An investigation of the hard and soft quality management factors of Australian SMEs and their association with firm performance

The purpose of this paper is to investigate the key “hard” and “soft” quality management factors used by Australian small and medium enterprises (SMEs) and their association with organisational performance.

A survey questionnaire was constructed for this research using Powell's quality management framework. The respondents were required to indicate their degree of implementation of quality management practices and to rate their TQM performance in relation to overall performance, return on assets, market share and customer satisfaction.

The study found that improved overall performance appears to be favourably influenced by a combination of “hard” TQM factors such as benchmarking and quality measurement, continuous improvement, and efficiency improvement; and the “soft” TQM factors consisting of top management philosophy and supplier support, employee training and increased interaction with employees and customers. Furthermore, the TQM factors of employee training, efficiency improvement, and employee and customer involvement would appear to be important in maintaining customer satisfaction, whilst employee and customer involvement also appeared to be important in maintaining a competitive edge in terms of return on assets.

The findings show that it is necessary to focus on a combination of soft or behavioural aspects and the hard “systems‐oriented” aspects of QM to achieve an improvement in overall performance, and that to maintain customer satisfaction and return on assets it is just as important to focus on employee involvement and training, as it is to have a customer focus.