empirical study of tqm in china
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which is mainly concentrate that how TQM is effective in Chinese education system.TRANSCRIPT
An empirical study of TQMpractices in Japanese-owned
manufacturers in ChinaMasahiro 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 andthe business performance of Japanese-owned manufacturers in China.
Design/methodology/approach – In this study, 200 companies out of the universe 1000 werechosen by random sampling in June 2002.
Findings – A total of 52 usable questionnaires were received and the overall response rate was 26percent. The survey results show that TQM practices influence overall company performancesignificantly in Japanese-owned manufacturers in China. This implies that TQM is an effective methodto improve business performance regardless of where the company might be operating as long as theTQM practices are implemented appropriately. In addition to the research data, findings from a fieldstudy also provide supplementary evidence to support this conclusion.
Originality/value – The findings based on the empirical research would be useful to both decisionmakers and researchers who are interested in this growing “factory of the world”.
Keywords Total quality management, Japan, China
Paper type Research paper
IntroductionQuite a number of organisations have tried to implement total quality management(TQM) practices but have failed to achieve their goals, while many other organisationshave implemented TQM with great success (Douglas and Judge, 2001). Much literaturein the early 1990s discussed how Japanese manufacturers used TQM implementationto improve their competitive positions in the global market place and how their successin quality management influenced many firms 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 Canonwho have a strong background in both quality management and global operations(Japan Management Association, 2001). For example, Toyota is one of the mostsuccessful companies in the world and has used quality-focused policies together withstrategies aimed at improving performance, reliability and safety through theimplementation of TQM practices (Nikkei News, 2003). Thus quality management isstill regarded as a fundamental and vital business strategy in the competitive globalmarket place.
The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at
www.emeraldinsight.com/researchregister www.emeraldinsight.com/0265-671X.htm
The authors would like to express our sincere appreciation to Dr Hongyi Sun from Hong KongUniversity and Professor Rao at Toledo University who kindly granted us to use the frameworkof the research and the questionnaire originally developed by Raghunathan et al. (1997).
IJQRM22,6
536
Received January 2003Revised February 2004
International Journal of Quality &Reliability ManagementVol. 22 No. 6, 2005pp. 536-553q Emerald Group Publishing Limited0265-671XDOI 10.1108/02656710510604872
It is now often highlighted that Chinese industries have been growing rapidly andthat the quality of products “made in China” has improved dramatically. Since Chinabegan the “open-door and reform policy” in 1978, the planned economy has beentransformed to a market economy. China’s new policy has accelerated the rate offoreign direct investment since 1980 (Sun, 2000).
According to the statistics published by the Foreign Trade Department of theChinese government in 2002, foreign direct investment increased from US$6.6 billion in1990 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 thesame period. Moreover the statistics show that the accumulated number of investorsduring the same period reached 367,700 including 22,000 Japanese investors. Usingthose direct investment resources, many joint ventures and foreign owned companieshave started operations in China. However, it was found that there were many qualityproblems in the operations. Many operations suffered due to the lower quality level ofChinese materials and products compared to international standards, and could notmanufacture their own products to a satisfactory quality level. It is reported that one ofthe biggest business risks for Japanese owned companies surveyed in 1995 was the“quality problem” (Huang, 2003). Sun (2000) pointed out that Norwegian joint venturesin 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 tomodern 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 howdid they implement quality management ?
In this study, an attempt was made to find how Japanese-owned manufacturers inChina transferred management methods from their mother plant in Japan to theirChinese plant, and to explore the relationship between TQM practices and businessperformance in their organisations in China. Despite the large number of studies andarticles on TQM practice and its implications, very few articles concerning qualitymanagement in Japanese-owned manufacturers operating in China have beenpublished. So the authors believe that their findings based on the empirical researchwould be useful to both decision makers and researchers who are interested in thisgrowing “factory of the world” (Saraph et al., 1989).
Development of quality management in JapanThe foundation of quality management in Japan was established in the 1960s (Deming,1986; Juran, 1989). Ishikawa was one of the core members who learnt qualitymanagement philosophies and methods from Deming and Juran in the 1950s and thenspread the techniques of the Japanese quality management system (TQC) to othercountries (Ishikawa, 1981). The success of Japanese business in the global market placefrom the 1970s to the 1980s was the result of various factors, including stronggovernment leadership, a significant inflow of technology, capital investment from theUS and quality management practices directly instructed by top management whounderstood the quality gurus’ management philosophy (Yoshida, 1989).
TQM practices inJapanese-owned
manufacturers
537
It is also observed that through quality control (QC) circles operators can realisewhat the problem is and how to resolve it. Only those who do the job every day andknow the job well can improve the operation (Yoshida, 1993). According to the reportpublished by JUSE the number of QC-circles in Japan was 425,119 with 3,257,777members registered as of August 2001, providing evidence of penetration of qualitymanagement in Japan (JUSE, 2002).
The essence of the Deming management philosophy which has contributed to theimprovement of the Japanese products and services is summarised as follows: first ofall, to improve quality by reducing machine troubles and mishandling that enables costreduction. Secondly, achieving more market-share with better quality and competitiveprices, resulting in increasing sales, profitability and employment (Walton, 1987).Deming’s quality management philosophy was examined in light of business practicesin Japan (Yoshida, 1995).
This survey of TQM practices and business performance in Japanese-ownedmanufacturers in China shows that the Japanese quality management principlesreflected in Deming management philosophy have guided manufacturers in a betterdirection even in a different environment.
Development of quality management in ChinaZhao et al. (1995) emphasized that quality improvement efforts in Indian, Chinese andMexican companies were not much lower than those in the developed countries such asCanadian, German, Japanese and US companies and that such benchmarking of qualitymanagement was vital for international business.
Yu et al. (1998) stated that the visit of the Japanese quality management delegationled by Ishikawa in 1978 stimulated Chinese people to learn modern quality controlmethods. They realised that Chinese industries needed to improve the quality of goodsand services to become competitive in the international market place. Therefore theChinese government issued a series of instructions to improve quality and tried topromote TQM widely and strongly. In 1986, the Chinese government decided that allmedium and large state-owned companies should implement TQC (Sun, 2000). It ispointed out that modern technology and the management know-how from foreigninvested companies have spilled over into Chinese companies and that Chinesegovernment has implemented a campaign of introducing TQM activities and theISO9000 series (Tuan and Ng, 1998).
MethodologyThe survey instrument adopted in this research is a pre-tested questionnaire that hasbeen used in similar earlier empirical studies. Research through the distribution,collection and analysis of a questionnaire was conducted in Japan and China in June2002. The theoretical framework by Raghunathan et al. (1997) was adopted in thissurvey in cooperation with Sun (2000). The questionnaire was previously used incomparison of quality management practices in different countries such as the USA,India, Mexico, Norway and China. The questionnaire consists of 118 related questionsin nine categories as shown in Figure 1. These categories correspond to the USMalcolm Baldrige National Quality Award (MBNQA) criteria, which has been used forthe evaluation of quality management in many of US organisations (Pannirselvamet al., 1998).
IJQRM22,6
538
Evans (1997) proposed a causal model of the key linkages in the Baldrige Awardframework 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, humanresource development and management, and process management – all leading to theachievement of ever improving business results. As it is difficult to prove the causalrelationship between TQM practices and the business results by a simple data process,the correlation analysis with appropriate content, construct validity and reliability, themethod 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 stepwisemultiple regression analysis to discover the relationship between TQM practices andbusiness results. As there were no differences stated between state-owned companiesand joint ventures in his sample, it is mentioned that the comparative studies of TQMimplementation between Chinese state-owned companies and foreign investedcompanies would be interesting to explore in future research (Hua et al., 2000; Sun,2000). Therefore, this research targeted Japanese-owned manufacturers in Chinaincluding joint ventures invested by Japanese companies moderate to conduct a further
Figure 1.Questionnaire categories
TQM practices inJapanese-owned
manufacturers
539
investigation of the relationship between TQM practices and business performancesusing the same instrument.
Five-point scales from 1 (very low) to 5 (very high) were used for the total 118questions to measure the responses. Moreover 24 questions regarding the turnover,number of employees, and ISO certificate status etc. were also asked additionally inthis questionnaire.
SurveyThere were 18,000 companies invested in by Japanese enterprises according to Chineseforeign trade department as of year 2000 (Mitsubishi Research, 2001). A total of 4,154companies 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 inBeijing, Shanghai, Jiangsu and Liaoning were selected as the universe. The breakdownof 1,000 companies in the universe and profiles of samples are shown in Figure 2.
A total of 200 companies out of the universe were chosen by random sampling inJune 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 methodsFactor-analysis using SPSS was conducted by analysing the data collected. As 20reliable and valid factors are identified, multiple regression analysis was conducted inorder to explore the relationship between TQM practice and business performance.Generally a relationship analysis is based on correlation coefficients, however in our
Figure 2.Basic information aboutsamples
IJQRM22,6
540
analysis, t-value with two-tailed tests were used for testing hypotheses along the line ofearlier similar research (Douglas and Judge, 2001). Theory and research suggest thatthe greater the extent to which, a set of TQM practices is adopted by a Japanese-ownedmanufacturer in China, the higher business performance is achieved.
Validity and reliabilityThe validity and reliability tests by Cronbach’s alpha test were conducted to establishconstruct validity and the reliability of this research, with the result shown in Table I.The alphas coefficients range from a minimum of 0.70 to a maximum of 0.93, whichindicates that the scales are reliable (Sun, 2000).
In total, 20 factors (17 TQM practices and three performance factors) are classifiedand labelled respectively in Table I. For example, three factors are identified forcategory factor no. 7 in the questionnaire that consists of 14 questions as listed inFigure 1 and two questions of category no. 9 related to quality management results ofthe company. The first factor is labelled “internal performance” because of the showinghigher loading coefficients of questionnaire items such as cost reduction (7k) andincrease of profit (7j) and employee’s satisfaction (9h). The second factor is labelled“quality performance” because of the showing higher loading coefficients ofquestionnaire items such as reduction of scrap levels (7a), rework level (7b) andwarranty costs (7c). The third factor is labelled “external performance” showing higherloading coefficients of questionnaire items such as market share (7f) and thecontribution to expanding business (7g).
Table II shows the results of multiple regression analysis using three businessperformances as the dependent variables and TQM practices as independent variables.Utilising factor analysis with Varimax rotation, it was found that each category had asingle factor or several factors which were formed by grouping variables based on therotated loading coefficients.
Douglas and Judge (2001) tested hypotheses by hierarchical regression analysis andindicated the result that the degree of TQM implementation in hospitals was positivelyand significantly related to the financial performance of a hospital. The score of eachfactor is used as explanatory variables in the regression analysis that follows. Toclarify the relationship between implementation of TQM practices and organisationalperformances such as internal performance, quality performance and externalperformance, the following seven hypotheses are offered in our study:
H1. The extent of the implementation of the leadership is significantly related tothe business performance. Leadership represents three factors such asleadership by top management (V11), middle management (V12) and publicresponsibility (V13).
H2. The extent of use of the quality information (V21) is significantly related tothe business performance.
H3. The extent of implementation of TQM strategy (V31) is significantly relatedto the business performance.
H4. The extent of development of human resource is significantly related to thebusiness performance. Development of human resource represents six factorssuch as employee involvement (V411), training (V412), employee
TQM practices inJapanese-owned
manufacturers
541
Qu
esti
onn
aire
item
san
dlo
adin
gco
effi
cien
tsN
o.C
ateg
ory
fact
ors
Rel
iab
ilit
yte
stC
ron
bac
h’s
a1
23
45
67
89
10E
igen
val
ues
Per
cen
tag
eof
exp
lain
.
Tot
alp
erce
nt
ofex
pla
in.
1Leadership
0.87
951d
1a1c
9d1h
1i9b
9a9c
V11
Top
man
agem
ent
0.81
0.69
10.
654
20.
088
0.35
50.
291
0.22
0.00
90.
248
5.55
142
.697
42.6
97V
12M
idd
lem
anag
emen
t2
0.01
90.
20.
252
0.73
90.
736
0.69
20.
201
0.3
0.13
21.
672
12.8
6555
.562
V13
Pu
bli
cre
spon
sib
ilit
y0.
174
0.98
50.
273
0.37
60.
335
0.23
40.
872
0.86
40.
808
1.10
38.
485
64.0
472
Inform
ation
0.89
52d
2f2g
2h2c
2e2b
2aV
21Q
ual
ity
info
rmat
ion
0.85
50.
815
0.79
80.
791
0.75
30.
719
0.70
40.
639
4.64
558
.058
583
Strategy
0.93
943b
3a3g
3j3d
3h3c
3e3i
3fV
31S
trat
egy
0.87
60.
851
0.84
80.
840.
818
0.81
60.
785
0.76
20.
740.
711
6.5
6565
,002
41Humanresource
0.92
2341
f9f
9e41
d41
b41
c41
l41
hV
411
Em
plo
yee
inv
olv
emen
t0.
80.
790.
764
0.76
30.
134
0.20
80.
356
0.11
17.
343
52.4
5252
.452
V41
2T
rain
ing
0.40
70.
281
20.
050.
158
0.85
40.
821
0.74
62
0.00
81.
483
10.5
9563
.047
V41
3E
mp
loy
eere
spon
sib
ilit
y2
0.01
80.
008
0.35
40.
216
0.04
82
0.08
10.
070.
925
1.01
87.
271
70.3
1842
Employee/union
0.93
4942
m42
n42
l42
q42
c42
b42
d42
i42
g42
hV
421
Un
ion
inv
olv
emen
t0.
893
0.89
10.
878
0.84
30.
390.
435
0.32
0.12
70.
303
0.31
28.
851
.766
51.7
66V
422
Par
tici
pat
ion
0.11
10.
083
0.19
60.
139
0.79
30.
764
0.74
50.
186
0.20
70.
344
2.39
114
.062
65.8
25V
423
Com
pan
yru
nac
tiv
ity
0.26
30.
273
0.26
40.
006
0.18
32
0.00
80.
326
0.81
40.
769
0.74
71.
277
7.51
473
.341
5Qualityassurance
0.92
645f
5l5j
5e5h
5a5d
5i5c
V51
Pro
cess
con
trol
0.76
60.
758
0.75
50.
724
0.70
60.
330.
310.
121
0.55
26.
717
5655
.975
V52
Des
ign
app
lica
tion
0.36
40.
235
0.25
10.
211
0.32
90.
835
0.82
60.
763
0.62
61.
094
9.12
165
.096
6Supplier
0.77
966b
6a6h
6g6j
6d6c
6f6e
V61
Rel
iab
ilit
y0.
865
0.75
80.
720.
632
0.60
82
0.03
30.
178
20.
038
0.21
83.
865
38.6
5238
.652
V62
Inv
olv
emen
t0.
026
0.08
60.
236
20.
366
0.43
0.89
10.
837
0.06
30.
367
1.82
218
.222
56.8
74V
63R
elat
ion
ship
20.
018
0.06
20.
061
0.48
20.
286
0.18
20.
011
0.92
90.
775
1.42
214
.225
71.0
997
Perform
ance
0.92
977j
7k9h
7b7c
7a7d
7f7g
7eV
71In
tern
alp
erfo
rman
ce0.
857
0.76
10.
683
0.29
70.
299
0.33
42
0.02
20.
101
0.21
10.
249
7.67
347
.954
47.9
54V
72Q
ual
ity
per
form
ance
0.14
30.
066
0.30
20.
846
0.76
60.
762
0.71
80.
182
0.21
0.24
51.
674
10.4
6158
.416
V73
Ex
tern
alp
erfo
rman
ce0.
232
0.18
12
0.10
50.
127
0.34
50.
277
0.12
30.
875
0.86
20.
825
1.53
89.
615
68.0
38
Custom
er0.
9243
8p8n
8l8q
8a8d
8g8h
8j8f
V81
Ben
chm
ark
ing
0.92
0.82
20.
809
0.28
80.
177
0.11
70.
093
20.
001
0.09
70.
324
7.30
640
.589
40.5
89V
82C
ust
omer
’ssa
tisf
acti
on0.
098
0.33
70.
128
0.75
80.
740.
718
20.
021
0.22
40.
415
20.
044
2.41
613
.424
54.0
14V
83F
eed
bac
k0.
025
20.
040.
188
0.36
42
0.16
30.
353
0.82
40.
775
0.11
50.
478
1.37
17.
619
61.6
32V
84M
onit
orin
g0.
137
0.15
40.
062
0.06
10.
376
0.08
90.
150.
148
0.79
30.
713
1.04
75.
819
67.4
51
Table I.Reliability and constructvalidity tests
IJQRM22,6
542
Inte
rnal
per
form
ance
,V
71.
Qu
alit
yp
erfo
rman
ce,
V72
.E
xte
rnal
per
form
ance
,V
73.
Hy
pot
hes
esV
aria
ble
sT
QM
pra
ctic
es(v
aria
ble
s)b
RR
2t-
val
ue
F-v
alu
e
Sig
nifi
-
can
ceb
RR
2t-
val
ue
F-v
alu
e
Sig
nifi
-
can
ceb
RR
2t-
val
ue
F-v
alu
e
Sig
nifi
-
can
ce
0.62
60.
392
9.33
20.
001
0.72
80.
530
16.3
620.
000
0.63
50.
403
20.2
300.
000
H1
1Leadership
V11
Top
man
agem
ent
20.
197
21.
287
0.07
40.
514
20.
104
20.
618
V12
Mid
dle
man
agem
ent
0.16
80.
997
0.10
30.
662
0.04
30.
258
V13
Pu
bli
cre
spon
sib
ilit
y0.
071
0.42
90.
012
0.81
02
0.06
22
0.42
3
2Inform
ation
H2
V21
Qu
alit
yin
form
atio
n0.
206
0.94
40.
656
3.38
20.
002 *
*2
0.29
52
1.39
8
3Strategy
H3
V31
Str
ateg
y0.
056
0.28
92
0.39
42
2.16
20.
039
0.63
54.
498
0.00
0 **
H4
41Humanresource
V41
1E
mp
loy
eein
vol
vem
ent
0.33
22.
160
0.03
9 *0.
075
0.43
52
0.12
42
0.71
7
V41
2T
rain
ing
0.01
00.
635
0.03
00.
222
0.05
20.
329
V41
3E
mp
loy
eere
spon
sib
ilit
y0.
156
0.98
12
0.10
92
0.78
82
0.18
82
1.33
5
42Employee/union
V42
1U
nio
nin
vol
vem
ent
0.24
01.
663
0.13
81.
133
20.
038
20.
261
V42
2P
arti
cip
atio
n0.
121
0.65
90.
030
0.18
50.
133
0.79
0
V42
3C
omp
any
run
acti
vit
y0.
100
0.65
40.
015
0.11
52
0.14
32
0.97
8
H5
5Qualityassurance
V51
Pro
cess
con
trol
20.
168
20.
936
0.48
53.
606
0.00
1 **
20.
023
20.
154
V52
Des
ign
app
lica
tion
0.12
80.
737
0.30
11.
848
0.13
20.
726
H6
6Supplier
V61
Rel
iab
ilit
y0.
194
1.07
52
0.00
72
0.04
52
0.02
12
0.13
3
V62
Inv
olv
emen
t0.
080
0.52
22
0.01
82
0.12
70.
196
1.24
2
V63
Rel
atio
nsh
ip0.
193
1.34
30.
052
0.42
50.
063
0.44
0
H7
8Custom
er
V81
Ben
chm
ark
ing
0.25
11.
774
20.
133
21.
004
20.
133
20.
879
V82
Cu
stom
er’s
sati
sfac
tion
0.43
12.
804
0.00
9 **
20.
096
20.
608
20.
042
0.02
7
V83
Fee
db
ack
0.12
00.
751
0.01
90.
135
0.28
01.
786
V84
Mon
itor
ing
20.
146
20.
862
0.22
01.
563
0.02
30.
148
Notes:
*tð0:0
1Þ.
t^
tð0:
05Þ¼
1:96
0;**
t^
tð0:
01Þ¼
2:57
6
Table II.Regression analysis
between TQM practicesand performance
TQM practices inJapanese-owned
manufacturers
543
responsibility (V143), union involvement (V421), union participation (V422)and company run activity (V423).
H5. The extent of implementation of quality assurance is significantly related tothe business performance. Quality assurance represents two factors such asprocess control (V51) and design application (V52).
H6. The extent of relationship with supplier is significantly related to the businessperformance. Relationship with supplier represents three factors such asreliability (V61), involvement (V62) and relationship (V63).
H7. The extent of implementation of customer’s satisfaction is significantlyrelated to the business performance. Customer’s comparative satisfactionrepresents four factors such as benchmarking (V81), customer’s satisfaction(V82), feedback (V83) and monitoring (V84).
Research resultsAs the result of regression analysis, the following findings were obtained. The researchresults 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) issignificantly related (t ¼ 3:382, p , 0:01** ) to the quality performance (V72).
. H3 was accepted. The extent of implementation of TQM strategy (V31) issignificantly related (t ¼ 4:498, p , 0:01** ) to the external performance (V73).
. H4 was accepted. The extent of employee involvement (V411) is significantlyrelated (t ¼ 2:160, p , 0:05* ) to the internal performance (V71).
. H5 was accepted. The extent of implementation of process control issignificantly related (t ¼ 3:606, p , 0:01** ) to the quality performance (V72).
. H6 was rejected. The extent of relationship with supplier is not significantlyrelated to the performance.
. H7. The extent of implementation of customer’s satisfaction is significantlyrelated (t ¼ 2:804, p , 0:01** ) to the internal performance (V71).
Discussions and implicationsThe data sample of Japanese-owned manufacturers in China shows following qualitymanagement 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 assessmentto 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 tothe question that TQM has contributed to keep the company in business; and
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. 61.5 per cent of samples marked a “high” and “very high” rating of assessment tothe question that TQM has contributed to improving business performance ofthe company.
Thus this research found that most of Japanese-owned manufacturers in China haveimplemented quality management and that TQM practices have contributed to theiroperations. Our findings support the earlier literature indicating relationship betweenTQM practices and organisational performance in changing environments (Douglasand Judge, 2001).
Research results shown in Table III indicate the comparison between Sun’s researchin 1998 and ours in 2002. In earlier research, Sun investigated the differences in qualitymanagement between Chinese manufacturing companies in the Shanghai area andNorwegian manufacturing companies located in Norway. It was described that qualitymanagement practices in Shanghai companies were still at the stage of quality control,with some distance to TQM, as they neglected customer satisfaction and qualityassurance. The pattern in Norwegian companies was that customer consideration andquality assurance contributed to the improvement of business performance. Shanghaicompanies showed that strategy and employee involvement contributed directly to thebusiness performance (Sun, 2000).
While in our study it is concluded as follows: first, TQM practice of employeeinvolvement and customer’s satisfaction in Japanese-owned manufacturers in Chinasignificantly related to internal performance such as cost reduction and increasingprofit. Second, the strategy related to external performance such as increasing marketshare and competitiveness. Third, both quality information and process control relatedto external performance such as reducing rework, warranty cost and scrap.
Through these investigations we could summarise that Japanese-ownedmanufacturers in China are “strategic management and employee involvementoriented” against Norwegian companies described as “customer’s satisfaction andquality assurance oriented” and the Chinese companies described as “quality controland strategic management oriented” (Sun, 2000). Notably it is pointed out thatemployee involvement has a positive effect on TQM results as three different companyorigins support this practice.
Internal performance Quality performance External performance
Norwegian company Leadership Employee improvementCitizenship Quality assuranceSupplier Customer’s satisfaction
Supplier cooperationChinese company Strategy Employee involvementJapanese-owned company Employee involvement Quality information Strategy
Customer’s satisfaction Process control
Notes: Result of multiple regression by step-wise methods; data of Norwegian and Chinese companiesare from earlier literature (Sun, 2000)
Table III.Research results
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Field researchIn addition to the survey data, findings from a field research provide supplementaryinformation which were obtained from some Japanese-owned manufacturers when oneof the authors visited Dalian China in July 2002.
Contribution. The Chinese government have appreciated the contribution ofJapanese owned manufacturing company like Toshiba to the promotion of both thequality management and export business in China. They were evaluated as asuccessful model of foreign-owned company who had contributed to introducingJapanese quality management and to export promotion for China.
Technology transfer. Many Japanese-owned companies in China played animportant role as a bridge between foreign and Chinese companies and the roles oftransferring Japanese technology and management know-how to companies in China.They have achieved a higher quality level and better productivity in meetingdemanding customer’s requirement. For example the productivity of Toshiba Dalianhas been improved to 1.5 times better than its mother plant in Japan. The defect rate oftheir products was also improved, ranging from minimum 2/3 to maximum 1/16compared with the rate of its mother plant.
Motivation. The management of Japanese-owned manufacturing company tried tomaximise the motivation of employees and let them realise the “joy of work”.
Dalian model in Toshiba. It is reported that Toshiba called the successfulmanagement method in Toshiba Dalian as the “Dalian model” and has been applyingthe method to their overseas operations in the Philippines, Germany and France(Arakawa, 1998). The former managing director of Toshiba Dalian repeated that thekey words of the successful management were quality management, development ofhuman resources and transference of Japanese management system to the Dalian plantby using well-organised manuals. He emphasized the importance of respecting humanresources and that this model was also adopted successfully to a joint venturecompany with Chinese partner in Liaoning, China.
Our survey results indicate that the Japanese quality management principles whichwere reflected in Deming management philosophy, have been transferred toJapanese-owned companies guiding them in a better direction even in a differentenvironment.
Limitations and future researchWe state several limitations of this study for future research. First, the sample size ofthis survey was relatively small. For future research, larger sample sizes of more than70 are to be expected. Second, performance measures in this study rely not on objectiveevaluations like financial statements but on subjective evaluations.
Lastly, as this study was cross-sectional, the causal relationship of findings mightbe reinforced by a longitudinal study.
ConclusionsBased on the results of data analysis in this study and the field research information, itis concluded that TQM practices in Japanese-owned manufacturing companies inChina are positively and significantly related to the performance of the organisations.The study findings are summarised as follows: the TQM practice of employeeinvolvement through company-wide program and total commitment to improving
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customer’s satisfaction in Japanese-owned manufacturers in China significantly relatesto internal performance such as reducing cost, increasing profitability and improvingemployee’s satisfaction. Strategic planning process of quality management includingoperational plan to improve customer’s satisfaction relates to external performancesuch as increasing market share and competitiveness.
Using quality information and implementing process control such as preventiveequipment maintenance and standardisation of work instructions relates to qualityperformance such as reducing rework, warranty cost and scrap. Quality managementis one of operations management methods that respects human resources and providesemployee motivation. Through the implementation of quality management theorganisation can improve the quality level of their products and services and thusachieve competitiveness in global market place. Ishikawa (1981) indicated that thebetter quality made less rework and better productivity. He also commented thatquality management method like QC activity was adaptable in any other countries.Many of Japanese manufacturers realise how important quality management is, andthey have transferred the management methods to their overseas plant to improve thequality level successfully.
Porter stated that creating and sustaining superior competitiveness is achieved byestablishing better value-chain techniques such as superior marketing and designwork, higher quality and productivity, lower cost of materials and logistics thancompetitors (Porter, 1985). It is said that a prosperous country can be built when itpossesses superior industries formed by successful companies which are highlycompetitive in global market place (Porter, 1992). Therefore we believe that it isworthwhile to explore the relationship between quality management and businessperformance that is relevant to the global competitiveness of a country.
In summary, our finding is that TQM is an effective method to improve businessperformance regardless of where the company might be operating, as long as the TQMpractices are implemented appropriately. It is expected that these findings of qualitymanagement in this study will help quality people in manufacturing companies andindustries, not only in China but also in other developing countries.
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Appendix
Figure A1.International comparative
study of qualitymanagement practices
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Figure A1.
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Figure A1.
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Figure A1.
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Figure A1.
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