The Influence of Total Quality Management (TQM) on Quality Cost Efficiency and Managerial Performance and the Implications for Company Performance

  • Elvina Elvina Universitas Kristen Maranatha, Bandung, Indonesia
  • Silvia Anggraeni Universitas Kristen Maranatha, Bandung, Indonesia
  • Sonnya Nurman Sasongko Universitas Kristen Maranatha, Bandung, Indonesia
  • Amanda Yunne Erlandian Universitas Kristen Maranatha, Bandung, Indonesia
Keywords: Total Quality Management (TQM), Quality Cost Efficiency, Managerial Performance, Company Performance


The study aimed to determine the effect of Total Quality Management (TQM) on quality cost efficiency and managerial performance and its implications on company performance. In the research, the researchers involved 100 companies in Indonesia. The analysis used is a structural approach to the Equation Model (SEM) assisted by the Smart PLS application. The results showed that there was a significant positive effect between total quality management, quality cost efficiency, managerial performance, and total management quality on company performance mediated by managerial performance. The amount of the r square of the company’s performance variable is explained by the total quality management, quality cost efficiency, and managerial performance of 88.9%.


Abbas, J. (2020). Impact of total quality management on corporate sustainability through the mediating effect of knowledge management. Journal of Cleaner Production, 244, 118806.

Abubakar, A. M., Elrehail, H., Alatailat, M. A., & Elçi, A. (2019). Knowledge management, decision-making style and organizational performance. Journal of Innovation & Knowledge, 4(2), 104–114.

Al-Dhaafri, H. S., Al-Swidi, A. K., & Yusoff, R. Z. Bin. (2016). The mediating role of total quality management between the entrepreneurial orientation and the organizational performance. TQM Journal, 28(1), 89–111.

Albuhisi, A. M., & Abdallah, A. B. (2018). The impact of soft TQM on financial performance: The mediating roles of non-financial balanced scorecard perspectives. International Journal of Quality and Reliability Management, 35(7), 1360–1379.

Almatrooshi, B., Singh, S. K., & Farouk, S. (2016). Determinants of organizational performance: a proposed framework. International Journal of Productivity and Performance Management, 65(6), 844–859.

Appelbaum, D., Kogan, A., Vasarhelyi, M., & Yan, Z. (2017). Impact of business analytics and enterprise systems on managerial accounting. International Journal of Accounting Information Systems.

Aquilani, B., Silvestri, C., Ruggieri, A., & Gatti, C. (2017). A systematic literature review on total quality management critical success factors and the identification of new avenues of research. TQM Journal, 29(1), 184–213.

Bakotić, D., & Rogošić, A. (2015). Employee involvement as a key determinant of core quality management practices. Http://Dx.Doi.Org/10.1080/14783363.2015.1094369, 28(11–12), 1209–1226.

Bolatan, G. I. S., Gozlu, S., Alpkan, L., & Zaim, S. (2016). The Impact of Technology Transfer Performance on Total Quality Management and Quality Performance. Procedia - Social and Behavioral Sciences, 235, 746–755.

Chams, N., García-Blandón, J., & Hassan, K. (2021). Role Reversal! Financial Performance as an Antecedent of ESG: The Moderating Effect of Total Quality Management. Sustainability 2021, Vol. 13, Page 7026, 13(13), 7026.

Dahlgaard-Park, S. M., Reyes, L., & Chen, C. K. (2018). The evolution and convergence of total quality management and management theories. Https://Doi.Org/10.1080/14783363.2018.1486556, 29(9–10), 1108–1128.

Dahlgaard, J. J., Reyes, L., Chen, C. K., & Dahlgaard-Park, S. M. (2019). Evolution and future of total quality management: management control and organisational learning. Https://Doi.Org/10.1080/14783363.2019.1665776, 30(sup1), S1–S16.

Donate, M. J., Ruiz-Monterrubio, E., Sánchez de Pablo, J. D., & Peña, I. (2020). Total quality management and high-performance work systems for social capital development: Effects on company innovation capabilities. Journal of Intellectual Capital, 21(1), 87–114.

Ertuğrul Köse, & Hüner Şencan. (2016). The Effect of Decision Making Competence on Managerial Performance . International Journal of Commerce and Finance, 2(2).

Gerner, M. (2019). Assessing and managing sustainability in international perspective: corporate sustainability across cultures – towards a strategic framework implementation approach. International Journal of Corporate Social Responsibility 2019 4:1, 4(1), 1–34.

Gerrish, E. (2016). The Impact of Performance Management on Performance in Public Organizations: A Meta-Analysis. Public Administration Review, 76(1), 48–66.

Ghani Al-Saffar, N. A., & Obeidat, A. M. (2020). The effect of total quality management practices on employee performance: The moderating role of knowledge sharing. Management Science Letters.

Hernandez-Espallardo, M., Osorio-Tinoco, F., & Rodriguez-Orejuela, A. (2018). Improving firm performance through inter-organizational collaborative innovations: The key mediating role of the employee’s job-related attitudes. Management Decision, 56(6), 1167–1182.

Holota, T., Hrubec, J., Kotus, M., Holienčinová, M., & Čapošov, E. (2016). The management of quality costs analysis model. Serbian Journal of Management, 11(1), 119–127.

Jalilvand, M. R., Khazaei Pool, J., Balouei Jamkhaneh, H., & Tabaeeian, R. A. (2018). Total quality management, corporate social responsibility and entrepreneurial orientation in the hotel industry. Social Responsibility Journal, 14(3), 601–618.

Jimoh, R., Oyewobi, L., Isa, R., & Waziri, I. (2018). Total quality management practices and organizational performance: the mediating roles of strategies for continuous improvement. Https://Doi.Org/10.1080/15623599.2017.1411456, 19(2), 162–177.

Kaur, M., Singh, K., & Singh, D. (2019). Synergetic success factors of total quality management (TQM) and supply chain management (SCM): A literature review. International Journal of Quality and Reliability Management, 36(6), 842–863.

Kolding, M., Sundblad, M., Alexa, J., Stone, M., Aravopoulou, E., & Evans, G. (2018). Information management – a skills gap? Bottom Line, 31(3–4), 170–190.

Leu, J. Der, & Lee, L. J. H. (2016). Enterprise resource planning (ERP) implementation using the value engineering methodology and Six Sigma tools. Http://Dx.Doi.Org/10.1080/17517575.2016.1215537, 11(8), 1243–1261.

Lindström, J., Lejon, E., Kyösti, P., Mecella, M., Heutelbeck, D., Hemmje, M., … Gunnarsson, B. (2019). Towards intelligent and sustainable production systems with a zero-defect manufacturing approach in an Industry4.0 context. Procedia CIRP, 81, 880–885.

Malik, T. M., Khalid, R., Zulqarnain, A., & Iqbal, S. A. (2016). Cost of quality: Findings of a wood products’manufacturer. TQM Journal, 28(1), 2–20.

Manova, K., & Yu, Z. (2017). Multi-product firms and product quality. Journal of International Economics, 109, 116–137.

Mehralian, G., Nazari, J. A., Nooriparto, G., & Rasekh, H. R. (2017). TQM and organizational performance using the balanced scorecard approach. International Journal of Productivity and Performance Management, 66(1), 111–125.

Mokhtar, N., Jusoh, R., & Zulkifli, N. (2016). Corporate characteristics and environmental management accounting (EMA) implementation: evidence from Malaysian public listed companies (PLCs). Journal of Cleaner Production, 136, 111–122.

Muhammad Haroon Hafeez, Muhammad Farhan Basheer, Majid Rafique, & Sulaman Hafeez Siddiqui. (2018). Exploring the Links between TQM Practices, Business Innovativeness and Firm Performance: An Emerging Market Perspective. Pakistan Journal of Social Sciences (PJSS), 38(2), 485–500.

Neyestani, B. (2017). Principles and Contributions of Total Quality Mangement (TQM) Gurus on Business Quality Improvement. SSRN Electronic Journal.

Nguyen, T. L. H., & Nagase, K. (2019). The influence of total quality management on customer satisfaction. Https://Doi.Org/10.1080/20479700.2019.1647378, 12(4), 277–285.

Pambreni, Y., Khatibi, A., Ferdous Azam, S. M., & Tham, J. (2019). The influence of total quality management toward organization performance. Management Science Letters.

Pellegrino, R., Costantino, N., & Tauro, D. (2020). The role of risk management in buyer-supplier relationships with a preferred customer status for total quality management. TQM Journal, 32(5), 959–981.

Psomas, E. L., & Jaca, C. (2016). The impact of total quality management on service company performance: evidence from Spain. International Journal of Quality and Reliability Management, 33(3), 380–398.

Randhawa, J. S., & Ahuja, I. S. (2017). 5S – a quality improvement tool for sustainable performance: literature review and directions. International Journal of Quality and Reliability Management, 34(3), 334–361.

Sader, S., Husti, I., & Daróczi, M. (2019). Industry 4.0 as a Key Enabler toward Successful Implementation of Total Quality Management Practices. Periodica Polytechnica Social and Management Sciences, 27(2), 131–140.

Saha, N., Gregar, A., & Sáha, P. (2017). Organizational agility and HRM strategy: Do they really enhance firms’ competitiveness? International Journal of Organizational Leadership.

Schaltegger, S., & Wagner, M. (2017). Managing and Measuring the Business Case for Sustainability : Capturing the Relationship between Sustainability Performance, Business Competitiveness and Economic Performance. Managing the Business Case for Sustainability, 1–27.

Shadi Abualoush, Ra’ed Masa’deh, Khaled Bataineh, & Ala’aldin Alrowwad. (2018). The role of knowledge management process and intellectual capital as intermediary variables between knowledge management infrastructure and organization performance. Interdisciplinary Journal of Information, Knowledge, and Management, 13, 279–309.

Shafiq, M., Lasrado, F., & Hafeez, K. (2017). The effect of TQM on organisational performance: empirical evidence from the textile sector of a developing country using SEM. Https://Doi.Org/10.1080/14783363.2017.1283211, 30(1–2), 31–52.

Shin, D. H. (2017). Conceptualizing and measuring quality of experience of the internet of things: Exploring how quality is perceived by users. Information & Management, 54(8), 998–1011.

Shin, D., & Konrad, A. M. (2014). Causality Between High-Performance Work Systems and Organizational Performance: Https://Doi.Org/10.1177/0149206314544746, 43(4), 973–997.

Tseng, S. M. (2016). Knowledge management capability, customer relationship management, and service quality. Journal of Enterprise Information Management, 29(2), 202–221.

Vysochynska, O. (2017). Total cost of poor quality.

Welford, R. (2016). Corporate environmental management 3: Towards sustainable development. Corporate Environmental Management 3: Towards Sustainable Development, 3, 1–184.

Whitley, R. (2019). On the Nature of Managerial Tasks and Skills: Their Distinguishing Characteristics and Organization. Managerial Work, 337–352.

Xie, J., Nozawa, W., Yagi, M., Fujii, H., & Managi, S. (2019). Do environmental, social, and governance activities improve corporate financial performance? Business Strategy and the Environment, 28(2), 286–300.

Yannis, P., & Nikolaos, B. (2018). Quantitative and Qualitative Research in Business Technology: Justifying a Suitable Research Methodology. Review of Integrative Business and Economics Research.

Yokokawa, H., & Mizoguchi, M. (2016). Collaboration structure for the resurrection of Iitate Village, Fukushima: A case study of a nonprofitable organization. In Agricultural Implications of the Fukushima Nuclear Accident: The First Three Years.

Zabri, S. M., Ahmad, K., & Wah, K. K. (2016). Corporate Governance Practices and Firm Performance: Evidence from Top 100 Public Listed Companies in Malaysia. Procedia Economics and Finance, 35, 287–296.

How to Cite
Elvina, E., Anggraeni, S., Sasongko, S., & Erlandian, A. (2022). The Influence of Total Quality Management (TQM) on Quality Cost Efficiency and Managerial Performance and the Implications for Company Performance. Indonesian Interdisciplinary Journal of Sharia Economics (IIJSE), 5(2), 459-480.