Achieving Sustainable Performance Through TQM and Market Orientation: A Proposed Framework for Empirical Investigations - Page 9

Description of the conceptual Model

This model combines the elements of both quality orientation and market orientation into an integrated approach. Market-based quality (MBQ) orientation is defined as business philosophy that guides managers to choose the way of doing business. It is a business culture-organisational culture, climate, and style that are oriented toward satisfying profitable customers. “The culture, climate and style pertain to the interrelationships which exist within a firm’s micro-environment”, while the orientation pertains to how firms interact with all environment (Miles et al., 1995). Explicitly, the actual orientation defines how firm relates to its external, internal and the contextual competitive environment. As firm faces unique situations within their internal and external environment, the actual orientation represents selecting the contents and processes from the model that compatible to the firm resources and skills in an attempt to develop a sustainable advantage.

This model assumes that the philosophy held by organisational members influences both the strategic and tactical decisions in all business activities and is consistent with Foxal (1984) that organisational orientation influence the actions and “the attitudes and behaviour of all members of the company”. This implied that MBQ orientation should be pervasively deployed throughout the organisation and led by top management.

The model incorporates all critical elements derived from market-based behaviour and quality-focused characteristics. However, in practice each firm may display a set of operating principles that suit their contextual environment especially related to their control-learning oriented goals. In order to study the relationship between firm’s actual orientation (measured on set of practices) and firm’s performance, a causal model (see figure 1.4) is constructed. These relationships between core elements in the model and performance form the main hypotheses in this research. The causal model extracts the “content elements” from the conceptual model and the list of practices in table 1.1.

Research model (figure 1.5) shows the contents and processes of the MBQ orientation. The contents are the core practices (elements) that truly create competitive advantage, which have been identified from the literature as operational optimisation (process efficiency), products / service reliability, design optimisation and market advantage. These core elements are by no mean exhaustive but are thought as sufficient to embrace the peripheral concepts delineated from market orientation and TQM fundamentals. The causal model separates the process elements from the contents though they may be equally important in securing the sustainable advantage.

These contents elements are derived directly from Deming three stage definition of quality; i.e. quality of design and redesign; quality of conformance; and quality of performance [Gitlow et al., (1987, p. 8)] and Juran’s four elements definition; quality of design, quality of conformance; availability; and field service (Juran and Gryana, 1988). Juran is more explicit than Deming to state quality of performance in terms of availability and field service, which can be translated into product reliability consistent with SERVQUAL model by Zeithaml et al., (1990).

Reliability, a primary element of TQM is a multi-construct concept encompassing product usable age, ease and speed of maintainability, parts replacement availability, promptness of correction, delivery as promise, on-time service, and integrity of service in correcting problems. Reliability is at the core of product offering supported by services as ‘augmented product’ making a bundle of benefits to the customer. High reliability is not only a core determinant of product performance but also perquisite to customer satisfaction.

Market advantage in this context is the result of leveraging the product reliability and customer satisfaction relative to the competition in the industry. In another word market advantage is the consequence of product/service reliability and customer satisfaction. The latter two concepts are the purpose of all quality strategies. Therefore quality of performance is measured in the marketplace and can be enhanced externally, for example through customer education and after sale service. Similarly, relationship-marketing strategies are primarily concerned with enhancing and translating the outcome of quality of performance to create market advantage.

Quality of conformance in operations management or engineering term means meeting standards in production process ( Crosby, 1979) and associated with process control. Operational optimisation is largely affected by optimum design. Design and operational optimisation in turn result in high reliability products/ service being delivered to customer. This value-added chain is continuously improved through various TQM efforts and market oriented behaviour thus making firms achieve both operational excellence and unique market position to sustain their performance.

Figure 1.4
MBQ Orientation: Content - process model

MBQ Orientation: Content - process model

Figure 1.5 MBQ Orientation: Research Model

MBQ Orientation: Research Model

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