IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 58, NO.
2, MAY 2011
Assessing the Effectiveness of Quality Management
in a Global Context
Damien Power, Tobias Schoenherr, and Danny Samson
AbstractManufacturers are faced with growing obstacles to
quality coordination and assurance, as illustrated by the recent
quality failures for toy cars and pet food. The objective of this paper
is to contribute insight into these obstacles based on the theoretical
domain of competitive capability progression (CCP), as well as
the related concept of performance frontiers. Four hypotheses are
developed and tested with data collected in a worldwide survey of
manufacturing plants. In order to provide a relevant context for
both CCP and the theory of performance frontiers, we focus on two
sets of countries: more recently industrialized economies in Asia
(China, Taiwan, South Korea), and long-standing industrialized
economies in Western Europe (Germany, Finland, Italy, Sweden).
We analyze the effectiveness of quality management in these two
groups in terms of their impact on perceived and actual quality
performance, and offer explanations for the difficulties that exist
in global quality management. Our findings stress the importance
of having a common understanding of what defines good quality
across plants globally. Contributions to both theory and practice
are highlighted.
Index TermsCompetitive capability progression, global man-
ufacturing, quality management, survey, theory of performance
frontiers.
I. INTRODUCTION
UALITY has become a prerequisite for success in todays
Q competitive environment. However, at the same time, it
has become increasingly difficult to manage and ensure quality
coordination and assurance as manufacturing operations expand
into a global domain. What can go wrong if quality is not vigor-
ously managed throughout a global chain of supply was demon-
strated by the recent recalls of toy cars [69] and pet food [18].
It is, therefore, of utmost importance that quality is consistently
managed, especially when members of a supply chain operate
in a globally dispersed and complex environment. Such chain
entities may be at diametrically opposed extreme positions in
terms of dimensions such as industrialization, sophistication of
manufacturing methods, and investments in quality programs.
It is, therefore, important to understand variations in quality
management and performance in a global context.
Manuscript received February 18, 2010; revised August 23, 2010; accepted
September 8, 2010. Date of publication December 6, 2010; date of current ver-
sion April 20, 2011. Review of this manuscript was arranged by Department
Editor J. K. Liker.
D. Power and D. Samson are with the Department of Management and
Marketing, University of Melbourne, Melbourne, Vic. 3010, Australia (e-mail:
damien@unimelb.edu.au, d.samson@unimelb.edu.au).
T. Schoenherr is with the Department of Supply Chain Management, Eli
Broad Graduate School of Management, Michigan State University, East
Lansing, MI 48824 USA (e-mail: schoenherr@bus.msu.edu).
Digital Object Identifier 10.1109/TEM.2010.2081992
0018-9391/$26.00 2010 IEEE
307
The objective of this paper is to contribute insight into the vari-
ation in quality management and performance within a global
context. Based on the theoretical domains of competitive ca-
pability progression (CCP) and the related concept of perfor-
mance frontiers, we develop four hypotheses, which are tested
with data collected in a worldwide survey of manufacturing
plants. We focus on two sets of countries: more recently in-
dustrialized (MRI) economies in Asia (China, Taiwan, South
Korea), and long-standing industrialized (LSI) economies in
Western Europe (Germany, Finland, Italy, Sweden). We ana-
lyze quality management practice and performance in these two
regions, and offer explanations for the variations that exist on
these dimensions. Our results stress the importance of having a
common understanding of what defines good quality between
trading partners, especially when they are geographically dis-
persed, which is quite common in todays supply chains. Our
measures for quality management consist of total quality man-
agement, ISO 9000 certification, and Six Sigma practices and
processes, all of which are aimed in different ways at satisfying
customer requirements through error reduction and prevention;
in so doing, these practices are able to achieve improved process
stability and reduced process variability (as further detailed in
subsequent sections).
The paper makes the following contributions to both theory
and practice. First, we test the contention that not all quality
management improvement programs lead to better perceived
quality performance. This performance is assessed based on
survey respondents answers to questions assessing their per-
ception of their product quality compared to that of their com-
petitors. Our claim is based on the argument that one approach
to quality management does not fit all environments, which can
explain the sometimes vastly different methods for, and view-
points toward, quality management in different countries and/or
economic regions. We include the quality management pro-
grams of total quality management (TQM), ISO 9000 certifica-
tion, and Six Sigma. These three quality management programs
are used as they represent three approaches to the manage-
ment of quality that, whilst sharing some common elements,
have fundamental differences in their respective approach and
philosophy. Our contention is tested across the whole dataset,
undifferentiated by region, to set the stage for further analy-
sis. Second, we suggest that the impact of quality management
improvement programs (within a plant) on both perceived and
actual quality performance is influenced by the extent of in-
dustrialization within an economic region (we use our MRI
and LSI distinction introduced above to differentiate). While
perceived performance is assessed via the same qualitative as-
sessment as above, actual performance is measured by hard
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measures such as defect rates. And lastly, we show that perceived
quality and the change of actual quality performance (within a
plant) varies significantly based on the extent of industrialization
within an economic region (we compare the MRI versus the LSI
economies).
The rationale for our investigation is based on various calls for
future research, such as the one issued by Sousa and Voss [67],
who encourage a more detailed and solid understanding of
operations managements (OM) performance effects by using
finer quality performance models, and suggest the investigation
of the models relationships across different contexts (p. 106).
It is the global context, and more specifically the investigation
and comparison of quality practices and performance across
differentially industrialized regions, which is the focus of this
study. As such, the findings of this research have important
theoretical implications for investments in quality improvement
programs and for expectations regarding potential outcomes. In
addition, valuable practical advice is provided for practitioners
managing global supply chains.
II. LITERATURE REVIEW AND THEORETICAL FOUNDATION
Quality management (QM) is an established field with well-
developed definitional and conceptual foundations [67], [79].
Dean and Bowen [16] described QM as consisting of principles,
practices, and techniques: principles lead to the development of
practices, which are then implemented via techniques [79]. It
has therefore been suggested that empirical research in opera-
tions management should focus on practices, since it is mostly
through them that quality improvements are achieved [67], [79].
Consistent with this notion we focus in our study on the three
quality management practices of TQM, ISO 9000 certification,
and Six Sigma.
Various reviews on QM have been published over the years
with the aim to integrate and reflect on the work that has been
done in this area. Major contributions include the early re-
view of Ahire et al. [1], the more reflective and later account
by Sousa and Voss [67], as well as the review by Sila and
Ebrahimpour [65] on survey-based TQM research. Nair [45]
provided a meta-analysis of the relationship between quality
management practices and firm performance, and, most re-
cently, Molina-Azorn et al. [42] offered a review of empiri-
cal studies in quality management, environmental management,
and firm performance. Individual works include for example
Cristiano et al. [13], who investigated key factors in the suc-
cessful application of quality function deployment, Dreyfus
et al. [17], who explored the impact of just-in-time implemen-
tation and ISO 9000 certification on total quality management,
and Curkovic et al. [15], who researched the linkage between
total quality management and environmentally responsible man-
ufacturing. Further research has looked at the incorporation of
quality considerations into project time/cost tradeoff analysis
and decision making [52], and at an innovation diffusion model
of total quality management [2]. Despite the proliferation of
QM-related research, as illustrated by these references, there is
still the need for further discovery, particularly also as it relates
IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 58, NO. 2, MAY 2011
to the practice-performance relationship and the role of specific
contingencies [32].
Within this body of knowledge, our research is positioned as
follows. In one of the earliest cross-sectional studies of Western
organizations, Powell [53] found that systemic elements, tools,
and techniques of QM, such as process improvement, were not
related to creating advantage. Instead, tacit factors, such as hav-
ing an open culture and workforce empowerment, played a key
role. Samson and Terziovski [59] confirmed these findings in a
subsequent larger study. Further results from others have also
been mixed in terms of the impact of various operations man-
agement initiatives on performance (e.g., [10], [21]). Overall,
some studies do show strong positive relationships between QM
and performance, while others do not, warranting further inves-
tigation. Research also varies in the components found to be key
drivers of performance improvements. Explicating these issues
in regard to the role of specific contingencies has therefore been
suggested [10]. Our research in this paper extends and contin-
ues this body of literature by examining the impact of QM on
performance aspects and by explicating the contingent role of
industrialization. What makes our study unique is that we focus
on different regions of the world which are characterized by
differential maturity and degree of economic development. This
highlights one of the key contributions of this study: the use of
a single set of validated constructs across geographic regions in
which the role of economic development can be tested. Such in-
vestigations are important and necessary, since while Choi and
Eboch [10] pointed out the likelihood of contingent factors be-
ing the explanation for their proposed paradox, few researchers
have conducted studies that involved more than a single sample
from a single country. Studies such as Corbett et al. [12] pro-
vide a notable exception. These authors studied quality manage-
ment practices and performance in Asia and the South Pacific.
Unlike their study though, the present research measures and
compares the impact of QM on performance outcomes across
regions in different economic and geographic contexts. As such,
we compare companies in more recently industrialized nations
(China, Taiwan, South Korea) to firms in economies where in-
dustrial development has a longer history (Germany, Finland,
Italy, Sweden). With this multi-regional approach we will be
able to test hypotheses, and reveal the impact of differences in
external forces related to the economic environment of the plant.
To more fully develop this approach, we draw on the theory
of performance frontiers [60], [61], [73], as well as CCP [57],
according to which we expect efforts and impacts of programs,
such as QM, to be a function of the extent and maturity of prior
endeavors in the respective area. In other words, we expect plants
in long-standing industrialized economies, which are often quite
mature in their implementation of QM practices, to invest less
in these programs, when compared to plants in more recently
industrialized economies. Similarly, plants in MRI economies
are expected to have more opportunities for improvement (e.g.,
in reducing waste, such as defects). As a result, a stronger invest-
ment emphasis is expected in plants in such regions, compared
to regions in which waste reduction initiatives have been known
and tried for some time. Against this background one could ask
the question whether Powells [53] tacit factors are, on average,
POWER et al.: ASSESSING THE EFFECTIVENESS OF QUALITY MANAGEMENT IN A GLOBAL CONTEXT
different in plants located within more recently industrialized
economies when compared to their long-standing industrialized
counterparts. In addition, Reed et al. [56] suggested that organi-
zational factors do impact the effectiveness of QM, stressing the
importance of our investigation into the understanding of how
quality management practices may vary in different economic
contexts.
In the present study, we use the established QM practices of
total quality management (TQM), ISO 9000 certification, and
Six Sigma. First, TQM, which can be defined as a holistic man-
agement philosophy that strives for continuous improvement in
all functions of an organization ([33], p. 406), has received
considerable attention in academic research, as illustrated in re-
views of the concept (e.g., [66]). However, past research also
showed that not all TQM initiatives lead to improved perfor-
mance [59]. Choi and Eboch [10] suggested the use of theory
to explain such findings. Along these lines, the present research
explores economic context as having an impact on the utilization
and performance of TQM, applying the theories of performance
frontiers and competitive capability progression.
Second, ISO 9000 certification is a process that aims to
evaluate a firms ability to effectively design, produce, and de-
liver quality products and services ([68], p. 503). Similar to the
practice of TQM, ISO 9000 system certification has been shown
to produce mixed results. Recent studies in Australia and New
Zealand [19], [72] Taiwan [31], [38], and Iran [6] have shown
substantially varying impacts of such certification on perfor-
mance. Since no common measures have generally been used
across these and a host of other studies, it is difficult to fully as-
semble a clear understanding of which factors underlie these dif-
ferences across non-standard measures in differing countries. As
noted above, relevant theory (such as the theory of performance
frontiers and CCP) may explain why some inconsistencies have
been found in attempts to associate ISO 9000 practices with
higher performance. Companies are often required to achieve
such certification, and consider it as part of the cost of doing
business. Investments in certification, although one may view
it as a compliance activity, may also be accompanied by the
development of standardized processes and performance mea-
sures especially in MRI economies. In LSI economies, on the
other hand, the performance-lifting expectation may have al-
ready been transcended. Against this background, we study the
practice and performance impact of ISO 9000 certification in
two different regions of the world.
And third, Six Sigma, which has been widely studied and
reported on in recent years (e.g., [62], [79]), can be defined
as an organized, parallel-meso structure to reduce variation in
organizational processes by using improvement specialists, a
structured method, and performance metrics with the aim of
achieving strategic objectives ([62], p. 540). Lagrosen and
Lagrosen [36] considered contingent factors impacting Six
Sigma success, citing for example leadership commitment, in
their single country study in Sweden. Schroeder et al. [62] sug-
gested that Six Sigma differs from other quality improvement
initiatives on its organizational and structural factors. From this
we conclude that there is a need for, and Schroeder et al. [62]
call for, the identification of contingent factors relevant to the
309
implementation of Six Sigma, as well as its impact on perfor-
mance. It has furthermore been acknowledged that, as a result
of this difference and the strong reliance on the use of rigor-
ous statistical testing, Six Sigma is highly dependent on firm
or plant-level goal congruence in order for it to be success-
ful [25], [39]. As such, Six Sigma complements the other two
elements (TQM and ISO 9000 certification) used in this study
to assess quality management within a global context. We build
on this literature and the associated theoretical ideas in the next
section to develop our hypotheses.
III. HYPOTHESIS DEVELOPMENT
Prior research on the adoption and use of various improve-
ment programs within firms has noted that various contingent
factors play an important role in both the implementation deci-
sion and the ultimate outcomes [8], [35]. Coupled with this is
the expectation that, for all three of the QM programs consid-
ered in this study, the maturity of the initiative within a plant
will vary, or as Zeitz et al. [78] have said, the degree of en-
trenchment will differ between plants. The propensity to adopt
a specific improvement program, which may be driven by a
range of factors, combined with the temporal dimension asso-
ciated with maturity, begs the question as to whether benefits
derived from investment in such programs will be contingent on
both motivation and experience.
Successful investments in QM programs have been related
specifically to other contingencies as well, including knowledge
transfer [41] and the relationships between stages of implemen-
tation. As such, ISO 9000 is recommended to be implemented
with a two-stage approach consisting of assimilation and going
beyond what the standard requires [49]. Furthermore, Sila [64]
suggested the comparative role of institutional and contingency
effects on moderating TQM and ISO 9000 performance. Ye-
ung et al. [77] noted that different types of quality orientation,
combined with the attitudes of senior managers to quality, can
influence the effectiveness and applicability of the system in
different industrial environments. In addition, the effectiveness
of Six Sigma programs has been linked to specific quality im-
provement targets and goals [39], and commitment to a shared
vision [25].
While we focus on the described three QM programs of TQM,
ISO 9000 certification and Six Sigma, we note that they are not
meant to be mutually exclusivethey are three aspects of what
we define as Quality Management. As such, there must be
some overlap as they share common goals, philosophies and, in
some cases, methods. At the same time, however, they are dif-
ferent on some of thesein particular, the three programs will
differ in the philosophy related to the achievement of objec-
tives and the emphasis placed on specific methods (cf., [3]). For
example, while Six Sigma shares the objective of reduction in
process variation with TQM, and while both use statistical anal-
ysis and teamwork as fundamental components, TQM programs
usually focus on incremental improvement of separate processes
independently. In contrast, central to Six Sigma approaches are
typically the improvement of business-wide processes, the re-
duction of costs, and the elimination of non-value added steps.
310
This is reflected in their definitions and in the research refer-
enced above, and suggests that Six Sigma specifically aims to
reduce waste and cycle times at the business process level. In
addition, while ISO 9000 certification also focuses on process
standardization, it seeks to achieve this through the provision
of a standardized set of process objectives and protocols for
auditing the integrity of process documentation. On balance,
we therefore suggest that this difference in emphasis, combined
with the identified contingencies, has a differential impact on
quality. Specifically, one may expect that the general practice
of TQM, whose underlying principles can be said to be serving
as a foundation for the more specific ISO 9000 certification and
Six Sigma, exhibits the strongest impact on performance. This
forms our first hypothesis, which is formally stated as follows.
H1a: Not all quality management improvement programs lead to
better perceived competitive quality performance.
The theory on competitive capability progression has been
used to examine and explain the differences between effort and
impact of various quality improvement initiatives on competitive
quality performance outcomes (cf., [9], [11], [20]). The theory
suggests that not only do firms build competitive positions by
developing portfolios of capabilities [57], they also confront
the inevitable situation of diminishing returns as they approach
their performance frontier [60], [73]. The theoretical position
of a performance frontier represents the maximum output that
can be produced from any given set of inputs, given technical
considerations [60, p. 107]. This theory contends that technical
constraints of this nature are inherent in the degree of economic
development of a country. We argue that, relative to plants in
emerging economies, plants in industrialized nations are closer
to the theoretical limit of their asset frontier, and that these
plants have pushed their operating frontier over time to be in
close proximity to the asset frontier. Resource investments, and
the ability to further leverage the impact of those investments,
have therefore matured and are thus constrained for these plants.
Plants in emerging or more recently industrialized economies,
however, when averaged across a group of plants, are expected
to be operating in an environment where investment in quality
management programs are not subject to such constraints. The
impact of these investments will not have matured yet as there
is still scope to expand the performance frontier. This can be
realized by both an expansion of the asset investment and a
reduction of the gap between operations and additional resource
investments in quality over time. As such, the progression of
competitive capabilities, which is related to quality management
programs in the present study, is expected to be facilitated in
plants located in MRI or emerging economies, compared to
those in LSI economies.
Operationally, we expect this effect to be noticeable in plants
located in long-standing industrialized economies by their lower
levels of return on investments in quality management, and con-
versely, in plants in more recently industrialized economies
by their higher levels of return. Using a cross-regional study
design, we should be able to examine whether the expected
differences in this factor explain variance in competitive QM
effectiveness versus the opportunity set prescribed by competi-
IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 58, NO. 2, MAY 2011
tive capability progression and the theory of performance fron-
tiers [57], [60], [73].
In addition, the universal applicability of specific programs,
such as TQM, has been tested in cross-country studies and
still has been found to be unresolved vis-a-vis the debate be-
tween convergence and national specificity [58]. It has also been
found that TQM, being a team-based improvement program,
can be subject to the influence of national cultural characteris-
tics such as individualism/collectivism [54]. In this study, the
Asian countries (China, Taiwan, and South Korea) had a collec-
tivist bias [28], [29]. We would, therefore, also expect there to
be a cultural effect recorded for investment in TQM for these
countries.
As with H1a above, we differentiate between the three el-
ements of quality management (TQM, ISO 9000 certification,
Six Sigma) not on the basis of them being mutually exclusive,
but on them providing three different perspectives of the qual-
ity management prism. Against this context we hypothesize the
following.
H1b: The impact of investment in quality management improvement
programs on perceived competitive quality performance is greater
for plants in more recently industrialized economies than for those
in long-standing industrialized economies.
Numerous studies have been conducted over the years em-
pirically testing the relationship between investment in QM
programs and performance (e.g., [21], [33], [34], [59]). In his
meta-analysis reviewing research linking QM practices to per-
formance, Nair [45] noted that . . . a large variance in aggregate
performance can be attributed to QM practices. He furthermore
commented that this reaffirms the role of QM practices in im-
proving performance (p. 970). More specifically in regards to
the QM practices considered in our study, Zu et al. [79] sug-
gested that Six Sigma provides a distinct set of practices capa-
ble of complementing traditional QM programs and improving
performance measurably [79]. For ISO 9000, recent research
focusing on the 2000 standard also found that, although it is not
directly associated with quality improvement, growth in expe-
rience with the standard is associated with investment in TQM
and related programs [40].
Having established this apparent connection between prac-
tices and performance in the context of quality program invest-
ment, an issue not well understood is how this association will
vary in an international context. As argued above, it can be
expected that there will be variations in the ability to leverage
investments based on the extent of industrialization (i.e., based
on the theory of performance frontiers and CCP). Within this
context it is also not well understood which types of programs
are associated with measures of actual performance across na-
tional boundaries. Many studies in this area have relied mostly
on measures of perceived performance only. In a recent study
examining such relationships on an international basis, the inter-
pretation of the findings was at best equivocal, and the following
conclusion was drawn, together with the request for further re-
search [58]:
Interestingly, while there has been considerable theorizing as to the
prospect of convergence for management theory to date, empirical
POWER et al.: ASSESSING THE EFFECTIVENESS OF QUALITY MANAGEMENT IN A GLOBAL CONTEXT
findings supporting the convergence hypothesis side of the debate has
been rare, with much of the empirical findings tending to side with
the National Specificity argument. With the observed similarities in
the applicability of TQM between Japan and the USA and, to a lesser
extent, between Germany and Italy, the current study may, very well,
be one of only a handful to provide some preliminary evidence that
the adoption of certain management practices (in this case, TQM)
across different countries (e.g. Japan and the USA; Germany and
Italy) can possibly follow indistinguishable patterns (p. 58).
The gist of this statement is that despite there being signif-
icant commonalities between implementation across countries,
the relationship with performance improvement may vary sig-
nificantly across national boundaries. We argue that a proportion
of this variance can be attributed to extent of economic devel-
opment, and that the associated effects can be explained by
the theory of performance frontiers and CCP. Specifically, we
expect the impact of QM to have a greater impact on quality
improvement in MRI economies, due to the expectation that
their performance frontier has not yet fully been exploited and
their lower levels of capability maturity. In order to further test
these relationships across our country sets we formulate our next
hypothesis as follows:
H2a: The impact of investment in quality management improvement
programs on improvement in actual quality performance is greater
for plants in more recently industrialized economies than for those
in long-standing industrialized economies.
When assessing performance in academic research either sub-
jective (perceived) or objective (actual) performance measures
have been used. Our study uses both. The actual measure con-
sists of reject rates measured over a 2-year period, providing
a specific and objectively quantifiable means by which qual-
ity outcomes (change in reject rates, as a measure of quality
improvement) can be captured. The perceived measures ask
respondents how they rate themselves on quality-related as-
pects relative to their competition. This measure thus assesses
the confidence a plant manager may have in systems and pro-
cesses. It can, however, be argued that this is a perception
only, and therefore failing to be a reliable assessment of the
plants true quality capability. Nevertheless, perceptual mea-
sures of performance are and have been used extensively in
operations management research as a means for assessing per-
formance [22], [23], [26], [30], [59], [71], thus our inclusion of
this measure in the present study.
Since we have both actual and perceptual measures we are
able to test for significant differences on this basis. As such,
with the data being divided between the more recently indus-
trialized Asian plants and those in long-standing industrialized
Western European countries, the hypotheses regarding perfor-
mance frontiers and competitive capability progression can be
further validated in this way. For example, the perception of rel-
ative performance may be lower in a plant in an industrialized
country, since the plant is comparing itself to competitive rivals
at the same maturity level. Further, the change in defect rates
measured over a 2-year period may be very low, since the plant
can be expected to be at a more mature stage of competitive
progression [57] and to be closer to the performance frontier
[73]. The reverse may apply in a plant in an emerging economy,
311
where a perceived high level of performance in quality may be
accompanied by some measurable change in reject rates. This
would be consistent with the plant being at a less mature stage
in terms of competitive capability progression [57], and hav-
ing more scope for improvement due to a performance frontier
gap [73]. We therefore hypothesize the following:
H2b: Both the perception of current competitive quality performance
and actual improvement of reject rates are greater in plants in more
recently industrialized economies than for those in long-standing
industrialized economies.
IV. METHODOLOGY
A. Data Collection and Sample
Data collected by the Global Manufacturing Research Group
(GMRG) were used to test the hypotheses. The GMRG is a
multinational association of researchers dedicated to the world-
wide study and improvement of manufacturing practices [75].
Since the inception of the group in the 1980s, members have
administered a standardized survey in their respective countries
four times [76]. Rigorous translating and back-translating of
the English original is applied when converting the question-
naire into the native language of the country; ensuring equiv-
alency, validity and reliability of the translated surveys. Data
from previous rounds of the survey have been used to pro-
vide significant insight into global manufacturing and opera-
tions strategy (e.g., [4], [47], [61]). This global database was
thus deemed a formidable starting point for the assessment of
obstacles to quality coordination and assurance in global supply
chains.
For the present study data from the most recent round were
used, which were collected between 2006 and 2008. In order
to test the compatibility of quality management approaches and
perceptions in a global context we focused on two sets of coun-
tries. The first set consists of more recently industrialized na-
tions in Asia, and includes China, Taiwan and South Korea. The
second set comprises the long-standing industrialized Western
European counties of Germany, Finland, Italy, and Sweden. For
parsimony in subsequent analysis, rather than focusing on indi-
vidual nations, we considered the set of Asian countries as MRI
economies and the set of Western European countries as LSI
economies. The classification of the set of countries into these
two categories based on their degree of industrialization is con-
sistent with the Morgan Stanley Capital International Emerg-
ing Markets (MSCIEM) Index to benchmark economies [5].
As such, the MSCIEM Index classifies the countries of China,
Taiwan and South Korea as emerging.
The manufacturing site or plant formed the unit of analysis,
and all data were collected from plant managers within that
particular site. A total of 506 responses were available to test
our hypotheses. Demographic information about the dataset is
provided in Table I. As can be seen, the Asian plants had, in
general, more employees when compared to Western European
plants. The sample sizes for the Asian and Western European
groups were comparable.
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TABLE I
SAMPLE DEMOGRAPHICS
B. Measures
In this study we used a set of three quality management
initiatives and programs as the practices against which we com-
pare Asian and Western European countries. The first quality
management practice is total quality management (TQM), a
management framework aimed at continuously improving man-
ufacturing processes. Common techniques within TQM include
cross-functional product design, process management, supplier
quality management, and customer involvement [14]. A second
practice is ISO 9000 certification, an evaluation process aimed
at assessing a firms capability for effectively designing, produc-
ing and delivering products and services to the customer [68].
Desired outcomes of this approach are improved quality, ef-
ficiency and financial performance [8]. Six Sigma, which can
be defined as an organized and systematic method for strategic
process improvement and new product and service development
[. . .] to make dramatic reductions in customer defined defect
rates [39, p. 195], is the final quality management practice
we consider. Respondents were asked to indicate to what ex-
tent their company had invested resources, such as money, time
and/or people, in various programs over the last 2 years. The
scale ranged from not at all (value = 1) to to a great extent
(value = 7).
For the perceptual evaluation of quality performance we uti-
lized three assessments of quality commonly used in the litera-
ture [24]: product features, product performance, and perceived
overall product quality. Product features, unique aspects that
supplement the basic function of a product [24], can enable
differentiation [46] and can be a key ingredient of competitive
strategy [37]. Product performance, which relates to a products
primary operating characteristics [24], is a key ingredient of
quality [70], contributing also to performance measures such as
brand reputation, satisfaction and loyalty [63]. Perceived overall
product quality relates to inferences about quality, rather than
reality itself [24]. Customers deduce this type of quality from
tangible or intangible aspects of a product, including its image,
reputation, brand name and advertising [21]. Respondents were
asked to indicate on a seven-point scale whether their plants
performance is far worse (value = 1), competitive (value = 4),
or far better (value = 7) than the plants competitors.
IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 58, NO. 2, MAY 2011
For the evaluation of actual quality performance, we relied on
quantitative reject/return rates as indicated by the plant manager
at four distinct points of the value chain. As such, we asked each
respondent to specify 1) their percent of rejects of incoming
material, 2) their percent of rejects during processing (scrap
rate), 3) their percent of rejects at final inspection, and 4) their
percent of returns from the final customer. Each respondent was
requested to indicate these measurement values at the present
time, in addition to these values 2 years ago. The difference
between these two values then provides a sound metric for actual
quality improvement for the plant over this 2-year time period.
Two commonly used control variables are included, which
consist of firm size and industry. The total number of employees
of the plant is used as a proxy for firm size, and is used in all
regression models. An industry code was utilized to control for
potential industry effects for H1a, which used data from all
seven countries. The variable was not used for the subsequent
regression models for country comparisons (H1b and H2a) as
missing data within some countries negatively impacted the
degrees of freedom when this variable was included. Since the
survey is conducted in various countries with different national
classification systems, the industry was recoded into a GMRG-
developed code. All measures are provided in Appendix A.
Since we are dealing with a multi-country dataset, measure-
ment equivalence needs to be assessed [44]. To do so, we
mean-centered all variables by country and reran the analy-
ses reported in the following section. The results did not differ
significantly, suggesting measurement equivalence as not being
a serious threat to validity. Further, common method bias was
assessed via the traditional Harman one-factor test [51]. The
one-factor model exhibited significantly worse fit, suggesting
that common method bias is not of serious concern.
V. STATISTICAL ANALYSIS AND RESULTS
Hypothesis H1a suggested that not all quality improvement
programs lead to improved perceived quality performance. To
test this contention, we compared the contribution of the three
quality management initiatives to the variance in perceived com-
petitive quality performance. To do this we conducted ordinary
least-squares regression analysis. The results indicate that TQM
POWER et al.: ASSESSING THE EFFECTIVENESS OF QUALITY MANAGEMENT IN A GLOBAL CONTEXT 313

TABLE II
(a) COMPARATIVE EXPLANATION OF PERCEIVED QUALITY PERFORMANCE. (b) COMPARATIVE BETA VALUES

TABLE III Korea, recorded higher (and statistically significant) levels of

EXTENT OF INVESTMENT IN QUALITY PROGRAMS
investment (based on the mean score). An independent samples
t-test confirmed this in each of the three quality related prac-
tices. The values for the long-standing industrialized countries
were not statistically different.
A regression model was also used to test this hypothesis
(replicated in both the LSI and MRI groups) with the depen-
dant variables being the three separate measures of perceived
performance, and the independent variables being extent of in-
contributes significantly in all three cases. It must be noted,
vestment in each of TQM, ISO 9000 certification and Six Sigma.
however, that the strength of the total effect recorded is weak,
Plant size was used as the control variable. When comparing the
with the strongest being just under 0.06 based on the adjusted
proportion of variance in the three quality-related performance
R2 value. Six Sigma was found to be a significant, though
outcomes (perceived performance) explained by investment in
weak contributor only to improved product performance. No
each of these programs between the two country groups, fur-
impact was detected on product features and perceived quality.
ther significant differences are apparent. For all three variables
There were no significant effects recorded for the ISO 9000
measuring perceived competitive quality performance, the ef-
certification predictor, which is, however, not surprising given
fect of investment in quality improvement programs (as rep-
earlier research on the role of this practice in predicting firm
resented by the three independent variables) was a significant
performance. Neither industry sector nor firm size accounted
predictor in the more recently industrialized Asian economies
for significant variance in any of the dependent variables [see
group. The adjusted R2 values ranged from 0.066 to 0.120 (see
Table II(a) and (b)].
Table V(a)), and the primary predictor variable was in all three
To provide further insight we examined the mean values
cases the investment in TQM programs (see Table V(b)). By way
for extent of investment in the three quality related programs.
of contrast, no significant effect was recorded for these same re-
Higher levels of investment in TQM programs were recorded,
gression models for the plants in the long-standing European
followed by the investment in ISO 9000 certification and Six
industrialized economies sample (see Table VI).
Sigma. A one-sample t-test using a test point of 4 (expected
The difference in the beta coefficients of the MRI and LSI
value at the mid-point of the seven-point Likert scale) indicated
economies were statistically significant in most cases, as indi-
that investment in TQM programs was significantly higher than
cated by the chi-square difference tests. Specifically, the beta
the expected value, while investment in Six Sigma was signifi-
coefficients linking TQM and ISO 9000 certification to product
cantly lower. Investment in ISO 9000 certification was found to
features were statistically different at the 0.1 (2 = 3.389,
be less than the expected value but not at the required confidence
d.f. = 1) and 0.01 (2 = 6.885, d.f. = 1) significance level,
level (p > 0.05). Most striking was the gap recorded between
respectively. The impact of Six Sigma on product features was
investment in TQM and Six Sigma across the full data set (see
not significantly different across our two groups (2 = 2.278,
Table III).
d.f. = 1). The impact on product performance was statistically
In our hypothesis H1b, we suggested that the impact of QM
significant at the 0.01 level (2 = 8.617, d.f. = 1) for TQM,
improvement programs on perceived competitive quality perfor-
at the 0.01 level (2 = 9.356, d.f. = 1) for ISO 9000 cer-
mance is influenced by different levels of investment in different
tification, and at the 0.1 level (2 = 3.143, d.f. = 1) for
countries. Specifically, we hypothesized the influence of QM on
Six Sigma. And lastly, significant differences between the two
perceived performance to be greater in MRI economies when
groups in the models linking QM to overall perceived prod-
compared to their LSI counterparts. To investigate this, we com-
uct quality were statistically significant at the 0.001 level for
pared the extent of investment between the two country sets. As
TQM (2 = 12.051, d.f. = 1) and ISO 9000 certification
can be seen from Table IV, the plants in the more recently indus-
(2 = 11.045, d.f. = 1), but were not significant for Six
trialized economies, which included China, Taiwan and South
Sigma (2 = 2.132, d.f. = 1).
314 IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 58, NO. 2, MAY 2011

TABLE IV
COMPARATIVE INVESTMENT IN QUALITY PROGRAMS

TABLE V
IMPACT OF QM ON PERCEIVED QUALITY PERFORMANCE, MRI ECONOMIES

TABLE VI
IMPACT OF QM ON PERCEIVED QUALITY PERFORMANCE, LSI ECONOMIES

Hypothesis H2a suggested that the impact of investment in
quality improvement programs on actual quality performance
will be greater in MRI economies than in LSI economies. We
tested this contention with a regression model (replicated in
both the LSI and MRI groups) where the dependant variables
were actual performance improvement over a 2-year period (at
four different points in the value chain), and the independent
variables were extent of investment in each of TQM, ISO 9000
certification and Six Sigma. Plant size was used as the control
variable.
Some important differences are noted in the results for the
two groups of plants. For the plants from long-standing indus-
trialized European countries, a weak though significant effect is
recorded between investment in quality management programs
(R2 = 0.041, p < 0.05no significant individual Beta, but
all Betas are positive) and the improvement of reject rates at
the incoming goods stage only. By way of contrast, for the
more recently industrialized Asian emerging economy group,
medium/strong and significant effects are recorded (R2 =
0.233 p < 0.001 for incoming goods; R2 = 0.58 p < 0.05
for final inspection) between investments in quality management
programs and changes in reject rates for both incoming goods
and final inspection. Specifically, the Beta values indicate that
this effect in both cases can be attributed to a negative association
with investment in Six Sigma programs (beta = 0.498 p <
0.001 for incoming goods; beta = 0.212 p < 0.05 for final
inspection).
Similar as above, tests were conducted to assess statistically
significant differences between the beta coefficients of the MRI
and LSI economies. Specifically, the beta coefficients linking
ISO 9000 certification with improvement in reject rates at the
incoming material and processing stage, as well as with the
improvement in customer returns, were statistically different at
the 0.05 level (2 = 4.168, d.f. = 1), (2 = 6.874, d.f. =
1) and (2 = 4.256, d.f. = 1), respectively. In addition, the
impact of Six Sigma on the improvement of incoming material
rejects was significantly different across our two groups (2 =
2.833, d.f. = 1), as was the impact of TQM on the improvement
of reject rates at final inspection (2 = 3.780, d.f. = 1), both
at the 0.1 significance level.
Overall, these results suggest that the implementation of Six
Sigma resulted in an actual increase of reject rates. Based on
the rigorous application of statistical testing in Six Sigma, this
program has led the plant to see an increase in reject percentages
at both of these process stages. The implication of these find-
ings is that, in the long-standing industrialized European plants,
investment in quality programs is associated with improvement
of reject rates, while in the more recently industrialized Asian
POWER et al.: ASSESSING THE EFFECTIVENESS OF QUALITY MANAGEMENT IN A GLOBAL CONTEXT 315

TABLE VII
(a) IMPACT OF QM AND ACTUAL IMPROVEMENT IN QUALITY PERFORMANCE, MRI ECONOMIES. (b) IMPACT OF QM AND ACTUAL
IMPROVEMENT IN QUALITY PERFORMANCE, LSI ECONOMIES

plants it is largely associated with identification of quality prob- TABLE VIII

COMPARATIVE MEAN SCORES FOR PERCEIVED QUALITY PERFORMANCE AND
lems (i.e., Six Sigma is able to identify problems that may have ACTUAL IMPROVEMENT IN QUALITY PERFORMANCE (INDEPENDENT
gone unrecognized beforesee Table VII(a) and (b)). SAMPLES t-TEST)
Hypothesis H2b suggested the presence of significant dif-
ferences in perceived and actual quality performance between
different countries. In the more recently industrialized nations
group, perceived quality performance was greater in all three
cases, and at a statistically significant level for product features
and product performance. Rates of improvement in rejects at
incoming goods, in process, and for customer returns were also
all higher for these plants. Further, the difference between the
mean values for rates of improvement in customer returns be-
tween the two groups was statistically significant. In this case
the more recently industrialized Asian plants were recording an
almost 3% change in the reduction of customer returns over the
2-year period (see Table VIII).
level of statistical significance. Part of the explanation lies in the
comparison between levels of investment provided in Table III,
VI. DISCUSSION AND IMPLICATIONS where it is clear that TQM programs are more widely adopted
For H1a, the results indicate that investments in quality re- and embedded in plant operations. This is not surprising, given
lated practices contribute to improved quality outcomes across that TQM is the longest standing of the three methods, is now
the full dataset. Although the strengths of the effects are weak, mature and has become more widely understood. As such, it
they are significant and therefore noteworthy (see Table III). should be expected to play an important role in explaining qual-
When the individual beta values are examined, it is also apparent ity performance improvement in many plants, possibly even as
that the investment in TQM programs provides the major pro- a building block to pursue more specific QM initiatives such as
portion for the explanation of this variance, while both ISO 9000 ISO 9000 certification and Six Sigma. The result for ISO 9000
certification and Six Sigma do not contribute at an acceptable certification is consistent with other recent research that has
316
identified the role of isomorphic factors, as suggested by Sila
[64]:
According to institutional theory, organizations create structures
to look legitimate to important stakeholders. This is due in part to
regulations, procedures, and structures imposed on them by envi-
ronmental institutions. Organizations may be forced to change their
structures due to governmental pressures, imitate the structures of
other organizations as a result of competitive pressures, or conform
to normative standards developed by such organizations as accredi-
tation companies and consumer organizations [74]. ISO registration,
which is one of the institutional factors in the current study, is an
accreditation process that seeks to standardize systems for quality
around the world. Thus, companies need to conform to a number of
normative standards to obtain registration (p. 92).
Such normative forces and compliance (sometimes also coer-
cive) pressures in many plants could lead to, at best, a minimum
level of adoption in order to comply. It can also be expected
that maintenance of these standards can have a tendency to be
focused on maintaining minimum levels of performance, rather
than promoting continuous process improvement. This is con-
sistent also with earlier research indicating that investment in
ISO 9000 certification can be neutral in terms of performance
impacts. As cautioned by Sroufe and Curkovic [68], ISO qual-
ity standards ensure only that a quality system exists but cannot
guarantee its functionality (p. 504). The authors refer to nu-
merous prior studies illustrating that ISO certification does not
in itself ensure improved firm performance (e.g., [43], [48]), and
that it is unclear what level of resources need to be expended
in order to improve quality performance (e.g., [27], [50], [55]).
Along these lines, prior research has also noted that the man-
agers motives (i.e., in seeking certification) play a key role in the
determination of business performance as a result of ISO 9000
certification [72], a factor that could also affect this finding.
The result recorded for Six Sigma (a significant though weak
positive effect recorded for product performance only) may, in
part, be explained by the comparatively low levels of invest-
ment. However, this low level of investment may reflect the fact
that the training requirement for Six Sigma is significantly less
than for (say) TQM. In a typical Six Sigma program, training is
focused on developing a small group of experts, thus requiring
lower levels of investment. The rationale is that these experts
drive quality improvement as local champions. An alternate
explanation may lie in the lack of congruence between goal
setting and investment in Six Sigma programs. It has been pro-
posed that, in order for Six Sigma programs to be effective,
there must be a strong linkage to specific quality improvement
targets and goals [39]. This must be reinforced by management
commitment and the promotion of a shared vision [25]. To test
this contention, we conducted a follow-up test in which we cor-
related the extent of investment in Six Sigma programs with
a variable that measures the weight senior management places
on quality conformance as a competitive goal. No significant
relationship was recorded across the dataset (see Appendix B).
Our data thus indicate that investment in Six Sigma programs
may not be adequately supported by a clear focus on specific
quality-related goals.
IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 58, NO. 2, MAY 2011
Results for H1b provide evidence that investment in quality-
related programs is at higher levels in our sample drawn
from more recently industrialized Asian economies (Tables IV
through VI). Further, it is evident that this investment in these
plants yields perceived benefits, which are not recorded in plants
in our long-standing industrialized European sample. It is also
found that, similar to H1a, the major contribution in these more
recently industrialized economy plants comes from investment
in TQM programs. As was noted earlier, the strength of this
effect in the Asian countries, given that they have a cultural bias
toward collectivism and the team-based orientation of TQM, is
consistent with the results of recent studies [54]. However, it
is also evident that investment in quality management gener-
ally is stronger in the more recently industrialized Asian coun-
tries independent of this team based effect. In particular, invest-
ment in Six Sigma and ISO programs is substantially greater.
At the same time, TQM is the only program to contribute to
improved perceived outcomes (though the effect is weak) for
the long-standing industrialized European plants, indicating the
additional influence of other factors. The explanation of this
difference can therefore also, in part, be attributed to the dif-
ferential maturity of programs between these two groups based
on the maturity of industrialization. As such, further investment
in these programs could be difficult to maintain or to sustain
for the plants in the long-standing industrialized countries (i.e.,
the low-hanging fruit have already been picked). The theory
of performance frontiers combined with competitive capability
progression (CCP) [20], [57] provides insight, in that plants in
the long-standing industrialized nations can be expected to be,
on average, closer to the physical limits of asset investments
and thus be constrained in extending the performance fron-
tier [73]. In this sense, new investment in quality improvement
programs is likely to yield diminishing returns. For the plants
in more recently industrialized economies the opposite could be
expected, with capability lagging behind investment in physical
assets and programs, thus providing scope to extend the perfor-
mance frontier. This should then provide greater opportunity for
both investment and quantifiable returns in the area of quality
management.
The lack of improved performance resulting from investment
in ISO 9000 certification is common to both groups, with the
influence of isomorphic factors (identified above) on adoption
being again a likely partial explanation. For investment in Six
Sigma programs the result is also consistent in both groups.
The follow-up test reported above and included in Appendix B
(correlating the variables extent of investment in Six Sigma
and the weight senior management places on quality confor-
mance as a competitive goal), provides further support. This
indicates that a clear focus on specific quality-related goals is
not underpinning these investments in either group. Or put an-
other way, goal congruence (or lack thereof) is not a function of
the maturity of industrialization.
The results relevant to H2a [see Table VII(a) and (b)] indi-
cate that investment in quality management in long-standing
industrialized countries is generally associated with some im-
provement, albeit weak, of reject rates at the incoming goods
stage over the 2-year time period. In addition, while investment
POWER et al.: ASSESSING THE EFFECTIVENESS OF QUALITY MANAGEMENT IN A GLOBAL CONTEXT
in Six Sigma in these countries is not associated specifically
with an improvement of reject rates, investment in this program
in the more recently industrialized economies is associated with
an increase of reject rates, both for incoming goods and final
inspection. The general association recorded between invest-
ment in quality management and improvement of reject rates in
the long-standing industrialized plants is consistent with these
plants being at a higher level of experience (and competence)
with these methods.
Zeitz et al. [78] showed that a distinction can be made in terms
of adoption versus entrenchment when looking at quality rather than mitigating them), while the plants in the industrial-
management programs. As such, since the pursuit of excellence
in quality is largely built on philosophical underpinnings requir-
ing paradigm and cultural change, firms that adopt TQM, ISO
9000 certification and/or Six Sigma are at an application level
that is basic and thus low in potential for performance leverage.
On the other hand, entrenchment is characterized by practices
and their driving philosophies being hard-wired into the op-
erations and management of the plant. It is plausible that many
of the plants in the long-standing industrialized economies are
at this stage of their quality management experience, and there-
fore record some correlation with improvement of reject rates.
This position is perhaps also consistent with the effect not being
attributable to any specific practice (i.e., no specific beta value
accounting for the majority of the variance), but to the group of
practices as a whole. In the case of the plants in the more re-
cently industrialized Asian economies, the results are consistent
both with lower levels of entrenchment of the methodologies,
and with improvement potential required to make up a perfor-
mance frontier gap (plants in these countries are less advanced
in terms of competitive progression). Results for H1b indicate
a significant association between investment in TQM programs
and perceived quality improvement in the more recently in-
dustrialized Asian plants. In this case, however, no significant
association is recorded between these same investments and
changes in reject rates over a 2-year period. TQM is a set of
methodologies that are predicated on incremental change and
continuous improvement over time. As such, it can be expected
that perceived quality performance is associated with these in-
vestments, whereas the link to short-term changes in reject rates
may not be that obvious. It is also possible that plants in these
economiesalthough recording improvements through invest-
ment in TQM, which can partly be explained by a performance
frontier gapare still at lower levels of entrenchment than
their counterparts from long-standing industrialized economies.
In the case of Six Sigma the significant (and in the case of in-
coming goods, strongly significant) association with increased
reject rates in the more recently industrialized nations is of par-
ticular interest. At first sight, this would suggest a deterioration
as opposed to an improvement in plant performance. However,
we provide the following rational explanation for this develop-
ment. Six Sigma apparently manifests itself in these plants by
the identification and isolation of quality problems (resulting in
higher reject rates), rather than their mitigation (as is evident
in the long-standing industrialized plants, where investment in
quality management showed a weak, though significant, link
with improved reject rates for incoming goods). Before pro-
317
cesses can be improved, their capability must be established,
which in turn relies on the measurement of inputs and outputs.
Six Sigma is based on such rigorous measurement and statis-
tical analysis. It is, therefore, plausible that in the emerging
plants investment in these programs is providing data consis-
tent with this early stage in the improvement cycle. Plants in
these environments can be characterized as being at lower lev-
els of entrenchment. In other words, the plants in the more
recently industrialized economies are, on average, at a differ-
ent point in this cycle (i.e., at the stage of identifying problems
ized economies are using QM to improve reject rates (i.e., at
the stage of mitigating problems rather than identifying them).
It can also be argued that the strength of the relationship (par-
ticularly for the investment in Six Sigma, with increased reject
rates at incoming goods inspection) in the more recently indus-
trialized economy plants is indicative of a strong emphasis in
these plants on quantifying quality problems as well as perhaps
reflecting lower levels of maturity in the supply chain. This is
consistent with them being at an earlier stage in the adoption
versus entrenchment continuum, and at less advanced levels
in terms of competitive capability progression.
For H2b the results indicate some significant differences in
both perceived and actual quality between the two groups, as
hypothesized (see Table VIII). The more recently industrialized
Asian plants exhibited both higher levels of perceived perfor-
mance and greater improvement of reject rates (except for final
inspection). As such, further evidence is provided supporting
the propositions that these two groups are at different stages,
on average, in terms of both competitive capability progres-
sion [20], [57] and their position relative to performance fron-
tiers [73]. The explanation for the higher levels of perceived
competitive performance in the more recently industrialized
Asian nations is consistent with them operating in environments
in which they are able to better leverage investments in QM im-
provement programs (i.e., consistent with the results recorded
for H1a). The greater improvements of reject rates further re-
inforce this, and provide additional evidence for these plants
having more scope for competitive capability progression, as
well as likely being able to progress toward their performance
frontiers [57]. Or put another way, they are in a position to
leverage significant opportunities for improvement [73].
VII. CONCLUSION
A. Contributions to Theory
The findings of this study have important implications for
theories around both the motivation for investing in quality im-
provement programs and the expectations regarding potential
outcomes. Of the three quality improvement initiatives, TQM
was found to be the program that explained the majority of the
variance in perceived performance. TQM is a system of initia-
tives that can be assessed as being at a high level of maturity and
relative diffusion (as evidenced from the results in Table III).
Contrasted with ISO 9000 certification this was not surprising,
given that investment in ISO standards can often have a compli-
ance focus and therefore be subject to isomorphic institutional
318
pressures. It can be argued that, although ISO 9000 certifica-
tion (like TQM) is mature and highly diffused, the motivations
of many plant managers for adoption mitigate against ongoing
performance improvementthe focus is on compliance rather
than on continuous improvement [64]. Further support is also
found in the comparisons between the plants in the two country
sets: the same result was recorded for ISO 9000 certifications
contribution to performance, independent of the effects related
to competitive maturity recorded for TQM and Six Sigma. What
is of particular interest is the lack of contribution of investment
in Six Sigma. Prior studies have proposed that goal congru-
ence is of fundamental importance to the effectiveness of Six
Sigma programs, due to the particular focus on rigorous statis-
tical testing and the setting of ambitious improvement targets
(cf., [62]). Whereas TQM has long been predicated on the con-
cept of incremental continuous improvement, Six Sigma tends
to be more aggressive in both setting targets and goals, and
pursuing the specific goal of conformance. In this study, in-
vestment in Six Sigma explained no significant variance in per-
ceived performance, while the lack of correlation between the
emphasis placed on measuring quality conformance by senior
management and such investment was also apparent. This result
provides support for the importance of goal congruence for this
type of program. It may be argued that alignment of goals and
senior management support are also vital for the effectiveness
of a TQM program. The results indicate, however, that despite
this apparent lack of goal congruence, TQM was still the ma-
jor explanatory variable. The area where Six Sigma was found
to be providing the greatest contribution was in the identifica-
tion (rather than the rectification) of actual defects. Further, the
supply chain stages where these defects were being identified
were at incoming goods (receiving) and at final inspection, i.e.,
not during the process or operations stage within the plant.
In other words, one possible conclusion is that investment in
Six Sigma is (in this study) evidenced by a focus on inspection
rather than on process improvement. A corollary is that the lack
of goal congruence in the case of Six Sigma yields an inspec-
tion focus, rather than one with a bias toward ongoing process
improvement.
The differences recorded between the two groups of coun-
tries in this study also provide further theoretical insights. In
all hypothesized relationships, the plants in the more recently
industrialized Asian economies recorded higher levels of in-
vestment in the three quality initiatives, as well as significant
contributions to performance, compared to their long-standing
industrialized European counterparts. Independent of the pre-
dicted national culture/team-based effect for investment in TQM
programs [54], this evidence provides further support for both
the theories of competitive capability progression and perfor-
mance frontiers. The consistency of the performance-related
effects (performance explained by investment) recorded for the
more recently industrialized Asian plants, combined with the
evidence indicating higher levels of investment, as well as both
perceived and actual performance, point towards there being less
constraint on investment and higher potential returns in this sec-
tor. This provides evidence supportive of the notion that plants in
less industrially mature economies are positioned farther from
IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 58, NO. 2, MAY 2011
their performance frontier, and are thus both able to invest more
in programs and able to promote further progress, and are also in
a better position to leverage such investments for performance
improvement. The results for the respective quality initiatives
indicate that investment in TQM is more likely to yield posi-
tive returns in terms of performance improvement. Interestingly,
however, investment in Six Sigma provided the strongest cor-
relations with actual performance, which was in both cases the
identification of quality defects rather than their eradication.
We suggest that this result provides further evidence in support
of these plants (located in more recently industrialized Asian
economies) being, on average, at lower levels of competitive
maturity (competitive capability progression) and being farther
away from the physical limits of their respective performance
frontiers. For these plants, Six Sigma is being used to identify
quality problems that do not appear to be present at the same
levels in the industrialized European plants. At the same time,
the evidence is clear that these former plants are, on average,
able to leverage benefits from TQM programs, which are less
readily available to their counterparts in the long-standing in-
dustrialized group. The lack of any significant effect of ISO
9000 certification in this context again reinforces the sense that
investment in this area is performance improvement neutral, and
that the presence of isomorphic adoption drivers can have the
effect of reducing investment in this area to an order qualifier
status.
B. Contributions to Practice
The findings support the notion that, on average, investments
in quality-related programs lead to better performance. How-
ever, it is important to recognize that not all programs have the
same effect. As such, the practice of TQM had the biggest impact
on all three quality performance measures, whereas Six Sigma
only had a marginal impact on product performance and over-
all quality. Practitioners are therefore advised to understand the
differences between the practice of TQM and the practice of Six
Sigma. The investment in TQM likely produces the best return,
but may also require higher levels of investment, (i.e., it may
cost more as it requires extensive training across the organiza-
tion), commitment and culture change. Our results also suggest
that ISO 9000 certification does not directly impact quality per-
formance. While this is a finding that goes against the objective
of obtaining this certification, it is consistent with prior research
that has labeled it as more likely to promote compliance rather
than continuous improvement (e.g., [64]). Before embarking on
the quest to get ISO 9000 certified, managers should be aware
that certification of itself is not likely to positively impact plant
performance.
A further contribution to practice is our finding that the impact
of QM improvement programs on perceived competitive quality
performance is influenced by different levels of investment in
different countries. As such, plants in our more recently indus-
trialized Asian sample reported greater investments in TQM,
Six Sigma and ISO 9000 certification than their long-standing
industrialized Western European counterparts. Furthermore, the
benefits received from these investments were greater among
POWER et al.: ASSESSING THE EFFECTIVENESS OF QUALITY MANAGEMENT IN A GLOBAL CONTEXT
the more recently industrialized Asian sample. For managers in
this latter group of nations these findings imply that investments
in QM programs are absolutely crucial for improved quality per-
formance over time, whereas the significance of the return on
investment may be limited to maintaining current levels of per-
formance in the long-standing industrialized group. Operations
strategies should therefore be tailored to the respective economic
environment and the maturity of the operations systems within
plants.
Yet another contribution to practice lies in our observation
that there are differences in the perception of competitive qual-
ity performance and actual quality performance that can be
explained by the maturity of economic development and geo-
graphic region. As such, investment in Six Sigma has led to
an increase in quality reject rates among the more recently in-
dustrialized Asian sample. The meticulous data collection and
analysis as stipulated by Six Sigma can be expected to result in
more defects being discovered in less mature quality systems as
a precursor to time being spent on improving the actual quality of
the products through process improvement. In order to improve
processes managers need to be firstly able to assess process
capability, and our finding re-enforces this notion. The finding
should be encouraging for practitioners as it offers motivation
to continue with rigorous measurement, since once Six Sigma
has been thoroughly adopted and established, defect rates will
likely decrease. Analogies can be found in the literature on en-
terprise systems implementations, benefits from which are often
only achieved sometime after the implementation (cf., [7]). It
is important to recognize that simply the implementation of Six
Sigma does not lead to success. It is how the data collected and
analyzed with Six Sigma are used that can make a difference,
along with having the will to persevere.
A final contribution to industry practice lies in the finding that
the perception of competitive quality performance and actual
quality performance differs between plants in different coun-
tries. As such, plants in our more recently industrialized Asian
sample had, on average, higher scores on the perceived qual-
ity performance measures. In addition, these plants recorded a
greater level of improvement in terms of product returns from
customers. This result is encouraging for managers in these
plants in that it indicates that they are rapidly achieving higher
quality levels. At the same time it is a warning for plant man-
agers in the long-standing industrialized nations that the plants
in emerging economies are developing significant competitive
quality performance (i.e., as well as cost), and that in many in-
dustries this is already commonplace. These managers should
therefore not be complacent, and despite their high quality lev-
els, should strive for further continuous improvement.
C. Limitations and Future Research Directions
As with any research, certain limitations exist that can how-
ever serve as exciting opportunities for future research. As such,
we were constrained in our research by the countries available
in the GMRG dataset. It would have been insightful to also com-
pare our findings to the Japanese setting, the origin of the modern
quality movement, as well as to include countries such as the
319
U.K. or France in Europe, and India in Asia. These and other
countries would have provided additional and more fine-grained
insight into our hypotheses. Future research is encouraged in this
regard.
Furthermore, it is likely that there is a connection of European
with Asian plants via the supply chain. However, it is highly
unlikely that a survey respondent in Europe was connected to a
survey respondent in Asia in our dataseta true and direct link
via a supply chain is, therefore, only implied, and not given. We
leave this more focused investigation for future research, but also
note that the collection of such data will be extremely difficult. It
is already problematic to collect dyadic data in a single country.
With dyads now spanning multiple countries or event continents,
this endeavor becomes much more challenging.
Finally, in some of the Asian countries in this study social
desirability may have come into play, and perceptions of per-
formance may have been difficult to differentiate from actual
objective performance. We recognize that these factors could
provide further explanation of some relationships. In addition,
we were not able to include any cultural component in the anal-
ysis. Future research is thus encouraged in investigating how
culture might influence the practice and perception of QM.
D. Conclusion
Quality coordination and assurance in a global context is
faced with ever-changing obstacles and challenges. It was the
aim of this paper to bring insight into this area, provide con-
tributions to theory development, and offer insight for prac-
ticing managers. We analyzed quality management investment
and performance in the two regions, and offered explanations
for the differences in both perceived and actual outcomes. Our
findings stressed the importance of having a common under-
standing of what defines good quality across diverse economic
regions. Overall, the paper makes the following contributions.
First, we tested the contention that not all quality management
improvement programs lead to better perceived quality perfor-
mance. Our claim was based on the argument that one approach
to quality management does not fit all, which can explain the
sometimes vastly different methods for, and viewpoints toward,
quality management in different countries and/or economic re-
gions. Second, we suggested that the impact of quality manage-
ment improvement programs on perceived competitive quality
performance is influenced by different levels of investment in
different countries based on the maturity of economic develop-
ment. Third, we investigated the hypothesis that investments in
quality management programs are correlated with better actual
quality performance. And fourth, we examined the relationship
between perceived quality performance and actual quality per-
formance, which we propose to be different across economic
regions. We found intriguing insight into what practices are cor-
related with actual quality performance, and whether perceived
performance translates into actual quality performance. Overall,
we followed various calls for future research regarding the role
of contingent factors in operations management, such as that is-
sued by Sousa and Voss [67]. The findings of this research have
important implications for understanding the role of theories
320
explaining how degree and maturity of economic development
can influence both the extent and impact of investment in quality
management at the plant level.
APPENDIX A
QUESTIONNAIRE ITEMS
A.1. Quality Management Practices
In the last 2 years, to what extent has the plant invested
resources (money, time and/or people) in programs in the fol-
lowing areas? Please mark a number.
A.2. Perceived Quality Performance
For each of the items listed below, how does your plants
performance compare with your competitors? Please mark a
number.
A.3. Actual Quality Performance
What are the plants approximate reject/return percentages at
each of the following stages now and 2 years ago?
APPENDIX B
CORRELATIONS: QUALITY GOAL FOCUS/INVESTMENT IN SIX
SIGMA PROGRAMS
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322 IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 58, NO. 2, MAY 2011

Damien Power received the Bachelors degree in Danny Samson received the Bachelors degree (with
business (manufacturing management), the Masters honors) in chemical engineering from the University
degree in operations management (by research) and of New South Wales, Sydney, Australia, and the Ph.D.
the Ph.D. degree in operations management, all from degree in management from the Australian Graduate
Monash University, Melbourne, Australia. School of Management, Sydney.
He is currently an Associate Professor of opera- In 1988, he joined as a Professor of manage-
tions management in the Department of Management ment in the Department of Management and Market-
and Marketing, University of Melbourne, Melbourne, ing, University of Melbourne, Melbourne, Australia,
Australia. He has been an Instructor on the Ameri- where he was the Head of the Department of Man-
can Production and Inventory Control Society CPIM agement in the Faculty of Economics and Commerce
program for over 10 years. His research interests in- from 2002 to 2004. He is currently the Director of
clude lean manufacturing, quality management, supply chain management and the Foundation for Sustainable Economic Development at the University of
business to business e-commerce, lean manufacturing systems, and project man- Melbourne. He was involved in various positions which include as an Engineer,
agement. He also has extensive management experience gained over more than a Lecturer at AGSM, an Assistant Professor of business administration at the
a 20 year period across a range of industries including electronics, metering, University of Illinois, and a Professor of manufacturing management at the Mel-
and food. He was in operations, manufacturing, and supply management with bourne Business School, University of Melbourne. During his academic career
multi-national organizations such as Schlumberger RMS Australia and NEC he has been a Consultant to senior executives in most manufacturing industries
Australia, where he was involved in systems implementation, tender negotia- and in numerous service sector organizations. He is the author or coauthor of
tion, new product localization, technology transfer, and facility management. He more than 100 academic research papers published in journals, including the
is the author or coauthor of more than 80 refereed international journal articles Academy of Management Executive, Journal of the Operational Research Soci-
and conference papers and coedited/coauthored three books. ety, European Journal of Operational Research, Journal of Business Research,
Dr. Power a certified Fellow of American Production and Inventory Control International Journal of Management Science, ASTIN Bulletin, Interfaces, In-
Society at the level of CFPIM. ternational Journal of Technology Management, Australian Accounting Review,
Decision Support Systems, International Journal of Production and Operations
Management, Journal of Risk and Insurance, Journal of Management, and
Journal of Operations Management, where he is Associate Editor. He is the
author of several books which include Managerial Decision Analysis (Irwin
1987, Chicago), Production and Operations Management (Prentice Hall, 1991,
Melbourne), Management for Engineers (three editions) (Prentice Hall, 1999,
Melbourne), Patterns of Excellence (FT Publications, 2003, London).
Tobias Schoenherr received the M.B. and B.Sc. de-
grees and the Ph.D. degree in operations manage-
ment and decision sciences, all from Indiana Uni-
versity, Bloomington, and the Diplom-Betriebswirt
(FH) degree from the European School of Business,
Reutlingen, Germany.
He is currently an Assistant Professor of sup-
ply chain management in the Department of Supply
Chain Management, Eli Broad Graduate School of
Management, Michigan State University, East Lans-
ing. He is also an American Production and Inventory
Control Society (APICS) Certified Supply Chain Professional. He was involved
in teaching at Indiana University, Eastern Michigan University, the Interna-
tional Graduate School of Business, Zagreb, Croatia, and the Central European
University, Budapest, Hungary. His research interests include strategic supply
chain management, including strategic sourcing, (global) operations strategy,
use of technology in SCM, and outsourcing. He is author or coauthor of papers
published or forthcoming in Management Science, Journal of Operations Man-
agement, Production and Operations Management Journal, Journal of Busi-
ness Logistics, International Journal of Production Research, Journal of Supply
Chain Management, International Journal of Operations and Production Man-
agement, and others.