Total Quality Management and Innovation Performance:An Empirical Study on the Interrelationships and Effects

Total Quality Management (TQM) is considered as the foundation of improving productivity, profitability and customer satisfaction in organizations. Then again the factors of market competition, cost pressures, customer demands, etc., are forcing organizations to be innovative in all their activities. While a quality performance is imperative to attain the competitive advantage, innovation is the catalyst for further growth. Hence organizations cannot dispense with any of these. Consequently, it is important to investigate on how these two could be taken up together. This paper attempts to investigate the interrelationships and the effect of one on another through an empirical approach. The literature review reveals that studies in this direction are scarce as far as Indian Organizations are concerned. To examine further, constructs describing both were identified. A research framework, which explores the relationship between them, was developed. With the assistance of Confederation of Indian Industry, large and medium scale TQM organizations in the manufacturing sector were identified. The study consisted of two stages—a pilot study and a main study. In the main study data, first, a confirmatory factor analysis was carried out for reconfirming the validity and a summated scale of data created for further analysis. Second, this data was analyzed using multiple regression method. The different assumptions underlying multiple regression were verified. The regression models were estimated and hypothesis was tested. Overall, the findings indicated that there exists a positive correlation between TQM and innovation performance. Further, the significant variables were identified from the individual regression models. They were interpreted and the models were validated. The Strategy of focusing on the identified significant variables of TQM was suggested.