바로가기메뉴

본문 바로가기 주메뉴 바로가기

logo

Logistic Capability and Total Quality Management Practice on SME's Performance

The Journal of Distribution Science / The Journal of Distribution Science, (P)1738-3110; (E)2093-7717
2022, v.20 no.7, pp.97-105
https://doi.org/https://doi.org/10.15722/jds.20.07.202207.97
MARJAN, Yakuttinah
HASANAH, Uswatun
MULIATIE, Yurilla Endah
USMAN, Indrianawati
  • Downloaded
  • Viewed

Abstract

Purpose: This study aims to analyze and prove the effect of logistic capability and Total Quality Management practices on Micro, Small and Medium Enterprises (SME) performance directly or mediated by non-financial performance. Research design, data and methodology: This study tested the hypothesis using Hierarchical multiple regression analysis, the method of data collection in this study was using questionnaire, the sampling technique was purposive sampling technique, with SME that has been established for more than 5 years and manufacturing. The data analyzed were 180 respondents using SPSS 25. Results: The findings showed that logistic capability has direct and indirect effects on SME financial performance and has a positive effect on SME financial performance mediated by non-financial performance. While the total quality management practices have a positive effect on SME financial performance mediated by non-financial performance. Thus, companies can achieve maximum financial performance if they invest in developing employee knowledge and concerning on non-financial actions, such as employee satisfaction, innovation and proactively seeking market opportunities. Conclusions: In conclusion, one of the main factors that companies need to consider to improve financial performance is non-financial performance in mediating the effect of logistic capability and TQM practices on the financial performance of SMEs.

keywords
Logistic Capability, TQM Practices, SME, Distribution, Non-financial Performance, Financial Performance

Reference

1.

Arsić, M., Jovanović, Z., Tomić, R., Tomović, N., Arsić, S., &Bodolo, I. (2020). Impact of Logistics Capacity on Economic Sustainability of SMEs. Sustainability, 12(5), 1911. https://doi.org/10.3390/su12051911

2.

Baron, R. M., & Kenny, D. A. (1986). The moderator–mediator variable distinction in social psychological research:Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173–1182. https://doi.org/10.1037/0022-3514.51.6.1173

3.

Brah, S. A., & Lim, H. Y. (2006). The effects of technology and TQM on the performance of logistics companies. International Journal of Physical Distribution & Logistics Management, 36(3), 192–209. https://doi.org/https://doi.org/10.1108/09600030610661796

4.

Choi, B., & Lee, H. (2003). An Empirical Investigation of Knowledge Management Styles and Their Effect on Corporate Performance. Information & Management, 40(4), 403–417. https://doi.org/10.1016/S0378-7206(02)00060-5

5.

Ciptono, W. S. (2007). Hierarchical level oF managers’ abilities: A Moderator between Quality Management Practices and Company Financial Performance. Gadjah Mada International Journal of Business, 9(3), 295. https://doi.org/10.22146/gamaijb.5591

6.

Dayton, N. A. (2003). The demise of total quality management (TQM). The TQM Magazine, 15(6), 391–396. https://doi.org/10.1108/09544780310502723

7.

Demirbag, M., Lenny Koh, S. C., Tatoglu, E., & Zaim, S. (2006). TQM and market orientation’s impact on SMEs’ performance. Industrial Management & Data Systems, 106(8), 1206–1228. https://doi.org/10.1108/02635570610710836

8.

Dick, G. P. M. (2009). Exploring performance attribution. International Journal of Productivity and Performance Management, 58(4), 311–328. https://doi.org/10.1108/17410400910950991

9.

Dunk, A. S. (2011). Product innovation, budgetary control, and the financial performance of firms. The British Accounting Review, 43(2), 102–111. https://doi.org/10.1016/j.bar.2011.02.004

10.

Feng, J., Prajogo, D. I., Chuan Tan, K., & Sohal, A. S. (2006). The impact of TQM practices on performance. European Journal of Innovation Management, 9(3), 269–278. https://doi.org/10.1108/14601060610678149

11.

Fullerton, R. R., & Wempe, W. F. (2009). Lean manufacturing, non-financial performance measures, and financial performance. International Journal of Operations &Production Management, 29(3), 214–240. https://doi.org/10.1108/01443570910938970

12.

Gligor, D. M., & Holcomb, M. C. (2012). Understanding the role of logistics capabilities in achieving supply chain agility: A systematic literature review. Supply Chain Management: An International Journal, 17(4), 438–453. https://doi.org/10.1108/13598541211246594

13.

Haas, M. R., & Hansen, M. T. (2005). When using knowledge can hurt performance: the value of organizational capabilities in a management consulting company. Strategic Management Journal, 26(1), 1–24. https://doi.org/10.1002/smj.429

14.

Hansson, J., & Eriksson, H. (2002). The impact of TQM on financial performance. Measuring Business Excellence, 6(4), 44–54. https://doi.org/10.1108/13683040210451714

15.

Haroon, U., Shariff, M. N. M., & Yusof, M. S. (2019). Exploring the Relationship Between Innovation Capability, Total Quality Management and SMEs Performance in Electric Fan Industry of Pakistan: Moderating Effect of Relational Learning. International Journal of Financial Research, 10(3), 353. https://doi.org/10.5430/ijfr.v10n3p353

16.

Hoque, Z. (2004). A contingency model of the association between strategy, environmental uncertainty and performance measurement: Impact on organizational performance. International Business Review, 13(4), 485–502. https://doi.org/10.1016/j.ibusrev.2004.04.003

17.

Kale, P., & Singh, H. (2007). Building firm capabilities through learning: The role of the alliance learning process in alliance capability and firm-level alliance success. Strategic Management Journal, 28(10), 981–1000. https://doi.org/10.1002/smj.616

18.

Kot, S. (2018). Sustainable Supply Chain Management in Small and Medium Enterprises. Sustainability, 10(4), 1143. https://doi.org/10.3390/su10041143

19.

Lassala, C., Orero-Blat, M., & Ribeiro-Navarrete, S. (2021). The financial performance of listed companies in pursuit of the Sustainable Development Goals (SDG). Economic Research-Ekonomska Istraživanja, 34(1), 427–449. https://doi.org/10.1080/1331677X.2021.1877167

20.

Modarres, M., & Pezeshk, J. (2017). Impact of tota quality management on organisational performance: exploring the mediating effects of organisational learning and innovation. International Journal of Business Environment, 9(4), 356–389. https://doi.org/10.1504/IJBE.2017.10013402

21.

Moeller, K. (2009). Intangible and Financial Performance: Causes and Effects. Journal of Intellectual Capital, 10(2), 224–245.

22.

Moneva, J. M., Rivera-Lirio, J. M., & Muñoz-Torres, M. J. (2007). The corporate stakeholder commitment and social and financial performance. Industrial Management & Data Systems, 107(1), 84–102. https://doi.org/10.1108/02635570710719070

23.

Moreno-Jiménez, B., Rodríguez-Muñoz, A., Hernández, E. G., &Blanco, L. M. (2014). Development and validation of the Occupational Hardiness Questionnaire. Psicothema, 26(2), 207–214. https://doi.org/10.7334/psicothema2013.49

24.

Prieto, I. M., & Revilla, E. (2004). An Empirical Investigation of Knowledge Management Styles and Their Effects on Learning Capacity. Management Research: Journal of the Iberoamerican Academy of Management, 2(2), 133–146. https://doi.org/10.1108/15365430480000506

25.

Salaheldin, I. S. (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. https://doi.org/10.1108/17410400910938832

26.

Shafqat, T., Mushtaq, R., Tahir, Z., & Shaheen, W. A. (2021). Effects of Total Quality Management (TQM) on Financial and Non-financial Performance: Evidence from Higher Educational Sector of Pakistan. Humanities & Social Sciences Reviews, 9(3), 1027–1037. https://doi.org/10.18510/hssr.2021.93101

27.

Shahin, A. (2011). An Investigation on the Influence of Total Quality Management on Financial Performance the Case of Boutan Industrial Corporation. International Journal of Business and Social Science, 2(15), 105–112.

28.

Škrinjar, R., Bosilj‐Vukšić, V., & Indihar‐Štemberger, M. (2008). The impact of business process orientation on financial and non‐financial performance. Business Process Management Journal, 14(5), 738–754. https://doi.org/10.1108/14637150810903084

29.

Sridhar, S., & Srinivasan, R. (2012). Social Influence Effects in Online Product Ratings. Journal of Marketing, 76(5), 70–88. https://doi.org/10.1509/jm.10.0377

30.

Sutrisno, T. F. C., Effendy, J. A., & Prathivi, M. D. G. (2019). Hybrid Strategy Study : The Role of Entrepreneurial Orientation and Total Quality Management in MSMEs. Jurnal Manajemen Dan Kewirausahaan, 7(2), 124–131.

31.

Valaei, N., & Rezaei, S. (2016). Job satisfaction and organizational commitment. Management Research Review, 39(12), 1663–1694. https://doi.org/10.1108/MRR-09-2015-0216

32.

Zawawi, N. F. B. M., Wahab, S. A., & Mamun, A. Al. (2017). Logistics Capability, Logistics Performance, And The Moderating Effect Of Firm Size: Empirical Evidence From East Coast Malaysia. The Journal of Developing Areas, 51(2), 171–182. https://doi.org/10.1353/jda.2017.0038

33.

Zimon, D. (2016). The Impact of TQM Philosophy for the Improvement of Processes in the Supply Chain. International Journal for Quality Research, 11(1), 3–16.

The Journal of Distribution Science