Relationship between quality management practices and innovation

• Author: Dong‐Young Kim,Uma Kumar,Vinod Kumar
• Published date: 01 May 2012
• DOI: http://doi.org/10.1016/j.jom.2012.02.003
• Date: 01 May 2012

Journal

of

Operations

Management

30

(2012)

295–315

Contents

lists

available

at

SciVerse

ScienceDirect

Journal

of

Operations

Management

jo

ur

nal

home

page:

www.elsevier.com/locate/jom

Relationship

between

quality

management

practices

and

innovation

Dong-Young

Kima,∗, Vinod

Kumarb,1,

Uma

Kumarb,2

aCoggin

College

of

Business,

University

of

North

Florida,

1

UNF

Drive,

Jacksonville,

FL

32224-7699,

USA

bSprott

School

of

Business,

Carleton

University,

1125

Colonel

by

Drive,

Ottawa,

ON

K1S

5B6,

Canada

a

r

t

i

c

l

e

i

n

f

o

Article

history:

Received

20

August

2010

Received

in

revised

form

13

February

2012

Accepted

24

February

2012

Available

online

15

March

2012

Keywords:

Quality

management

practices

Radical

product

innovation

Radical

process

innovation

Incremental

product

innovation

Incremental

process

innovation

Administrative

innovation

a

b

s

t

r

a

c

t

The

purpose

of

this

study

is

to

examine

the

associations

among

different

quality

management

(QM)

prac-

tices

and

investigate

which

QM

practices

directly

or

indirectly

relate

to

five

types

of

innovation:

radical

product,

radical

process,

incremental

product,

incremental

process,

and

administrative

innovation.

We

test

the

proposed

framework

and

hypotheses

using

empirical

data

from

ISO

9001

certified

manufacturing

and

service

firms.

The

results

show

that

a

set

of

QM

practices

through

process

management

has

a

positive

relationship

with

all

of

these

five

types

of

innovation.

It

was

found

that

process

management

directly

and

positively

relates

to

incremental,

radical,

and

administrative

innovation.

Organizational

capability

to

manage

processes

may

play

a

vital

role

in

identifying

routines,

establishing

a

learning

base,

and

sup-

porting

innovative

activities.

The

findings

also

reveal

that

the

value

of

an

individual

QM

practice

is

tied

to

other

QM

practices.

Therefore,

highlighting

just

one

or

a

few

QM

practices

or

techniques

may

not

result

in

creative

problem

solving

and

innovation.

©

2012

Elsevier

B.V.

All

rights

reserved.

1.

Introduction

Over

the

last

30

years,

innovation

has

caught

the

attention

of

researchers

and

practitioners

(Gatignon

et

al.,

2002;

Damanpour,

1987).

In

a

turbulent

economic

environment,

innovation

is

a

strate-

gic

driver

in

seizing

new

opportunities

and

protecting

knowledge

assets

(Hurmelinna-Laukkanen

et

al.,

2008;

Teece,

2000).

Specifi-

cally,

innovation

plays

a

key

role

in

providing

unique

products

and

services

by

creating

greater

value

than

was

previously

recognized

and

establishing

entry

barriers

(Lloréns

Montes

et

al.,

2005).

The

importance

of

innovation

has

motivated

researchers

to

identify

the

various

driving

forces

of

innovation

(Becheikh

et

al.,

2006).

Some

researchers

contend

that

quality

management

(QM)

could

be

one

of

the

prerequisites

of

innovation

(Hoang

et

al.,

2006;

Perdomo-Ortiz

et

al.,

2006).

QM

practices

contribute

to

operational

and

financial

performance,

allowing

a

firm

to

achieve

a

competitive

advantage

(Lagrosen

and

Lagrosen,

2005;

Kaynak,

2003).

It

is

not

surprising

that

many

manufacturing

and

service

firms

around

the

world

(e.g.,

Xerox,

Ford,

Motorola,

and

Federal

Express)

have

adopted

QM

over

the

last

two

decades

(Rahman,

2004;

Powell,

1995).

Since

the

early

2000s,

researchers

have

conducted

empirical

studies

on

the

relationship

between

QM

and

innovation.

While

∗Corresponding

author.

Tel.:

+1

904

620

5865.

E-mail

addresses:

d.kim@unf.edu

(D.

Y.

Kim),

Vinod

Kumar@carleton.ca

(V.

Kumar),

Uma

Kumar@carleton.ca

(U.

Kumar).

1Tel.:

+1

613

520

2379.

2Tel.:

+1

613

520

6601.

previous

studies

have

provided

interesting

insight

into

the

role

of

QM

practices

in

innovation,

a

few

shortcomings

in

these

studies

emerge

from

the

literature

review.

First

of

all,

earlier

studies

failed

to

explain

which

QM

practices

are

directly

or

indirectly

associated

with

innovation.

Most

studies

examined

only

the

direct

relation-

ship

between

QM

practices

and

innovation.

Researchers

have

tended

to

identify

whether

the

implementation

of

QM

practices

is

positively

related

to

innovation

(e.g.,

Abrunhosa

et

al.,

2008;

Martinez-Costa

and

Martinez-Lorente,

2008;

Hoang

et

al.,

2006)

or

which

QM

practice

is

directly

related

to

innovation

(Moura

et

al.,

2007;

Prajogo

and

Sohal,

2004).

Second,

researchers

were

limited

to

assessing

only

a

few

types

of

innovation.

Some

studies

examined

a

single

type

of

innovation,

such

as

process

innovation

(e.g.,

Abrunhosa

et

al.,

2008)

or

product

innovation

(e.g.,

Prajogo

and

Sohal,

2004),

whereas

others

explored

both

process

and

product

innovation

(e.g.,

Feng

et

al.,

2006;

Martinez-Costa

and

Martinez-Lorente,

2008).

Looking

at

the

earlier

studies,

two

ques-

tions

arise:

Is

it

worthwhile

to

examine

QM

practices

that

can

lead

to

only

product

and

process

innovations?

If

not,

what

other

types

of

innovation

should

be

explored

to

clearly

address

an

association

between

QM

and

innovation?

These

studies

devoted

only

limited

attention

to

examining

various

types

of

innovation.

This

narrow

view

of

innovation

may

be

a

barrier

that

causes

a

misunderstand-

ing

of

the

contribution

of

QM

to

innovation.

The

multidimensional

types

of

innovation

need

to

be

tested

to

correctly

understand

the

real

value

of

QM

on

innovation.

Third,

earlier

studies

on

the

relationship

between

QM

and

innovation

have

provided

incon-

sistent

findings

(See

Appendix

A).

Some

found

that

QM

practices

are

positively

related

to

innovation

(e.g.,

Perdomo-Ortiz

et

al.,

0272-6963/$

–

see

front

matter

©

2012

Elsevier

B.V.

All

rights

reserved.

doi:10.1016/j.jom.2012.02.003

296

D.

Y.

Kim

et

al.

/

Journal

of

Operations

Management

30

(2012)

295–315

2006;

Martinez-Costa

and

Martinez-Lorente,

2008),

whereas

oth-

ers

concluded

that

there

is

no

evidence

linking

QM

activities

and

innovation

(e.g.,

Singh

and

Smith,

2004;

Moura

et

al.,

2007;

Prajogo

and

Sohal,

2004;

Santos-Vijande

and

Álvarez-González,

2007).

This

study

explores

the

following

two

questions:

What

rela-

tionship

exists

among

QM

practices?

Which

QM

practices

are

directly

or

indirectly

related

to

innovation?

We

concentrate

on

the

research

questions

by

conducting

an

empirical

study

of

man-

ufacturing

and

service

firms.

The

objective

of

this

study

is

to

empirically

investigate

the

relationships

among

QM

practices

and

to

explore

which

QM

practices

are

directly

or

indirectly

associ-

ated

with

five

types

of

innovation:

radical

product,

radical

process,

incremental

product,

incremental

process,

and

administrative.

The

remainder

of

this

study

is

organized

as

follows.

The

following

section

describes

the

extant

literature,

gives

a

research

model,

and

presents

hypotheses.

The

next

section

presents

methodology,

including

data

collection,

measurement

scales,

measurement

anal-

ysis,

and

hypothesis

testing.

Finally,

this

study

concludes

with

a

discussion,

notes

the

implications

of

the

results,

and

gives

sugges-

tions

for

future

research.

2.

Theoretical

background

and

hypotheses

This

section

discusses

four

topics:

QM

practices,

classification

of

innovation,

the

relationship

between

QM

and

innovation,

and

a

research

model.

2.1.

QM

practices

QM

is

a

holistic

management

philosophy

that

fosters

all

func-

tions

of

an

organization

through

continuing

improvement

and

organizational

change

(Kaynak

and

Hartley,

2005).

QM

captures

features

from

distinct

organizational

models

and

extends

them

by

offering

principles,

methodologies,

and

techniques

(Spencer,

1994).

Researchers

emphasize

that

it

is

necessary

for

firms

to

define

and

develop

QM

practices

that

can

assist

a

multi-dimensional

manage-

ment

philosophy.

QM

practices

refer

to

critical

activities

that

are

expected

to

lead,

directly

or

indirectly,

to

improved

quality

perfor-

mance

and

competitive

advantage

(Flynn

et

al.,

1995).

Much

attention

in

the

research

has

been

devoted

to

develop-

ing

measurement

constructs

of

QM

and

examining

the

association

between

QM

practices

and

performance.

Saraph

et

al.

(1989)

pro-

vide

the

first

attempt

to

explore

the

measurement

of

QM

practices

(Perdomo-Ortiz

et

al.,

2006).

Their

motivation

is

fuelled

by

the

lack

of

a

systematic

attempt

to

organize

a

set

of

QM

practices

and

the

need

to

develop

measures

of

the

overall

QM

efforts

in

the

litera-

ture.

Using

a

survey

of

162

general

managers

and

quality

managers,

they

propose

and

test

eight

critical

factors

of

QM:

the

role

of

man-

agement

leadership,

the

role

of

the

quality

department,

training,

employee

relations,

quality

data

and

reporting,

supplier

quality

management,

product/service

design,

and

process

management.

Similarly,

Flynn

et

al.

(1994),

in

their

survey

of

716

respondents,

argue

that

QM

studies

on

theory

development

and

measurement

failed

to

yield

conclusive

evidence

related

to

validity

and

reliability.

They

suggest

seven

key

dimensions

of

QM

and

scales:

top

manage-

ment

support,

quality

information

systems,

process

management,

product

design,

workforce

management,

supplier

involvement,

and

customer

involvement.

Although

there

is

little

agreement

on

the

list

of

QM

practices

(Samson

and

Terziovski,

1999),

the

efforts

to

develop

a

set

of

QM

practices

provide

a

theoretical

foundation

to

scientifically

connect

traditional

QM

philosophies

with

practical

activities.

The

existing

empirical

research

on

the

relationship

between

QM

practices

and

performance

is

characterized

by

examinations

of

the

interdependent

nature

of

QM

practices.

Researchers

view

an

organization

to

be

a

system

of

interlocking

processes.

The

research,

called

linkage-oriented

research,

mainly

tests

associations

among

QM

practices

(Sila

and

Ebrahimpour,

2005).

The

linkage-oriented

research

relies

on

sophisticated

analysis

techniques,

such

as

struc-

tural

equation

modeling,

path

analysis,

and

partial

least

square

method

(e.g.,

Flynn

et

al.,

1995;

Ravichandran

and

Rai,

2000)

because

the

research

mainly

includes

a

complex

research

model

with

many

variables.

Actually,

researchers

have

provided

mixed

findings

on

the

relationships

among

QM

practices.

We,

how-

ever,

find

two

common

views

in

the

literature.

The

first

view

is

that

the

successful

implementation

of

QM

can

be

attributed

to

the

strong

support

of

a

combination

of

a

series

of

practices,

not

just

a

few

practices

separately

(Ravichandran,

2007;

Nair,

2006;

Schendel,

1994;

Douglas

and

Judge,

2001).

The

second

view

is

that

QM

practices

could

lead

to

improved

performance

in

areas

such

as

quality,

operations,

innovation,

and

business

results

(Flynn

et

al.,

1995;

Ravichandran

and

Rai,

2000;

Hoang

et

al.,

2006;

Kaynak,

2003).

We

regard

these

views

as

basic

assumptions

in

this

study.

2.2.

Classification

of

innovation

Innovation

refers

to

new

applications

of

knowledge,

ideas,

methods,

and

skills

that

can

generate

unique

capabilities

and

lever-

age

an

organization’s

competitiveness

(Andersson

et

al.,

2008;

Daft,

1978).

This

definition

reflects

a

broader

view

of

innovation

by

cov-

ering

both

administrative

and

technological

innovation.

In

a

global

market,

firms

should

have

the

ability

to

identify

new

chances,

and

to

reconfigure

and

shield

technologies,

competences,

knowl-

edge

assets,

and

complementary

assets

to

accomplish

a

sustainable,

competitive

advantage

(Teece,

2000).

It

is

necessary

to

understand

a

type

of

innovation

and

its

different

features,

because

a

spe-

cific

type

of

innovation

requires

an

organization

to

demonstrate

unique

and

sophisticated

responses.

Researchers

have

explored

the

classification

of

innovation

in

different

ways.

Although

pre-

vious

studies

have

proposed

various

classifications

of

innovation,

we

found

that

empirical

studies

on

innovation

have

explored

five

types

of

innovation:

incremental

product,

incremental

process,

radical

product,

radical

process,

and

administrative

(e.g.,

Salavou

and

Lioukas,

2003;

Di

Benedetto

et

al.,

2008;

Herrmann

et

al.,

2007;

Vermeulen,

2005;

Chandy

and

Tellis,

1998).

We

argue

that

investigating

the

various

types

of

innovation

helps

practitioners

break

down

their

overall

strategies

on

innovation

into

a

particu-

lar

type

of

innovation

area

and

efficiently

allocate

resources

for

a

specific

type

of

innovation.

Thus,

our

study

applies

the

five

types

of

innovation

to

analyze

correlations

with

QM

practices.

In

order

to

distinguish

the

five

types

of

innovation,

we

need

to

discuss

the

differences

between

administrative

and

technological

innova-

tion;

incremental

and

radical

innovation;

and

product

and

process

innovation.

Innovation

is

first

split

into

administrative

and

technological

innovation.

Administrative

innovation

refers

to

the

application

of

new

ideas

to

improve

organizational

structures

and

systems,

and

processes

pertaining

to

the

social

structure

of

an

organization

(Weerawardena,

2003;

Damanpour,

1987).

In

contrast,

technolog-

ical

innovation

is

defined

as

the

adoption

of

new

technologies

that

are

integrated

into

products

or

processes

(Yonghong

et

al.,

2005).

Administrative

innovation

is

often

triggered

by

internal

needs

for

structuring

and

coordination,

while

technological

innova-

tion

mainly

responds

to

environmental

factors,

such

as

uncertain

market

conditions

or

technical

knowledge

(Daft,

1978;

Gaertner

et

al.,

1984).

Administrative

innovation

uses

a

top-down

approach

where

upper

level

managers

commit

to

relevant

activities,

whereas

technological

innovation

applies

a

bottom-up

approach

where

lower

level

technicians

are

involved

(Daft,

1978).

Administra-

tive

innovation

requires

considerable

set-up

costs

and

entails