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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

Muhammad Tahir *

Dr. Saima Batool **

Dr. Kausar Takrim ***

* Business Administration Department, Iqra National University,

Peshawar.

** Assistant Professor, Department of Management Sciences,

Qurtuba University of Science & IT, Peshawar.

*** Assistant Professor, College of Home Economics, University of

Peshawar.

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 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

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Introduction

Small and Medium Enterprises (SME‘s) contribution to any

country‘s economic development is vital as SMEs provides self-

employment, 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

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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

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

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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?

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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

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 36-

99 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.

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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

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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

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.

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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

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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

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

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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,

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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.

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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

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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

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

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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.

Table 1: Demographic Profile of Survey Respondents and

Organizations (N=120)

Frequency Percentage (%)

Gender

Male 101 84.16%

Female 19 15.83%

Age Group

25 Years & Less 30 25%

26 To 40 Years 59 49.16%

41 Years & Above 31 25.83%

Educational Level

Intermediate Or Less 47 39.16%

Bachelors 39 32.50%

Masters Or Above 34 28.33%

Manufacturing Nature

Textile 23 19.16%

Agriculture & Dairy Products 19 15.83%

Construction Material &Tools 27 22.50%

Household Goods 31 25.83%

Food & Beverages 7 5.83%

Others 13 10.83%

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%

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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.

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Table 2. Descriptive Statistics

Dimensions Number

of Items

Cronbach’s

Alpha Min Max Mean S.D

Top Management Commitment 09 .75 1.89 4.44 3.61 .51

Customer Focus 10 .81 2.30 4.20 3.47 .43

People Management 12 .76 2.67 5.17 3.54 .43

SQM 06 .69 2.17 5.00 3.96 .62

Continuous Improvement 07 .64 3.71 4.57 3.55 .44

Process Management 06 .72 3.17 5.00 4.12 .49

Full Measure 50 .74

Figure 1: Mean Score for TQM Dimensions in Manufacturing Based SMEs in Pakistan

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 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

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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.

The results are given in the table below.

Table 3: Effect of TQM on Exports

Variables Model 1 Model 2

Top Management Commitment .22** .57***

Customer Focus .37*** -.13

People Management .36** .10

Supplier Quality Management -.05 .39**

Continuous Improvement -.03 .26**

Process Management .57** .17*

R 2

.30 .36

F Statistics 5.55** 9.75***

Notes: *p <0.10; * *p < 0.05; * * *p < 0.01; and values in table are

standardized coefficients

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

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(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 F-

statistics shows that the model is fit and highly significant (F-

Stat=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

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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

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

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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

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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 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.

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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 cross-

sectional data, while longitudinal data may have provided better

results.

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