Total quality management (TQM) strategy and organisational characteristics: Evidence from a recent WTO member

Abstract

This paper presents a comparative study on the relationship between implementing total quality management (TQM) and organisational characteristics (size, type of industry, type of ownership, and degree of innovation) in a newly industrialised country in South East Asia. Vietnam has become the 150th member of the World Trade Organisation (WTO) since January 2007, and this is the first empirical study to examine TQM practices in Vietnam. Analysis through Structural Equation Modelling, t-test and MANOVA of survey data from 222 manufacturing and service companies produced three major findings. First, this study supports previous research findings that TQM can be considered as set of practices. Second, industries in Vietnam have deployed certain TQM practices (customer focus and top management commitment) at much higher levels than others, namely information and analysis system, education and training, employee empowerment, and process management. Finally, MANOVA shows a clear difference in TQM practices by company size, industry type, and degree of innovation. Large companies had higher implementation levels across almost all practices except for teamwork and open organisation when compared to small- and medium-sized companies. TQM practices were statistically more significant in manufacturing companies compared to service companies, and firms having a higher degree of innovation also showed higher levels of TQM practice implementation. In particular, the low deployment of TQM practices in service industries, where TQM has been considered as order- qualifier, highlights the challenges for Vietnam's service industries that pursue TQM to successfully compete in the global marketplace.