgroups should be combined into one subgroup
or stand as separate entities. For this purpose, two competing models of
multidimensional TQM were tested. The first competing model comprises three
TQM subgroups as described above, whilst the second competing model comprises
two TQM subgroups, with TQM2 and TQM3 being combined into one subgroup. The
result of these two measurement models indicates that the first competing model has a
significantly better fit (at p , 0.05), based on the discrepancy of the chi-square value
(Dx) and the degree of freedom.
The structural model to examine the relationship between the four cultural
dimensions with the three TQM subgroups is shown in Figure 3. In analysing this
model, SEM was used for model generation purposes that involve a blend of
exploratory and confirmatory, ahead of the strictly confirmatory approach. In model
generation applications, when an initial model does not fit the data, it can be modified
by deleting, adding, and/or modifying paths in the model (as suggested by
modification indices), then re-tested using the same data set. The final purpose is to
establish a model that makes theoretical sense and reasonable correspondence to
Figure 3.
The pluralist model of the
relationship between
organizational culture and
TQM practices
TQM and
organizational
culture
1115

16. the data (Joreskog, 1993; Bollen and Long, 1993; McCallum, 1995). With four by three
relationships, there were twelve paths that needed to be estimated. However, the initial
findings showed that not all of these 12 paths were significant. The non-significant
paths of the initial structural relationship were then deleted, and this resulted in
improvement of the GFI indices of the model. This process was continued until the best
competing model was established. The final model is shown in Figure 3, and the GFI
indices suggest that the model is robust even though the number of estimated
parameters is far more complex than the first model. Eight out of twelve paths of
structural relationship were found to be significant (at p , 0.01) as shown in Figure 3.
The findings once again suggest that group culture is the most dominant among
these four cultural dimensions. It significantly relates to the three TQM subgroups.
The other relationship provides sensible results where TQM1 is driven by a group and
developmental culture. Both group and developmental cultures represent the
flexible-type cultures that match the characteristics of the TQM1 subgroup, which
comprises human factors, which are leadership and people management. TQM2 is
related to both developmental and rational cultures; meaning that this subgroup is
driven by a combination of cultures that balance the flexibility and control
orientations, which are also external-oriented. Both cultures fit the characteristics of
the TQM2 subgroup that comprises customer focus and process management that
focus on the external environment (i.e. customer needs) but at the same time emphasize
productivity and performance. TQM3 as expected is more concerned with an internal
and control orientation that is reflected by its relationships with rational and
hierarchical culture in addition to the most dominant sub-culture, group culture.
Overall, the findings of the pluralist model indicate an interesting shift of cultural
emphasis between the three TQM subgroups. TQM1 is that which is “purely”
flexible-oriented, followed by TQM2 which comprises both flexible and control
orientations, and finally TQM3 which is the most control-oriented.
Comparing the two models of the structural relationship between organizational
culture and TQM practices, it is obvious that the pluralist model is shown to be a better
model as indicated by the values of the GFI indices. The result is also more revealing
particularly in the case of hierarchical culture, which appears to have no significant
relationship with TQM in the unitarist model (Figure 2). Therefore, the
multidimensional model of TQM practices and cultures is supported here.
Discussion
The findings above provide evidence of the need for managing multidimensional
elements within TQM that reflect multidimensional cultures. In particular, although
they may be seen as somewhat controversial, the findings do support the existence of
the mechanistic-type culture within TQM practices, represented by the TQM3
subgroup. This finding is even more important as a counterbalance of the “bias”
towards group and developmental culture which has dominated the literature on TQM
as noted in the earlier section. Therefore, the findings substantiate the idea of the
juxtaposition of different elements of TQM, the control and people-centred elements,
and that the coexistence of both elements does not necessarily cause a situation where
one can undermine the other. The paradoxical combinations of these cultures concur
with the findings of past studies in the area (Buenger et al., 1996; Kalliath et al., 1999;
Zammuto and Krakower, 1991). This finding also supports the underlying assumption
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17. of the competing values model with regard to the importance of balance. This is
because, when organizations overemphasize one culture and ignore the other, they may
become dysfunctional and the “single” culture may turn out to be weaknesses (Denison
and Spreitzer, 1991).
The importance of this issue can also be viewed from a strategic point of view in
relation to the escalating pressure for organizations to pursue more complex, often
inconsistent, aspects of performance. In this regard, Benner and Tushman (2003)
highlight the idea of dynamic capabilities that integrate the firm’s abilities for both
exploitation – which emphasizes control – and exploration – which promotes
flexibility. We believe that such integration concurs with the need to appreciate the
coexistence of control and people-centred cultures within the organization as identified
in this study. Supporting this proposition, Denison and Spreitzer (1991) specifically
affirm the need to incorporate and balance all four cultural types that represent the
capacity to respond to a wide set of environmental conditions.
By and large, the coexistence of the control and people-centred models implies that
TQM calls for a synthesis of these antagonistic elements within an organization. As
Thompson (1998) affirms, the need for managing the cultural paradox could be one of
the primary issues of TQM and the biggest challenge for organizations that
implement it. The major implication of this finding is that organizations need to
accommodate divergent goals by developing a system and/or structure that allows
enough flexibility for adapting different (even contrasting) management styles, hence,
swinging comfortably between control and flexibility and between internal and
external orientations, which is known as the “ambidextrous” approach (Tushman,
1996). We believe that this issue is worthy of examination for research on TQM in
the future.
Conclusion
It is our hope that the present study helps to nurture a dialog that explores these and
other relationships between TQM and culture. Our results support the pluralist view,
yet it still opens further debate in the area, particularly between the organizational
versus departmental the level. Intuitively, one may argue that multidimensional
cultures are applicable only at the organizational level, but once we look into specific
parts of the organization we will find subgroups of culture, which are more
homogenous, according to the specific task(s) they face. For example, developmental
culture can be found to be more prevalent in the R&D function, whilst rational or
hierarchical culture is more alive in the (manufacturing) production function.
Further, the implications of this research raise questions regarding the most
appropriate combination of cultures for TQM. One might posit that the answer to this
question hinges on variables such as industry sector and strategic goals of the
organizations. We need to examine further if our findings would be different when
such control variables are added. Also, it would be interesting to explore if the
configuration of TQM subgroups will vary, in contingent on these factors, as
suggested by Sitkin et al. (1994) and Spencer (1994). In this regard, we may find
different configurations of TQM based on different levels of the three subgroups,
contingent to these external and internal control variables. For example, firms
operating in a stable industry would emphasis more the control elements of TQM (i.e.
TQM2 and TQM3) compared to those operating in a dynamic environment.
TQM and
organizational
culture
1117

18. Another important issue is related to the effectiveness of these cultures in
determining organizational performance. For example, the studies by Powell (1995)
and Samson and Terziovski (1999) suggest that the “soft” factors of TQM – associated
with TQM1 in this study – were found to be the strongest predictors of organizational
performance. On the other hand, the “hard” factors – associated with the TQM3
subgroup in this study – did not show any significant relationship with organizational
performance. Does this lead to a conclusion that the cultures supporting these practices
(i.e. group and developmental cultures) are the best and therefore should be nurtured,
and at the same time, hierarchical factors – which underlie TQM3 – should be
suppressed? If so, under what conditions?
Finally, this study considers organizational culture as the antecedent of TQM
practices. However, as mentioned in the literature review section, there are many
arguments that promote TQM as a vehicle for organizational change, including the
cultural element. We believe that the recursive effect between TQM and organizational
culture would be an interesting topic to examine although it can only be done using a
longitudinal study.
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