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The effect of company size on the relationship between TQM strategy and organisational performance

Milé Terziovski (Milé Terziovski is at the Department of Management, Faculty of Business and Economics, Monash University, Victoria, Australia.)
Danny Samson (Danny Samson is at the Department of Management, The University of Melbourne, Australia.)

The TQM Magazine

ISSN: 0954-478X

Article publication date: 1 April 2000



The purpose of this study was to test the effects of company size on the strength of the relationship between TQM and organisational performance. Based on a cross‐sectional study of manufacturing firms in Australia and New Zealand, the paper tests two hypotheses involving TQM and organisational performance. The central finding of the study is that TQM has a significant and positive relationship with most of the dimensions of organisational performance. The relationship weakened for defect rates and warranty costs when it was co‐varied for company size. We conclude that company size impedes the implementation of TQM. Larger companies tend to gain greater benefits from TQM than smaller firms. These findings are consistent with some of the literature. Overall, the findings show that a typical manufacturing organisation is more likely to achieve high organisational performance with TQM than without TQM. The findings have implications for managers wishing to formulate a business strategy based on TQM.



Terziovski, M. and Samson, D. (2000), "The effect of company size on the relationship between TQM strategy and organisational performance", The TQM Magazine, Vol. 12 No. 2, pp. 144-149.




Copyright © 2000, MCB UP Limited

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