4 Abstracts

6/19/2021 The Effects of Total Quality Management on Exports in Manufacturing Based Small and Medium Enterprise's: A Case Study of Organizati…

https://www.proquest.com/abiglobal/docview/2098670887/fulltext/237508D542AE4CA2PQ/111?accountid=10378 1/14

Full Text | Scholarly Journals

The Effects of Total Quality Management on Exports in Manufacturing Based Small and Medium Enterprise's: A Case Study of Organizations from Selected Regions of Pakistan

Tahir, Muhammad; Batool, Saima; Takrim, Kausar.

NUML International Journal of Business & Management; Islamabad  Vol. 11, Iss. 1,  (Jun 2016): 173-

197.

Full Text

Abstract

The importance of exports and Small and Medium Enterprise 's development cannot be undermined for

any country 's economic and social development. The current study is motivated due to limited

understanding of Total Quality Management (TQM) among manufacturing based SMEs in the context

of Pakistan. The objective of the study was set to assess the level of TQM implementation and its

impact on the exports in the case of manufacturing based SMEs in Pakistan. The study utilized survey

methodology and data is collected through convenient sampling from 120 respondents belonging to

manufacturing based SMEs located in Peshawar, Haripur, and Rawalpindi. Correlation and regression

analysis were carried out on the data. Key findings indicate that there is low level of TQM

implementation despite its positive effects on export promotion in the sample firms. The low

implementation can be associated to limited resources, owner 's low education and interest in quality

Turn on search term navigation

Headnote

Abstract

The importance of exports and Small and Medium Enterprise 's development cannot be undermined for

any country 's economic and social development. The current study is motivated due to limited

understanding of Total Quality Management (TQM) among manufacturing based SMEs in the context

of Pakistan. The objective of the study was set to assess the level of TQM implementation and its

impact on the exports in the case of manufacturing based SMEs in Pakistan. The study utilized survey

methodology and data is collected through convenient sampling from 120 respondents belonging to

manufacturing based SMEs located in Peshawar, Haripur, and Rawalpindi. Correlation and regression

analysis were carried out on the data. Key findings indicate that there is low level of TQM

implementation despite its positive effects on export promotion in the sample firms. The low

implementation can be associated to limited resources, owner 's low education and interest in quality

ABI/INFORM Global

6/19/2021 The Effects of Total Quality Management on Exports in Manufacturing Based Small and Medium Enterprise's: A Case Study of Organizati…

https://www.proquest.com/abiglobal/docview/2098670887/fulltext/237508D542AE4CA2PQ/111?accountid=10378 2/14

and limited support from government and its related agencies. It is suggested that increase of TQM

implementation among manufacturing based SMEs in Pakistan can yield some desirable outcomes

such as exports.

Key Words: Exports, TQM, SMEs, Manufacturing sector, Continuous improvement, Process

management

Introduction

Small and Medium Enterprises (SME's) contribution to any country's economic development is vital as

SMEs provides selfemployment, generate taxes, enhance the GDP, and enable effective utilization of

country's resources. SMEs also contribute to the society by involving in global trade including imports

and exports and thus improving country's balance of payment as well as consumers welfare. According

to experts, SMEs are providing more than half of the employment and playing a major role in national

economic development of several developing economies (Valmohammadi, 2011). Thus, economic

system of several countries is anchored on highly efficient and productive SMEs (Hill, Nancorrow, &

Wright, 2002). Exports on the other hand, are highly important for a country and their contribution in

economic development is also well established (Khan & Saqib, 1993). In Pakistani context, relatively

few studies are conducted in manufacturing based SMEs.

Many previous studies which examined the relationship between TQM and business performance

focused on large organizations and were limited in terms of empirical evidence focusing on SMEs,

(Seth & Tripathi, 2005) especially in developing countries (Koh, Demirbag, Bayraktar, Tatoglu, & Zaim,

2007), in ASEAN countries (Arumugam, Ooi, & Fong, 2008), and emerging market economies (Demirbag,

Koh, Tatoglu, & Zaim, 2006).

Overall, the limited literature on TQM ( Total Quality Management ) in Pakistani based SMEs suggests

that there is limited awareness and application of TQM among Pakistani SMEs. Moreover, the positive

outcomes of TQM in Pakistani based SMEs are also reported. The current study is motivated due to

scarcity of literature on TQM in manufacturing based SMEs in addition to low understanding of TQM.

Conceptual Framework

TQM, which is a management philosophy, is a set of management practices as well as philosophies

which aims to improve the quality of all aspects of an organization. The concept is developed as a

result of intense competition faced by the American and European manufacturers from the Japanese

manufacturers. The concept quickly become a managerial fad and first widely adopted in developed

countries and later in developing countries. Pakistan is also a later adopter in the introduction of TQM

in Pakistan. This study utilized six key factors of TQM based on the work of Abusa (2011) which are

expected to appropriately cover the concept. These factors are top management commitment,

customer focus, people management , supplier quality management , continuous improvement, and

process management . Moreover, the application of the quality management concepts in SMEs and

its impact on business performance has not yet been clearly understood (Gadenne & Sharma, 2009).

Problem Statement

6/19/2021 The Effects of Total Quality Management on Exports in Manufacturing Based Small and Medium Enterprise's: A Case Study of Organizati…

https://www.proquest.com/abiglobal/docview/2098670887/fulltext/237508D542AE4CA2PQ/111?accountid=10378 3/14

In Pakistani context, relatively few studies are conducted in manufacturing based SMEs. Example

include a study conducted by Moosa (1999) in ISO certified firms and found that overall awareness

about various quality tools is low and most of the quality management is practiced in production

function alone. Awan (2003) also conducted a study in ISO registered firms belonging to sports

industry of Pakistan and found that TQM resulted in increase in sales including exports, increase in

customer satisfaction, and better utilization of human and material resources as well as reduction in

costs and wastages. Overall, the limited literature on TQM in Pakistani based SMEs suggests that there

is limited awareness and application of TQM among Pakistani SMEs. Moreover, the positive outcomes

of TQM in Pakistani based SMEs are also reported. The current study is motivated due to scarcity of

literature on TQM in manufacturing based SMEs in addition to low understanding of TQM.

This study is intended to fill the literature gap by looking at the effects of TQM in the context of

manufacturing based SMEs in Pakistan. For this purpose, the study has chosen the exports as main

outcome for the analysis in current study. The findings can be helpful for SMEs, academics,

practitioners, and policy makers.

Objectives

Based on the gap in literature, the objectives of the current study are set to assess the level of TQM

implementation among the Pakistani manufacturing based SMEs. Second objective of the study is to

see the effects of TQM on exports in the Pakistani manufacturing based SMEs context.

Research Question:

1. Does Total Quality Management have Effects on Exports in Manufacturing Based SME'S?

Sub Questions:

1.1. Does Top Management Commitment have Effects on Exports in Manufacturing Based SME'S?

1.2. Does Customer Focus have Effects on Exports in Manufacturing Based SME'S?

1.3. Does People Management have Effects on Exports in Manufacturing Based SME'S?

1.4. Does Supplier Quality Management have Effects on Exports in Manufacturing Based SME'S?

1.5. Does Continuous Improvement have Effects on Exports in Manufacturing Based SME'S?

1.6. Does Process Management have Effects on Exports in Manufacturing Based SME'S?

Hypothesis:

H1: Total Quality Management has Significant Effects on Exports in Manufacturing Based SME'S Sub

Hypotheses:

H2: Top Management Commitment has Significant Effects on Exports in Manufacturing Based SME'S

H3: Customer Focus has Significant Effects on Exports in Manufacturing Based SME'S

H4: People Management has Significant Effects on Exports in Manufacturing Based SME'S

6/19/2021 The Effects of Total Quality Management on Exports in Manufacturing Based Small and Medium Enterprise's: A Case Study of Organizati…

https://www.proquest.com/abiglobal/docview/2098670887/fulltext/237508D542AE4CA2PQ/111?accountid=10378 4/14

H5: Supplier Quality Management has Significant Effects on Exports in Manufacturing Based SME'S

H6: Continuous Improvement has Significant Effects on Exports in Manufacturing Based SME'S

H7: Process Management has Significant Effects on Exports in Manufacturing Based SME'S

Literature Review

Small enterprises can be defined as an enterprise which employs 10-35 employees and has productive

assets of Rs. 2-20 millions while medium enterprises are having employees between 3699 and

productive assets of Rs. 20-40 millions (SMEDA, 2007-Small and Medium Sized Enterprises

Development Authority of Pakistan).

A lot of variety exists in SMEs; however, some key characteristics of SMES are as follow. A major

characteristic of SME is that they have comparatively limited resources (Bridge, O'Neill, & Cromie,

1998). The scarcity of resources is due to the fact that mostly, SMEs capital is furnished from one or

few individual. Another characteristic of SME is that mostly they have organizational type of sole

proprietorship or partnership and often owner and manager are same (Bridge et al., 1998). That's why,

Noor, Ramayah, Carlene, & Liz (2010) argues that in SMEs, the personality and competencies of owner

makes a significant effect on the success or failure of SMEs.

According to Ramström (1971), mostly SMEs have simple and organic structure with high degree of

informality and less sophistication. Because of small size, there is small hierarchy and workers can

easily interact with each other and with management (Julien, 1998). SMEs also have limited customer

base along with direct interaction between employees and customers (Julien, 1998). Mostly, SMEs

exist to serve a small segment called 'niche' (Storey, 1994). Despite some degree of flexibility, SMEs are

reported to show a high degree of resistance in accepting change as well as implementing new

technologies (Marri, Gunasekaran, & Sohag, 2007).

SMEs in Pakistan

SMEs are considered as an engine for creating jobs, economic growth, and success of a country

(Ebrahim, Ahmad, & Taha, 2009). Despite, such benefits, Government of Pakistan gave little attention to

the SMEs sector and situation did not change until 1998 when Government created 'Small and Medium

Enterprise Development Authority'. The objective of this institution is to promote small and medium

size businesses in the country and provide the necessary assistance (KalSoft, 2004). According to Aziz

& Ahmad (2013) as well as SMEDA, there are 3.2 million business firms in Pakistan which are

contributing more than 30% of national GDP and earns 35% export earnings. Experts, however, believes

that actual figures are much higher than the official figures as many SMEs owners do not get the

registration or hide data due to taxation issues. Aziz & Ahmad (2013) described that majority of SMEs

in Pakistan are with less than 99 people while insufficient management skills and poor development of

human resource is also common. Thus it can be argued that despite huge potential, these SMEs are

unable to tap the potential benefits due to lack of support and training (Noor et al., 2010). Government

of Pakistan under the leadership of Prime Minister Nawaz Sharif has started a major loan scheme. The

loan scheme will provide small loans on low subsidized interest rates to young individuals in order to

setup their own businesses. This grand scheme is expected to increase the SME sector in the Pakistan.

TQM for SMEs

6/19/2021 The Effects of Total Quality Management on Exports in Manufacturing Based Small and Medium Enterprise's: A Case Study of Organizati…

https://www.proquest.com/abiglobal/docview/2098670887/fulltext/237508D542AE4CA2PQ/111?accountid=10378 5/14

TQM is one of the most important topics in operations management research and has received high

attention in the last two decades (Jung & Wang, 2006). Porter & Tanner (2001) defined TQM as a

business process focusing on improving organizational effectiveness, efficiency and responsiveness to

customer needs by actively involving people in process improvement activities. Since TQM is more a

managerial philosophy, therefore, it covers a wide range of organizational aspects. There is not much

consensus as to what constitute TQM; therefore, different experts have come up with their own list of

TQM factors. For example, Saraph, Benson, & Schroeder (1989) identified eight essential factors

including role of top management , quality policy and role of the quality department, training, product /

service design, supplier quality management , process management , quality data reporting and

employee relations. Similarly, Black & Porter (1995) validated ten factors including people and

customer management , supplier partnership, communication, customer satisfaction, external interface

management , strategic quality management , teamwork, operational quality planning, improvement

measurement systems, and corporate quality culture.

This study utilized six key factors of TQM based on the work of Abusa (2011) which are expected to

appropriately cover the concept. These factors are top management commitment, customer focus,

people management , supplier quality management , continuous improvement, and process

management . Their relevance for SMEs is as under. Top management 's commitment is a key TQM

factor. It requires organization's top management to be committed towards quality , become role

model, and make policies and take steps to implement quality . Since, many SMEs are managed by the

owner; therefore, the management function in these SMEs is quite weak. The managers in SMEs have

limited managerial skills and experience (Haksever, 1996). Moreover, top management in SMEs tends

to adopt a short term perspective which does not match and support TQM very effectively (Ghobadian

& Gallear, 1996). Despite such limitations, SMEs can be very effective in implementing TQM as they got

edge in terms of small size and direct interaction of employees with management and customers

(Ghobadian & Gallear, 1996).

Customer focus is another TQM factor which refers to understanding the needs of customer in a timely

manner and then producing products and services accordingly. According to Haksever (1996), SMEs

are in disadvantageous position in comparison to the larger organizations as due to limited resources;

they are unable to collect very sophisticated data related to customer needs. However, other experts

such as Ghobadian & Gallear (1996) argue that since SMEs have close and direct interaction with

customers; therefore, they are in advantageous position as they can easily understand and collect data

related to customer needs. Effective people management which is also called Human Resource

Management is also an important factor of TQM and includes employees training and education,

offering reasonable compensation system, and reasonable feedback mechanism. The HR function in

most SMEs is also not very sophisticated (De Kok, 2003). Most SMEs offer very limited or no training

and there is often informal and inadequate compensation (Ghobadian & Gallear, 1996). Thus, the less

use of high performance HRM practices put SMEs in disadvantageous position for TQM

implementation.

Continuous improvement is another TQM factor which refers to organizational continuous monitoring

of its processes and bringing improvements on incessant basis. The scarcity of resources in SMEs

hinders the continuous improvement and its tools such as PDSA (Ghobadian & Gallear, 1996). A

counter argument can be that SMEs due to small size can be more adoptable and thus continuous

improvement is a lot easier in SMEs. Process management is another TQM factor which includes more

hard aspects of TQM. Several sub activities such as house-keeping, benchmarking, statistical

6/19/2021 The Effects of Total Quality Management on Exports in Manufacturing Based Small and Medium Enterprise's: A Case Study of Organizati…

https://www.proquest.com/abiglobal/docview/2098670887/fulltext/237508D542AE4CA2PQ/111?accountid=10378 6/14

techniques, constitute the process management . According to Ghobadian & Gallear (1996), SMEs are

unable to follow the process management due to limited resources and less managerial expertise.

Overall, it can be conclude that TQM factors in SMEs are affected by limited resources, low

management skills, short term thinking, informal system, and low attention towards quality .

Exports and its Importance for Pakistan

Pakistan is a developing economy and depends heavily on exports for growth and foreign reserves.

Exports related data is normally collected and published by Pakistan Bureau of Statistics. A review of

this data shows that Pakistani exports are averaged of 35070.16PKR Million from 1957 until 2015.

Similarly, the highest Pakistani exports in any one particular month were 275483 PKR million in

September 2013; while the lowest recorded exports in the history are 51 PKR million in April 1958.

According to Pakistan Bureau of Statistics (2015) Pakistan's main exports are mineral fuels (19 percent

of the total shipments), manufactured goods (19 percent) and beverage and tobacco (13 percent).

Others exports items include: food and live animals (11 percent), crude materials (11 percent),

chemicals (11 percent), machinery (8 percent) and miscellaneous articles (8 percent). Pakistan main

export partners are United States (13.6 percent), China (11 percent of the total export), United Arab

Emirates (8.5 percent) and Saudi Arabia (8.5 percent).

The role of exports for economic expansion of a country is evident from the classical writings. Classical

writers such as Marshall (1890) supported the notion of economic progress of a country through

international trade. The positive impact of exports on the economic growth of a country especially

among developing countries is well established in the literature (Bahmani-Oskooee & Alse, 1993). In

Pakistani context, a study conducted by Khan & Saqib (1993) also found a strong positive relationship

between export performance and economic growth in Pakistan. Another study conducted by Khan,

Malik, & Saqib (1995) found a strong support for export growth and economic growth in Pakistan. A

relatively recent study conducted by Azam & Naeem (2009) also found that domestic investment, FDI,

and trade openness had positive effects on economic growth in Pakistan during the period of 1971 to

2005. Thus, it can be concluded that exports indeed supports economic growth and are good for the

country.

The Relationship between TQM and Exports

Literature on TQM have supported its positive outcomes including productivity and manufacturing

performance (Chenhall, 1997); quality performance (Fuentes, Montes, & Fernandez, 2006); employee

satisfaction and performance (Sadikoglu & Zehir, 2010; Fuentes et al., 2006); innovation performance

(Sadikoglu & Zehir, 2010); and customer satisfaction (Fuentes et al., 2006). TQM is also having positive

relationship with market share (Sadikoglu & Zehir, 2010), financial performance (Fuentes et al., 2006);

and aggregate firm performance (Sadikoglu & Zehir, 2010). The positive outcomes of TQM for SMEs in

the context of developing countries are also reported (Salaheldin, 2009; Demirbag et al., 2006). Example

of such studies include a study conducted by Salaheldin (2009) in Qatari Industrial sector which found

positive effect of TQM on operational and organizational performance. Similarly, a study conducted by

Demirbag et al., (2006) in Turkish textile industry found a positive relationship between TQM and non-

financial performance of SMEs. Valmohammadi (2011) conducted a study in Iranian manufacturing

SMEs and found positive effect of TQM on several dimensions of organizational performance including

profitability, customer satisfaction, sales growth, and employee morale.

6/19/2021 The Effects of Total Quality Management on Exports in Manufacturing Based Small and Medium Enterprise's: A Case Study of Organizati…

https://www.proquest.com/abiglobal/docview/2098670887/fulltext/237508D542AE4CA2PQ/111?accountid=10378 7/14

In Pakistani context, relatively few studies are conducted in manufacturing based SMEs. Example

include a study conducted by Moosa (1999) in ISO certified firms and found that overall awareness

about various quality tools is low and most of the quality management is practiced in production

function alone. Awan (2003) also conducted a study in ISO registered firms belonging to sports

industry of Pakistan and found that TQM resulted in increase in sales including exports, increase in

customer satisfaction, and better utilization of human and material resources as well as reduction in

costs and wastages.

Research Methodology

The study adopted an objective approach accompanied with quantitative methodology and cross

sectional survey as a main tool for data collection. The study was conducted during 2015. The decision

is taken keeping in view the cost and time constraints. Below is the detail of methodology.

Instrumentation

A survey for data collection was designed which consisted of three parts. First part was used to collect

data about respondent's demographic and organizational information. Second part was designed to

collect information about TQM and its six dimensions which was adopted by a measure developed by

Abusa (2011). There were 50 statements used to measure TQM and its sub dimensions which were

anchored on Likert scale. Third part was used to collect perceptual export related information. This part

asked respondents two questions. First question asked respondents to tell the estimated Pakistani

rupees figure of exports related sales of their organization during last one year. Second question asked

respondents to tell the perceived proportion of exports to the total sales of their organization during

last one year. It is understood that answers to the exports related questions as well as TQM statements

were based on the respondent's perception and memory; and thus subject to recall bias and thus

remained a limitation of the study.

Population and Sampling

This study is focused towards manufacturing based SMEs in Pakistan; therefore, all of the

manufacturing based SMEs in Pakistan constitute its population. The sample was drawn from

industrial estates and industrial parks located in three major cities of Pakistan including Peshawar,

Haripur, and Rawalpindi.

Data Collection Method

Survey questionnaire included an introductory letter which explained the aim of the research, provided

the instructions of how to complete the questionnaire, and ensuring respondents that their

confidentiality will be strictly maintained. A total of 300 questionnaire were distributed out of which

120 used questionnaire were returned which gave a satisfactory reply rate of 40%. The high response

rate was achieved because individuals were reminded about survey after few weeks of non-response.

Moreover, alternative arrangements of filling the survey in an online webpage were also made. The

language used in the questionnaire was English. The respondents included owners as well as the top

management team of the organization.

Reliability and Validity

6/19/2021 The Effects of Total Quality Management on Exports in Manufacturing Based Small and Medium Enterprise's: A Case Study of Organizati…

https://www.proquest.com/abiglobal/docview/2098670887/fulltext/237508D542AE4CA2PQ/111?accountid=10378 8/14

In order to ensure the generalized results the study ensured reliability and validity. The validity was

established by applying the face validity of the measure adopted in the current study. To address the

reliability of the measures adopted in the current study, the Cronbach alpha test was used. The results

given in the table II shows that the Cronbach alphas for all six aspects and the full scale were well

above 0.60 and thus can be considered satisfactory (Sekaran & Bougie, 2010). The following table

provides demographic information of survey.

Analysis of the demographic information shows that the data was collected from 101 male (84%) and

19 female (16%). Most of the respondents belonged to the age groups of 26 to 40 years (49%) and

subsequently to the age group of 41 years and above (25%). Similarly, education wise, 32% respondents

had educational level of 14 years; while, 28% respondents had education level of 16 years and above.

Respondents belonged to the different types of manufacturing nature and the highest category was

household goods (25.83% respondents), followed by construction material and tools (22.5%

respondents). Similarly, 19% respondents belonged to the textile sector; 15.8% to agriculture and dairy

products; and 5.8% to food and beverage; while, 10% belonged to the 'other' category.

Data Analysis

Once quantitative data was collected, it was entered in to SPSS version 20 and checked for any errors

or missing values. After complete checking, frequencies were calculated to form a demographic profile

of the respondents. In order to test the level of TQM implementation among manufacturing based

SMEs, averages were calculated and chart were used. Similarly, for checking the relationship between

TQM elements and exports variables, regression analysis technique was used. Before running the

regression, its assumptions including data normality, multi co-linearity, and Homoscedasticity were

checked and found within satisfactory range.

Variables

Independent:

Total Quality Management : Dimensions (Top Management Commitment, Customer Focus, People

Management , Supplier Quality Management , Continuous Improvement, Process Management )

Dependent: Exports: (Model 1: Log of perceived export value during last one year, Model 2: Perceived

proportion of exports to the total sales during last one year)

Findings

Key results of the study are given in this section. Table II and figure 1 shows the descriptive statistics,

Cronbach's alpha for the TQM dimensions.

Mean score on the six dimensions of TQM shows that the level of TQM implementation in

manufacturing based Pakistani SMEs ranges from low to medium. The first dimension was top

management 's commitment and results shows that management in manufacturing based SMEs is

moderately interested and committed towards implementing quality (M=3.61, S.D=.51). Results on the

second dimension of TQM shows that manufacturing based SMEs have medium level customer focus

(M=3.47, S.D=.43). People management which is third dimension of TQM in this study is also

moderately practiced (M=3.54, S.D=.43). The results on the fourth dimension of TQM which is supplier

6/19/2021 The Effects of Total Quality Management on Exports in Manufacturing Based Small and Medium Enterprise's: A Case Study of Organizati…

https://www.proquest.com/abiglobal/docview/2098670887/fulltext/237508D542AE4CA2PQ/111?accountid=10378 9/14

quality management shows that this dimension is practiced little higher compare to the other TQM

dimensions (M=3.96, S.D=.62). The fifth dimension is continuous improvement and results shows that

it is also moderately practiced by manufacturing based SMEs in Pakistan (M=3.55, S.D=.44). Finally, the

last and sixth dimension of TQM was process management and results shows that it receives greater

attention of SMEs as the mean score on this dimension is highest among all six dimensions (M=4.12,

S.D=.49). Overall, based on the above results, it can be concluded that manufacturing based SMEs in

Pakistan have moderate level of TQM implementation and thus there is valid room for improvement.

After conducting the descriptive statistics, the data was further analyzed by using the regression test.

In order to see the effect of TQM on exports, two separate regression tests were run. For this purpose,

first the perceived exports values in PKR during last one year by respondent's organizations were

converted in to the log form. The conversion was made in order to smooth the data. The log values

were then taken as a dependent variable. Similarly, in second model, the values of export proportion

were given in the percentage form. In both regressions, TQM elements were taken as independent

variables.

Results of model 1 shows that TQM dimensions are positively and significantly related to the log of

perceived export value during last one year. The results shows that for dependent variable, top

management commitment is having positive and significant effect (beta=.22, p value<0.05); customer

focus having positive and highly significant effect (beta=.37, p value<0.01); people management

having positive and significant effect (beta=.36, p value<0.05); and process management having

positive and significant effect (beta=.57, p value<0.05). The value of R-square shows that dimensions

of TQM explains about 30% variation in the perceived value of exports during last one year. Moreover,

the value of F-statistics shows that model is fit and significant (F-Stat=5.55, p value<0.05).

The results for model 2 also show that TQM dimensions are positively and significantly related to the

perceived proportion of exports to the total sales during last one year. The results shows that for

dependent variable, top management commitment is having positive and highly significant effect

(beta=.57, p value<0.01); supplies quality management is having positive and significant effect

(beta=.39, p value<0.05); continuous improvement is having positive and significant effect (beta=.26, p

value<0.05); and process management is having positive and significant effect (beta=.17, p value<0.1).

The value of R-square shows that dimensions of TQM explains about 36% variation in the perceived

proportion of exports to the total sales during last one year. Moreover, the value of Fstatistics shows

that the model is fit and highly significant (FStat=9.75, p value<0.01). Overall, these results show that

TQM is having positive and significant effect on exports volume as well as percentage of exports to the

total sales.

Discussion

The objective of the study was twofold; first to assess the level of TQM implementation and second to

see the effect of TQM on export promotion in the context of manufacturing based SMEs in Pakistan. To

achieve the research objectives, data was collected from 120 respondents who belonged to the

management of manufacturing based SMEs located in three major cities of Pakistan. The results

indicate that TQM implementation among SMEs in Pakistan is still low. These findings are similar to

the findings of studies conducted few years ago e.g. a study conducted by Kureshi, Qureshi, & Sajid in

6/19/2021 The Effects of Total Quality Management on Exports in Manufacturing Based Small and Medium Enterprise's: A Case Study of Organizati…

https://www.proquest.com/abiglobal/docview/2098670887/fulltext/237508D542AE4CA2PQ/111?accountid=10378 10/14

2010 found that significant gap exist among the SMEs Entrepreneurs regarding the knowledge of TQM

practices. Another such study conducted by Moosa (1999) found that TQM concept is mostly

concentrated in production function, while, its application is low in other functions,

The reason for low level of implementation can be due to lack of 'true' commitment by many SMEs as

they implemented TQM not as part of a strategy to improve quality or reduce costs but in response to

external pressures such as prerequisite for exporting in certain countries (Sun & Cheng 2002; Guilhon,

Martin, & Weill, 1998). TQM implementation is difficult for SMEs due to the fact that most SMEs have

very limited resources which make them very hard for investing in human resource or process

improvement etc. Similarly, since many SMEs are under the ownership of one individual; therefore, the

owner's general education and awareness of TQM can also have significant effect on organization's

intention to implement TQM. Another reason of low TQM implementation can be that SMEs mostly

have informal and simple structure which makes it difficult to implement something which requires

high standardization as well as documentation.

Other reasons include cultural as well as institutional. In terms of culture, Pakistani culture is generally

possesses high resistance towards new ideas. There is often suspicion towards new phenomenon and

TQM is also no exception. Moreover, as TQM is a product of Western and Japanese culture and thus

requires specific type of behavior which might not be very much aligned with Pakistani culture. The low

level of implementation can also be due to limited support by the government and its supporting

agencies. Moreover, institutional arrangement in Pakistan is like this that they offer little assistance

and support to the SMEs; therefore, SMEs have to rely on their own capabilities and resources to

implement TQM.

The results also indicated that TQM is having positive and significant effects on exports promotion.

These results are consistent with other several International studies in developing countries which

reported positive outcomes other than exports e.g. Salaheldin (2009) and Demirbag et al., (2006). The

results are also consistent with some local studies such as Awan (2003) who also found to have

positive effect of TQM on exports related sales. Overall, the results shows that Pakistani Manufacturing

based SMEs are still lagging in TQM implementation while the TQM contribute positively in exports

promotions.

Conclusion

The study was conducted with a view to assess the level of TQM implementation and its effects on

exports. Data collected from 120 respondents belonging to manufacturing based SMEs in Pakistan

shows that overall there is low level of TQM implementation in these organization. Similarly, there is low

level of awareness and commitment of top management towards quality management . Other TQM

practices such as supplier quality management , process management , and continuous improvement

are also practiced at low level. The TQM implementation is also suffered from limited human and

financial resources along with low managerial know how and low support from the government. The

literature suggests that TQM implementation can yield positive outcomes for organizations and the

current study also found positive effects of TQM on exports. Thus, it can be concluded that if

organizations commit more resources towards implement TQM, then it can certainly produce positive

outcomes including boost in exports. Therefore, it can be argued that TQM can be a mantra for success

6/19/2021 The Effects of Total Quality Management on Exports in Manufacturing Based Small and Medium Enterprise's: A Case Study of Organizati…

https://www.proquest.com/abiglobal/docview/2098670887/fulltext/237508D542AE4CA2PQ/111?accountid=10378 11/14

for manufacturing based SMEs in Pakistan as it can enable SMEs to gain more market share in

International markets, better adoption for competitive environment and globalization, and greater social

benefits for the country as well.

Recommendations

Based on the findings of the study, the following recommendations are put forward.

1. SMEs in Pakistan should give more importance to the TQM and should strive towards removing the

gap between desired and actual level.

2. Management in SMEs should also put more efforts to improve the level of TQM implementation in

their respective organizations as it can be a key for survival as well as for gaining competitive

advantage.

3. Quality management team should be actively involved in lobbying and communicating benefits of

TQM to the top management in order to secure more commitment and resources for TQM.

4. Government should develop Institutions which provide assistance to the SMEs regarding quality

management implementation.

5. Universities should also offer more courses in order to increase the awareness and skills related to

TQM.

6. Researchers should also conduct more context based research which enables SMEs businesses to

understand the nature of TQM and resolve issues related to implementation.

Limitations

The study has some limitations which are related to the methodology as well as sampling. The data

collection is only based on survey technique while other methods of data collection such as interviews

were not utilized which remains a limitation. Another main limitation is related to small sample size

with limited geographical coverage which makes it difficult to generalize the results over wider context.

Similarly, the survey instrument utilized in the current study was also originally developed by Abusa

(2011) for conducting research in Libya; therefore, the result of that instrument needs to be interpreted

with care as cultural bias can mislead the results. The study while obtaining information on TQM, used

only six dimensions of TQM; which however remains a limitation as other dimensions of TQM also

exists which this study did not focused on. The actual export data in addition to TQM related

information was also not easily available and difficult to access; therefore, the perceived values given

by the respondents were used which are also subject to human error. The study only used

crosssectional data, while longitudinal data may have provided better results.

References

References

Abusa, F. (2011). TQM implementation and its impact on organizational performance in developing

countries: a case study on Libya (Unpublished doctoral thesis), University of Wollongong, Australia.

6/19/2021 The Effects of Total Quality Management on Exports in Manufacturing Based Small and Medium Enterprise's: A Case Study of Organizati…

https://www.proquest.com/abiglobal/docview/2098670887/fulltext/237508D542AE4CA2PQ/111?accountid=10378 12/14

Arumugam, V., Ooi, K. B., & Fong, T. C. (2008). TQM practices and quality management performance:

An investigation of their relationship using data from ISO 9001:2000 firms in Malaysia. The TQM

Magazine, 20(6), 636-650.

Awan, H. M. (2003). An evaluation of ISO 9000 registration practices in the sports goods industry of

Pakistan. Journal of Managerial Finance, 29, 109-134.

Azam, M. & Naeem-ur-Rahman, K. (2009). Empirical analysis of the determinants of economics growth

in Pakistan; 1971-2005. Sarhad Journal of Agriculture, 25(2), 307-312.

Aziz, T. & Ahmad, A. (2013). An evaluation of business improvement through quality management

principles in SMEs. International Journal of Quality and Innovation, 2(2), 193-216.

Bahmani-Oskooee, M. & Alse, J. (1993). Export growth and economic growth: an application of

cointegration and error-correction modeling. Journal of Developing Areas, 27(4), 535-542.

Black, S., & Porter, L. J. (1995). An empirical model for total quality management . Total Quality

Management , 0(2), 149-164.

Bridge, S., O'Neill, K., & Cromie, S. (1998). Understanding enterprise, entrepreneurship and small

business. London: MacMillan Business.

Chenhall, R. H. (1997). Reliance on manufacturing performance measures, total quality management

and organizational performance. Management Accounting Research, 8(2), 187- 206.

De Kok. (2003). Human resource management within small and mediumsized enterprises. Rozenberg.

Demirbag, M., Koh, S. C. L., Tatoglu, E., & Zaim, S. (2006). TQM and market orientation's impact on

SMEs' performance. Industrial Management & Data Systems, 106(8), 1206-1228.

Ebrahim. N. A., Ahmed, S., & Taha, Z. (2009). Virtual R & D teams in small and medium enterprises: A

literature review. Scientific Research and Essays, 4(13), 1575-1590.

Federal Bureau of Statistics. (2015/ External Trade Statistics for Last 5 Years. Retrieved from

http://www.pbs.gov.pk/sites/default/files/other/vearbook2013 /YEAR%20BOOK%2020 13 - 14%20final

.pdf

Fuentes, M., Montes, M., & Fernandez, L. M. Total quality management , strategic orientation and

organizational performance: the case of Spanish companies. Total Quality Management and

Business Excellence, 17(3), 303-323.

Gadenne, D., & Sharma, B. (2009). An investigation of the hard and soft quality management factors of

Australian SMEs and their association with firm performance. International Journal of Quality &

Reliability Management , 26(9), 865-880. DOI Address http://dx.doi.org/10.1108/026567109110995064

Ghobadian, A. & Gallear, D. (1996). Total Quality Management in SMEs. Omega International Journal

of Management Science, 24(1), 83-106.

6/19/2021 The Effects of Total Quality Management on Exports in Manufacturing Based Small and Medium Enterprise's: A Case Study of Organizati…

https://www.proquest.com/abiglobal/docview/2098670887/fulltext/237508D542AE4CA2PQ/111?accountid=10378 13/14

Guilhon, A., Martin, J., & Weill, M. (1998). Quality approaches in small or medium-sized enterprises:

methodology and survey results. Total Quality Management , 9(8), 689-701.

Haksever, C. (1996). Total quality management in the small business environment. Business

Horizons, 39(2), 33-41.

Hill, J., Nancorrow, C., & Wright, L. T. Lifecycles and crisis points in SMEs: a case approach. Marketing

Intelligence & Planning. 20(6), 361369.

Julien, P. A. (1998). The state of the art on small business and entrepreneurship. Aldershot: Ashgate

Publishing Ltd.

Jung, J. & Wang, Y. (2006). Relationship between total quality management (TQM) and continuous

improvement of international project management (CIIPM). Technovation, 26 (5), 716-722.

KalSoft Pvt. Ltd. (2004). Turn potential into profits: business to business portal for industrial

information network - (KPL), Pakistan: Author. Retrieved from

http://www.ekalsoft.com/kalsoft/downloads/smeda.pdf

Khan, A. H. & Saqib, N. (1993). Exports and economic growth: The Pakistan experience. International

Economic Journal, 7(3), 55-64.

Khan, A. H., Malik, A., & Hasan L. (1995). Exports, growth and causality: an application of co-integration

and error-correction modeling. The Development Review, 34(4), 1003-1012.

Koh, S. C. L., Demirbag, M., Bayraktar, E., Tatoglu, E., & Zaim, S. (2007). The impact of supply chain

management practices on performance of SMEs. Industrial Management & Data Systems, 107(1),

103-124.

Kureshi, Qureshi, F. & Sajid, A. (2010). Current health of quality management practices in service

sector SMEs: a case study of Pakistan. The TQM Journal, 22(3), 317-329.

Marri, H. B., Gunasekaran, A., Sohag, R. A. (2007). Implementation of advanced manufacturing

technology in Pakistani small and medium enterprises: an empirical analysis. Journal of Enterprise

Information Management , 20(60), 726 - 739.

Marshall, A. (1890). Principles of economics, London: Macmillan.

Moosa, K., (1999). Quality culture in Pakistani organizations (Unpublished doctoral thesis), Sheffield

Hallam University, UK.

Noor, H. A., Ramayah, T., Carlene, W. & Liz, K. (2010). Is entrepreneurial competency and business

success relationship contingent upon business environment? a study of Malaysian SMEs. International

Journal of Entrepreneurial Behavior and Research, 16(3) 182-203.

Porter, L. & Tanner, S. (2001). Assessing business excellence. a guide to business excellence and self-

assessment. Oxford: Elsevier ButterworthHeinemann.

6/19/2021 The Effects of Total Quality Management on Exports in Manufacturing Based Small and Medium Enterprise's: A Case Study of Organizati…

https://www.proquest.com/abiglobal/docview/2098670887/fulltext/237508D542AE4CA2PQ/111?accountid=10378 14/14

Ramström, D. (Eds.). (1971). Mindre företag - problem och villkor (small enterprises- problems and

conditions). Stockholm, Sweden: Prisma.

Sadikoglu, E., & Zehir, C. (2010). Investigating the effects of innovation and employee performance on

the relationship between total quality management practices and firm performance: an empirical

study of Turkish firms. International Journal of Production Economics, 127(1), 13-26.

Salaheldin, S. I. (2009). Critical success factors for TQM implementation and their impact on

performance of SMEs. International Journal of Productivity and Performance Management , 58(3), 215-

237.

Saraph, J. V., Benson, P. G., & Schroeder, R. G., (1989). An instrument for measuring the critical factors

of quality management . Decision Science 20(4), 810-829.

Sekaran, U., & Bougie, R. (2010). Research methods for business: a skill building approach. West

Sussex, UK: John Wiley & Sons Ltd.

Seth, D. & Tripathi, D. (2005). Relationship between TQM and TPM implementation factor and business

performance of manufacturing industry in an Indian context. International Journal of Quality &

Reliability Management , 22(3) 256-277.

Small and Medium Enterprise of Pakistan. (2007). SME Policy 2007, SME Led Economic Growth:

Creating Jobs and Reducing Poverty, SMEDA, SME Policy Recommendations, Section III. Retrieved

from http://www.smeda.org/proiects/SME-policv-development.html

Storey, D. J. (1994). Understanding the small business sector. London: International Thomson

Publishing Inc.

Sun, H. & Cheng, T. K. (2002). Comparing reasons, practices and effects of ISO 9000 certification and

TQM implementation in norwegian SMEs and large firms. International Small Business Journal, 20(4),

421-442.

Valmohammadi, C. (2011). The impact of TQM implementation on the organizational performance of

Iranian manufacturing SMEs. The TQM Journal, 23(5), 496-509.

Copyright National University of Modern Languages Press Jun 2016

Copyright © 2021 ProQuest LLC.