Total quality management practices and business outcome: evidence from small and medium enterprises in Western Australia

Many studies have highlighted the importance of total quality management (TQM) for small and medium enterprises (SMEs). However, little research has been published on how TQM principles have been implemented in SMEs in Australia. Recently, a highly credible report suggested that the quality philosophy has not effectively reached the core of Australia's commercial based-780 000 SMEs. Drawing on this critical finding, this study made an attempt to identify the extent of TQM practices in SMEs in Western Australia and its impact on business performance. Using the criteria of the Australian Business Excellence framework as a guide, a questionnaire with 36 items was developed, checked for reliability and validity and applied to create a self-assessment measure of TQM practices. The results showed that, individually, most of the quality criteria had significant relationships with business outcome, which is measured in terms of revenue, profitability and number of customers. However, it was evident from the analysis that SMEs see criteria such as leadership and people as critical to their business but give little attention to other criteria of TQM. For further improvement of their business, SMEs in Western Australia have to be strategic and more customer focused by making use of relevant data and information appropriately.