Examining the effects of contextual factors on TQM and performance through the lens of organizational theories: An empirical study

Abstract Although much has been written about TQM, little attention has been paid to the potential effects of contextual factors on TQM and TQM–performance relationships. The use of organizational theory to formulate propositions regarding the effects of such factors is especially scarce in the TQM literature. This study uses institutional theory and contingency theory as the basis to test a number of such propositions. First, a model of TQM and organizational performance is developed. Then using survey data, the effects of five contextual factors – three institutional factors and two contingency factors – on the implementation of TQM practices and on the impact of TQM on key organizational performance measures are analyzed within a TQM–performance relationships model framework. The three institutional factors include TQM implementation, ISO 9000 registration, and country of origin, and the two contingency factors include company size and scope of operations. The results show that the implementation of all TQM practices is similar across subgroups of companies within each contextual factor. In addition, the effects of TQM on four performance measures, as well as the relationships among these measures, are generally similar across subgroup companies. Thus, for the five contextual factors analyzed, the overall findings do not provide support for the argument that TQM and TQM–performance relationships are context‐dependent. The implications of the study for managers and researchers, as well as study limitations, are also discussed.