STRUCTURAL ANALYSIS OF TOTAL QUALITY MANAGEMENT, ISO/TS16949

AND ORGANIZATIONAL PERFORMANCE IN MALAYSIAN AND THAILAND

AUTOMOTIVE INDUSTRY

NORHAYATI BINTI MOHMAD ZAKWAN @ ZAKUAN

UNIVERSITI TEKNOLOGI MALAYSIA

STRUCTURAL ANALYSIS OF TOTAL QUALITY MANAGEMENT, ISO/TS16949

AND ORGANIZATIONAL PERFORMANCE IN MALAYSIAN AND THAILAND

AUTOMOTIVE INDUSTRY

NORHAYATI BINTI MOHMAD ZAKWAN @ ZAKUAN

A thesis submitted in fulfilment of the

requirements for the award of the degree of

Doctor of Philosophy (Mechanical Engineering)

Faculty of Mechanical Engineering

Universiti Teknologi Malaysia

DECEMBER 2009

iv

ACKNOWLEDGEMENTS

In the name of Allah, Most Gracious, Most Merciful. I thank Allah for granting

me perseverance and strength I needed to complete this thesis.

I would like to express my sincere thanks and deep gratitude to my main thesis

supervisor Professor Ir. Dr. Sha’ri Mohd Yusof, for encouragement, guidance, critics

and friendship. I am also very thankful to my co-supervisor, Professor Dr. Awaluddin

Mohd Shaharoun for guidance, advices and motivation. I must also acknowledge

Associate Professor Dr. Tritos Laosirihongthong and his staff at Thammasat University,

Thailand for their invaluable assistance given. Without their continued support and

interest, this thesis would not have been the same as presented here.

I am also indebted to Universiti Teknologi Tun Hussien Onn (UTHM) for

funding my PhD study. Librarians at UTM, UTHM, and UM also deserve special thanks

for their assistance in supplying the relevant literatures. Several members of UTM and

UTHM should also be recognized for their support. Their views and tips are useful

indeed. Unfortunately, it is not possible to list all of them in this limited space.

I would also like to express my deepest gratitude to my husband, Dr. Muhamad

Zameri Mat Saman, my daughters, Nurateera Putri and Nuraqeela Putri, and my son,

Muhamad Luqman Hakeem for providing the continuous support, encouragement and

enduring the hardship together throughout this project and also to my father, Mohmad

Zakuan, my mother in-law, Mek and family members for their support and

encouragement during this project. I love you very much.

v

ABSTRACT

The implementation of total quality management has not occurred at the same pace in different regions of the world. Despite the number of publications on total quality management, little empirical work has been carried out in developing countries especially on comparative studies amongst ASEAN countries involving the automotive industries. A comparative study can provide an overall perspective and understanding of the main differences and similarities in total quality management implementation. Furthermore, based on previous studies acquiring quality management systems such as ISO standards appeared to improve the performance of automotive industry. ISO/TS16949 is a specification which is comparatively new to the ASEAN automotive industry. Due to its short history, there is still confusion about the effects of ISO/TS16949 registration and efforts on total quality management and organizational performance relationships. The aim of this study is to compare and develop a model that incorporates total quality management implementation, ISO/TS16949 efforts and their impact on organizational performance between Malaysian and Thailand automotive industries. Two structural models have been proposed which are moderator and mediator research models. To that end a survey was conducted to determine the extent of total quality management implementation and ISO/TS16949 efforts in Malaysian and Thailand automotive industries as well as their relationship with organizational performance. Data were obtained from 161 and 150 automotive companies and related suppliers in Malaysia and Thailand with 25% and 21% response rate respectively.Structural Equation Modeling technique was utilized to perform the required statistical analysis of the data from the survey. Exploratory factor analysis, reliability analysis and confirmatory factor analysis to test for construct validity, reliability, and measurements loading were performed. Having analyzed the measurement model, the structural model was then tested and confirmed. The testing and confirmation results revealed that there are significant differences between total quality management implementation in Malaysia and Thailand, where total quality management implementation is better in Thailand. Furthermore, the results indicate that ISO/TS16949 certification does not affect the relationship between TQM and organizational performance. However, the assessment reveals that efforts on ISO/TS16949 registration assist in improvingorganizational performance when coupled with total quality management. The study contributes to knowledge on quality management and provides practical guidelines for automotive practitioners to improve their organizational performance. This is a theoretical, methodological, and analytical detailed empirical study that adds to the limited existing literature on quality management especially in ASEAN context. The study provides valuable groundwork for further studies on the improvement of organizational performance through total quality management and ISO/TS16949.

vi

ABSTRAK

Pelaksanaan pengurusan kualiti menyeluruh adalah tidak seragam di setiap kawasan di seluruh dunia. Walaupun terdapat banyak penerbitan dihasilkanmengenainya, hanya sedikit sahaja kajian empirikal yang melibatkan negara membangun dan sehingga kini didapati tiada kajian berkaitan pelaksanaan pengurusan kualiti menyeluruh yang melibatkan perbandingan sektor automotif dikalangan negara ASEAN. Secara amnya, perspektif dan pemahaman mengenai perbezaan dan persamaan di dalam pelaksanaan pengurusan kualiti menyeluruh dapat dilihat daripada kajian perbandingan. Di samping itu, berdasarkan kajian sebelum ini, sesebuah syarikat yang memperoleh sijil sistem pengurusan kualiti seperti piawai ISO dapat membantu menaiktaraf prestasi organisasi tersebut. ISO/TS16949 adalah merupakan spesifikasi yang baru diperkenalkan khas untuk sektor automotif terutama di negara ASEAN. Oleh kerana sejarah yang pendek, maka terdapat banyak kekeliruan kesan spesifikasi tersebut terhadap hubungan pelaksanaan pengurusan kualiti menyeluruh dan prestasi organisasi. Tujuan kajian ini adalah untuk membangunkan model penyelidikan yang melibatkan antara pelaksanaan pengurusan kualiti menyeluruh, ISO/TS16949 dan di samping itu juga mengkaji kesannya terhadap prestasi organisasi di antara sektor automotif di Malaysia dan Thailand. Dua model telah dicadangkan iaitu model moderator dan mediator. Tinjauan melalui soal selidik dijalankan untuk memastikan tahap pelaksanaan pengurusan kualiti menyeluruh dan usaha-usaha bagi memperoleh sijil ISO/TS16949berserta petunjuk prestasi organisasi. Di Malaysia, 161 soal selidik telah berjaya dikumpulkan membawa kepada 25% kadar balasan. Sementara itu, di Thailand 150 soal selidik diperolehi membawa kepada 21% kadar balasan. Teknik struktur persamaan model telah digunakan untuk menganalisa data yang diperolehi daripada hasil tinjauan tersebut. Penjelajahan analisis faktor, analisis kebolehpercayaan dan penetapan analisis faktor bagi tujuan pengesahan konstruk, kebolehpercayaan dan model pengukuran telah dilaksanakan. Setelah pengukuran model ini dilakukan, model struktur diuji. Hasil daripada ujian yang telah dijalankan, terdapat perbezaan didalam pelaksanaan pengurusan kualiti menyeluruh diantara Malaysia dan Thailand, dimana kadar perlaksanaan di Thailand adalah lebih baik. Selain daripada itu, hasil kajian juga menunjukkan bahawa sijil ISO/TS16949 tidak memberi kesan kepada hubungan pengurusan kualiti menyeluruh dan prestasi organisasi. Walau bagaimanapun, kajian ini menunjukkan usaha bagi mendapatkan pengiktirafan sijil ISO/TS16949 jika digabungkan dengan perlaksanaan pengurusan kualiti menyeluruh memberi kesan yang lebih baik kepada prestasi organisasi. Kajian ini telah menghasilkan sumbangan dari segi implikasi teori dan juga implikasi pengurusan. Ini adalah merupakan kajian empirikal yang telah melalui kaedah dan analisis terperinci dan menyumbang kepada pemahaman yang terhad didalam pengurusan kualiti terutama di konteks ASEAN. Kajian ini juga dapat memberi asas kepada kajian lanjutan bagi menaiktaraf prestasi organisasi iaitu melalui perlaksanaan pengurusan kualiti menyeluruh dan ISO/TS16949.

vii

TABLE OF CONTENTS

CHAPTER TITLE PAGE

DECLARATION ii

DEDICATION iii

ACKNOWLEDGEMENTS iv

ABSTRACT v

ABSTRAK vi

TABLE OF CONTENTS vii

LIST OF TABLES xiv

LIST OF FIGURES xviii

LIST OF ABBREVIATIONS xxi

LIST OF APPENDICES xxiii

1 INTRODUCTION

1.1 Background of Research 1

1.2 Problem Definition 4

1.3 Research Questions 5

1.4 Research Objectives 6

1.5 Scope and Assumptions 6

1.6 Significance of Research 7

1.7 Definition of Terms 8

1.8 Research Contributions 10

1.9 Outline of Thesis 11

1.10 Summary 13

vii

TABLE OF CONTENTS

CHAPTER TITLE PAGE

DECLARATION ii

DEDICATION iii

ACKNOWLEDGEMENTS iv

ABSTRACT v

ABSTRAK vi

TABLE OF CONTENTS vii

LIST OF TABLES xiv

LIST OF FIGURES xviii

LIST OF ABBREVIATIONS xxi

LIST OF APPENDICES xxiii

1 INTRODUCTION

1.1 Background of Research 1

1.2 Problem Definition 4

1.3 Research Questions 5

1.4 Research Objectives 6

1.5 Scope and Assumptions 6

1.6 Significance of Research 7

1.7 Definition of Terms 8

1.8 Research Contributions 10

1.9 Outline of Thesis 11

1.10 Summary 13

viii

2 LITERATURE REVIEW

2.1 Introduction 14

2.2 Overview of the Malaysian and Thailand Automotive

Industry 15

2.2.1 Overview of the Malaysian Automotive Industry 15

2.2.2 Overview of the Thailand Automotive Industry 16

2.2.3 Comparison of Malaysian and Thailand

Automotive Industries 18

2.3 Quality and Total Quality Management 19

2.3.1 Quality in International Context 19

2.3.2 Quality Assessment Framework 23

2.3.2.1 Deming Prizes (DP) 24

2.3.2.2 European Quality Award (EQA) 24

2.3.2.3 Malcolm Baldrige National Quality

Award (MBNQA) 25

2.3.3 The Importance of Total Quality Management 26

2.3.4 TQM Evolution 28

2.3.5 TQM Definitions and Components 29

2.3.6 TQM in Malaysia 30

2.3.7 TQM in Thailand 31

2.3.8 TQM Research and Current Trends 33

2.4 ISO/TS16949 36

2.4.1 Background of ISO/TS16949 36

2.4.2 Relationship between ISO/TS16949 and TQM 38

2.5 Performance Management Systems (PMS) 40

2.5.1 PMS Definitions 40

2.5.2 PMS Evolution 41

2.5.3 Roles of Performance Measurement 43

viii

2 LITERATURE REVIEW

2.1 Introduction 14

2.2 Overview of the Malaysian and Thailand Automotive

Industry 15

2.2.1 Overview of the Malaysian Automotive Industry 15

2.2.2 Overview of the Thailand Automotive Industry 16

2.2.3 Comparison of Malaysian and Thailand

Automotive Industries 18

2.3 Quality and Total Quality Management 19

2.3.1 Quality in International Context 19

2.3.2 Quality Assessment Framework 23

2.3.2.1 Deming Prizes (DP) 24

2.3.2.2 European Quality Award (EQA) 24

2.3.2.3 Malcolm Baldrige National Quality

Award (MBNQA) 25

2.3.3 The Importance of Total Quality Management 26

2.3.4 TQM Evolution 28

2.3.5 TQM Definitions and Components 29

2.3.6 TQM in Malaysia 30

2.3.7 TQM in Thailand 31

2.3.8 TQM Research and Current Trends 33

2.4 ISO/TS16949 36

2.4.1 Background of ISO/TS16949 36

2.4.2 Relationship between ISO/TS16949 and TQM 38

2.5 Performance Management Systems (PMS) 40

2.5.1 PMS Definitions 40

2.5.2 PMS Evolution 41

2.5.3 Roles of Performance Measurement 43

vii

TABLE OF CONTENTS

CHAPTER TITLE PAGE

DECLARATION ii

DEDICATION iii

ACKNOWLEDGEMENTS iv

ABSTRACT v

ABSTRAK vi

TABLE OF CONTENTS vii

LIST OF TABLES xiv

LIST OF FIGURES xviii

LIST OF ABBREVIATIONS xxi

LIST OF APPENDICES xxiii

1 INTRODUCTION

1.1 Background of Research 1

1.2 Problem Definition 4

1.3 Research Questions 5

1.4 Research Objectives 6

1.5 Scope and Assumptions 6

1.6 Significance of Research 7

1.7 Definition of Terms 8

1.8 Research Contributions 10

1.9 Outline of Thesis 11

1.10 Summary 13

vii

TABLE OF CONTENTS

CHAPTER TITLE PAGE

DECLARATION ii

DEDICATION iii

ACKNOWLEDGEMENTS iv

ABSTRACT v

ABSTRAK vi

TABLE OF CONTENTS vii

LIST OF TABLES xiv

LIST OF FIGURES xviii

LIST OF ABBREVIATIONS xxi

LIST OF APPENDICES xxiii

1 INTRODUCTION

1.1 Background of Research 1

1.2 Problem Definition 4

1.3 Research Questions 5

1.4 Research Objectives 6

1.5 Scope and Assumptions 6

1.6 Significance of Research 7

1.7 Definition of Terms 8

1.8 Research Contributions 10

1.9 Outline of Thesis 11

1.10 Summary 13

vii

TABLE OF CONTENTS

CHAPTER TITLE PAGE

DECLARATION ii

DEDICATION iii

ACKNOWLEDGEMENTS iv

ABSTRACT v

ABSTRAK vi

TABLE OF CONTENTS vii

LIST OF TABLES xiv

LIST OF FIGURES xviii

LIST OF ABBREVIATIONS xxi

LIST OF APPENDICES xxiii

1 INTRODUCTION

1.1 Background of Research 1

1.2 Problem Definition 4

1.3 Research Questions 5

1.4 Research Objectives 6

1.5 Scope and Assumptions 6

1.6 Significance of Research 7

1.7 Definition of Terms 8

1.8 Research Contributions 10

1.9 Outline of Thesis 11

1.10 Summary 13

viii

2 LITERATURE REVIEW

2.1 Introduction 14

2.2 Overview of the Malaysian and Thailand Automotive

Industry 15

2.2.1 Overview of the Malaysian Automotive Industry 15

2.2.2 Overview of the Thailand Automotive Industry 16

2.2.3 Comparison of Malaysian and Thailand

Automotive Industries 18

2.3 Quality and Total Quality Management 19

2.3.1 Quality in International Context 19

2.3.2 Quality Assessment Framework 23

2.3.2.1 Deming Prizes (DP) 24

2.3.2.2 European Quality Award (EQA) 24

2.3.2.3 Malcolm Baldrige National Quality

Award (MBNQA) 25

2.3.3 The Importance of Total Quality Management 26

2.3.4 TQM Evolution 28

2.3.5 TQM Definitions and Components 29

2.3.6 TQM in Malaysia 30

2.3.7 TQM in Thailand 31

2.3.8 TQM Research and Current Trends 33

2.4 ISO/TS16949 36

2.4.1 Background of ISO/TS16949 36

2.4.2 Relationship between ISO/TS16949 and TQM 38

2.5 Performance Management Systems (PMS) 40

2.5.1 PMS Definitions 40

2.5.2 PMS Evolution 41

2.5.3 Roles of Performance Measurement 43

viii

2 LITERATURE REVIEW

2.1 Introduction 14

2.2 Overview of the Malaysian and Thailand Automotive

Industry 15

2.2.1 Overview of the Malaysian Automotive Industry 15

2.2.2 Overview of the Thailand Automotive Industry 16

2.2.3 Comparison of Malaysian and Thailand

Automotive Industries 18

2.3 Quality and Total Quality Management 19

2.3.1 Quality in International Context 19

2.3.2 Quality Assessment Framework 23

2.3.2.1 Deming Prizes (DP) 24

2.3.2.2 European Quality Award (EQA) 24

2.3.2.3 Malcolm Baldrige National Quality

Award (MBNQA) 25

2.3.3 The Importance of Total Quality Management 26

2.3.4 TQM Evolution 28

2.3.5 TQM Definitions and Components 29

2.3.6 TQM in Malaysia 30

2.3.7 TQM in Thailand 31

2.3.8 TQM Research and Current Trends 33

2.4 ISO/TS16949 36

2.4.1 Background of ISO/TS16949 36

2.4.2 Relationship between ISO/TS16949 and TQM 38

2.5 Performance Management Systems (PMS) 40

2.5.1 PMS Definitions 40

2.5.2 PMS Evolution 41

2.5.3 Roles of Performance Measurement 43

vii

TABLE OF CONTENTS

CHAPTER TITLE PAGE

DECLARATION ii

DEDICATION iii

ACKNOWLEDGEMENTS iv

ABSTRACT v

ABSTRAK vi

TABLE OF CONTENTS vii

LIST OF TABLES xiv

LIST OF FIGURES xviii

LIST OF ABBREVIATIONS xxi

LIST OF APPENDICES xxiii

1 INTRODUCTION

1.1 Background of Research 1

1.2 Problem Definition 4

1.3 Research Questions 5

1.4 Research Objectives 6

1.5 Scope and Assumptions 6

1.6 Significance of Research 7

1.7 Definition of Terms 8

1.8 Research Contributions 10

1.9 Outline of Thesis 11

1.10 Summary 13

vii

TABLE OF CONTENTS

CHAPTER TITLE PAGE

DECLARATION ii

DEDICATION iii

ACKNOWLEDGEMENTS iv

ABSTRACT v

ABSTRAK vi

TABLE OF CONTENTS vii

LIST OF TABLES xiv

LIST OF FIGURES xviii

LIST OF ABBREVIATIONS xxi

LIST OF APPENDICES xxiii

1 INTRODUCTION

1.1 Background of Research 1

1.2 Problem Definition 4

1.3 Research Questions 5

1.4 Research Objectives 6

1.5 Scope and Assumptions 6

1.6 Significance of Research 7

1.7 Definition of Terms 8

1.8 Research Contributions 10

1.9 Outline of Thesis 11

1.10 Summary 13

vii

TABLE OF CONTENTS

CHAPTER TITLE PAGE

DECLARATION ii

DEDICATION iii

ACKNOWLEDGEMENTS iv

ABSTRACT v

ABSTRAK vi

TABLE OF CONTENTS vii

LIST OF TABLES xiv

LIST OF FIGURES xviii

LIST OF ABBREVIATIONS xxi

LIST OF APPENDICES xxiii

1 INTRODUCTION

1.1 Background of Research 1

1.2 Problem Definition 4

1.3 Research Questions 5

1.4 Research Objectives 6

1.5 Scope and Assumptions 6

1.6 Significance of Research 7

1.7 Definition of Terms 8

1.8 Research Contributions 10

1.9 Outline of Thesis 11

1.10 Summary 13

viii

2 LITERATURE REVIEW

2.1 Introduction 14

2.2 Overview of the Malaysian and Thailand Automotive

Industry 15

2.2.1 Overview of the Malaysian Automotive Industry 15

2.2.2 Overview of the Thailand Automotive Industry 16

2.2.3 Comparison of Malaysian and Thailand

Automotive Industries 18

2.3 Quality and Total Quality Management 19

2.3.1 Quality in International Context 19

2.3.2 Quality Assessment Framework 23

2.3.2.1 Deming Prizes (DP) 24

2.3.2.2 European Quality Award (EQA) 24

2.3.2.3 Malcolm Baldrige National Quality

Award (MBNQA) 25

2.3.3 The Importance of Total Quality Management 26

2.3.4 TQM Evolution 28

2.3.5 TQM Definitions and Components 29

2.3.6 TQM in Malaysia 30

2.3.7 TQM in Thailand 31

2.3.8 TQM Research and Current Trends 33

2.4 ISO/TS16949 36

2.4.1 Background of ISO/TS16949 36

2.4.2 Relationship between ISO/TS16949 and TQM 38

2.5 Performance Management Systems (PMS) 40

2.5.1 PMS Definitions 40

2.5.2 PMS Evolution 41

2.5.3 Roles of Performance Measurement 43

viii

2 LITERATURE REVIEW

2.1 Introduction 14

2.2 Overview of the Malaysian and Thailand Automotive

Industry 15

2.2.1 Overview of the Malaysian Automotive Industry 15

2.2.2 Overview of the Thailand Automotive Industry 16

2.2.3 Comparison of Malaysian and Thailand

Automotive Industries 18

2.3 Quality and Total Quality Management 19

2.3.1 Quality in International Context 19

2.3.2 Quality Assessment Framework 23

2.3.2.1 Deming Prizes (DP) 24

2.3.2.2 European Quality Award (EQA) 24

2.3.2.3 Malcolm Baldrige National Quality

Award (MBNQA) 25

2.3.3 The Importance of Total Quality Management 26

2.3.4 TQM Evolution 28

2.3.5 TQM Definitions and Components 29

2.3.6 TQM in Malaysia 30

2.3.7 TQM in Thailand 31

2.3.8 TQM Research and Current Trends 33

2.4 ISO/TS16949 36

2.4.1 Background of ISO/TS16949 36

2.4.2 Relationship between ISO/TS16949 and TQM 38

2.5 Performance Management Systems (PMS) 40

2.5.1 PMS Definitions 40

2.5.2 PMS Evolution 41

2.5.3 Roles of Performance Measurement 43

ix

2.5.4 PMS Models 44

2.5.5 Shortcomings of the Existing Performance

Measurement Systems 46

2.5.6 Relationship between TQM and Organizational

Performance 50

2.6 Summary 52

3 DEVELOPMENT OF RESEARCH MODEL AND RESEARCH

HYPOTHESES

3.1 Introduction 53

3.2 TQM Constructs 53

3.2.1 Analysis of Developed Constructs 54

3.2.2 Defining TQM Constructs 58

3.3 ISO/TS16949 Efforts 60

3.3.1 Control Plan 62

3.3.2 Management Tools and Techniques 63

3.3.3 Improvement Activity 65

3.3.4 Internal Audit 67

3.4 Organizational Performance Measures 68

3.4.1 Level of Satisfaction 69

3.4.1.1 Customer Satisfaction 69

3.4.1.2 Employee Satisfaction 71

3.4.2 Business Results 73

3.4.2.1 Product Quality Effectiveness 73

3.4.2.2 Financial Performance 74

3.5 Research Model 76

3.5.1 A Review on Structural Equation Modeling 76

3.5.2 A Proposed Research Model 80

3.5.3 Research Hypotheses 82

ix

2.5.4 PMS Models 44

2.5.5 Shortcomings of the Existing Performance

Measurement Systems 46

2.5.6 Relationship between TQM and Organizational

Performance 50

2.6 Summary 52

3 DEVELOPMENT OF RESEARCH MODEL AND RESEARCH

HYPOTHESES

3.1 Introduction 53

3.2 TQM Constructs 53

3.2.1 Analysis of Developed Constructs 54

3.2.2 Defining TQM Constructs 58

3.3 ISO/TS16949 Efforts 60

3.3.1 Control Plan 62

3.3.2 Management Tools and Techniques 63

3.3.3 Improvement Activity 65

3.3.4 Internal Audit 67

3.4 Organizational Performance Measures 68

3.4.1 Level of Satisfaction 69

3.4.1.1 Customer Satisfaction 69

3.4.1.2 Employee Satisfaction 71

3.4.2 Business Results 73

3.4.2.1 Product Quality Effectiveness 73

3.4.2.2 Financial Performance 74

3.5 Research Model 76

3.5.1 A Review on Structural Equation Modeling 76

3.5.2 A Proposed Research Model 80

3.5.3 Research Hypotheses 82

x

3.6 Summary 89

4 RESEARCH METHODOLOGY

4.1 Introduction 91

4.2 Research Design 91

4.3 Overall Structure of Research Methodology 92

4.4 Survey Methodology 95

4.4.1 Questionnaire Development 95

4.4.2 Expert Validation 102

4.4.3 Pilot Study 105

4.4.4 Population and Sampling of the Study 109

4.4.5 Data Collection 110

4.4.5.1 Treatment for Missing Data 112

4.4.5.2 Test of Response Bias 113

4.4.6 Reliability 114

4.4.7 Validity 115

4.4.8 Statistical Analysis 116

4.4.8.1 The SPSS 117

4.4.8.2 Structural Equation Modeling (SEM) 117

4.5 Summary 124

5 SURVEY RESULTS AND ANALYSIS

5.1 Introduction 125

5.2 Respondent General Descriptive Statistic 126

5.2.1 The Number of Year in Business 126

5.2.2 Types of Ownership 127

5.2.3 Number of Employees 128

5.2.4 Types of Products Manufactured 130

xi

5.2.5 Types of Quality System Certification 131

5.2.6 Current Position in the Company 131

5.3 Exploratory Factor Analysis (EFA) 132

5.3.1 EFA on TQM Constructs 133

5.3.1.1 Initial Solution Results 134

5.3.1.2 Rotated Component Matrix Results 134

5.3.2 EFA on Organizational Performance (OP) 136

5.3.2.1 Initial Solution Results 136

5.3.2.2 Rotated Component Matrix Results 137

5.3.3 EFA on ISO/TS16949 Efforts 138

5.3.3.1 Initial Solution Results 138

5.3.3.2 Rotated Component Matrix Results 139

5.4 Reliability Analysis 139

5.4.1 Reliability Analysis of TQM Constructs 140

5.4.2 Reliability Analysis of OP Measures 141

5.4.3 Reliability Analysis of ISO/TS16949 Efforts 141

5.5 Confirmatory Factor Analysis (CFA) 142

5.5.1 Confirmatory Factor Analysis – Single Factor 142

5.5.1.1 CFA: Single Factor for TQM Constructs 143

5.5.1.2 CFA: Single Factor for Organizational

Performance (OP) Measures 154

5.5.1.3 CFA: Single Factor for ISO/TS16949

Efforts 157

5.5.2 First Order Confirmatory – Multiple Factors 163

5.5.2.1 TQM Constructs with Eight Factors 164

5.5.2.2 Organizational Performance (OP)

Measures with Two Factors 170

5.5.2.3 ISO/TS16949 Efforts with Three

Factors 171

5.6 Conclusions on EFA, Reliability, and CFA 174

xii

5.7 Test of Hypotheses 174

5.7.1 Comparative Analysis of TQM Implementation

between Malaysia and Thailand 175

5.7.2 Analyzing the Effect of ISO/TS16949

Certification – Moderator 179

5.7.2.1 The Effect of ISO/TS16949 Certification

in Malaysia Automotive Industry 181

5.7.2.2 The Effect of ISO/TS16949 Certification

in Thailand Automotive Industry 184

5.7.3 Measuring the Impact of ISO/TS16949

Efforts – Mediator 188

5.7.3.1 Mediating Effect of ISO/TS16949

Efforts in Malaysia 190

5.7.3.2 Mediating Effect of ISO/TS16949

Efforts in Thailand 192

5.8 Summary 195

6 DISCUSSIONS AND IMPLICATIONS

6.1 Introduction 196

6.2 The Findings of TQM Constructs Measurement

Model 197

6.3 The Findings of Organizational Performance (OP)

Measurement Model 199

6.4 The Findings of ISO/TS16949 Efforts Measurement

Model 200

6.5 Comparisons of TQM Implementation between

Malaysia and Thailand 201

6.6 The Moderating Effect of ISO/TS16949 Certification 203

6.7 The Mediating Impact of ISO/TS16949 Efforts 208

xiii

6.8 Implications of the Study 211

6.8.1 Theoretical Implications 211

6.8.2 Managerial Implications 212

6.9 Summary 214

7 CONCLUSIONS AND RECOMMENDATIONS

7.1 Introduction 215

7.2 Research Contributions 215

7.2.1 Academic and Practical Contributions 215

7.2.2 Disseminations of Knowledge through Publications 216

7.3 Fulfillment of Research Objectives 219

7.4 Limitations of the Research 220

7.5 Recommendations for Future Research 222

7.6 Conclusions 223

REFERENCES 224

APPENDICES A - K 262 - 316

xiv

LIST OF TABLES

TABLE NO. TITLE PAGE

2.1 Countries investigated and the number of corresponding articles

(Sila and Ebrahimpour, 2003) 22

2.2 Research on comparative study in quality practices

implementation between countries from the year 2000 to 2007 23

2.3 Criteria for ISO 9000 and ISO 14000 certifications 24

2.4 The European Quality Award criteria 25

2.5 Malcolm Baldrige National Quality Award criteria 25

2.6 Criteria for Quality Management Awards 26

2.7 Summarized findings of studies 27

2.8 Summarized of performance measurement definition 41

2.9 Examples of PMS model and their critical problems 49

3.1 Constructs proposed from literature 55

3.2 Comparison of quality management constructs across

different studies 57

3.3 ISO/TS16949 efforts and their measurement items 61

3.4 Performance measures proposed by literature 69

3.5 Summary of past-related research using SEM approach 79

4.1 TQM constructs and their measurement items 96

4.2 ISO/TS16949 efforts and their measurement items 99

4.3 Organizational performance measures and their measurement

Items 102

4.4 Summaries of comments and suggestions from quality experts

and practitioners’ 104

xv

4.5 Types of products manufactured 107

4.6 Types of quality system certification 108

4.7 Pilot results of internal consistency analysis for TQM constructs 108

4.8 Pilot results of internal consistency analysis for OP measures 108

4.9 Pilot results of internal consistency analysis for ISO/TS16949

Efforts 109

4.10 Summary of final dataset 113

4.11 Symbol in SEM 118

4.12 Recommended values of goodness-of-fit measures 121

5.1 The number of year in business for Malaysian respondents 126

5.2 The number of year in business for Thailand respondents 127

5.3 Percentage of type of ownership for Malaysian companies 127

5.4 Percentage of type of ownership for Thailand companies 128

5.5 Type of material used for Malaysia 130

5.6 Type of material used for Thailand 130

5.7 Types of quality system certification for Malaysia respondents’ 131

5.8 Types of quality system certification for Thailand respondents’ 131

5.9 Current position in the company for Malaysia respondents’ 132

5.10 Current position in the company for Thailand respondents’ 132

5.11 KMO and Bartlett's Test for TQM constructs 133

5.12 Results of total variance explained for TQM items 134

5.13 KMO and Bartlett's Test for OP measures 136

5.14 Results of total variance explained for OP items 137

5.15 KMO and Bartlett's Test for ISO/TS16949 efforts 138

5.16 Results of total variance explained for ISO/TS16949 efforts 139

5.17 Results of internal consistency analysis for TQM constructs 140

5.18 Results of internal consistency analysis for OP measures 141

5.19 Results of internal consistency analysis for ISO/TS16949 efforts 141

5.20 Regression weights of QL construct 145

5.21 Regression weights of CFS construct 146

5.22 Regression weights of QIA construct 147

xvi

5.23 Regression weights of HRD construct 149

5.24 Regression weights of SPM construct 150

5.25 Regression weights of SQM construct 151

5.26 Regression weights of QR construct 152

5.27 Regression weights of QA construct 154

5.28 Regression weights of LS construct 155

5.29 Regression weights of BR construct 157

5.30 Regression weights of CP factors 158

5.31 Regression weights of MTT factors 160

5.32 Regression weights of Improvement Activity factors 162

5.33 Regression weights of Internal Audit factors 163

5.34 Results of internal consistency analysis for QRA items 166

5.35 Regression weights of seven TQM constructs 167

5.36 Regression weights of two OP measures 171

5.37 Regression weights of three ISO/TS16949 efforts 173

5.38 Summarizes of EFA, reliability and CFA results 174

5.39 Assessment of multivariate normality 175

5.40 Descriptive of survey respondent 177

5.41 Correlations matrix between TQM constructs 177

5.42 Independent sample t-test for mean country TQM construct

comparison 178

5.43 Results of TQM implementation in Malaysian and Thailand

automotive industries 179

5.44 Standardized regression weight between TQM and OP for

“None ISO/TS16949 certification companies” in Malaysia 182

5.45 Standardized regression weight between TQM and OP for

“ISO/TS16949 certification companies” in Malaysia 184

5.46 Standardized regression weight between TQM and OP for

“None ISO/TS16949 certification companies” in Thailand 186

5.47 Standardized regression weight between TQM and OP for

“ISO/TS16949 certification companies” in Thailand 187

xvii

5.48 Standardized regression weight of path model for

Malaysia automotive industry 191

5.49 Direct (DE) and Indirect Effects (IE) analysis for Malaysia

automotive industry 192

5.50 Standardized regression weight of path model for

Thailand automotive industry 194

5.51 Direct (DE) and Indirect Effects (IE) analysis for Thailand

automotive industry 194

6.1 The difference between eight-factor and seven-factor model

for TQM constructs 198

6.2 Organizational performance (OP) measures with two-factor

model 199

6.3 ISO/TS16949 efforts with three-factor model 200

6.4 Correlations matrix between TQM constructs 202

6.5 The structural relationship between TQM and OP for

Malaysian automotive industries 204

6.6 The structural relationship between TQM and OP for

Thailand automotive industries 205

6.7 Summary results on moderating effect 207

6.8 Inner and outer regression weights for the structural relationship

between TQM and OP with a mediation of ISO/TS16949

efforts for Malaysian and Thailand automotive industries 209

6.9 Inner regression weights between latent variables in the

structural model for Malaysian and Thailand automotive

industries 210

xviii

LIST OF FIGURES

FIGURE NO. TITLE PAGE

1.1 The world vehicle market for year 2000 and projected for

2010 (The Malaysian Automotive Association, 2006) 3

1.2 Organization of the thesis 12

2.1 Modified TQM slope from ISO 9000 to TQM through

ISO/TS16949 (Cohen, 1995) 39

2.2 The evolutionary process of performance measurement

(Folan and Browne, 2005) 42

3.1 TQM constructs 56

3.2 ISO/TS16949 efforts 62

3.3 Customer satisfaction measures 71

3.4 Employee satisfaction measures 73

3.5 Product quality effectiveness measures 74

3.6 Financial performance measures 75

3.7 The model of the structural relationship between TQM and

two organizational performances (Prajogo and Sohal, 2004) 77

3.8 Conceptual SEM for Taiwan and Hong Kong data

(Lin et al., 2005) 77

3.9 A proposed theoretical structural equation model

(Sanchez-Rodriguez et al., 2006) 78

3.10 A proposed moderator research model 80

3.11 A proposed mediating research model 81

4.1 Overview of overall structure research methodology 94

4.2 Type of company ownership 106

xix

4.3 Distribution of companies according to number of employees 107

4.4 Six stage process for structural equation modeling

(Hair et al., 1998) 120

4.5 Flowchart of analysis steps 123

5.1 Distribution of Malaysian companies according to number

of employees 129

5.2 Distribution of Thailand companies according to number

of employees 129

5.3 QL- Statistic results and factor loading 144

5.4 CFS- Statistic results and factor loading 145

5.5 QIA- Statistic results and factor loading 147

5.6 HRD- Statistic results and factor loading 148

5.7 SPM- Statistic results and factor loading 149

5.8 SQM- Statistic results and factor loading 150

5.9 QR- Statistic results and factor loading 152

5.10 QA- Statistic results and factor loading 153

5.11 LS- Statistic results and factor loading 155

5.12 BR- Statistic results and factor loading 156

5.13 CP- Statistic results and factor loading 158

5.14 MTT- Statistic results and factor loading 159

5.15 Improvement activity- Statistic results and factor loading 161

5.16 Internal audit- Statistic results and factor loading 162

5.17 The output path diagram for eight factors TQM model 165

5.18 Modified TQM model: The output path diagram with

seven factors 169

5.19 The output path diagram for two factors OP model 170

5.20 The output path diagram for three factors ISO/TS16949 model 172

5.21 Research model – Moderator 180

5.22 The structural relationship between TQM and OP for

“None ISO/TS16949 certification companies” in Malaysia 182

5.23 The structural relationship between TQM and OP for

xx

“None ISO/TS16949 certification companies” in Malaysia 183

5.24 The structural relationship between TQM and OP for

“None ISO/TS16949 certification companies” in Thailand 185

5.25 The structural relationship between TQM and OP for

“None ISO/TS16949 certification companies” in Thailand 187

5.26 Research model – Mediator 189

5.27 Inner and outer regression weights for the structural relationship

between TQM and OP with a mediation of ISO/TS16949

efforts for Malaysia automotive industry 191

5.28 Inner and outer regression weights for the structural relationship

between TQM and OP with a mediation of ISO/TS16949

efforts for Thailand automotive industry 194

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LIST OF ABBREVIATIONS

AGFI Adjusted goodness of fit index

BOI Board of investment

BR Business results

CBU Complete built-up

CFA Confirmatory factor analysis

CFI Comparative fit index

CFS Customer focus and satisfaction

CKD Complete knocked-down

CP Control plan

DP Deming prize

EFA Exploratory factor analysis

EQA European quality award

FMEA Failure mode and effect analysis

GFI Goodness of fit index

HICOM Heavy industries Corporation of Malaysia berhad

HRD Human resource development

IATF International automotive task force

KVP Kelab Vendor Perodua

LS Level of satisfaction

MACPMA Malaysian Automotive Component Parts Association

MBNQA Malcolm baldrige national quality award

MEM Mitsubishi electric Malaysia

MTT Management tools and techniques

OP Organizational performance

PMQA Prime minister quality award

PMS Performance measurement system

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PVA Proton vendors Association

QA Quality assurance

QFD Quality function deployment

QIA Quality information and analysis

QL Quality leadership

QMS Quality management system

QR Quality results

QRA Quality results and assurance

RMSEA Root mean square error approximation

SEM Structural equation modeling

SMEs Small and medium enterprises

SPM Strategic planning management

SPSS Statistical package for social sciences

SQM Supplier quality management

TLI Tucker lewis index

TQA Thailand quality award

TQM Total quality management

TSC Toyota supplier club

xxiii

LIST OF APPENDICES

APPENDIX TITLE PAGE

A The survey instrument (English version) 262

B List of international, national experts and pilot study companies 269

C The survey instrument (Thailand version) 271

D An example letter sent to quality experts 281

E An example cover letter for pilot study 282

F An example cover letter for final survey 283

G An example cover letter for final survey (Thailand version) 284

H1 Results of total variance explained for TQM items 286

H2 Results of total variance explained for OP items 287

H3 Results of total variance explained for ISO/TS16949 288

I1 Summary results of rotated factor matrix – Varimax with

Kaizer Normalization (TQM) 289

I2 Summary results of rotated factor matrix – Varimax with

Kaizer Normalization (OP) 290

I3 Summary results of rotated factor matrix – Varimax with

Kaizer Normalization (ISO/TS16949) 291

J1 Results of reliability analysis for TQM constructs 292

J2 Results of reliability analysis for OP measures 297

J3 Results of reliability analysis for ISO/TS16949 efforts 299

K Publications 302

1

CHAPTER 1

INTRODUCTION

1.1 Background of Research

In a competitive market, the demand for quality is emerging as the single most

critical factor for companies to survive in the ever expanding global market place.

Quality is vital in determining the economic success of manufacturing companies

(Garvin 1988; Curkovic, et al., 2000). World class manufacturing companies gain

competitive edge and greater market share through extraordinary levels of performance

by providing a quality product with a competitive price as required by demanding

customers.

The concept of Total Quality Management (TQM) has been developed as the

result of intense global competition. Organizations with international trade and global

competition have paid considerable attention to TQM philosophies, procedures, tools

and techniques. According to Juran, international competition requires higher levels of

quality by organizations (Blackiston, 1996).

However, the implementation of quality management has not occurred at the

same pace in different regions of the world. Early implementation started in Japan, US,

Europe, and followed by the developing countries. In order to compete in the global

market, these countries need to implement quality management practices, tools, and

techniques within all sections of their industries. Despite the number of publications and

2

quantity of research on TQM, little empirical work has been carried out in developing

countries, particularly in the ASEAN region.

In Malaysia automotive industry itself, there are a few studies that have been

conducted on the implementation of quality practices. Noviyarsi (2005) had developed a

framework for quality engineering implementation which can assist the automotive

companies to meet their customer satisfaction. Deros et al. (2004) had suggested a

framework for benchmarking implementation for automotive manufacturing SMEs.

Meanwhile, Sohail et al. (2003) had compared the TQM practices and organizational

performances of companies with and without ISO 9000. They pointed out there are

significant differences in performances between certified and non-certified companies.

However, all of them focus within Malaysian context, and till date no research has been

conducted in quality practices and implementation especially on comparative study

among ASEAN country dedicated to automotive industries.

Since the realization of ASEAN Free Trade Area (AFTA) in 2005, it shows the

impact on Malaysia’s car manufacturer sales. Prior to AFTA, most of Malaysian

automotive market is protected by the government with instruments such as tariffs,

refunds schemes and investment control in order to compete with their overseas

competitors. Actually, AFTA, for automotive industries, in a positive perspective would

drive the regional manufacturing integration and cost competitiveness among ASEAN

countries rather being a threat to them. Based on analysis for the world vehicles market

for the year 2000 and projected 2010 by The Malaysian Automotive Association report

(2006), as shown in Figure 1.1, ASEAN is the fifth largest market in the world and

Malaysia is far behind when compared to Thailand by the year 2010.

3

Figure 1.1 The world vehicle market for year 2000 and projected for 2010

(The Malaysian Automotive Association, 2006)

In the quest to standardize quality certification requirements, the automotive

original equipment manufacturers (OEMs) have strongly suggested to their suppliers to

obtain ISO/TS16949 registration. ISO/TS16949 is an ISO technical specification jointly

developed by the International Automotive Task Force (IATF) and the ISO that serves

as a common automotive quality system requirement catalog. This specification aligns

existing American (QS9000), German (VDAG.1), French (EAQF) and Italian (AVSQ)

automotive quality systems standard within the global automotive industry (Kartha,

2004).

Having a quality system in place and obtaining ISO/TS16949 registration does

not necessarily assure organizational performance improvement. There is no guarantee

of business after completing quality certification, but failure to do so may result in loss

of business opportunities.

Given the importance of automotive industries to the Malaysian economy, the

author decided to evaluate the impact of ISO/TS16949 registration efforts on the

Number

4

relationship between TQM and organizational performance. In order to survive in a

competitive market place, quality practices implementation is one of the key issues that

can help align organization’s to stay competitive. Besides that, based on current

situation, comparative study among ASEAN, especially Thailand, could provide an

overall perspective and understanding of the main differences and similarities for TQM

practices and the impact of ISO/TS16949 certification. Those strength that exist within

the Malaysian automotive practices can be maintained, while those lacking in practices

from Thailand counterparts could probably be absorbed and copied by Malaysian

automotive industry players.

1.2 Problem Definition

Malaysia used to be the largest auto market in ASEAN but recently it has been

overtaken by Thailand and Indonesia and now is in third place (Ahmad, 2006). Prior to

AFTA, the Malaysian automotive industry enjoyed considerable growth but now faces

intense competition from ASEAN and other global manufacturers. Furthermore, to help

the National Automotive Policy (NAP) achieve one of their objectives which is to

promote Malaysia as an automotive regional hub, further research is essential. By

implementing TQM practices, it is believed workforce productivity and production

efficiency will be upgraded to be competitive and customer focused.

In the automotive industry, the demand for ISO/TS16949 registration is

increasing rapidly, as many car manufacturers require that their suppliers to obtain it.

ISO/TS16949 registration requires the existence of proper quality plans, programs,

documentation, and procedures. Despites being demanding, there is still considerable

confusion surrounding the effects of ISO/TS16949 registration efforts on the TQM

practices and organizational performance. A review of the literature identified a lack of

study especially on the effects of ISO/TS16949 in the automotive industry.

5

Besides that, the main motivating factor for conducting this research was to find

out the gap between the Malaysian and Thailand automotive industries on the

relationship between TQM practices, ISO/TS16949 and organizational performance.

Parast et al. (2006) pointed out that more comprehensive and comparative studies of

successful quality practices implementation would be helpful especially for those who

are still struggling. It is strongly believed that the findings of this research will be

suitable, effective and help local car manufacturers and suppliers in their effort to

become more effective and competitive.

1.3 Research Questions

Four research questions to be addressed in this research are:

i. To what extent Malaysian and Thailand automotive industries implement TQM?

ii. Does TQM implementation contribute to organizational performance in

Malaysian and Thailand automotive industries?

iii. Does ISO/TS16949 contribute to organizational performance in Malaysian and

Thailand automotive industries?

iv. Does ISO/TS16949 affect the relationship between TQM and organizational

performance in Malaysian and Thailand automotive industries?

6

1.4 Research Objectives

The research has three main objectives, which are as follows:

i. To identify and assess the TQM constructs, ISO/TS16949 efforts and

organizational performance measures for Malaysian and Thailand automotive

industries.

ii. To develop a research model of the TQM, ISO/TS16949 and organizational

performance relationship.

iii. To analyze and compare the relationship of TQM, ISO/TS16949 and

organizational performance between Malaysia and Thailand automotive

industries.

1.5 Scope and Assumptions

To make the research more effective and manageable, the research scope of this

study focused on three main areas, which are as follows:

i. This research will focus on the TQM implementation and efforts on

ISO/TS16949 registration in Malaysia and Thailand automotive industries.

ii. The population and samples of survey respondents targeted in this research will

comprise of automotive industries operating in Malaysia and Thailand.

iii. The proposed research model can act as a guideline for Malaysian automotive

industries to improve their performance. Actual implementation in any company

is beyond the scope of this research.

7

The following assumptions were made regarding this research:

i. The instruments applied in this research measure TQM constructs, ISO/TS16949

efforts and organizational performance are valid and reliable.

ii. The distributions of the randomly selected subjects were assumed to be normal

and provide a valid representation of the population of the study.

iii. Respondents of the questionnaire would give honest answer to survey questions

regarding their organization.

1.6 Significance of Research

Research on quality management practices in the ASEAN region will add to the

total knowledge of quality management and could help to develop a unique model for

quality management. The implementation of TQM practices and implementation has

been enhanced to compete with new challenges in business and to satisfy the emerging

quality paradigm (Thia et al., 2001; Linderman et al., 2004). Several authors have

pointed out the need for more empirical research (Flynn et al., 1995; Walton and

Handfield, 1996), and also the need for more sophisticated research designs in the study

of quality practices field among developing countries (Parast et al. 2006). While, with

the impressive growth of ISO/TS16949 registration implies that awareness exists for the

importance of this certification. Surprisingly, it may seem there are only small numbers

of empirically based attempt to test the significance of ISO/TS16949 certification.

Additionally, there is no empirical studies that examine the relationship between TQM,

ISO/TS16949 and organizational performance.

Several researchers have pointed out the importance of international quality

practices research extended to other countries and regions around the world. Lin et al.

(2004) conducted a comparative study of quality practices between three countries in

automotive industries; USA, Japan and Taiwan. They have identified the differences and

8

pointed out what practices lead to efficient or inefficient performance. While, Iwaarden

et al. (2006) had focused on quality management practices for European countries in

automotive industries. They found that the management control model in the quality

management is useful in explaining what changes are necessary to maintain high quality

levels. Most of these studies, however, use different methodology, instruments and

constructs for comparing quality practices across countries around the world. No study

was found comparing quality practices in automotive industries within ASEAN

countries.

The model developed in this research will hopefully facilitate and simplify the

quality practices implementation process for local car manufacturers and suppliers; help

them identify the gap between their current practices and best practices compared to

their competitors and develop a plan to reduce the gap. So, the needs of the Malaysian

automotives industries for a proper quality implementation and practices is significant

and clear in order to jump to a higher level of global competition.

The research findings will lead to a better understanding and provide new

insights for quality management area where TQM and ISO/TS16949 registration efforts

are important to improve organizational performance. As such, it is expected to benefit

both researchers and practitioners.

1.7 Definition of Terms

The following definitions are adopted in the context of this thesis:

a) Direct Effect (DE)

Direct effect is a directional relationship between two variables with no

intervening variables (Hoyle, 1995)

9

b) Endogenous Variables

Endogenous variables are those influenced by factors that are inside the

structural model (Mueller, 1996)

c) Exogenous Variables

Exogenous variables are those influenced by factors that are outside the

structural model (Mueller, 1996)

d) Indirect Effect (IE)

Indirect effect is the effect on one variable (independent) on another (dependent)

through one or more mediating variables (Hoyle, 1995).

e) ISO/TS16949

ISO/TS16949 is an ISO technical specification that represents a comprehensive

quality management system for the global automotive industry to achieve world

class levels of product quality, productivity, competitiveness and continual

improvements.

f) Latent variable

Latent variable is an unobserved variable.

g) Organizational Performance

Measurement of the performance of one company’s against those of another

company.

h) Structural Equation Modeling (SEM)

Structural equation modeling is a multivariate analytic tool, which incorporates

both the theoretical and empirical aspects of research and is supported by

powerful computer software packages such as AMOS (Chinna, 2009)

10

i) Total Quality Management (TQM)

A customer-focused management philosophy and strategy management, which

seeks continuous improvement in business, process using tools and techniques,

which encompasses the participation of all employees.

1.8 Research Contributions

This study examines the relationship among TQM, ISO/TS16949 and

organizational performance in Malaysian and Thailand automotive industries. The

research findings are expected to contribute to the theory and practice of automotive

industry.

This study provides an academic contribution, with its empirical evidence and

validation which would makes it generally applicable within automotive organizational

performance measurement in quality management area. The developed and tested

content of this study fills the research gap by providing a reliable and useful reference

material on the critical factors of TQM implementation and ISO/TS16949 registration

efforts on organizational performance.

On top of that, the contribution for practitioners is to provide important

guidelines for automotive and related companies to implement TQM with ISO/TS16949

registration efforts to improve organizational performance. The measurement

instruments developed in this study should be a valuable tool for organizations to

evaluate and compare their current practice.

11

1.9 Outline of Thesis

This thesis is organized into seven chapters as shown in Figure 1.2. The first

chapter has highlighted the background of research. It has also outlined the research

questions, objectives, scope and assumptions, the significance of this research,

definitions of terms and finally research contributions. Chapter two presents some

review of literature to understand the issues of the research. The review describes about

automotive industries in Malaysian and Thailand, total quality management and

performance measurement systems.

Chapter three critically reviews the development of TQM constructs,

ISO/TS16949 efforts and performance measures constructs. This is followed by brief

review on the use of structural equation modeling by past researchers. Based on that, a

proposed research model has been developed which will be used in this study for

Malaysian and Thailand automotive industries. Finally, this chapter provides a research

hypotheses development.

Chapter four is to illustrate the methods and procedures that will be used in the

study. It gives a detail description of the research process and discusses each of the

research stages. This chapter starts with a research design, a discussion on the overall

structure of the research methodologies, and survey methodology. In survey

methodology section, a detailed explanation has been provided on questionnaire

development, expert validation, pilot study, population and sampling of the study,

reliability, validity, and statistical analysis.

The fifth chapter presents the results of the survey. It discusses the respondents’

general descriptive statistics, validation of the survey instruments by using reliability

and validity test. The chapter also presents a set of hypothesis testing included to test

significant difference in TQM implementation in Malaysian and Thailand automotive

industries, moderator analysis and mediator analysis.

12

Chapter six provides an overall discussion of research findings and implications

in light of the results of Chapter five. Finally, Chapter seven concludes the thesis with

lists of contributions, conclusions and recommendations for further research.

Figure 1.2 Organization of the thesis

Chapter I

Introduction

Chapter II

Literature Review

Chapter III

Development of Research Model and Hypotheses

Chapter IV

Research Methodology

Chapter V

Survey Results and Analysis

Chapter VI

Discussions and Implications

Chapter VII

Conclusions and Recommendations

13

1.10 Summary

This chapter has laid the foundation for the thesis. Among others, it has

introduced the background of the research and described the objectives and scope of the

research. The research significance is briefly described, definition of terms used in this

research is presented, research contributions are highlighted and the organization of the

thesis is outlined.