the effect of total quality management (tqm )on ...the effect of total quality management (tqm )on...
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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
COPY RIGHT © 2013 Institute of Interdisciplinary Business Research 627
OCTOBER 2013
VOL 5, NO 6
The Effect of Total Quality Management (TQM )on Organization
Performance the Mediation of Market Orientation (Case Study Insurance Companies City of Rasht)
Mohammad Taleghani
Department of Industrial Management, Rasht Branch, Islamic Azad University, Rasht, Iran
Esmaeil Malek Akhlagh
Department of Business Management, University of Guilan,, Guilan ,Iran
Azamossadat Hoseini
Department of Business Management, Science and Research Branch, Islamic Azad University,
Guilan, Iran
(Corresponding Author)
Abstract
It is critical that the managers understand and design strategies to
obtain a greater performance. Market orientation (MO) has emerged
as a significant antecedent of performance. The current situation is
one of the best tools for a dynamic organization whose purpose is to
operate in a competitive environment, known as total quality
management. TQM as a management paradigm has been accepted
by many organizations around the world. TQM is an organization
that attempts to make the structures, procedures, customs, behavior
and even their infrastructure in order to maintain customer
satisfaction, coupled with the emphasis on compatibility, quality
improvement and organizational competitiveness improvement. So ,
this research aims to add systematic view to quality subject by
examine the intermediation role of market organizations
performance . Current research seeks to examine the effects of total
quality management on performance(service quality) will
intermediation of market orientation. After gathering information by
questionnaire from managers, experts 8 senior , we use
SPSS&AMOS for analyzing of data.
Keyword : Total Quality Management , Market Orientation , Organizational
Performance, Service Quality , Insurance
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Introduction
Today's quality improvement has high importance in parts of industry, production,
hygiene, treatment and education and service. In general one organization has
emerged based on public and social needs. Organizations in order to obtain their
purpose must have relationship with other parts. This issue is very important that
managers design strategies which through its improve organization performance
(Pearce 2003). On the other develop institutions and various industrial
organizations and commercial and increase intense of competition between them
caused to organizations to survive do not short of none practical. Today's high
competition and speed of changing global economy has forced organization use of
creative and innovative management methods. Total quality management were
used as a managerial attitudinal in many organizations. Accepting this concept
caused to develop of concepts related to quality. In this study, tries to be identified
add systematic view to data quality subject and simultaneously effects of this two
management approaches on organizational performance by examine the
intermediation role of market organizations performance. (Dess Et al. 1999)
Problem Statement
The concept of managerial attitudes, total quality management were used in many
organizations and has many benefits especially in the economic parts. Accepting
this concept in industry caused to develop and publication of concepts related to
quality thus it seems that were conducted one less organized study in order to
collect statistics and its results. In addition, it seems while many organizations
known marketing concepts, recognized, accepted and used from them (Shane Et al.
2003). Less effort were conducted for study the effect of total quality management
with marketing view. There is research in the field of literature about customer
and market orientation. Also have been conducted a series of investigations about
market orientation and business performance (Kohli 1993 & Narver 1990). For
example, attract of customer satisfaction can be the tool which shows business
performance that clearly shows relationship between business performance and
market orientation. The issue products quality and services quality is the concepts
that it's has been a lot of attention in the marketing literature (Holsapple Et al.
2009). Reviewing this literature indicates that marketing researchers have special
attention to product quality and service and at result customer satisfaction,
reviewing this literature also do not determine completely amount of application
of total quality management in marketing. Using from methods and concepts of
quality improvement in duties marketing managers and consequently in market
research and the role of competitors for marketers can be as a beginning to
attitudes quality improvement in task intermediate systems (Benbya 2008). In
overall, it seems that do not conducted a lot studies to relationship between total
quality management. With creation this in mentality this study is focused on how
relationship between total quality management and market orientation with
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superior quality and how they effect on organization performance. In fact the
major questions of the research is total quality management and market
orientation are in connection with the performance and this relationship is added
to the organizations. (Milton 2002)
Previous Research
1. Thesis with title : » Impact of total quality management on organization
performance intermediation market orientation « presented by Rozita
Khajei and Azar Kafashpour and Ahmad Zendehdel (2009). The results
indicate that the results obtained from past research about the positive
impact of both approaches total quality management and market orientation
on performance ,but analysis of the two systems in parallel shows that
organizational market orientation could not played a mediating role in
hotels three, four and five star Mashhad.
2. Thesis with title : » The effects of total quality management and market
orientation on small business performance « presented by Demirbag M.and
S.C. Lenny koh , Ekrem Tatoglu, Selim Zaim (2006). The results showed
that while market orientation has a positive effect on total quality
management, it has not effect on organizational performance. Also the
results showed that market orientation has a positive effect on organization
performance through the role of establishment total quality management.
3. Shahram Gilaninia ( 2011) in study with title » The effect levels of total
quality management on performance of insurance companies in Iran » has
paid to reviews the effect of dimension different levels of total quality
management on performance of insurance companies according to model
David Garvin in insurance industry. The results showed that the effect of
dimension different levels of total quality management on performance of
insurance companies in Iran is different.
Theoretical Research
Total Quality Management : The total quality management overall is the ways
improving management effectiveness, flexibility and competitiveness in
manufacturing and service organizations. (Ebert 2005)
Market Orientation : The market orientation is a stage of organization
development or as a level that reflects the organizational maturity. (Hayes 1998)
Organizational Performance : The organization performance shows that how an
organization reach to its mission and goals. (Mumford Et al. 2004)
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Service Quality : The service quality is involves comparing comparison of
customer expectations with feeling and customer perception of actual
performance. (Jung Et al 2003)
Insurance : The insurance is as a industry has an important and effective role in
growth and development sustainable economic of countries. (Teresa Et al. 2006)
Models of Research
Figure 1 : Conceptual Model of Research
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The Research Hypotheses
The Main Hypothesis
H1 : Total quality management in organization has effect on service quality.
H2 : Organizational market orientation has effect on service quality.
H3 : Total quality management has effect on organizational market orientation.
H4: Total quality management has effect on service quality intermediation
organizational market orientation.
The Sub Hypothesis
1. H1 : Total quality management has effect on functional service quality.
2. H2 : Total quality management has effect on technical services quality.
1. H2 : Orbital customer has effect on technical services quality.
2. H2 : Create and exchange of information has effect on technical services
quality.
3. H2 : Axial competition has effect on technical services quality.
4. H2 : Orbital customer has effect on functional service quality.
5. H2 : Create and exchange of information has effect on functional service
quality.
6. H2 : Axial competition has effect on functional services quality.
1. H3 : Total quality management has effect on orbital customer.
2. H3 : Total quality management has effect on create and exchange of
information.
3. H3 : Total quality management has effect on axial competition.
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Research Methodology
In this study is used from random sampling. Statistical population in this study
included all the managers and BS and MS of insurance companies city of Rasht
that according to the data collected in total, 264 people ( managers, BS and MS)
are working in insurance companies surveyed in the city of Rasht. In this study is
used questionnaires tools for data gathering.
Validation of Questionnaire
The most usual test of internal, is the Cronbach's alpha coefficient which is done
for multi measure questions or classifications (Danaeefar Et al 2008). Alpha
cronbakh results as the following :
Table 1 : Cronbach's Alpha
Cronbach's alpha Number of Questions Coefficients
0.811 13 Total Quality
Management
0.841 14 Market Orientation
0.705 10 Service Quality
0.909 37 Entire Questionnaire
Test Results
The First Main Hypothesis Testing : Total quality management has effect on
functional service quality.
Table 2 : Regression model between variables total quality management and service quality
Determination
Coefficient Significant
t
Regression
Coefficients
Dependent
Variable
Independent
Variable
0.260 0.000 5.875 0.217 Service
Quality
Total Quality
Management
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According to the results obtained there is significant linear relationship between
total quality management and service quality in level error 0.05 (t=5.875,
Sig.<0.05). Also the variable of total quality management can determine %26.0
changes of service quality, its mean independent variable can predict %26.0 of
dependent variable changes the research hypothesis is accepted
The Second Main Hypothesis Testing : Organizational market orientation has
effect on service quality.
Table 3 : Regression model between variables market orientation and service quality
Determination
Coefficient Significant
t
Regression
Coefficients
Dependent
Variable
Independent
Variable
0.256 0.000 5.812 0.215 Service
Quality
Market
Orientation
According to the results obtained there is significant linear relationship between
market orientation and service quality in level error 0.05 (t=5.812, Sig.<0.05).
Also the variable of market orientation can determine %25.6 changes of service
quality, its mean independent variable can predict %25.6 of dependent variable
changes the research hypothesis is accepted.
The Third Main Hypothesis Testing : Total quality management has effect on
organizational market orientation.
Table 4 : Regression model between variables total quality management and market
orientation
Determination
Coefficient Significant
t
Regression
Coefficients
Dependent
Variable
Independent
Variable
0.271 0.000 6.036 0.519 Service
Quality
Market
Orientation
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According to the results obtained there is significant linear relationship between
total quality management and market orientation in level error 0.05 (t=6.036,
Sig.<0.05). Also the variable of total quality management can determine %27.1
changes of market orientation, its mean independent variable can predict %27.1 of
dependent variable changes the research hypothesis is accepted.
The Fourth Main Hypothesis Testing : Total quality management has effect on
service quality intermediation organizational market orientation.
Table 5 : Multiple regression model between variables of the research.
Determination
Coefficient Significant
t
Regression
Coefficients
Dependent
Variable
Independent
Variable
0.340
0.001
Service
Quality
Total
Quality
Management 3.504 0.144
0.001 3.416 0.140 Market
Orientation
According to the results obtained there is significant linear relationship between
total quality management and service quality when there is market orientation
variables in the model in level error 0.05 (t=3.416, Sig.<0.05) thus the research
hypothesis is accepted.
The First Sub Hypothesis Testing : Total quality management in organization
has effect on functional service quality.
According to the results obtained there is significant linear relationship between
total quality management and functional service quality in level error 0.05
(t=5.801, Sig.<0.05). Also the variable of total quality management can determine
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%25.6 changes of functional service quality, thus the research hypothesis is
accepted.
The Second Sub Hypothesis Testing : Create and exchange of information has
effect on technical services quality.
According to the results obtained there is significant linear relationship between
create and exchange of information and technical service quality in level error
0.05 (t=3.135, Sig.<0.05). Also the variable of create and exchange of information
can determine %9.1 changes of technical service quality, thus the research
hypothesis is accepted.
The Third Sub Hypothesis Testing : Axial competition has effect on technical
services quality.
According to the results obtained there is significant linear relationship between
axial competition and technical service quality in level error 0.05 (t=2.517,
Sig.<0.05). Also the variable of axial competition can determine %6.1 changes of
technical service quality, thus the research hypothesis is accepted.
The Fourth Sub Hypothesis Testing : Orbital customer has effect on functional
service quality.
According to the results obtained there is significant linear relationship between
orbital customer and functional service quality in level error 0.05 (t=5.997,
Sig.<0.05). Also the variable of orbital customer can determine %26.8 changes of
functional service quality, thus the research hypothesis is accepted.
The Fifth Sub Hypothesis Testing : Create and exchange of information has
effect on functional service quality.
According to the results obtained there is significant linear relationship between
create and exchange of information and functional service quality in level error
0.05 (t=4.663, Sig.<0.05). Also the variable of create and exchange of information
can determine %9.1 changes of functional service quality, thus the research
hypothesis is accepted.
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The Sixth Sub Hypothesis Testing : Axial competition has effect on functional
services quality.
According to the results obtained there is significant linear relationship between
axial competition and functional service quality in level error 0.05 (t=3.672,
Sig.<0.05). Also the variable of axial competition can determine %6.1 changes of
functional service quality, thus the research hypothesis is accepted.
Conclusions
The analysis results show market orientation has the mediating effect between
TQM and performance in insurance companies city of Rasht. At the end, by
attention to the results suggestions are presenting for improve affecting of upper
system on performance.
Research Suggestions
1. Employees training (training)
2. Changes in order to continuous improvement with surveys from
customers(continuous improvement)
3. Appropriate surveillance on performance by managers based on
commitment principle (commitment)
4. Create offers system for customers and assign awards and lottery to best
offers
5. Intercommunity and cooperation
Suggestions for Future Research
1. Investigate and accurate recognition of dimension total quality management
on market orientation
2. Perform this research in other locations and times and investigate adaptive
its results.
3. Investigate the effects of education, type of company and managers history
on companies performance
4. Investigate and recognition the effects of organization market orientation
dimension with other components of organization performance such as
profitability and satisfaction.
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Limitations of Research
1. Insurance companies in the city of Rasht have very much dispersion
2. Lack of managers and need to spend long time to access them.
3. Low tendency in providing the information required by some managers.
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