Structural analysis of total quality management, ISO/TS16949 and organizational performance in Malaysian and Thailand automotive industry

Abstract

The implementation of total quality management has not occurred at the same pace in different regions of the world. Despite the number of publications on total quality management, little empirical work has been carried out in developing countries especially on comparative studies amongst ASEAN countries involving the automotive industries. A comparative study can provide an overall perspective and understanding of the main differences and similarities in total quality management implementation. Furthermore, based on previous studies acquiring quality management systems such as ISO standards appeared to improve the performance of automotive industry. ISO/TS16949 is a specification which is comparatively new to the ASEAN automotive industry. Due to its short history, there is still confusion about the effects of ISO/TS16949 registration and efforts on total quality management and organizational performance relationships. The aim of this study is to compare and develop a model that incorporates total quality management implementation, ISO/TS16949 efforts and their impact on organizational performance between Malaysian and Thailand automotive industries. Two structural models have been proposed which are moderator and mediator research models. To that end a survey was conducted to determine the extent of total quality management implementation and ISO/TS16949 efforts in Malaysian and Thailand automotive industries as well as their relationship with organizational performance. Data were obtained from 161 and 150 automotive companies and related suppliers in Malaysia and Thailand with 25% and 21% response rate respectively. Structural Equation Modeling technique was utilized to perform the required statistical analysis of the data from the survey. Exploratory factor analysis, reliability analysis and confirmatory factor analysis to test for construct validity, reliability, and measurements loading were performed. Having analyzed the measurement model, the structural model was then tested and confirmed. The testing and confirmation results revealed that there are significant differences between total quality management implementation in Malaysia and Thailand, where total quality management implementation is better in Thailand. Furthermore, the results indicate that ISO/TS16949 certification does not affect the relationship between TQM and organizational performance. However, the assessment reveals that efforts on ISO/TS16949 registration assist in improving organizational performance when coupled with total quality management. The study contributes to knowledge on quality management and provides practical guidelines for automotive practitioners to improve their organizational performance. This is a theoretical, methodological, and analytical detailed empirical study that adds to the limited existing literature on quality management especially in ASEAN context. The study provides valuable groundwork for further studies on the improvement of organizational performance through total quality management and ISO/TS16949.