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IJQRM 22,6

An empirical study of TQM practices in Japanese-owned manufacturers in China

Masahiro Miyagawa and Kosaku Yoshida
Aoyama Gakuin University, Tokyo, Japan
Abstract
Purpose The main purpose of this study is to explore the relationship between TQM practices and the business performance of Japanese-owned manufacturers in China. Design/methodology/approach In this study, 200 companies out of the universe 1000 were chosen by random sampling in June 2002. Findings A total of 52 usable questionnaires were received and the overall response rate was 26 percent. The survey results show that TQM practices inuence overall company performance signicantly in Japanese-owned manufacturers in China. This implies that TQM is an effective method to improve business performance regardless of where the company might be operating as long as the TQM practices are implemented appropriately. In addition to the research data, ndings from a eld study also provide supplementary evidence to support this conclusion. Originality/value The ndings based on the empirical research would be useful to both decision makers and researchers who are interested in this growing factory of the world. Keywords Total quality management, Japan, China Paper type Research paper

536
Received January 2003 Revised February 2004

International Journal of Quality & Reliability Management Vol. 22 No. 6, 2005 pp. 536-553 q Emerald Group Publishing Limited 0265-671X DOI 10.1108/02656710510604872

Introduction Quite a number of organisations have tried to implement total quality management (TQM) practices but have failed to achieve their goals, while many other organisations have implemented TQM with great success (Douglas and Judge, 2001). Much literature in the early 1990s discussed how Japanese manufacturers used TQM implementation to improve their competitive positions in the global market place and how their success in quality management inuenced many rms in other countries (Yavas, 1995; Yoshida, 1989). Although the Japanese economy has suffered a long recession in the past decade, there are still many successful Japanese manufacturers like Toyota, Honda and Canon who have a strong background in both quality management and global operations (Japan Management Association, 2001). For example, Toyota is one of the most successful companies in the world and has used quality-focused policies together with strategies aimed at improving performance, reliability and safety through the implementation of TQM practices (Nikkei News, 2003). Thus quality management is still regarded as a fundamental and vital business strategy in the competitive global market place.
The authors would like to express our sincere appreciation to Dr Hongyi Sun from Hong Kong University and Professor Rao at Toledo University who kindly granted us to use the framework of the research and the questionnaire originally developed by Raghunathan et al. (1997).

It is now often highlighted that Chinese industries have been growing rapidly and that the quality of products made in China has improved dramatically. Since China began the open-door and reform policy in 1978, the planned economy has been transformed to a market economy. Chinas new policy has accelerated the rate of foreign direct investment since 1980 (Sun, 2000). According to the statistics published by the Foreign Trade Department of the Chinese government in 2002, foreign direct investment increased from US$6.6 billion in 1990 to US$69.2 billion in 2001 and the accumulated amount was US$734.8 billion. Japanese enterprises invested an accumulated amount of US$44.1 billion during the same period. Moreover the statistics show that the accumulated number of investors during the same period reached 367,700 including 22,000 Japanese investors. Using those direct investment resources, many joint ventures and foreign owned companies have started operations in China. However, it was found that there were many quality problems in the operations. Many operations suffered due to the lower quality level of Chinese materials and products compared to international standards, and could not manufacture their own products to a satisfactory quality level. It is reported that one of the biggest business risks for Japanese owned companies surveyed in 1995 was the quality problem (Huang, 2003). Sun (2000) pointed out that Norwegian joint ventures in Shanghai area also experienced quality problems and revealed following reasons: . the Chinese side normally adopted a low quality and low price strategy; . enterprises were not well adapted to the new market economy system and to modern quality management methods; and . quality consciousness based on meeting customer needs was weak. How did foreign-owned manufacturers in China resolve the quality problems and how did they implement quality management ? In this study, an attempt was made to nd how Japanese-owned manufacturers in China transferred management methods from their mother plant in Japan to their Chinese plant, and to explore the relationship between TQM practices and business performance in their organisations in China. Despite the large number of studies and articles on TQM practice and its implications, very few articles concerning quality management in Japanese-owned manufacturers operating in China have been published. So the authors believe that their ndings based on the empirical research would be useful to both decision makers and researchers who are interested in this growing factory of the world (Saraph et al., 1989). Development of quality management in Japan The foundation of quality management in Japan was established in the 1960s (Deming, 1986; Juran, 1989). Ishikawa was one of the core members who learnt quality management philosophies and methods from Deming and Juran in the 1950s and then spread the techniques of the Japanese quality management system (TQC) to other countries (Ishikawa, 1981). The success of Japanese business in the global market place from the 1970s to the 1980s was the result of various factors, including strong government leadership, a signicant inow of technology, capital investment from the US and quality management practices directly instructed by top management who understood the quality gurus management philosophy (Yoshida, 1989).

TQM practices in Japanese-owned manufacturers 537

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538

It is also observed that through quality control (QC) circles operators can realise what the problem is and how to resolve it. Only those who do the job every day and know the job well can improve the operation (Yoshida, 1993). According to the report published by JUSE the number of QC-circles in Japan was 425,119 with 3,257,777 members registered as of August 2001, providing evidence of penetration of quality management in Japan (JUSE, 2002). The essence of the Deming management philosophy which has contributed to the improvement of the Japanese products and services is summarised as follows: rst of all, to improve quality by reducing machine troubles and mishandling that enables cost reduction. Secondly, achieving more market-share with better quality and competitive prices, resulting in increasing sales, protability and employment (Walton, 1987). Demings quality management philosophy was examined in light of business practices in Japan (Yoshida, 1995). This survey of TQM practices and business performance in Japanese-owned manufacturers in China shows that the Japanese quality management principles reected in Deming management philosophy have guided manufacturers in a better direction even in a different environment. Development of quality management in China Zhao et al. (1995) emphasized that quality improvement efforts in Indian, Chinese and Mexican companies were not much lower than those in the developed countries such as Canadian, German, Japanese and US companies and that such benchmarking of quality management was vital for international business. Yu et al. (1998) stated that the visit of the Japanese quality management delegation led by Ishikawa in 1978 stimulated Chinese people to learn modern quality control methods. They realised that Chinese industries needed to improve the quality of goods and services to become competitive in the international market place. Therefore the Chinese government issued a series of instructions to improve quality and tried to promote TQM widely and strongly. In 1986, the Chinese government decided that all medium and large state-owned companies should implement TQC (Sun, 2000). It is pointed out that modern technology and the management know-how from foreign invested companies have spilled over into Chinese companies and that Chinese government has implemented a campaign of introducing TQM activities and the ISO9000 series (Tuan and Ng, 1998). Methodology The survey instrument adopted in this research is a pre-tested questionnaire that has been used in similar earlier empirical studies. Research through the distribution, collection and analysis of a questionnaire was conducted in Japan and China in June 2002. The theoretical framework by Raghunathan et al. (1997) was adopted in this survey in cooperation with Sun (2000). The questionnaire was previously used in comparison of quality management practices in different countries such as the USA, India, Mexico, Norway and China. The questionnaire consists of 118 related questions in nine categories as shown in Figure 1. These categories correspond to the US Malcolm Baldrige National Quality Award (MBNQA) criteria, which has been used for the evaluation of quality management in many of US organisations (Pannirselvam et al., 1998).

TQM practices in Japanese-owned manufacturers 539

Figure 1. Questionnaire categories

Evans (1997) proposed a causal model of the key linkages in the Baldrige Award framework addressed as linkages between management practices and business results. Namely the critical link between the fundamental management process of leadership, strategic planning, customer and market focus, information and analysis, human resource development and management, and process management all leading to the achievement of ever improving business results. As it is difcult to prove the causal relationship between TQM practices and the business results by a simple data process, the correlation analysis with appropriate content, construct validity and reliability, the method proved by Evans and Sun in the past was adopted in this research. Sun conducted the study of 71 Shanghai manufacturers in 1998 and used stepwise multiple regression analysis to discover the relationship between TQM practices and business results. As there were no differences stated between state-owned companies and joint ventures in his sample, it is mentioned that the comparative studies of TQM implementation between Chinese state-owned companies and foreign invested companies would be interesting to explore in future research (Hua et al., 2000; Sun, 2000). Therefore, this research targeted Japanese-owned manufacturers in China including joint ventures invested by Japanese companies moderate to conduct a further

IJQRM 22,6

investigation of the relationship between TQM practices and business performances using the same instrument. Five-point scales from 1 (very low) to 5 (very high) were used for the total 118 questions to measure the responses. Moreover 24 questions regarding the turnover, number of employees, and ISO certicate status etc. were also asked additionally in this questionnaire. Survey There were 18,000 companies invested in by Japanese enterprises according to Chinese foreign trade department as of year 2000 (Mitsubishi Research, 2001). A total of 4,154 companies out of 18,000 were listed in data book published in 2001 (Sousou-sha, 2001). Finally 1,000 manufacturing companies who were invested by Japanese companies in Beijing, Shanghai, Jiangsu and Liaoning were selected as the universe. The breakdown of 1,000 companies in the universe and proles of samples are shown in Figure 2. A total of 200 companies out of the universe were chosen by random sampling in June 2002 and questionnaires were sent to the CEOs of the parent companies in Japan. As a result, 52 out of 200 responded and the overall response rate was 26 per cent. Data analysis methods Factor-analysis using SPSS was conducted by analysing the data collected. As 20 reliable and valid factors are identied, multiple regression analysis was conducted in order to explore the relationship between TQM practice and business performance. Generally a relationship analysis is based on correlation coefcients, however in our

540

Figure 2. Basic information about samples

analysis, t-value with two-tailed tests were used for testing hypotheses along the line of earlier similar research (Douglas and Judge, 2001). Theory and research suggest that the greater the extent to which, a set of TQM practices is adopted by a Japanese-owned manufacturer in China, the higher business performance is achieved. Validity and reliability The validity and reliability tests by Cronbachs alpha test were conducted to establish construct validity and the reliability of this research, with the result shown in Table I. The alphas coefcients range from a minimum of 0.70 to a maximum of 0.93, which indicates that the scales are reliable (Sun, 2000). In total, 20 factors (17 TQM practices and three performance factors) are classied and labelled respectively in Table I. For example, three factors are identied for category factor no. 7 in the questionnaire that consists of 14 questions as listed in Figure 1 and two questions of category no. 9 related to quality management results of the company. The rst factor is labelled internal performance because of the showing higher loading coefcients of questionnaire items such as cost reduction (7k) and increase of prot (7j) and employees satisfaction (9h). The second factor is labelled quality performance because of the showing higher loading coefcients of questionnaire items such as reduction of scrap levels (7a), rework level (7b) and warranty costs (7c). The third factor is labelled external performance showing higher loading coefcients of questionnaire items such as market share (7f) and the contribution to expanding business (7g). Table II shows the results of multiple regression analysis using three business performances as the dependent variables and TQM practices as independent variables. Utilising factor analysis with Varimax rotation, it was found that each category had a single factor or several factors which were formed by grouping variables based on the rotated loading coefcients. Douglas and Judge (2001) tested hypotheses by hierarchical regression analysis and indicated the result that the degree of TQM implementation in hospitals was positively and signicantly related to the nancial performance of a hospital. The score of each factor is used as explanatory variables in the regression analysis that follows. To clarify the relationship between implementation of TQM practices and organisational performances such as internal performance, quality performance and external performance, the following seven hypotheses are offered in our study: H1. The extent of the implementation of the leadership is signicantly related to the business performance. Leadership represents three factors such as leadership by top management (V11), middle management (V12) and public responsibility (V13). H2. The extent of use of the quality information (V21) is signicantly related to the business performance. H3. The extent of implementation of TQM strategy (V31) is signicantly related to the business performance. H4. The extent of development of human resource is signicantly related to the business performance. Development of human resource represents six factors such as employee involvement (V411), training (V412), employee

TQM practices in Japanese-owned manufacturers 541

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IJQRM 22,6

No. 0.8795 5.551 1.672 1.103 4.645 6.5 7.343 1.483 1.018 8.8 2.391 1.277 6.717 1.094 3.865 1.822 1.422 7.673 1.674 1.538 7.306 2.416 1.371 1.047

1 V11 V12 V13 2 V21 3 V31 41 V411 V412 V413 42 V421 V422 V423 5 V51 V52 6 V61 V62 V63 7 V71 V72 V73 8 V81 V82 V83 V84 0.895 0.9394 0.9223 0.9349 0.9264 0.7796 0.9297 0.9243

Table I. Reliability and construct validity tests

Reliability test Cronbachs a 1 2 Questionnaire items and loading coefcients 3 4 5 6 7 8 9 10 Eigen Percentage values of explain. 42.697 12.865 8.485 58.058 65 52.452 10.595 7.271 51.766 14.062 7.514 56 9.121 38.652 18.222 14.225 47.954 10.461 9.615 40.589 13.424 7.619 5.819 Total per cent of explain. 42.697 55.562 64.047 58 65,002 52.452 63.047 70.318 51.766 65.825 73.341 55.975 65.096 38.652 56.874 71.099 47.954 58.416 68.03 40.589 54.014 61.632 67.451 1d 1a 1c 9d 1h 0.81 0.691 0.654 2 0.088 0.355 2 0.019 0.2 0.252 0.739 0.736 0.174 0.985 0.273 0.376 0.335 2d 2f 2g 2h 2c 0.855 0.815 0.798 0.791 0.753 3b 3a 3g 3j 3d 0.876 0.851 0.848 0.84 0.818 41f 9f 9e 41d 41b 0.8 0.79 0.764 0.763 0.134 0.407 0.281 2 0.05 0.158 0.854 2 0.018 0.008 0.354 0.216 0.048 42m 42n 42l 42q 42c 0.893 0.891 0.878 0.843 0.39 0.111 0.083 0.196 0.139 0.793 0.263 0.273 0.264 0.006 0.183 5f 5l 5j 5e 5h 0.766 0.758 0.755 0.724 0.706 0.364 0.235 0.251 0.211 0.329 6b 6a 6h 6g 6j 0.865 0.758 0.72 0.632 0.608 0.026 0.086 0.236 2 0.366 0.43 2 0.018 0.062 0.061 0.482 0.286 7j 7k 9h 7b 7c 0.857 0.761 0.683 0.297 0.299 0.143 0.066 0.302 0.846 0.766 0.232 0.181 2 0.105 0.127 0.345 8p 8n 8l 8q 8a 0.92 0.822 0.809 0.288 0.177 0.098 0.337 0.128 0.758 0.74 0.025 2 0.04 0.188 0.364 2 0.163 0.137 0.154 0.062 0.061 0.376 1i 9b 0.291 0.22 0.692 0.201 0.234 0.872 2e 2b 0.719 0.704 3h 3c 0.816 0.785 41c 41l 0.208 0.356 0.821 0.746 2 0.081 0.07 42b 42d 0.435 0.32 0.764 0.745 2 0.008 0.326 5a 5d 0.33 0.31 0.835 0.826 6d 6c 2 0.033 0.178 0.891 0.837 0.182 0.011 7a 7d 0.334 2 0.022 0.762 0.718 0.277 0.123 8d 8g 0.117 0.093 0.718 2 0.021 0.353 0.824 0.089 0.15 9a 9c 0.009 0.248 0.3 0.132 0.864 0.808 2a 0.639 3e 3i 3f 0.762 0.74 0.711 41h 0.111 2 0.008 0.925 42i 42g 42h 0.127 0.303 0.312 0.186 0.207 0.344 0.814 0.769 0.747 5i 5c 0.121 0.552 0.763 0.626 6f 6e 2 0.038 0.218 0.063 0.367 0.929 0.775 7f 7g 7e 0.101 0.211 0.249 0.182 0.21 0.245 0.875 0.862 0.825 8h 8j 8f 2 0.001 0.097 0.324 0.224 0.415 2 0.044 0.775 0.115 0.478 0.148 0.793 0.713

Category factors

Leadership Top management Middle management Public responsibility Information Quality information Strategy Strategy Human resource Employee involvement Training Employee responsibility Employee/union Union involvement Participation Company run activity Quality assurance Process control Design application Supplier Reliability Involvement Relationship Performance Internal performance Quality performance External performance Customer Benchmarking Customers satisfaction Feedback Monitoring

Internal performance , V71 . b b b R t-value F-value R t-value F-value R t-value R2 Signicance R2 R2 Signicance F-value

Quality performance , V72 .

External performance , V73 . Signicance

Hypotheses

Variables

TQM practices (variables)

0.626 2 0.197 0.168 0.071 20.104 0.043 20.062 0.002** 20.295 0.635 20.124 0.052 20.188 20.038 0.133 20.143 0.001** 20.023 0.132 20.021 0.196 0.063 0.039 0.206 0.056 0.332 0.010 0.156 0.240 0.121 0.100 2 0.168 0.128 0.194 0.080 0.193 1.075 0.522 1.343 2 0.007 2 0.018 0.052 2 0.045 2 0.127 0.425 2 0.936 0.737 0.485 0.301 3.606 1.848 1.663 0.659 0.654 0.138 0.030 0.015 1.133 0.185 0.115 2.160 0.635 0.981 0.039* 0.075 0.030 2 0.109 0.435 0.222 2 0.788 0.289 2 0.394 2 2.162 0.944 0.656 3.382 2 1.287 0.997 0.429 0.074 0.103 0.012 0.514 0.662 0.810

0.392

9.332

0.001

0.728

0.530

16.362

0.000

0.635

0.403 20.618 0.258 20.423 21.398 4.498 20.717 0.329 21.335 20.261 0.790 20.978 20.154 0.726 20.133 1.242 0.440

20.230

0.000

H1

H2

H3 H4

0.000**

H5

H6

H7 0.251 0.431 0.120 2 0.146 0.009** 1.774 2.804 0.751 2 0.862 2 0.133 2 0.096 0.019 0.220

1 V11 V12 V13 2 V21 3 V31 41 V411 V412 V413 42 V421 V422 V423 5 V51 V52 6 V61 V62 V63 8 V81 V82 V83 V84 2 1.004 2 0.608 0.135 1.563 20.133 20.04 0.280 0.023

Leadership Top management Middle management Public responsibility Information Quality information Strategy Strategy Human resource Employee involvement Training Employee responsibility Employee/union Union involvement Participation Company run activity Quality assurance Process control Design application Supplier Reliability Involvement Relationship Customer Benchmarking Customers satisfaction Feedback Monitoring

20.879 20.027 1.786 0.148

Notes: *t0:01 . t ^ t0:05 1:960; **t ^ t0:01 2:576

543

TQM practices in Japanese-owned manufacturers

Table II. Regression analysis between TQM practices and performance

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responsibility (V143), union involvement (V421), union participation (V422) and company run activity (V423). H5. The extent of implementation of quality assurance is signicantly related to the business performance. Quality assurance represents two factors such as process control (V51) and design application (V52).

544

H6. The extent of relationship with supplier is signicantly related to the business performance. Relationship with supplier represents three factors such as reliability (V61), involvement (V62) and relationship (V63). H7. The extent of implementation of customers satisfaction is signicantly related to the business performance. Customers comparative satisfaction represents four factors such as benchmarking (V81), customers satisfaction (V82), feedback (V83) and monitoring (V84).

Research results As the result of regression analysis, the following ndings were obtained. The research results are shown in Table II: . H1 was rejected. The importance of leadership in TQM implementation is vital, however in this research t value of this category is comparatively low. . H2 was accepted. The extent of use of the quality information (V21) is signicantly related (t 3:382, p , 0:01* * ) to the quality performance (V72). . H3 was accepted. The extent of implementation of TQM strategy (V31) is signicantly related (t 4:498, p , 0:01* * ) to the external performance (V73). . H4 was accepted. The extent of employee involvement (V411) is signicantly related (t 2:160, p , 0:05* ) to the internal performance (V71). . H5 was accepted. The extent of implementation of process control is signicantly related (t 3:606, p , 0:01* * ) to the quality performance (V72). . H6 was rejected. The extent of relationship with supplier is not signicantly related to the performance. . H7. The extent of implementation of customers satisfaction is signicantly related (t 2:804, p , 0:01* * ) to the internal performance (V71).

Discussions and implications The data sample of Japanese-owned manufacturers in China shows following quality management statistics: . 90 per cent of the sample have implemented TQM for more than three years; . 80.7 per cent of the sample marked a high and very high rating of assessment to the question that TQM was considered in the company strategic plan; . 75 per cent of samples marked a high and very high rating of assessment to the question that TQM has contributed to keep the company in business; and

61.5 per cent of samples marked a high and very high rating of assessment to the question that TQM has contributed to improving business performance of the company.

TQM practices in Japanese-owned manufacturers 545

Thus this research found that most of Japanese-owned manufacturers in China have implemented quality management and that TQM practices have contributed to their operations. Our ndings support the earlier literature indicating relationship between TQM practices and organisational performance in changing environments (Douglas and Judge, 2001). Research results shown in Table III indicate the comparison between Suns research in 1998 and ours in 2002. In earlier research, Sun investigated the differences in quality management between Chinese manufacturing companies in the Shanghai area and Norwegian manufacturing companies located in Norway. It was described that quality management practices in Shanghai companies were still at the stage of quality control, with some distance to TQM, as they neglected customer satisfaction and quality assurance. The pattern in Norwegian companies was that customer consideration and quality assurance contributed to the improvement of business performance. Shanghai companies showed that strategy and employee involvement contributed directly to the business performance (Sun, 2000). While in our study it is concluded as follows: rst, TQM practice of employee involvement and customers satisfaction in Japanese-owned manufacturers in China signicantly related to internal performance such as cost reduction and increasing prot. Second, the strategy related to external performance such as increasing market share and competitiveness. Third, both quality information and process control related to external performance such as reducing rework, warranty cost and scrap. Through these investigations we could summarise that Japanese-owned manufacturers in China are strategic management and employee involvement oriented against Norwegian companies described as customers satisfaction and quality assurance oriented and the Chinese companies described as quality control and strategic management oriented (Sun, 2000). Notably it is pointed out that employee involvement has a positive effect on TQM results as three different company origins support this practice.

Internal performance Norwegian company Leadership Citizenship Supplier

Quality performance External performance Employee improvement Quality assurance Customers satisfaction Supplier cooperation Employee involvement Strategy Table III. Research results

Chinese company Strategy Japanese-owned company Employee involvement Quality information Customers satisfaction Process control

Notes: Result of multiple regression by step-wise methods; data of Norwegian and Chinese companies are from earlier literature (Sun, 2000)

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Field research In addition to the survey data, ndings from a eld research provide supplementary information which were obtained from some Japanese-owned manufacturers when one of the authors visited Dalian China in July 2002. Contribution. The Chinese government have appreciated the contribution of Japanese owned manufacturing company like Toshiba to the promotion of both the quality management and export business in China. They were evaluated as a successful model of foreign-owned company who had contributed to introducing Japanese quality management and to export promotion for China. Technology transfer. Many Japanese-owned companies in China played an important role as a bridge between foreign and Chinese companies and the roles of transferring Japanese technology and management know-how to companies in China. They have achieved a higher quality level and better productivity in meeting demanding customers requirement. For example the productivity of Toshiba Dalian has been improved to 1.5 times better than its mother plant in Japan. The defect rate of their products was also improved, ranging from minimum 2/3 to maximum 1/16 compared with the rate of its mother plant. Motivation. The management of Japanese-owned manufacturing company tried to maximise the motivation of employees and let them realise the joy of work. Dalian model in Toshiba. It is reported that Toshiba called the successful management method in Toshiba Dalian as the Dalian model and has been applying the method to their overseas operations in the Philippines, Germany and France (Arakawa, 1998). The former managing director of Toshiba Dalian repeated that the key words of the successful management were quality management, development of human resources and transference of Japanese management system to the Dalian plant by using well-organised manuals. He emphasized the importance of respecting human resources and that this model was also adopted successfully to a joint venture company with Chinese partner in Liaoning, China. Our survey results indicate that the Japanese quality management principles which were reected in Deming management philosophy, have been transferred to Japanese-owned companies guiding them in a better direction even in a different environment. Limitations and future research We state several limitations of this study for future research. First, the sample size of this survey was relatively small. For future research, larger sample sizes of more than 70 are to be expected. Second, performance measures in this study rely not on objective evaluations like nancial statements but on subjective evaluations. Lastly, as this study was cross-sectional, the causal relationship of ndings might be reinforced by a longitudinal study. Conclusions Based on the results of data analysis in this study and the eld research information, it is concluded that TQM practices in Japanese-owned manufacturing companies in China are positively and signicantly related to the performance of the organisations. The study ndings are summarised as follows: the TQM practice of employee involvement through company-wide program and total commitment to improving

customers satisfaction in Japanese-owned manufacturers in China signicantly relates to internal performance such as reducing cost, increasing protability and improving employees satisfaction. Strategic planning process of quality management including operational plan to improve customers satisfaction relates to external performance such as increasing market share and competitiveness. Using quality information and implementing process control such as preventive equipment maintenance and standardisation of work instructions relates to quality performance such as reducing rework, warranty cost and scrap. Quality management is one of operations management methods that respects human resources and provides employee motivation. Through the implementation of quality management the organisation can improve the quality level of their products and services and thus achieve competitiveness in global market place. Ishikawa (1981) indicated that the better quality made less rework and better productivity. He also commented that quality management method like QC activity was adaptable in any other countries. Many of Japanese manufacturers realise how important quality management is, and they have transferred the management methods to their overseas plant to improve the quality level successfully. Porter stated that creating and sustaining superior competitiveness is achieved by establishing better value-chain techniques such as superior marketing and design work, higher quality and productivity, lower cost of materials and logistics than competitors (Porter, 1985). It is said that a prosperous country can be built when it possesses superior industries formed by successful companies which are highly competitive in global market place (Porter, 1992). Therefore we believe that it is worthwhile to explore the relationship between quality management and business performance that is relevant to the global competitiveness of a country. In summary, our nding is that TQM is an effective method to improve business performance regardless of where the company might be operating, as long as the TQM practices are implemented appropriately. It is expected that these ndings of quality management in this study will help quality people in manufacturing companies and industries, not only in China but also in other developing countries.
References Arakawa, N. (1998), Toshiba Dalian no Cho-sen, (The challenge of Dalian Toshiba), Mita Press, Tokyo, pp. 11-17. Deming, W.E. (1986), Out of the Crisis, MIT Press, Cambridge, MA, pp. 488-90. Douglas, T.J. and Judge, W.Q. (2001), Total quality management implementation and competitive advantage: the role of structural control and exploration, Academy of Management Journal, Vol. 44, pp. 158-69. Evans, J.R. (1997), Critical linkages in the Baldrige Award criteria: research models and educational challenges, Quality Management Journal, Vol. 5 No. 1, pp. 13-25. Hua, H., Chin, K.S., Sun, H. and Xu, Y. (2000), An empirical study on quality management practices in Shanghai manufacturing industries, Total Quality Management, Vol. 11 No. 8, pp. 1111-22. Huang, L. (2003), Shinko Shijyou Sennryakuron, (New Marketing Strategy), Chikura shobo, Tokyo, pp. 344-6. Ishikawa, K. (1981), Nihonteki Hinshitu Kanri, (Japanese Quality Management System), Nikkagiren (JUSE) Press, Tokyo, pp. 2-29.

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Figure A1. International comparative study of quality management practices

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Figure A1.

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Figure A1.

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Figure A1.

TQM practices in Japanese-owned manufacturers 553

Figure A1.