The comparative analysis of TQM practices and quality performance between manufacturing and service firms

This paper seeks to examine the difference between manufacturing and service firms with respect to the implementation of total quality management (TQM) practices, and the relationship of these practices to quality performance.

The empirical data were collected from 194 managers of Australian firms with an approximately equal proportion of manufacturing and service firms.

The finding indicates no significant difference in the level of most of TQM practices and quality performance between the two sectors. This supports the positive argument concerning the applicability of TQM practices in the service firms despite several differences in the nature of their operations compared to their manufacturing counterparts. Furthermore, using structural equation modelling (SEM) technique, this study has shown that TQM construct based on the Malcolm Baldrige National Quality Award (MBNQA) criteria is valid across both industry sectors, and its relationship with quality performance also indicates insignificant difference between the two sectors.

From a managerial point of view, the results confirm the applicability of TQM principles in both manufacturing and service sectors and the validity of the MBNQA criteria in operationalising TQM principles into a set of organizational practices.

The study contributes to the knowledge in terms of cross‐validating the TQM construct in the manufacturing and service sectors. It also differentiates from the earlier studies in the area by simultaneously testing the TQM construct and its relationship with quality performance in both sectors.