۱- Introduction

۲- Literature review

۳- Research design & methodology

۴- Analysis and results

۵- Conclusion

References

Abstract

In operation literature, the effect of total quality management on firm performance has been investigated in many studies. Compared to large manufacturing firms, most small and medium sized firms are slow and often reluctant to adopt quality management practices. This paper aims to examine the relationship between quality management dimensions and firm performance, considering manufacturing SMEs as focal point of research. Furthermore, the intention is to identify the major barriers to adoption of quality management practices in manufacturing SMEs. Empirical data were drawn from a sample of 127 manufacturing SMEs in India to address the research objective. The test of the structural model supports the proposed hypotheses, that total quality management is positively related to manufacturing performance.

Literature review

In developing economies, SMEs play an important role as they represent a major source of employment and generate significant revenue and export earnings. On a paper on SMEs, it is essential to understand how SMEs are defined. SMEs in both developed and developing economies are defined by a number of factors and criteria, such as location, size, age, structure, organization, number of employees, sales volume, worth of assets, ownership through innovation and technology etc. [15]. Indian manufacturing sector are classified by worth of assets, based on their investment in plant and machinery (original cost excluding land and building and the items specified by the ministry of small scale industries). Enterprises with investment between twenty-five lakh rupees and five crore rupees are categorized as small enterprises, while the enterprises with investment between five crore and ten crore rupees are categorized as medium enterprises. Indian SMEs contribution to GDP is about 17 percent, with a share of almost 40-45 percent manufactured output and exports. [16]. After the globalization of market in early 1980s, Indian SMEs have got many opportunities to work in integration with large scale MNCs. Hence SMEs are important in the setting of most developing economies like India, as they are highly flexible and responsive suppliers to large firms, customers of large firms and suppliers to end-user customers in their own right [17, 18]. Any compromise in quality by SMEs could jeopardize the whole manufacturing supply chain, resulting in raising costs because of poor quality [17, 19, 18]. TQM practices in SMEs have a relatively short history, and a lot of important issues and areas are largely undebated in academic research [1]. There are less research assessing the impact of TQM implementation on SMEs performance, considering developing economies like India as focal point of research. Also, there has been paucity of research that reports evidence regarding major TQM impeding factors that are encountered by SMEs in India. Based on the objective of the paper, a literature review was conducted aiming to collect and analyze all relevant papers in the operation research field by means of structured search for literature. The same is presented under various focused themes. The first section deals with relationship between TQM and firm performance. As we seek to understand the TQM-performance relationship, we also review literature that have reported major barriers to adoption and implementation of TQM in SMEs, that has been extensively discussed in second section.