Total Quality Management Final Submission

Running head: ORGANIZATIONAL CULTURE FOR TOTAL QUALITY MANAGEMENT1

A RESEARCH PROPOSAL: ORGANIZATIONAL CULTURE FOR TOTAL QUALITY

MANAGEMENT

Presented to

Dr. Martin W. Sivula

In Partial Fulfillment of

Business Information & Decision-Making MGMT 5500

Johnson & Wales University

By:

Aditya Chawla

February 18, 2016


Abstract

This research proposal further studies the relationship between TQM and organizational

performance. The purpose of this study is to find the best corporate culture that suits TQM. This

study also investigates if corporate cultures have a positive or negative relationship with TQM.

This study includes a sample of survey questionnaires (n=451 companies) which represents

feedback from industrial businesses and service organizations. The results are analyzed using

hierarchical linear regression methodology. The study suggests that TQM has a noticeable

positive effect on business performance. Observational evidences are found that adhocracy

culture has a positive impact on TQM. A new culture which is a combination of clan and

adhocracy culture named as ‘mixed culture’ is also tested as a variable and its results suggest

that it is the best culture to imply TQM. The results propose that additional research should be

conducted to better understand how mixed culture can be used to imply TQM effectively in a

business, and also, if clan culture effects TQM significantly.

Keywords: Organizational culture, Total Quality Management (TQM), clan culture, adhocracy

culture, market culture, hierarchy culture, mixed culture.

Introduction

In the past few decades, it has been recognized that corporate cultures have been changed

frequently by many organizations to successfully imply total quality management. The primary

reason to change corporate culture is to have competitive edge and generate more revenues.

Organizations have made attempts to employ its tools and methods, but they have failed because

uniformity of two variables, cultural and structural factors. (Burdett, 1994; Ehigie &

McAndrew, 2005; Grant, Shani, & Krishan, 1994). Undoubtedly, organizational culture is one


of the decisive variables in success or failure of TQM implementation (Tata & Prasad, 1998).

‘Competing Values Framework’ proposed by (Quinn 1988) is used to form a tool for

assessment of four different types of organizational cultures: clan, adhocracy, market and

hierarchy which are characterized on two magnitudes.

One magnitude demonstrates the shift towards the internal (unification of groups) or

external factors (challenging variations and competition) whereas second magnitude illustrates

the focus of organization on discipline, management, uniformity, adjustability, innovation,

diversity and versatility.

The objective of this study was to examine unambiguously which culture is a best fit to

adopt TQM, while illustrating the links using empirical study. Based on previous studies,

appropriate literature is discussed in regard to TQM and organizational culture to study which

culture can be expected to support TQM and promote it in a successful way. This study also

tests for positive relationship between TQM and organizational performance. Methodology used

is also discussed to execute empirical study. The third part of this study determines the results.

Last part of this research demonstrates the conclusions and limitations of the study and outlines

the possibility of future research.

This paper reviews the fundamental ideas of corporate culture and TQM philosophy, and

discusses the correlation between organizational cultures and TQM implementation in regard to

business performance. This is based on previous studies based on the model of Cameron and

Quinn (1999) who also proposed new cultures (Deshpande, Farley, & Webster, 1993; Lau

&Ngo, 2004; Moorman, 1995; Obenchain & Johnson, 2004; Stock, McFadden, & Gowen,

2007). This study does not support the findings related to clan culture, but it supported the


findings of other authors, such as Zu, Robbins, and Fredenall (2010), Dellana and Hauser

(1999) and Chung and Wiebe (1996).

Purpose of the Study

This study examines the relationship between four organizational cultures and TQM. This

paper studies the relationship between organizational culture and TQM. This work also

investigates if TQM has a positive relationship with organizational performance. This research

also propose the idea of forming a new culture which is a blend of clan and adhocracy culture

known as ‘mixed culture’ (Juan et al., 2013) which is analyzed to detect if it is pragmatic in

promoting flexibility in an organization while using TQM as a management tool.

This is done by reviewing the survey questionnaires collected from 451 Spanish companies

using cross-sectional design. The results will help us in finding empirical evidence about the

relationship between organizational culture and business performance; mixed culture and TQM;

and four corporate cultures and TQM.

Review of Related Literature

This part of the study examines the literature to analyze the relationship between TQM,

business performance and corporate cultures.

Total Quality Management

In last five decades, TQM has been used as a management tool to create an environment where

an organization can continuously improve its potential to deliver high quality products and

services to its customers. Its importance has navigated researchers, professionals and scholars to

study this management philosophy and evaluate how to implement it successfully (Ehigie and

McAndrew, 2005). The Philosophy of TQM was promoted effectively by Kaoru Ishikawa in

Japan, and W. Edwards Deming and Joseph Juran in the West (Myron Tribus, 1997). TQM is a


management innovation, if not a management revolution (S.M Dahlgaard-Park 1999, 2011).

Total Quality Management (TQM) is a broad concept which is accepted and used as a

mechanism for achieving excellence by many companies around the world. TQM is a multi-

dimensional concept (Ahire, Golhar, & Waller, 1996; Anderson, Rungtusanatham, &

Schroeder, 1994; Black & Porter, 1996). Two essential components of measuring dimensions of

TQM are the technical features of quality management and intangible features. Ishikawa’s tools

for problem solving lies under the first category. Second category of intangible elements

include leadership, corporate culture, management commitment, the ‘open’ organizations,

teamwork and empowerment. The categories are known as ‘hard’ (techniques) and ‘soft’

(intangibles) (Bou-Llusar, Escrig-Tena, Roca-Puig, & Beltran-Martin, 2009; Fotopoulus &

Psomas, 2009). They all conclude that leadership, management skills, culture, values,

management commitment, open organization and empowerment fall under the intangible

aspects of TQM.

Organizational Culture

Organizational culture has been defined in many ways. In the world of corporate management,

the literature commonly refers to organizational culture as the values, beliefs, and norms that

govern the behavior of the organization. The organization’s success or failure depends on how it

adopts the organizational culture in the present market while keeping in view the current

opportunities and limitations which are confronting the organization. The organization’s

philosophy or culture is the basic repository of corporate vision and value, and requires that the

policies, procedures, and processes of the organization be based on this philosophy (Batten,

1994). Many types of cultures have been described since this concept first appeared in

literature. Competing values model of Cameron and Quinn (1999) was chosen to classify


different types of cultures and examine their effect on TQM. This model has been used in

various empirical studies (Deshpande et al., 1993; Lau & Ngo, 2004; Obenchain & Johnson,

2004; Stock et al., 2007; Zu et al., 2010).

Two dimensions were used drawn out from 39 performance indicators developed by

Campbell (1977). These two dimensions are internal and external. Internal dimensions are

correlated with flexibility and stability of the organization. The second dimension indicate

external structure of the company. By combining these two competing values, Cameron and

Quinn (1999) have derived four different types of cultures: clan, adhocracy, hierarchy and

market. Clan culture is based on flexibility and internal focus which includes family like

behavior, promoting team work, commitment and involvement. Adhocracy culture has an

external structure that allows flexibility by fulfilling goals such as creativity, risk taking,

individuality and initiative. Market culture helps in differentiating an organization with its

competitors using stability and control to achieve its objectives of competitiveness and

productivity. Lastly, hierarchical culture focusses on stability and control, and internal focus

and integration. It is designed to improve efficiency, process uniformity, product uniformity and

ensure standardization.

Organizational Culture and TQM

The relationship between TQM and organizational culture raises some questions though role of

organizational culture is very vital to adopt TQM. The competing values suggested by Cameron

and Quinn (1999) can be used in implementing TQM, but these values can be found in any

culture hange which indicates that all types of cultures are needed. Every organization must

consider elements such as leadership, goals, vision, values, strategy, rewards, training,

organization, communication, promote quality, innovation before adopting a culture to use


TQM in a lucrative and successful way. Irani, Beskese, and Love (2002), Anderson et al. (1994)

and Detert et al (2000) believe that organizations with clan culture are most favorable to

implement TQM. Clan culture has an internal focus and integration that supports TQM.

Additionally, every work environment support training and motivation which are a part of clan

and adhocracy cultures. This will support the success of a TQM system (Yeo and Neal, 2004;

Arthur, 1994; Delery and Dotty, 1996 and Osterman, 1994).

Various elements of adhocracy culture promotes anticipation of customer needs,

continuous innovation and flexibility might demonstrate success of TQM. Reports of Douglas

and Judge (2001) found empirical evidence that the great inquisitiveness of adhocracy culture

has a conclusive relationship with TQM implementation and success.

Some studies have shown variables such as customer orientation and continual

improvement do not exist in market and hierarchical cultures, but exist in clan and adhocracy

cultures. These variables are decisive in TQM success. (Jabnoun & Sedrani, 2005).

Innovation is always required to meet the changing demands of customers, and thus, it is

an influential variable in implementing TQM. It is found that innovation and customer

orientation does not exist in hierarchical and market culture where control is important. The

organizations using these culture had little success (Mosadegh Rad, 2006). Hierarchical and

market cultures have high bureaucracy that do not encourage TQM because there is lack of

customer orientation. Hierarchical culture promotes quality management because it focus upon

normalization of processes and standardization of products whereas market culture focus upon

reducing transaction cost related to vendors, consumers and employees.


TQM and company performance

We aim to determine the relationship between organizational culture and TQM. Replication is

used to confirm the results of previous studies that found a positive effect of TQM on company

performance. Some previous studies have concluded that TQM companies have a competitive

advantage (Bou Llusar etal., 2001; Choi & Eboch, 1998; El Shenawy et al., 2007; Feng,

Prajogo, Chuan Tan, & Shoal, 2006; Hendricks and Singhal, 2001; Powell, 1995; Terziovski &

Samson, 2000).

Statement of the Problem

This study will measure the effect of corporate cultures on TQM. The results will give

empirical evidence about the positive and negative relationship between four corporate cultures

and TQM. It is expected that market and hierarchy culture will have negative impact on TQM

whereas adhocracy and clan cultures will have definite relationship with TQM. It also examines

if organizational culture is related to TQM, and whether TQM has a positive relationship with

organizational performance. This study will also look upon the effect of mixed culture on TQM

and how significant it can be in promoting TQM. This study is aimed at measuring the effect

that different virtual tools have in this context. Either it makes communication simpler or harder

within the team when completing a task. In particular, we wanted to find out the standard

culture that promotes flexibility, sustainability and growth while using TQM.

Research questions/Hypothesis


In this research, we analyze the data of those companies that used organizational culture to

implement TQM. In this study, the purpose is to study the following research questions:

• Is clan culture positively related to TQM?

• Is adhocracy culture positively related to TQM?

• Is market culture negatively associated with TQM?

• Is hierarchical culture negatively associated with TQM?

The following hypothesis have been developed collectively with the research questions:

• H1: Organizational culture is associated to TQM.

• H2: A quality for culture (mixed culture) has a certain relationship with TQM.

• H3: TQM has a definite relationship with organizational performance.

Methodology

Data Collection

The data was collected from 1600 Spanish companies. Personal interviews with general

managers and pre-structured questionnaires with closed questions were used to collect the

information data. Total number of valid questionnaires were 451 representing 25.2% of total

population. 251 responses came from industrial companies and 200 came from service

organizations. No significant differences were found between the two groups, eliminating

favoritism.

Total Quality Management: It is a multi-dimensional design. On the basis of its

dimensions, a scale has been developed to measure quality management consisting of eight


items. These items use a five-point Likert scale. After verifying their reliability (Cronbach’s α =

0.90), a new variable is formed which is a mean of these indicators (Espin et al., 2013).

Organizational culture: Organizational Culture Assessment Instrument developed by

Cameron and Quinn (1999) is used to measure organizational culture. This instrument has also

been used in previous research (Deshpande et al., 1993; Lau & Ngo, 2004; Muijen et al., 1999)

and some have validated it (Howard, 1988; Quinn & Spreitzer, 1991). To use the instruments,

four items that indicate four types of culture are used to measure organizational culture. Here,

every manager must designate 100 points to the four items. To conclude the result, type of

culture is calculated as the mean score on the items for each character for each type of culture.

Performance: There is no single measure for performance (Becker & Gerhart, 1996).

Therefore, 39 indicators are used in this study to get some outlook on overall performance. Each

indicator is rated on a five point Likert scale. The ‘global performance’ factor is used as a

standard for overall company’s performance. (Cronbach’s α = 0.76)

Control Variables: In this study, firm size, age and sector are used as control variables.

These all are indirectly related to TQM. Size of the company defines average number of

employees, age measures the number of years that the company has been operating in the

market, and sector is defined by a dummy variable whose value is zero.

Data Reference:

Gimenez-Espin, J. A., Jiménez-Jiménez, D., & Martínez-Costa, M. (2013, June). Organizational

culture for total quality management. Total Quality Management & Business Excellence,

24(5/6), 678-692. doi:10.1080/14783363.2012.707409


Analysis

This study examine the impact of organizational culture on TQM, finds out which

organizational culture is most suitable to TQM, and how TQM influences business

performance. Hierarchical linear regression analysis is used to test the hypotheses by using

control variables, type of corporate culture and TQM. Before analyzing the data statistically,

assumptions required for precise application of regression analysis were tested (Hair, Anderson,

Tatham, & Black, 2008).

Results

Empirical evidences were found in this study that suggested that TQM is realted or

organizational culture. Clan culture has no definite effect on TQM, but adhocracy culture does

effect TQM efficiently. As a result, customer orientation and innovation are related to TQM. It

is also found that market and hierarchical culture had a negative impact on TQM. The results

supported the idea of proposing a new culture- mixed culture or culture for quality. The results

also concluded that TQM has a significant and certain effect on business performance. The

impact is compatible with the recommendation reported in literature review.

Conclusion

Organizational culture is a key factor in implementing TQM. TQM gives the company a

competitive edge and also helps in making the business lucrative. It is one of the decisive

elements for a company to adopt business strategies. Customer focus is required for companies


to be successful and values in adhocracy culture allows innovation that helps the company in a

long run as new demands can be met by forming new goods or rendering new services to

customers. There is less freedom and responsibility, due to which hierarchical and market

cultures have shown a negative relationship with TQM. Moreover, market culture focus on

reducing costs related to employees, suppliers and customers which can deviate the company

from its original goals. Clan culture is oriented to flexibility but did not show significant impact

on TQM because of lack of external focus (Jabnoun & Sedrani, 2005; Thomas & William,

2001), yet it includes features like teamwork which are essential for implementing TQM.

A new culture is formed that contains internal and external orientation while focusing on

flexibility. It includes features of clan and adhocracy cultures. Support from previous studies

have been taken based on the model of Cameron and Quinn (1999), which also demanded for

additional culture (Deshpande et al., 1993; Lau & Ngo, 2004; Moorman, 1995; Obenchain &

Johnson, 2004; Stock et al., 2007).

Limitations to this study is that survey questionnaires were only given to general

managers of the company. Biases can occur as there is only one source of information. The

respondent may not reflect the workers view.

The instrument used to measure organizational culture assumes that there is a single

culture that is being followed in a company though there is a possibility that different

departments could be following different cultures.

It is suggested that more research should be conducted to analyze changes in

organizational culture of the company to help in implementing TQM. The questionnaires must

be sent to employees and managers also. Different cultures could appear in same organization


which can describe the behavior of different employees. Lastly, additional variables should be

included to develop an understanding of how organizational culture promote TQM including

human resource practices and market orientation.

References

Dahlgaard-Park, S. M., Chen, C., Jang, J., & Dahlgaard, J. J. (2013, February). Diagnosing and

prognosticating the quality movement – a review on the 25 years quality literature (1987–

2011). Total Quality Management & Business Excellence, 24(1/2), 1-18.

doi:10.1080/14783363.2012.756749

Dellana, S. A., & Hauser, R. D. (2000). Corporate culture's impact on a strategic approach to

quality. Mid-American Journal of Business, 15(1), 9. Retrieved February 18, 2016, from

Business Source Complete.

Gimenez-Espin, J. A., Jiménez-Jiménez, D., & Martínez-Costa, M. (2013, June). Organizational

culture for total quality management. Total Quality Management & Business Excellence,

24(5/6), 678-692. doi:10.1080/14783363.2012.707409

Hildebrandt, S. (1991, January). Quality culture and TQM. Total Quality Management, 2(1), 1-

15. Retrieved February 18, 2016, from Business Source Complete.

Kekale, T., Fecikova, I., & Kitaigorodskaia, N. (2004, October). To Make It Total': Quality

Management over Subcultures. Total Quality Management & Business Excellence, 15(8),

1093-1108. doi:10.1080/1478336042000255479

Total Quality Management Final Submission

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