JOURNAL OF QuaLity Journal of Quality Management MANAGEMENT Pergamon 5 (2000) 247-272 ‘www journalofqualitymanagement.com Top management leadership, employee empowerment, job satisfaction, and customer satisfaction in TQM organizations: an empirical study Isaiah O. Ugboro*, Kofi Obeng School of Business and Economics, North Carolina A&T State University, Greensboro, NC 27411, USA Received 1 June 1996; received in revised form 1 December 1999; accepted 1 April 2000 Abstract Top management leadership and employee empowerment are considered two of the most important principles of total quality management (TQM) because of their assumed relationship with customer satisfaction. As a result, many top management leadership and employee empowerment strategies and practices have been suggested in the management literature. However, few studies have been done to test this assumed relationship and determine which of these strategies and practices may be most effective in bringing about the intended results. This study surveyed organizations that have adopted TOM to determine the relationship between top management leadership, employees’ empowerment, job satisfaction, and customers’ satisfaction. The results reveal positive correlation between top management leadership, employee empowerment, job satisfaction, and customer satisfaction Employee empowerment and improved levels of job satisfaction are facilitated by top management leadership and commitment to the TQM goal of customer satisfaction by creating an organizational climate that emphasizes total quality and customer satisfaction. Effective strategies for achieving employee empowerment and job satisfaction, together with top management leadership roles in a TOM environment, are identified and discussed. © 2001 Elsevier Science Inc. All rights reserved, Keywords: Top management leadership; Employee employment; Customer satisfaction * Corresponding author. Tel: +1-336-334-7656 ext. 4028; fax: +1-336-334-7093. E-mail address: ugboroi@ncat.edu (1.0. Ugboro). 1084-8568/00/$ — sce front matter © 2001 Elsevier Science Inc. All rights reserved, Pll: $1084-8568(01)00023-2248 10. Ughoro, K. Obeng / Journal of Quality Management 5 (2000) 247-272 1. Introduction Today, more than ever, the long-term survival of many manufacturing and service organizations is considered to be inextricably linked to the ability of these organizations to produce goods and services that meet or exceed customers’ quality expectations. Therefore, organizations are searching for approaches to managing people and production systems in ways that assure the transformation of inputs into quality outputs that meet or exceed customers’ expectations. Total quality management (TQM), because of its focus on customer satisfaction, arguably is the most widely discussed approach to directing organizational efforts toward the goal of customer satisfaction. Its tenets are continuous improvement, top management leadership commitment to the goal of customer satisfaction, employee empow- erment, and customer focus. Advocates of TQM hold that the goal of customer satisfaction is achieved through top management commitment to creating an organizational climate that empowers employees and focuses all efforts on the goal of customer satisfaction. A positive relationship between leadership and commitment, and employee empowerment (leading to job satisfaction) with customer satisfaction is assumed. Both the trade and academic literatures on TQM suggest many different top leadership strategies and practices for empowering or involving employees in quality-related decision- making processes. However, few empirical studies, outside of the Malcolm Baldridge Award program, have been done to sufficiently document these relationships and to determine which of the many suggested strategies and practices are effective in bringing about the intended results (employee empowerment, job satisfaction, and superior customer satisfaction). This study surveyed organizations that formally introduced TQM as a means for identifying the management strategies and practices that are effective in bringing about employee empowerment, employee job satisfaction, and, ultimately, customer satisfaction. The objective of this study is to provide empirical assessment of the assumed relationship between top management leadership and commitment, employee empowerment, job satisfac- tion, and customer satisfaction. Such assessment should provide guidance to organizations in the design of empowerment and job satisfaction components of their TQM programs. Another objective is to provide empirical assessment for the TQM-based literature. 2. Literature review In almost all of the TQM literature, employee involvement, empowerment, and top management leadership and commitment are identified as crucial elements of a successfull TQM program (Bowen, Sichl, & Schneider, 1989; Brower, 1994; Camp, 1989; Deming, 1982; Mendelowitz, 1991; Roberts, 1994; Senge, 1994). Lawler (1994) referred to employee empowerment as one of the most important tenets of TQM. Thomas and Velthouse (1990) define empowerment “as intrinsic task motivation that manifests itself in four cognitions reflecting an individual’s orientation to his or her work roles.” By intrinsic task motivation, they mean “positively valued experiences that an individual derives directly from a task that produce motivation and satisfaction.” The four cognitions they identified are meaningfiulness, competence, impact, and choice. Meaningfulness is the value of the task goal or purpose in10. Ughoro, K. Obeng / Journal of Quality Management 5 (2000) 247-272 249 relation to the individual’s own ideals or standards, and competence is the degree to which a person can perform task activities skillfully. Impact, on the other hand, is the degree to which behavior is seen as making a difference in terms of accomplishing the purpose of the task, while choice is the causal responsibility for a person’s actions. A more operational-level and process-oriented definition of empowerment was offered by Bowen and Lawler (1992). They define empowerment “as sharing with front-line employees information about an organiza- tion’s performance, information about rewards based on the organization’s performance, knowledge that enables employees to understand and contribute to organizational perfor- mance, and giving employees the power to make decisions that influence organizational direction and performance.” In Zemke and Schaaf (1989), employee empowerment means turning the “front line” loose, and encouraging and rewarding employees to exercise initiative and imagination. One of the most frequently referenced definitions and constructs of empowerment has been offered by Conger and Kanungo (1988) who define empowerment as “a process of enhancing feelings of self-efficacy among organizational members through the identification of condi- tions that foster powerlessness, and through their removal by both formal organizational practices and informal techniques of providing efficacy information.” This definition implies strengthening the effort-to-performance expectancy or increasing employee feeling of self- efficacy. According to Conger and Kanungo, the effect of empowerment is “initiation and persistence of behavior by empowered employees to accomplish task objectives.” These definitions are derived from the management theory of power and authority delegation that gives an employee the right to control and use organizational resources to bring desired organizational outcomes. In practice, employee empowerment centers on strategies or interventions that strengthen employees’ self-efficacy or confidence in accomplishing task objectives. The management literature on employee empowerment identifies contextual factors and strategies that promote and support empowerment. For example, Burke (1986) suggests that a way to empower employees is to express confidence in them together with establishing realistic high- performance expectations for them. Block (1987) adds the creation of opportunities for employees to participate in decision-making and giving employees autonomy from bureau- cratic constraints as empowerment strategies. Comparatively, Benis and Nanus (1985) suggest the strategy of setting performance objectives for employees that are challenging and inspiring. Also, Hackman, Oldham, Janson, & Purdy (1975), Kanter (1979), Oldham (1976), and Strauss (1977) suggest performance-based reward systems and enriched jobs that provide autonomy and control, task identity, opportunities for career advancement, and task meaningfulness as ways to empower employees. At the organizational level, however, House (1988) and McClelland (1975) suggest that empowerment could be achieved through employee selection and training programs designed to provide required technical skills together with a culture that encourages self-determination and collaboration instead of competition. Thus, in TQM organizations, employee empowerment is operationalized by encouraging employees to respond to quality-related problems and giving them the resources and authority to do so. Also, employees are delegated authority and allocated resources to make quality improvement decisions in their jobs. In manufacturing environments, employees are empowered to accept or reject the quality of work-in-process and finished work (Rubinstein,250 10. Ughoro, K. Obeng / Journal of Quality Management 5 (2000) 247-272 1993). To Colzon (1987), the empowerment strategy is to free employees from the rigorous control imposed by instruction, policies, and orders and in their place give employees the freedom to take responsibility for their ideas, decisions, and actions. Obviously, from the preceding discussion, a primary objective of employee empowerment is to create a workforce that is energized by an enhanced ability to produce products or services that meet or exceed internal and external customers’ expectations. In the context of TOM, it is generally held that organizations best meet this objective when top management is committed to the goal of customer satisfaction and by creating an organizational climate that emphasizes customer satisfaction. It is generally held also that empowered employees have higher levels of job satisfaction and performance primarily because of their involvement in goal setting and in making decisions that affect their work. Blackburn and Rosen (1993) reported some preliminary evidence of these outcomes in their study of Baldridge Award- Winning Companies. However, other researches have failed to show unconditional relation- ships between involvement and participation in decision-making and improved performance (Cotton, Vollrath, Froggatt, Lengnick-Hall, & Jennings, 1988). Additionally, Bowen and Lawler (1992) and Lawler (1988) show that the effectiveness of empowerment and involvement in causing improved organizational performance is contingent upon other organizational factors such as a firm’s competitive strategies, technology, and the nature of the firm’s relationship with its customers. Similarly, studies on the relationship between job satisfaction and performance have failed to show a strong and unconditional link. For example, Iaffaldano and Mucinsky (1985) concluded from their analysis of results from several studies that at best, the relationship between job satisfaction and performance is very weak. Though this finding supports most previous studies, Petty, McGee, and Cavender (1984) found a higher and consistent positive correlation between individual job satisfaction and individual job performance. Also, Bhagat (1982) reported a positive relationship between employee job satisfaction and job perfor- mance. However, this relationship is moderated by time and organizational pressures to perform. A stronger relationship between job satisfaction and performance exists only when job satisfaction results in employee organizational commitments that in tur produce desirable organizational citizenship behavior (Williams & Anderson, 1991). This behavior is the willingness of an individual to engage in extra role behavior that is not generally considered a part of an individual’s job description. 2.1. Employee empowerment, organizational culture, and customer satisfaction TQM’s primary focus of customer satisfaction, measured by an organization’s ability to meet and exceed its customers’ expectations, often requires TQM organizations to maintain close contact with customers through postpurchase surveys, sales people, marketing, and customer relations departments (Hauser & Clausing, 1988). Additionally, the customer satisfaction focus requires the interactions between front-line employees and customers to be pleasant experiences especially for the customer. This latter requirement is facilitated by empowered and highly motivated employees who are satisfied with their jobs as a result of their empowerment, involvement, and perception of the emphasis that the organizational culture places on quality. Schlesinger and Heskett (1991) and Schlesinger and Zomitsky10. Ughoro, K. Obeng / Journal of Quality Management 5 (2000) 247-272 251 (1991) found that employees’ perception of service quality positively relates to both job satisfaction and employee self-perceived service capability. Also, Fulford and Enz (1995) found employee perception of empowerment to have an impact on employee loyalty, concen for others (including customers), and satisfaction. The implication of this finding is that enhancing employee service capability through empowerment contributes to employee job satisfaction, job commitment, pride of workmanship, and what Anderson, Rungtusanatham, and Schroeder (1994) called employee fulfillment or the degree to which employees feel that the organization continually satisfies their needs. Related findings reported by Tornow and Wiley (1991) are that employee attitudes — measured by feelings about reward for performance, work itself, management practices, satisfaction with the company, work group climate, and a culture for success — are related to customer satisfaction. Here, customer satisfaction is in terms of customer service, product quality, customer orientation, product functionality, and training. These measures of employee attitudes are similar to those of employee job satisfaction. Thus, employee perception of organizational climate and work content (job satisfaction) is related to customer satisfaction. These findings support and extend earlier works of Parkington and Schneider (1979), Schneider and Bowen (1985), and Schneider, Parkington, and Buxton (1980) that showed relationships between customer satisfaction and employee perception of an organiza tional culture or climate that emphasizes quality. 3. Hypotheses The premise of this study is that the adoption of TQM as a competitive strategy by an organization is a strategic decision. Therefore, it requires top management leadership and commitment to create an organizational climate/culture that promotes employee empower- ment and focuses on total quality and customer satisfaction. As Choi and Behling (1997) note, top management leadership is the basis of TQM. It is also one of the criteria in the Baldridge Award. These authors also note that many US companies, including Allied Signal and Xerox, stress the “importance of continuous leadership in the successful implementation of TQM.” There is no question, too, that top management leadership roles are essential to employee empowerment. In fact, one cannot empower employees without active top management involvement since empowerment involves power or role sharing. If employees are sutti- ciently empowered, it could translate into better employee behaviors, which subsequently could lead to increased customer satisfaction. Therefore, we formulate the following hypotheses to express the relationship between the concepts of top management leadership and commitment, and employee empowerment. Hypothesis 1: Top management leadership and commitment to total quality principles of participative management are positively associated with employee empowerment. An underlying feature of this hypothesis is the effect of top management leadership styles and commitment on empowerment. A leadership style can be classified as authoritarian if252 10. Ughoro, K. Obeng / Journal of Quality Management 5 (2000) 247-272 decisions are centralized, and there is little or no participation of employees in activities such as defining the organization’s quality mission, establishing performance goals, determining how work is to be done, or identifying how they are to be evaluated. With this type of leadership style, the potential for TQM’s success is quite slim indeed since employee involvement and empowerment cannot be achieved. Comparatively, a democratic leadership style that encourages employee participation is more suitable to employee empowerment and involvement and to the achievement of TQM objectives. Empowered employees have some control over their work, how the work is done, and the quality of the output. They have a great degree of task autonomy and identity. Because both task autonomy and identity are desirable job characteristics, we expect a positive relationship between employee empowerment and job satisfaction. This relationship is expressed in the following hypothesis: Hypothesis 2: Employee empowerment is positively associated with job satisfaction. It must be noted that by this hypothesis, we do not imply that job satisfaction is fully explained by employee empowerment to the exclusion of other factors such as promotion and career development opportunities, equitable reward, and recognition system, working conditions, supportive coworkers, and a challenging job. Employee empowerment is only a partial explanation of job satisfaction. However, if empowered employees are satisfied with their jobs, it may translate into improved product and customer service, which together increase customer satisfaction. A feeling of empowerment, too, may lead to a better job performance that may translate into better customer satisfaction. Therefore, we hypothesize that: Hypothesis 3a: Employee empowerment is positively associated with customer satisfaction. Hypothesis 3b: Employee job satisfaction is positively associated with customer satisfaction. 4. Methods 4.1. Data Testing the above hypotheses requires data on empowerment, job satisfaction, and top management leadership and commitment. The data were obtained from organizations that were chosen on the basis of their commitment to and implementation of the key elements of TQM espoused by Crosby (1979, 1984), Deming (1982), Juran (1964, 1986), and Taguchi and Clausing (1990). These elements include a definition of quality covering the full range of the production or service delivery system, top management leadership and commitment to total quality vision, values and customer satisfaction, employee empowerment and involve- ment, continuous improvement, involvement of suppliers and customers in the organization’s TQM efforts, and equitable reward systems. We chose members of the Association for Quality and Participation who are responsible for TQM in their respective organizations as an10. Ughoro, K. Obeng / Journal of Quality Management 5 (2000) 247-272 253 ideal population for the study. Consequently, a questionnaire was designed and sent with prepaid retumn postage to approximately 800 members, randomly selected from the associa- tion’s membership. A criterion for being selected was that the individual holds a management position and has responsibility for TQM. Also, copies of the questionnaire were sent to employees who were responsible for TQM in each of the companies that had won the Malcolm Baldridge Award for quality achievement since its inception. 5. Measures and scales The questionnaire required respondents to indicate the extent of their agreement or disagreement, and satisfaction or dissatisfaction (in the case of job satisfaction questions) with statements using a five-point Likert scale. These responses were to be based upon the experiences of the respondents with their respective TQM programs. The statements dealt with top management leadership and commitment to TQM, employee empowerment, TQM implementation strategies, employee job satisfaction, and customer satisfaction. 5.1. Employee empowerment In developing measures of employee empowerment, we relied upon the definition of the concept of empowerment offered by Conger and Kanungo (1988). This definition sees employee empowerment “as the removal of conditions that contribute to feelings of powerlessness and the creation of a work environment that strengthens an employee feeling of self-efficacy.” We identified three measures of empowerment and developed item statements for each measure. These measures are delegation of decision-making authority, participation or involvement in the decision-making process, and access to information and other organizational resources. With regard to the delegation of authority, there were four item statements that dealt with the authority to resolve customers’ quality- related problems, authority to accept or reject the quality of own work, or the work of others, and the authority to make quality-related decisions. Participation and involvement included four item statements that dealt with the existence of processes that bring multiple perspectives to bear on quality issues, employee involvement in the definition of the quality mission, the ease with which employees express quality improvement ideas, and employee participation in the quality improvement process. One statement dealt with the availability of job performance requirement information to employees. Respondents were to indicate the level of their agreement or disagreement to these statements using the following five-point Likert scale: strongly disagree=1, disagree=2, undecided=3, agree=4, and strongly agree=5. 5.2. Job satisfaction (employee fulfillment) Our conceptualization of the concept of job satisfaction was derived from the definition offered by Locke (1976), Wanous and Lawler (1972), and Reilly, Chatman, and Caldwell (1991). They defined job satisfaction as “a favorable attitude or pleasurable emotional state254 10. Ughoro, K. Obeng / Journal of Quality Management 5 (2000) 247-272 that results from a person’s job experience or a fit between a person and an organization.” Also, the experiences of organizations with successful TQM programs, especially those that have won the Malcolm Baldridge Quality Award, show that employee job satisfaction is influenced by improvements in work environment (location, space, and amenities). Other factors that influence job satisfaction are health and safety provisions, and the availability and quality of training programs, involvement in setting performance targets, process planning, opportunity for promotion, and career development. Additionally, employee job satisfaction is affected by the availability of information about the organization’s mission, values and management strategies, recognition schemes, and involvement in the total quality process. Therefore, we designed statements to assess the presence of factors that are associated with job satisfaction. Broadly, the satisfaction items were grouped under the following measures of job satisfaction: promotion and career advancement opportunity, equitable reward system, work environments that support productivity, enriched job, and participation. There were two statements for each of the other three measures except participation, which was measured with items, and enriched jobs, which was measured with one statement. Overall, there were 10 statements on job satisfaction for which we asked respondents to express their degree of satisfaction or dissatisfaction. The item statements of employee job satisfaction used are similar to those of the Minnesota Satisfaction Questionnaire (Dunnette, Campbell, & Hakel, 1967). 5.3. Customer satisfaction With TQM’s focus on quality products and services that meet or exceed customer expectation, organizational effectiveness has become synonymous with customer satisfac- tion. Berry, Parasuraman, and Zeithaml (1988), Berry, Zeithaml, and Parasuraman (1990), Bowen et al. (1989), and Garvin (1984, 1987) provide the most widely referenced definitions and measures of customer satisfaction. Berry et al. (1988) identified five principal measures used by customers to judge the quality of the services they receive. First, there are the tangibles that deal with the appearances of the physical facilities, equipment, personnel, and communication materials. Next is reliability, which is the ability to perform the promised service dependably and accurately. This is followed by responsiveness or the willingness to help customers and to provide prompt service. The fourth measure is assurance or the knowledge and courtesy of employees and their ability to convey trust and confidence to customers. Lastly, there is empathy, or the provision of caring, and individualized attention to customers. Garvin (1984), on the other hand, identified eight measures for evaluating product quality, which are performance, features, reliability, conformance, durability, serviceability, aes- thetics, and perceived quality in terms of the product’s reputation or how it compares to similar brands. These measures are the bases for assessing customers’ perceptions of product and service quality in this paper and are consistent with the customers’ satisfaction measures used by the General Accounting Office (1991). In manufacturing firms, we used product performance (which is a combination of features, reliability, and perceived quality), postpurchase serviceability, durability, con-10. Ughoro, K. Obeng / Journal of Quality Management 5 (2000) 247-272 255 formance, responsiveness, and empathy to customer complaints as measures of customer satisfaction. The same measures, with the exception of durability, were used to measure customer satisfaction in service firms. Thus, separate sets of customer satisfaction ratings were used for service and manufacturing firms. Respondents were asked to respond only to those that applied to their respective organizations and to rate their organizations from poor to excellent using the following Likert scale: poor= 1, below average=2, average=3, very good=4, and excellent=5. However, respondents from firms that considered themselves to be both manufacturing and service providers were asked to respond to both sets of questions. Specific statements were included in the survey that required respondents to rate their companies with respect to different measures of customer satisfaction. For conformance, the ratings regarded the ability of the organization’s product to meet design specifications, and the ability of the organization to provide service that meets customer expectations. For reliability, the ratings were with respect to defects, errors, and the rejection rate of the organization’s product, customer perception of product quality, and customer perception of service reliability. Durability ratings were to be made by respondents from manufacturing firms only and related to customer perception of product durability, quantity of customer returns, and cost of warranty payments. Serviceability ratings were in terms of on-time resolution of customers’ problems and the ability of the organization to provide accurate solutions to customer problems. Comparatively, responsiveness ratings were with respect to the existence of customer complaint handling procedures, customer accessibility to key personnel and staff, awareness of customer problems, and willingness of employees to provide prompt service to customers. Finally, empathy was rated according to an organiza- tion’s ability to provide individualized attention to customers, and courteous response to customer problems and inquiries. 5.4. Top management commitment and leadership Leadership and commitment were measured by designing questions to determine the extent to which top management is responsible for creating and sustaining an organizational climate or culture that supports the tenets of TQM. These principles include participative management, empowerment of all organization’s members to focus on and achieve total quality objectives, commitment to organizational systems that are designed to ensure total quality, and providing access to resources needed to achieve total quality goals as prescribed by Deming (1982). From these principles, three broad measures are used to describe top management leadership and commitment. They are leadership, commitment and involvement, and resource allocation. For each measure, a set of statements was developed to assess the levels to which respondents agreed or disagreed using the following five-point Likert scale: very dissatisfied=1, dissatisfied=2, somewhat satisfied=3, satisfied=4, and very satisi- fied=5. Five statements were developed to assess leadership roles. These statements referred to top management assumption of responsibility for initiating and maintaining quality goals and culture, continuous communication of top management vision and commitment to TQM to employees, the presence of policies and strategies based upon total quality concepts,256 10. Ughoro, K. Obeng / Journal of Quality Management 5 (2000) 247-272 credible reward systems that recognize employees for quality-related achievements, and policies to encourage employees to participate in the TQM process. Commitment and involvement were assessed with two statements that addressed top management involvement in reviewing progress on total quality efforts, and the amount of time top management spends on total quality issues. The resource allocation facet was assessed with two statements that focused on the provision of sufficient funds for equipment and training employees on essential TQM techniques. 5.5. Statistical method We used correlations to test the three hypotheses. Before doing so, we made some modifications to the data. Ifa measure had multiple items, their ratings were added to obtain a score for that measure. Also, we summed the scores for the measures to obtain composite scores for empowerment, customer satisfaction, job satisfaction, and top management leadership and commitment. Both scores are used in correlation analysis to relate empower- ment, customer satisfaction, job satisfaction, and top management leadership and commit- ment to each other. Thus, we obtain separate correlations for the composite scores and the measures. This allows us to test the effects of the measures on each other. Furthermore, we tested the reliability of the scales in two ways. First, we computed alpha coefficients for all item statements for empowerment, job satisfaction, customer service, and top leadership role and commitment separately. These coefficients allow us to determine if repeated samples will yield the same results. Second, we estimated the correlations among the items in each scale, and also among the items that fall under each measure. If the item statements measure the same things, then we should expect positive correlations between them. 6. Results Of the 800 mailed questionnaires, 300 responses were obtained. Out of this, 250 were usable; the rest were not because respondents either failed to answer all questions or declined to participate. A profile of the organizations to whom the questionnaires were sent is in Table 1. This table shows that our population was drawn from employees of different industries. Tables A.1—A.5 show the alpha values for each scale. Here, the alpha values are not for the separate measures but for all items used in each scale. The alpha values are more than .7 and fall into the acceptable range suggested in the literature. For example, Malhotra (1996) suggests alpha values of .6 or better for new scales and .7 or better for well-established scales. Also, Tables A.I—A.5 show that the correlations between the items are positive, which is what should be found. Tables A.1—A.5 show that while in general the respondents were more than somewhat satisfied with their jobs, there are three areas of concern. Most respondents were dissatisfied with target setting and career planning processes in their organizations, as well as with reward and recognition schemes. Also, most respondents were dissatisfied with career development opportunities and promotion in their organizations. In employee empowerment, the tables show two areas of concern. First, most employees did not feel that they had been10. Ughoro, K. Obeng / Journal of Quality Management 5 (2000) 247-272 287 Table 1 Profile of firms surveyed Business type Total number in survey Percent Electronics 6 0.75 ‘Transportation 30 3.76 Manufacturing 197 24.66 Health nR 901 Computers 3 0.38 Heating and air conditioning 1 0.13 Technology 4 5.13 Government 26 3.25 Food 19 2.38 Communication 4B 5.26 Consultancy 47 5.88 Insurance 19 2.38 Education 24 3.00 Utility 44 5.51 Petroleum 5 0.63 Employment agency 1 0.13 Retail 1 0.13 Parcel 2 0.25 Environmental 4 0.50 Others 218 26.91 Total 800 100.00 given sufficient authority to accept the quality of their own work. Second, most employees did not agree that they were actively involved in the definition of the quality missions and objectives of their organizations. These concerns undercut some of the objectives of TQM, which are to facilitate employee involvement, and change reward systems to include group and individual contributions. Table 2 shows the relationship between the measures of top management leadership and commitment and those of employee empowerment. Also shown is the correlation between the composite scores of top management leadership roles and empowerment. Irrespective Table 2 Correlation coefficients: top management leadership and employee empowerment Empowerment delegation of Empowerment: Empowerment: decision- participation/involvement Access to job ‘Top management composite making in decision-making requirements leadership score authority process information Leadership role - {6207 (.0001) 7560 (0001) 5499 (,0001) Commitment - 4749 (0001) £6324 (,0001) 4722 (,0001) Resource allocation - 4150 (0001) 5876 (.0001) 4418 (,0001) Composite score: top .7702 (.0000) management role258 10. Ughoro, K. Obeng / Journal of Quality Management 5 (2000) 247-272 of whether we use the composite or the individual scores of the measures, the correlations are significant and positive and support Hypothesis 1. For example, the correlations show that the roles and commitments of top leadership have very strong positive and significant associations with employee empowerment. The sizes of the coefficients suggest that the top management leadership role has a stronger association with employee empowerment than top management commitment or involvement in resource allocation. Likewise, the sizes of the correlation coefficients show a very strong association between top management leadership and empowerment in terms of employee participation and involvement in the organizational decision-making process. In terms of the sizes of the coefficients, top management commitment, involvement, and resource allocation are not strongly associated with empowerment in terms of delegation of decision-making authority and access to information. Hypothesis 2 is also supported by the correlations between the composite scores in Table 3. These correlations are statistically significant and show that employee empowerment is positively associated with job satisfaction. The correlations between the measures of employee empowerment and job satisfaction are also statistically significant. As in the previous discussion, the sizes of the correlation coefficients between the measures show strong associations between empowerment and job satisfaction. For example, empowering employees to participate and be involved in an organization is strongly associated with job satisfaction in terms of equitable reward. This empowerment is effective by being associated with employee satisfaction in terms of employee participation in the organization. Also, empowering employees by providing them access to job requirement information is associated with improvements in employee participation. Additionally, Table 3 shows that top management leadership and commitment has a strong positive relationship to employee satisfaction. Most notably, this leadership and commitment role has a positive and significant correlation with employee satisfaction in terms of equitable reward and participation. If employees are satisfied with their jobs from being empowered, and from top manage- ment leadership and commitment, we have argued that it could translate into increased customer satisfaction, which is the basis of most TQM programs. Table 4 shows the relationship between customer satisfaction, job satisfaction, and top management while Table 5 shows the relationship between employee empowerment and customer satisfaction. Again, we have provided both the correlation results for the composite scores and the measures. Consistent with Hypotheses 3a and 3b, the correlation between the composite scores for job satisfaction and customer satisfaction is positive and statistically significant. Similarly, there are positive and statistically significant relationships between customer satisfaction and top management leadership, and between customer satisfaction and employee empowerment. In no case is the relationship negative. Similarly, in no case is the direction of the relationship different in service and manufacturing firms. However, the sizes of the correlations in Table 4 show that in service firms, there appears to be a stronger relationship between both employee satisfaction with the availability of job requirement information (job content) and participation in the organization with customer satisfaction than in manufacturing firms. Similarly, the pattern that emerges from the sizes of the correlations indicates a stronger relationship between empowerment and customer satisfac- tion in service firms compared to manufacturing firms except in terms of reliability. These259 10. Ughoro, K. 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Obeng / Journal of Quality Management 5 (2000) 247-272 Table 5 Correlation coefficients: employee empowerment and customer satisfaction Employee empowerment Delegation of Participation| Empowerment: decision-making involvement in Access to composite score authority decision-making __ information Customer satisfaction in ‘manufacturing firms + Conformance - 2718 3722 2056 (0011) (0001) (olay + Reliability - 3919 5103, Ald (0069) (0001) (0001) + Durability - 2413 3767 3424 (0001) (0001) (0001) + Serviceability - 4492 4322 3339 (0001) (0001) (0001) Customer satisfaction in 4969 - - - manufacturing firms: (0001) summated Customer satisfaction in service firms + Conformance - 5251 4659 4469 (0001) (0001) (0001) + Reliability - 3633 3627 3314 (0001) (0001) (0001) + Serviceability - 5003 4436 ATI6 (0001) (0001) (0001) + Responsiveness - 5644 5101 4523 (0001) (0001) (0001) + Empathy - 5397 4901 4835 (0001) (0001) (0001) Customer satisfaction in 6460 - - - service firms: summated _(.0001) The levels of significance are in parentheses. differences in service and manufacturing firms in terms of the relationships between empowerment, top leadership, and commitment, and customer satisfaction are worthy of farther discussion. 7. Discussion and conclusion The overall results of this study support the findings of earlier studies that suggest the existence of relationships between top management leadership, employee empowerment (i.e. delegation of decision-making authority), and employee job satisfaction. This finding10. Ughoro, K. Obeng / Journal of Quality Management 5 (2000) 247-272 263 supports Fulford and Enz (1995) who found the perception of empowerment to impact employee loyalty, concern for others, and job satisfaction. Also, employee job satisfaction induced by job-related factors could in turn lead to improved customer satisfaction (Bhagat, 1982; Caldwell, 1984; Chacko, 1982; Ford, 1973; Hackman, 1977; Herzberg, 1968; Herzberg, Mausner, & Synderman, 1959; Kim, 1984; Latham & Steele, 1983; Lawler, Mohrman, & Ledford, 1992; MacGregor, 1960; Petty et al., 1984; Thomas & Velthouse, 1990; Vroom, 1964). Successfull TQM programs involve and empower employees, according to our study, by putting in place processes that bring multiple perspectives to bear on quality decisions, and delegating sufficient authority to employees to make both individual and collective decisions. Additionally, we found that these TQM organizations have communication systems that facilitate lateral and vertical flows of information critical to total quality objectives and actively involve employees in the definition of the organization’s quality mission and objectives. Furthermore, these programs empower employees to resolve customers’ com- plaints quickly and effectively, and continuously train employees on teamwork, problem recognition, and problem-solving skills. Another finding is that employees’ involvement or participation in TQM is facilitated by employee satisfaction with communication at lower organizational levels, availability of job requirement information, enhanced promotion, and development opportunities, and avail- ability of information about the organization’s values, vision, and strategies. Employee satisfaction with the organization’s reward and recognition systems, organizational adjust- ment to a total quality culture, training and retraining programs that facilitate continuous improvement, and health and safety provisions in the job environment also facilitate employee involvement and participation in TQM programs. These findings are consistent with the assertions of Caldwell (1984), Gufreda, Maynard, and Lytle (1990), Lawler et al. (1992), and Tannenbaum, Weschler, and Massarik (1961) that effective participative manage- ment requires an organizational culture that supports employee involvement (an element of employee empowerment). The resulting improvement in employee job satisfaction then leads to improved customer satisfaction. The findings also suggest a strong and active role for top management in creating an organizational culture that promotes total quality. These top management roles should include initiating and maintaining a total quality culture by being actively involved in reviewing progress of critical quality programs; making available sufficient resources to implement total quality initiatives; and devising credible reward systems that recognize employees’ and managers’ contributions to total quality objectives throughout the organization. Finally, we found a strong relationship between employee empowerment and job satisfaction, and between job satisfaction and customer satisfaction. Besides these findings, our study shows that employees are generally receptive to the idea of empowerment. However, they are not enthusiastic about being empowered to judge and either accept or reject the quality of the work of peers. This, perhaps, is due to employees’ desires to avoid interpersonal conflicts (that may result from the exercise of such authority) and to maintain group cohesiveness that contributes to effective teamwork and group performance (Idstein, 1993; Whitney & Smith, 1983). The value of this study is the empirical basis it provides for some frequently suggested management practices and strategies for achieving employee empowerment and participation264 10. Ughoro, K. Obeng / Journal of Quality Management 5 (2000) 247-272 in TQM organizations. The findings provide a prescriptive outline for the design and implementation of employee empowerment, top management leadership and commitment roles, and job satisfaction components of a TQM program. Additionally, the findings support previous studies that suggest a strong association between employee empowerment and customer satisfaction (¢.g., Miller & Monge, 1986; Wooldridge & Floyd, 1990). However, they disagree with those that found only a modest association between employee empower- ment and customer satisfaction (Adam, 1991; Locke & Schweiger, 1979). The findings can provide managers with a framework for formulating employee empowerment strategies, top management leadership roles based on what has worked in many organizations that have successful TQM programs. In service organizations, especially, a perception of satisfaction by customers, to a great extent, depends on the quality of the interaction between employees and the customer. As noted in the Literature Review (Schlesinger & Heskett, 1991; Schlesinger & Zomitsky, 1991), this interaction needs to be a pleasant experience for the customer. Obviously, employees who find their jobs unpleasant cannot convey pleasantness to customers during this interaction. This, according to our findings, underscores the importance of employees who are satisfied with their jobs as a result of their empowerment and perception of the emphasis that organizational culture places on quality. This, again, is facilitated by top management leadership and commitment to the creation of a total quality culture that emphasizes, among other things, employee empowerment in terms of their participation and involvement in the organizational decision-making processes and their access to job requirement information. Finally, there is an ongoing debate about the merits of TQM because not every organization has realized the associated benefits. This may not be due to the failure of TQM as a management philosophy but to its half-hearted implementation. As shown in this study, some organizations are willing to implement only those aspects of TQM supported by the existing organizational culture, and are not willing to undertake the total cultural transformation that TQM requires. For example, as we noted earlier, most employees did not feel that they had been given sufficient authority to reject or accept the quality of their own work. Second, most did not agree that they were actively involved in the definition of the organization’s total quality missions and objectives. These views, if widely held, can undermine the effectiveness of TQM efforts in these organizations. The fact that an organization claims to have a TQM program does not necessarily mean that TQM is fully and well implemented. 7.1. Implication for management A successful adoption of TQM as a competitive strategy requires both structural and cultural transformation. For example, our finding that associates the success of TQM programs with lateral and vertical flows of information has implication for the design of organizational communication and management information systems. Also, our finding, which associates employees’ commitment and participation with employee satisfaction with an organization’s adjustment process to a TQM culture, emphasizes the need for employee involvement in the cultural change or adjustment process. Finally, the strong relationships between top management leadership and commitment and employee empowerment and265 10. Ughoro, K. Obeng / Journal of Quality Management 5 (2000) 247-272 sosatpuared ur aur sat rqeqoad oy. 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