THE EFFECT OF TOTAL QUALITY

MANAGEMENT ON ORGANIZATIONAL
PERFORMANCE IN BAHIR DAR TEXTILE
SHARE COMPANY
By:

Aregash Mandie
 
Advisor
Dr. Wasihun Tiku
 

June,2018
D/M, Ethiopia
 Out lines
 Background of the Study
 Statement of the Problem
 Objectives of the Study
 General Objective
 Specific Objectives
 Hypothesis of the study
 Scope and Limitation of the Study
 Conceptual Framework
 Research Design
 Data Source and Collection Method
 Sample size and Sampling technique
 Method of Data Analysis
 Model specification
 Reliability and Validity of the Instrument
 Data Presentation, Analysis and Interpretation
 Summary Of Findings, Conclusions and Recommendations
 Background of the Study

 There are many definitions of Total Quality Management

• According to Kanji (1997), TQM is the culture of an

organization to commit to customer satisfaction through
continuous improvement.
 This culture varies from one country to another country and
between different industries, but has certain essential
principles, which can be implemented to secure greater market
share, increase profit and reduce costs (Kanji, 1997).
 Cont…

The benefits of quality improvement can not only be reflected

on decreasing costs, but also on maximizing business profits.

Thus, the study of the relationship between quality

management and firm performance is critical for managers

and researchers to better understand the effects of quality

management on different levels of firm performance.

 Cont…
• Since 1989s, TQM has been regarded as one of
effective ways for firms to improve their competitive
advantage.

• Leading pioneers in the quality area, such as

(Deming, 1986) and (Juran, 1993), asserted that
competitive advantage can be gained by providing
quality products or services.
 Cont…
• From the competitive advantage perspective,
organizations need to identify and understand the link
between total quality management and
organizational performance with the intention of
achieving competitive advantage.

• Therefore, this study intended to seek to know the effect

of total quality management on organizational
performance in textile industry specifically in Bahir
Dar Textile Share company.
 Statement of the Problem

 The adoption of the TQM ideology by most organization has

been hampered due to their non compliance with the
procedures and principles of TQM implementation.
 This has accounted for the failure of most organization in matting
up to their expected target from implementing this ideology
(Alkhafaji etal, 1998).
 Consequently, Lack of proper total quality management
implementation may result in losses which may eventually lead to
high defect rate, poor quality product, low market share, low
output level and low profitability.
 Cont…
 The question of TQM and organizational performance has not
exhaustively under investigation in Ethiopian context particularly
in textile industry.
 Thus, this thesis proposes a framework to investigate the current
status of TQM implementation and its effect on organizational
performance in Bahir Dar Textile Share Company. Accordingly
making TQM initiatives more efficient and active in Ethiopian
Textile Industry.
 Objectives of the Study

General Objective
The main objective of the study is to investigate the effect of total quality management
on organizational performance in Bahir Ddar Textile Share Company.
Specific Objectives
1.To examine the effect of continuous improvement on organizational performance in
BDTSC.
2.To evaluate the effect of customer focus on organizational performance in BDTSC.
3.To evaluate the effect of process management on organizational performance in
BDTSC.
4.To examine the effect of supplier quality management on organizational
performance in BDTSC.
5.To examine the effect of top management commitment on organizational
performance in the BDTSC.

•
 Hypothesis of the Study

H1:Continuous improvement has a positive significant

effect on organizational performance.
H2:Customer focus has positive significant effect on
organizational performance.
H3: Process management has a positive significant
effect on organizational performance.
H4:Supplier quality management has a positive
significant effect on organizational performance.
H5:Top management commitment has a positive
significant effect on organizational performance.
 Scope of the Study

Geographically delimit on
 Bahir Dar Textile Share Company.
 Conceptually delimit on motivational factors like
 continiuous improvement, customer focus, process
management, supplier quality management and top
management commitment and its effect on organizational
performance.
 Methodologically, the study
 apples explanatory research design with quantitative
approach
 simple random sampling and stratified random sampling
design technique would be used .
 Structural Self-administered questionnaires with closed
ended questions would be used .
 Limitation of the Research

 Conceptually this research was limited to only five

total quality management dimension.
 Geographically this research was limited only in
randomly selected Bahir Dar Textile Share textile
Company, which does not include all factories in
Ethiopia.
 Methodologically, the study employed only
questionnaire which is primary source of data.
Meanwhile, the result was probably been different or
more investigative, if consideration would have been
made to conduct interview to augment the study
findings with a qualitative data.
Conceptual Framework
 RESEARCH METHODOLOGY
 

Research Design
• For this study, the researcher applied the
explanatory type of design with a
quantitative method to analyze the data.
Data Sources
 The sources of the data would entirely from
Primary- structural self-administered
questionnaires.
 Data Collection Method

• Self-administered questionnaires with closed ended

questions which rated five points Likert scale were used.
• It has two parts.
 The first part contained demographic information
 The second part is questions designed to answer the
specific objectives that is stated.
• The instrument that it is employed in this research is a
questionnaire adapted from other researchers who
measured the scale in different studies.
• Shafiq et al (2017); Al-Damen (2017); Aysel et al.(2014);
Jaafreh and Al-abedallat (2013).
Sample Size and Sampling Technique
Sampling technique
• In selecting samples to be included in this
study, simple random sampling and
stratified random sampling design was used.
• The criterion for creation of strata was
department units. By taking in to
consideration the number of employees in
each departments the target population was
stratified.
 cont…
• To determine sample size, simplified formula
provided by Yamane (1967) is used i.e.

The number of samples is determined proportionally by

considering the number of employees in each
department of the Bahir Dar Textile Share Company.
sample size determination.docx
 Method of Data Analysis and Presentation
• SPSS version 20 were used in the study.
• The researcher would be used both Descriptive and
Inferential Statistics.
 The Descriptive Statistics such as frequency tables,
percentages and charts was applied to analyze data. The
mean and standard deviations calculated to check the
inclinations of respondents.
 Inferential Statistics such as correlation and regression
analysis
• Pearson product moment correlation coefficient was used to
explain the relation between the stated variables(To answer
specific objectives ).
• Enter multiple regression analysis was used to determine the
best prediction of a dependent variable from several
independent variables(To answer specific objective ).
 Reliability and Validity of the Instrument

• Reliability In order to test the reliability of the instrument the

Cronbach’s Alpha was applied. This model is used to measure
internal consistency of the tools employed to get necessary data
from respondents. reliability.docx
 The test has a reliability of 0.70 and above it is reliable.
 Validity, on the other hand, refers to the extent to which the
measurement measures what is intended to measure.
 In order to ensure the validness of this study the instruments
were checked and evaluated by professionals in the subject
matter area. Moreover my advisor had evaluated and
commented on the instruments before they are distributed to
the respondents.
 Model Specification
The multiple regression models were written with five independent variables
as:
OPi=βo+β1CI+β2CF+β3PM+β4SQM+β5TMC+Ei;

β0 - constant Coefficient for predictor variables.

• β1 measures of change in organizational performance with respect
to continuous improvement, holding other factor constant,
• β2 measures of change in organizational performance with respect
to customer focus, holding other factor constant,
• β3 measures of change in organizational performance with
respect to process management, holding other factor constant,
• β4 measures of change in organizational performance with respect
to supplier quality management, holding other factor constant,
and
• β5 measures of change in organizational performance with
respect to top management commitment, holding other factor
constant.
DATA PRESENTATION, ANALYSIS AND INTERPRETATION

Summary of Descriptive Statistics

 The mean value for independent variables below
the scale midpoint ranged from 2.13 to 2.49 which
is most respondents share similar opinions towards
each variable in this study. This implies that the
low level of practicing TQM in the company.
 When we come to organizational performance the
mean value is 3.01 values indicates that employees
in the textile industry are agreeing with the
indicator of organizational performance in the
study area.
 Correlation analysis
• The correlation analysis has indicated that all
variables were significant and correlated at the
p<0.05 with r = 0.373 for continuous improvement,
r= 0.348 for customer focus, r= 0.365 for process
management, r = 0.547 for supplier quality
management, and r = 0.476 for top management
commitment.
• The result shows that all tqm dimentions incuded in
the hypothesis are significantly and moderately
positive related to organizational performance.
correlation cofficient.docx document
 Regression Analysis and Presentation
Goodness of fit
 The value of R is 0.647 which implies that the multiple
correlation coefficients between the outcome and the
predictors are 64.7%.
 The value of R square/ multiple coefficients of determination/
in the model is 0.419 or 41.9% which implies that 41.9% of
the variability of the dependent variable (organizational
performance) is explained or accounted by the explanatory
variables included in the model.
 The adjusted R square gives some idea of how well the
model generalizes. This indicates that if the model was
derived from the population about 40.9% of the variability of
the outcome (organizational performance) would be
explained by the explanatory variables. model summary.docx
 Beta coefficient

beta coefficient table.docx

1. Continuous improvement has a significant positive influence on
organizational performance (B = 0.091, p < 0.05),
2. Customer focus has a significant influence on organizational
performance (B = 0.132, p < 0.05),
3. Process management has a significant influence on organizational
performance (B = 0.066, p < 0.05),
4. Supplier quality management has a significant influence on
organizational performance (B = 0.211, p < 0.05),
5. Top management commitment has a significant influence on
organizational performance (B = 0.117, p < 0.05).
 This finding implies that other unexplained variables could account for
other variance in organizational performance.
 cont…
• Among the independent variables, supplier
quality management has been found to be the
most important influencing factor to
organizational performance and explained
standardized coefficients (β) of 0.330
• It follows by top management commitment (β
= 0.199), customer focus (β = 0.161),
continuous improvement (β =0.125) and
process management (β =0.132).
 The Regression Model
OPi=βo+β1CI+β2CF+β3PM+β4SQM+β5TMC+Ei;
OPi=1.578+ 0.091CIi + 0.132CFi + 0.066PMi +
0.211SQMi+ 0.117TMCi+Ei;
• For this study all independent variables (continuous
improvement, customer focus, process management,
supplier quality management, and top management
commitment) have a positive β values indicating
positively influencing on organizational performance.

 They tell us to what degree each predictor affects the

outcome if the effects of all other predictors are held
constant.
 Summary of Major Findings

 The means of all variables in the study below the scale

midpoint which is most respondents share similar opinions
toward each variable in this study. Accordingly, it implies
that the low level of practicing TQM in the company.
 The correlation analysis has indicated that there is
significant and moderately positive relationship between
total quality management dimension and organizational
performance at the p<0.05.
 TQM dimensions are positively significant influence on
organizational performance. Meaning that the increase in
all TQM dimensions also increases organizational
performance keeping other things constant. They are
directly related to each other.
 Cont…
 To general the TQM dimensions that states in questionnaires’ the mean
value states that disagree with the issue. Thus, there is low level of
practicing TQM in the company.

significant and moderately positive relationship between TQM

dimension and organizational performance at the p<0.05.

The result of the study showed that all independent TQM dimensions are
found significantly influencing on organizational performance in the
study area.

All independent TQM dimensions are positively significant influence on

organizational performance. Meaning that the increase in all independent
TQM dimensions also increases organizational performance keeping
other things constant. They are directly related to each other.
 Conclusions
In line with the specific objectives of the study, the following
conclusions have been drawn:-

 From the outcomes of the study, it is clear that the Bahir Dar Textile
share company which does not observe TQM practices. As a result,
the cost of operating the business becomes very expensive hence
affecting their profits. It is also noted that organization’s that
embrace TQM practices, tend to gain a competitive edge against
their competitors.

 Supplier Quality Management has been found to be the most

important influencing factor to organizational performance and it
follows by top management commitment, customer focus,
continuous improvement and process management which are
realizing better organizational performance.
 Cont…
 The success of quality management practices in
delivering desired organizational performance
is strongly influenced by TQM dimension.

It is concluded that the successful

implementation of quality management
practices to generate the desired performance
and it is featured with low level of quality
management techniques.
 Recommendation
In light of the summary of the findings and conclusions drawn above,
the following major recommendations have been made.

 As we know Textile firms needed to engage suppliers of raw

material. So the company would assist the firms to address the
problem of raw material quality variations. Also by knowing
Suppliers would be part and parcel of the value chain hence they end
up knowing the exact quality requirements of the various stages of
production and building a good relationship among suppliers.

 The company top management show their commitment both in

theory and practice. The vision, mission statement and
company policies needed to be translated to action.
 Cont…

 The Organizations rely on their customers, so they

must understand the current and future needs, and
achieve their needs, and work to exceed their
expectations.

 This is achieved through research and understand all

the needs and expectations of the customer in terms
of products, services and delivery date, price and
reliability, and to link the goals established with
the needs and expectations of the client
 Cont…
 The company should find new ways and techniques
in producing better quality products, production, are
more competitive, as well as exceed customer
expectations. And also designed to ensure efficient
and effective utilization of the resources of the
organization and to achieve a quality driven culture.

 The organization should grow a stronger culture that

nurtures high-trust social relationship and respect for
individuals, a shared sense of membership of the
organization, and a belief that continuous
improvement is for the common good.
 Cont…
 The company should identifying the activities needed to
achieve the desired result, and measure the inputs and outputs
of the process, and to identify the communication channels of
main activities of the business, and the risk assessment results
and the potential impacts of operations;

 on customers, suppliers and other stakeholders, define

clearly the responsibilities and authorities of the of the
management of main activities only.

 The focus should be on how best design, manage and improve

processes in order to fully satisfy, and generate increasing
value for, customers and other stakeholders.
Thank you!!!