An empirical assessment of the influence of quality dimensions on organizational performance

While there are several conceptual models to suggest that there exists an association between quality dimensions (customer satisfaction, employee satisfaction, employee service quality) and organizational performance, no empirical study to date has verified such claims. This paper extends the literature by collecting hard data from 165 practising managers and testing their perceptions of the association among various quality dimensions and several organizational performance measures. The relationships between these quality dimensions and the nine component items that make up organizational performance were also investigated for both manufacturing and service firms. The data were grouped into four typologies to include type of firm, size, age, and presence of formal quality department. Multiple discriminant analysis was conducted to differentiate the typology of firms in a multivariate setting. Our results indicate that practising managers in manufacturing firms tend to perceive more widely a positive correlation between quality dimensions and the component items of organizational performance than managers in service firms. Also, managers from older manufacturing firms tend not to perceive a relationship between employee service quality and five component items of organizational performance such as competitiveness and market share. The measures used for the three quality dimensions and organizational performance are shown to be valid and reliable. However, information derived from the study shows that practising managers in the service sector do not perceive some of the claims and expected benefits of quality management activities.