article

The Long-Run Stock Price Performance of Firms with Effective TQM Programs

Authors:

Kevin B. Hendricks,

Vinod R. SinghalAuthors Info & Claims

Management Science, Volume 47, Issue 3

Pages 359 - 368

Published: 01 March 2001 Publication History

Abstract

This paper documents the long-run stock price performance of firms with effective Total Quality Management TQM programs. The winning of quality awards is used as a proxy for effective TQM implementation. We compare stock price performance of award winners against various matched control groups for a five-year implementation period and a five-year postimplementation period. During the implementation period there is no difference in the stock price performance, but during the postimplementation period award winners significantly outperform firms in the various control groups. Depending on the control group used, the mean outperformance ranges from 38% to 46%. Our results clearly indicate that effective implementation of TQM principles and philosophies leads to significant wealth creation. Furthermore, our results should alleviate many of the concerns regarding the value of quality award systems. Overall, these systems are valuable in terms of recognizing TQM firms and promoting awareness of TQM.

References

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Digital Library

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The Long-Run Stock Price Performance of Firms with Effective TQM Programs
1. Applied computing
  1. Enterprise computing

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Published In

cover image Management Science

Management Science Volume 47, Issue 3

March 2001

155 pages

ISSN:0025-1909

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Publisher

INFORMS

Linthicum, MD, United States

Publication History

Published: 01 March 2001

Received: 19 May 1998

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https://dl.acm.org/doi/10.1287/msom.2022.1129
Babenko VOnegina VKravchenko YVitkovskyi YAnisimova O(2022)Management of Product Quality and Competitiveness of Agricultural Enterprises in the Context of International IntegrationInternational Journal of Information Technology Project Management10.4018/IJITPM.31184513:2(1-14)Online publication date: 14-Oct-2022
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