The role of strategic planning in excellence management systems

Depósito de Investigación de la Universidad de Sevilla https://idus.us.es/ This is an Accepted Manuscript of an article published by Elsevier in European Journal of Operational Research, Vol. 248, no. 2, on January 2016, available at: https://doi.org/10.1016/j.ejor.2015.07.008 Copyright 2016 Elsevier. En idUS Licencia Creative Commons CC BY-NC-ND 1 The role of strategic planning in excellence management systems Eva Suarez, Arturo Calvo-Mora, José Luis Roldán Abstract The paper examines the role of the strategic planning process in excellence management systems (EMSs) and attempts to contribute evidence of how the efficient EMS works, by an analysis of the synergies and relationships between the critical factors of total quality management (TQM) and the organisation’s results. In order to reach these objectives, the excellence model of the European Foundation for Quality Management (EFQM) was used as a framework. The methodology used was the Partial Least Squares (PLS) technique. The data were collected from a sample of 225 Spanish firms, candidates for excellence awards, which have been subjected to the complete self- and external-assessment process. The results showed that the actions and the commitment of the leaders and the people to quality (EFQM enablers social factors) must be made effective through the design and implementation of a schematic of the key processes, suitable resource management and the establishment of alliances with the main suppliers and partners. Another critical issue for the success of TQM is the need to achieve integration of the quality values, objectives and practices into the strategic planning process. Moreover, the results also show how the management of the EFQM enablers technical factors differs based on the degree of excellence with which the strategic planning process is employed in the organisations which form the sample. 1. Introduction Total Quality Management is a comprehensive organisational management approach. This approach is based on the correct integration of certain cultural values and principles (continuous improvement, innovation and dynamism) in the strategy, structure and processes of the organisation. To put these values and principles into practice, organisations use a series of techniques, models and systems oriented towards stakeholder satisfaction and strengthening the competitiveness of the organisation. Moreover, for this management approach to achieve the desired effects, the implementation, development and improvement of a series of critical or key factors are needed. These factors must form a management system, i.e. synergies and relationships are produced between the critical factors of TQM (Bou-Llusar, Escrig-Tena, Roca-Puig, & Beltrán-Martín, 2009). Recognising and managing these synergies and relationships are fundamental for the implementation and improvement of the management system and the achievement of the planned objectives and results (Calvo-Mora, Picón-Berjoyo, Ruiz- Moreno, & Cauzo-Bottala, 2015). In the last 50 years TQM has been widely adopted (Zatzick, Moliterno, & Fang, 2012). As a consequence, numerous contributions have appeared that show how the implementation of TQM can help to achieve the objectives and to improve the performance of the organisations (Williams, Bertsch, Van der Wiele, Van Iwaarden, & Dale, 2006). There are also cases in which the implementation of TQM has not produced the anticipated results. This may be due, for example, to the effect of contextual variables, such as size, experience or the sphere of operations, which moderate the effects of the quality practices on the results (Nair, 2006; Taylor & Wright, 2003). In other cases, the research has not achieved the anticipated results due to design errors (Powell, 1995), such as inadequate selection of the sample, the indicators, or the statistical techniques used for the analysis of the data (Marín-Vinuesa, 2009). Conca, Llopis, and Tarí (2004) and Prybutok and Ramasesh (2005) differentiate three types of framework for the implementation of TQM: • Frameworks based on quality experts or gurus. This group would include the teachings and contributions of Deming, Juran, Crosby, Feigembaum, Ishikawa, Garvin, and Taguchi, among others. • Excellence models or quality awards. The most representative are the Deming Prize (Japan), the Malcolm Baldrige National Quality Award (USA), the European Quality Award and the Ibero-American Model of Management Excellence. • Models extracted from theoretical and/or empirical research that attempt to identify and develop scales of measurement for the dimensions or critical factors and the results of TQM. Theworks of Anderson, Rungtusanatham, and Schroeder (1994), Saraph, Benson, and Schroeder (1989) and Flynn, Schroeder, and Sakakibara (1994) were pioneering in this field. In this regard, diverse research has shown how the excellence models offer the ideal reference framework for the implementation and improvement of TQM in an organisation (Bou-Llusar et al., 2009; Kim, Kumar, & Murphy, 2010). Among the critical factors of TQM identified in the literature are: a flexible organisational culture oriented to innovation and continuous improvement; a determined commitment and leadership by the management; strategic planning; continuous improvement; a client and other stakeholder focused approach; management based on data and information analysis, as well as the management of personnel, processes and suppliers or other partners (Sila & Ebrahimpour, 2003). In this respect, Rahman and Bullock (2005) classify the critical factors of TQM as: (1) Soft aspects, corresponding to social and behavioural factors, such as an open and flexible culture, the management’s commitment and leadership, the human resources management and the focus on stakeholders. (2) Hard aspects, associated with the technical factors of the design, implementation and improvement of the quality management systems, such as the control and management pro cesses, the use of analysis, measurement and problem-solving tools, the management of different resources and supplier management. 3 (3) Strategic aspects, i.e. the need to integrate the quality objectives, plans and policies into the general strategic process of the organisation. In this sense, effective TQM ensures that management adopts a strategic overview of quality and focuses on prevention of problems (Oakland, 2011). In the EFQM model, and in the excellence models in general, no explicit distinction is made between social (soft), technical (hard) and strategic factors. Brown (2002) and Bou-Llusar et al. (2009) suggest the leadership and people criteria represent the TQM social factors in the model, whereas the criteria that refer to the processes, alliances and resources reflect the technical character of TQM. Finally, policy and strategy are the most difficult criteria to classify, as they contain items which relate to both soft and hard issues (Calvo-Mora, Picón- Berjoyo, Ruiz-Moreno, & Cauzo-Bottala, 2014a). For Castresana and Fernández-Ortiz (2005, p. 37) policy and strategy criteria reflect the business strategy as a tool or instrument of integration and coordination of other business resources and capabilities. From the research point of view, studies that have the analysis and understanding of how the excellence models work as their central objective are a few. More numerous are those that analyse the management systems based on the ISO 9000 international standards or other tools related to quality management and improvement, such as Benchmarking, Six Sigma, Just in Time, Lean, Enterprise Resources Planning and the Balanced Scorecard (Dahlgaard-Park, Chen, Jang, & Dahlgaard, 2013). Topics of research on excellence models have been focused on analysing the barriers to implementation (Ritchie & Dale, 2000; Sandbrook, 2001); the criteria of the models that are considered more critical to achieving success (Kim et al., 2010; Samuelsson & Nilsson, 2002; Tutuncu & Kucukusta, 2007); the possible internal improvements derived from the application of the models (Davies, 2008); the internal structure of relationships (Eskildsen, Kristensen, & Juhl, 2001; Calvo-Mora, Leal, & Roldán, 2005); the impact on the performance or the results of the organisations (Corredor & Goñi, 2010; Nazemi, 2010); and the usefulness of identifying the more representative resources and capacities of the company, which identify the key resources for generating competitive advantages (Castresana & Fernández-Ortiz, 2005; Martín-Castilla & Rodríguez-Ruiz, 2008). In this sense, Kim et al. (2010) and Dahlgaard-Park et al. (2013) point out that there is a serious lack of attention to some topics such as policy and strategy. Strategic planning constitutes a key piece in all quality systems, since it is a fundamental factor in the initiation and development of change in the organisation which requires the whole TQM initiative (Pfeifer, Schmitt, & Thorsten, 2005). Moreover, inefficient planning, or not considering quality as a strategic question, is one of the main causes of failure in the implementation of TQM (Taylor & Wright, 2003). Rusjan (2005) points out that assessment through the EFQM model does not advise on improving weak points or preserving strengths. For Ritchie and Dale (2000), this problem would be resolved by integrating the results of the self-assessment process into the strategic planning. In this case, strategic planning should be the bridge that connects the improvement of processes with priorities that support the organisation’s long term success and change (Samuelsson & Nilsson, 2002). It is important to explore these questions because the purpose of the EFQM model is to support organisations in achieving business excellence through continuous improvement, learning, creativity and innovation. In addition, when analysing the integration and adjustment of the strategic planning into a quality system, we must be aware that the critical factors do not act independently but form a management system (Bou-Llusar et al., 2009; Tarí, Molina, & Castejón, 2007). In this context, the following research questions are raised: (1) What role does strategic planning play in EMSs? (2) Do the critical factors of TQM form a management system in the context of the EFQM excellence model? (3) How does an efficient EMS work in practice? To answer these questions, the paper is organised as follows. First, a review is made of the literature on the relationships between the TQM social, technical and strategic factors, and their effect on an organisation’s results. Second, a multiple mediating model based on the EFQM model is proposed. The results are then presented, with a discussion based on the analysis of data collected from 225 Spanish firms. This study concludes with the conclusions and limitations of the study. 2. Literature review and hypotheses The EFQM model presents a framework that analyses the relationships between what an organisation does and the results that it is able to attain (Dror, 2008). The criteria that the model proposes represent the indicative elements of the degree of progression that a certain organisation follows to achieve excellence. These criteria are specified in five key implementation factors or “Enablers” (leadership, policy and strategy, partnerships and resources, people, and process), and the four remaining dimensions reflect the “Results” which the organisation attains, concerning their customers, employees, society and other key factors. The “Enablers” criteria cover what an organisation does and how it does it. The EFQM model establishes how the general performance of an organisation is reached by means of a leadership that directs and impels the policy and strategy, which will become reality through the management of people, resources, alliances and processes. As can be seen, in the EFQM model, strategy (policy & strategy criteria) is specifically included as a key factor of TQM implementation. However, no explicit mention is made of TQM social or technical type factors. Nevertheless, the leadership and people criteria correspond with TQM social factors, and the other two criteria, partnerships and resources, and processes, are associated with TQM technical factors (Abdullah, Uli, & Tarí, 2008; Brown, 2002; Reiner, 2002; Bou-Llusar et al., 2009). The literature includes numerous works that analyse the relationship between 5 TQM practices and the results of the companies. In many cases the conclusions of these works are contradictory. Thus, no clear results are obtained regarding which factors affect the results directly or indirectly or through the mediating effect of other factors (Ho, Duffy, & Shih, 2001). Controversy also exists over which are the critical factors of a social, technical or strategic na ture that have a more positive and significant influence on the results (Gadenne & Sharma, 2009). In addition, the success of TQM is conditioned by the interrelationships between the factors that form the company’s quality system (Bou-Llusar et al., 2009; Calvo-Mora et al., 2005). In the EFQM model, the “Results” criteria cover what an organisation achieves, regarding their customers, employees, society and other key results. The logic of the model is based on the fact that obtaining excellent results is directly related to the leadership capacity, the strategy quality and the deployment of the model through people, partners, resources and processes (EFQM, 2010). However, the relationships between the “Enablers” and the “Results” criteria are not explicitly established. For that reason, a research model (Fig. 1) is proposed which attempts to establish the possible relationships between the social, technical and strategic factors of the EFQM model and their relationship with the results of the organisation. Also, the role of strategic planning in this context is analysed in detail. Whereas Fig. 1A depicts the total effects of the TQM social factors on both the TQM Technical Factors and the Results constructs, Fig. 1B includes the policy & strategy as a mediating variable, thereby illustrating the indirect relationships postulated in Hypotheses 2–5. 2.1. The relationship between EFQM enablers social and technical factors The leadership of the management acts as a driving force in the implementation, development and improvement of TQM within a flexible, innovative and stakeholder oriented organisational culture. The commitment of the leaders must be shaped by objectives, strategies and plans that allow the company to obtain a greater performance (Rahman & Bullock, 2005). In this sense, the way of managing and assigning the technological, information and infrastructure resources is a key element in assessing management’s commitment to quality (Fotopoulos & Psomas, 2010). In addition, in the current business environment, the management of the relationships with the main suppliers of resources, and other partners, is a key element of the strategy of any organisation (Vanichchinchai & Igel, 2011). On the other hand, the effectiveness of other TQM technical factors such as product and service design, process management and the use of quality improvement tools, requires the participation of the workers through continuous training, empowerment and teamwork. In short, the TQM social and technical factors do not act independently within a Quality Management System (QMS). On the contrary, to obtain the implementation, development and improvement of a QMS, both types of factors must be integrated effectively (Rahman & Bullock, 2005). Thus, the following hypothesis is proposed: H1. EFQM enablers social factors are positively related to EFQM enablers technical factors. 2.2. The mediating role of policy and strategy In the present context, TQM plays an important strategic role for organisations. The reasons are, on one hand, the possibility of reaching a sustainable competitive advantage through the implementation and improvement of quality (Zatzick et al., 2012). Powell (1995) maintains that quality is an intangible strategic resource that is difficult to imitate by competitors. Reed, Lemak, and Montgomery (1996) maintain that TQM can be used in different strategic contexts, both for obtaining a costs advantage and in differentiation. Differentiation is associated with stakeholder orientation, and costs advantage with the process orientation. Prajogo and Sohal (2006) identify that TQM is related to the generic strategy of differentiation. Whereas Zatzick et al. (2012) find that TQM is positively related to performance for cost leaders. On the other hand, quality must be considered as a basic compo-nent of the strategy of any organisation, as it guarantees its survival and growth (Deming, 1982). Thus, Oakland (2011) considers that the objectives and practices of TQM must be incorporated into the strategic plan of the organisation in a systematic manner. For Dean and Evans (1994), the integration of TQM and strategic planning into an organisation’s culture and practices generates synergies that accelerate and increase the probabilities of success of the strategic process, as well as the achievement of the organisation’s mission and vision in a more efficient manner. In the EFQM model, strategic planning is contemplated in the policy and strategy criterion. This criterion refers to the way in which organisations instil their mission and vision through the development and deployment of stakeholder focused strategies, policies, plans, ob jectives and processes. In addition, they must take into account the characteristics of the business environment and the relative internal strengths and weaknesses of the organisation (EFQM, 2010). More specifically, it is a question of analysing and assessing: (1) the process of becoming attuned to the needs and expectations of the interest groups and to the relevant information in the business environment; (2) how information is translated into ideas, statements, approaches, objectives and plans; (3) the manner in which resources are assigned and activities are programmed to reach the proposed objectives; (4) how the communication and deployment of the objectives and plans is undertaken; and (5) the effectiveness of the mecha nisms for the monitoring and improvement of the strategic planning process. For Oakland (2011), the policy and strategy criterion serves as guidance, and is related to the other criteria or key management factors of the EFQM model, and it indirectly conditions the results that the company is able to attain. This is because the criteria plays a crucial role in management, as it defines the foundations of the business, the stakeholders, the market segments, the objectives, processes and resources necessary to attain the results. In addition, it is the responsibility of management to establish and to communicate the strategic direction of the organisation, as well as to try to obtain the collaboration of all the relevant people and partners, to make the mission, vision and objectives a reality (Kaynak, 2003). Finally, the strategy must be put into practice through the deployment of the key processes, the correct allocation of resources and the establishment or strengthening of alliances with the organisation’s main suppliers and partners (Hung, 2006). Thus, the following hypothesis is proposed: H2. The relationship between EFQM enablers social factors and EFQM enablers technical factors is mediated by the policy and strategy. 2.3. The relationship between EFQM enablers social factors and results In general, TQM social factors exert a positive influence on an organisation’s results (Rahman & Bullock, 2005), as they establish the basis of an open culture, adaptable to changes in the business environment, and play a crucial role in the orientation towards continuous improvement (Abdullah et al., 2008). Thus, the 5. Discussion The results support the reliability and validity of the measurement model (Tables 3 and 4), and hence the high predictive power of the EFQM model as a framework for the implementation of EMS’s based on TQM principles. It presents explained variance (R 2 ) values over 0.55 (Table 5 and Fig. 2). The proposed model shows a high predictive validity, since the Q 2 coefficient value of the dependent reflective variable is over 0 (Table 5). Moreover, the hypotheses that represent the direct effects between the variables (Fig. 2 and Table 5) are confirmed, as well as the indirect or mediation relationships (Table 6). These results confirm the existence of multiple interdependences and synergies in the implementation of the key factors of TQM, or put another way, the results confirm the systemic character of the quality management (Bou-Llusar et al., 2009). More specifically, the main objective of this research is to examine the role of strategic planning in excellence management systems. From the results generated by PLS methodology, the policy & strategy variable, or strategic planning, has a very important weight and plays a key role in the model. Firstly, the high predictive relevance (Q 2 = 0.595) and the percentage of variance explained of this variable (R 2 = 72.5%) are highlighted. Secondly, the results show the importance of strategic planning when effectively implementing the technical part of a QMS. This fact is confirmed by the high direct effect between both variables (a 2 = 0.635, t = 8.742), as well as by the important percentage of variance of the TQM hard factor dimension which explains the policy and strategy variable (R 2 = 55%) (Table 5). The importance of strategic planning is reinforced by the mediating effect that this variable exerts between the TQM social factor dimensions (leaderships and people) and TQM technical factors (partners and resources, and processes). In Fig. 2A, TQM social factors have a significant total effect on the TQM technical factors (c = 0.813, t = 27.337). However, when strategic planning is introduced as mediator (Fig. 2 B), the TQM social factors substantially reduce the direct effect on the TQM technical factors. Nevertheless, the percentage of explained variance of the TQM technical factors dimension increases importantly (R 2 = 66% → R 2 = 77.1%) when introducing the strategic planning into the model. These results indicate that the commitment of the management, and the involvement of the people, constitute a key piece in the EMSs when implementing process management, boosting the development of alliances with the main partners and suppliers, as well as efficiently managing the organisation’s resources. Nevertheless, these actions are more effective, dex of 34.58%. Accordingly, it means that policy & strategy and TQM and will be maintained and improved over time, if they are integrated systematically into the management of the organisation through the strategic planning process. Thirdly, the research model does not suggest a direct relationship between the policy and strategy variable (criteria 2) and the results variable, although an indirect relationship (a 2 ∗ b 1 = 0.195) is established through the TQM technical factors (criteria 3 and 4 in the EFQM model; Fig. 2). This is because policy & strategy criteria contemplate the process for (1) understanding the needs and expectations of stakeholders; (2) obtaining data about the business environment and translating it into objectives and plans; (3) defining and planning the allocation of necessary resources and the establishment of necessary alliances (criteria 3) and (4) deploying the schematic of key processes for the attainment of the proposed objectives and plans (criteria 4). Therefore, it is through the ability of the organisation to manage its resources, establish its alliances of cooperation and deploy and improve its key processes, that it will achieve better results over time. At this point it can be asked if the companies that make a better job of the strategic planning process, according to the direc tives of the EFQM model, also manage the TQM technical factors more efficiently (processes and partnerships and resources variables). This question was investigated by using the independent-samples t-test to compare the difference between means). As can be seen from Table 7, Levene’s test of equality of variances is not fulfilled (sig. > 0.05) for the Processes variable, which is why a nonparametric test had to be made, specifically, the Mann–Whitney test (z). The results obtained show that the management of the TQM technical factors differs based on the degree of excellence with which the strategic planning process is undertaken in the sample organisations. In this sense, the companies that obtain higher scores in the policy and strategy variable manage their processes, resources and key alliances more efficiently. On the contrary, the companies that ob tain lower scores in strategic planning, that is to say, have a lower degree of excellence in this aspect, and obtain worse scores when their management of the TQM technical factors is assessed. The other research question is to analyse the synergies and relationships between TQM social and technical factors, strategic planning and organisational results. In this sense, for TQM to produce the desired effects on the organisation’s results, the critical factors must be implemented in such a manner that they form a management system. In this system, the social factors act as a driving force by having a very important impact on the rest of the elements that compose the model. Specifically, the high direct effect on the policy & strategy variable (a 1 = 0.851, t = 36.992) is emphasised, which explains the 72.5% of its variance (Fig. 2 and Table 5). In this sense, it is the people, at different levels of responsibility, who shape the values and principles which guide policy and strategy with their behaviour and actions. In addition, TQM social factors also exert an important influence on the most operative part of the management system. This effect takes place directly (H1 = cʹ= 0. 272, t = 3.510; R 2 = 22.1%) (Table 5), and indirectly, through the mediating effect exerted by policy & strategy (H2 = a1 ∗ a2 = 0.541) (Table 6). In this case, it is shown how it is the management that must make the decisions relating to the allocation of resources, the establishment of strategic alliances with suppliers and partners and the design of the schematic of the key processes of the organisation. Later, the workers carry out the decisions and the plans, established by management, by undertaking their functions. On the other hand, TQM social factors also have a very significant influence on the results that an organisation can attain (H3 = dʹ = 0.47, t = 6.145; R 2 = 33.8%) (Table 5). In addition, when boosting the implementation of the other factors that also form the management system, there is also an indirect effect on the results through strategic planning (H5 = a1 ∗ a2 ∗ b1 = 0.166) and TQM technical factors (H4 = cʹ ∗ b1 = 0.083) (Table 6). Finally, within the management system, the direct influence of processes and alliance and resource management on the results (b 1 = 0.307, t = 3.712) is highlighted, which explains 21.2% of its variance (Table 5). Therefore, the results of the organisation are seen to be directly influenced by the way in which the processes are carried out, by the way the products and services are developed, by the efficiency in the management of the financial, material or knowledge resources, and by the management of the alliances and cooperation agreements that the company maintains with suppliers and other partners. 6. Conclusions The present research provides several practical recommendations for organisations immersed in management processes and quality improvement according to the EFQM model, as well as for organisations which, although not formally undertaking EFQM selfassessment processes, are involved in a TQM philosophy implementation project. Firstly, although the EFQM model is a non-prescriptive framework, i.e. it can be used in different ways, the research shows its systemic character. Therefore, if an organisation attempts to attain satisfactory and consistent results over time, it must not focus its ef forts solely on improving those facets of management that are distant from excellence. On the contrary, it must analyse and, where necessary, globally improve and strengthen both the management facet and the results achieved. For example, it will serve an organisation little to focus its efforts on improving or strengthening process, and resource and alliance management (TQM technical factors), if it does not have the support and involvement of the management and the workers (TQM social factors) or if these efforts are not systematically integrated into the strategic planning of the organisation. Secondly, the research emphasises the crucial role played by strategic planning in the success of an EMS; and more so today when organisations are action-oriented, and daily activity seems to be what gives direction to management. Nevertheless, excellence involves us questioning who we are and where we want to go. This is where the management and the people play an important role when establishing the organisation’s mission, vision and values. Subsequently, the organisation would have to be asked what can facilitate, and what can prevent, the attainment of the mission and vision; in short, it must design its selected strategy to reach its proposed future. The strategy has to be coherent with the values, and take into account stakeholder needs and expectations, and the business environment in which the organisation’s activity in undertaken. Therefore, it is essential to have updated information on what is happening outside the organisation, and on the internal indicators of the results of the internal activity. In this point it is crucial to create a systematic method for the monitoring and review of the strategy and the objectives which allows possible changes to be anticipated quickly. Accordingly, transforming strategic planning into a daily element of management involves the development of an efficient communication dynamic. However, noth ing will be achieved by planning alone; it will be necessary to specify the strategic objectives and to deploy the strategy in the different or ganisational levels by designing a schematic of the key processes. In addition, for these processes to work, it will be necessary to involve and train the people who participate in their execution, and to have suitable allocation and management of various resources (material, financial and knowledge). Finally, the management must continu ously monitor the proposed actions and the degree of achievement of the objectives. The EFQM model offers a wide variety of indicators for this purpose in the section dedicated to the assessment of the results that the organisation is reaching in terms of clients, people, society, and the key results of the business, mainly of an economic-financial nature. 6.1. Research limitations The interpretation of the results and conclusions of this study are subject to a series of limitations, principally of a methodological character. The first limitation is due to the technique used for the proposed model: structural equation modelling, which assumes the linearity of relationships between the latent variables. The second is related to the notion of causality. Our study considered a soft modelling approach oriented more towards prediction than causality. While causation guarantees the ability to control events, predictability only allows a limited degree of control (Falk & Miller, 1992). Notwithstanding, establishing causation is not easy in social research. Following Cook and Campbell (1979), determining causation requires demonstrating association, temporal precedence, and isolation. Statistical analysis alone cannot tentatively prove causation, because it does not establish isolation or temporal ordering (Bullock, Harlow, & Mulaik, 1994). Finally, the research design is cross-sectional instead of longitudinal. In this case, with a longitudinal study it would be possible to analyse the effects of TQM on the results in more detail, as the benefits of the management and quality improvement are appraised over the medium and long term. References Abdullah, M. M. B., Uli, J., & Tarí, J. J. (2008). The influence of soft factors on quality improvement and performance. The TQM Journal, 20(5), 436–452. Anderson, J. C., Rungtusanatham, M., & Schroeder, R. G. (1994). A theory of quality man agement underlying the Deming management method. Academy of Management Review, 19(3), 472–509. Barroso, C., Cepeda, G., & Roldán, J. L. (2010). Applying maximum likelihood and PLS on different sample sizes: studies on SERVQUAL model and employee behaviour model. In V. Esposito Vinzi, W. W. Chin, J. Henseler, & H. Wang (Eds.), Handbook of partial least squares: Concepts, methods and applications (pp. 427– 447). Berlin, Germany: Springer-Verlag. Bou-Llusar, J. C., Escrig-Tena, A. B., Roca-Puig, V., & Beltrán-Martín, I. (2009). An empirical assessment of the EFQM excellence model: evaluation as a TQM framework relative to the MBNQA model. Journal of Operations Management, 27, 1–22. Bullock, H. E., Harlow, L. L., & Mulaik, S. A. (1994). Causation issues in structural equation modeling research. Structured Equation Modeling, 1(3), 253–267. Brown, A. (2002). Using HR strategies to support business excellence. In Proceeding of the 7th world congress for total quality management: vol. 2 (pp. 339–346). Calvo-Mora, A., Leal, A., & Roldán, J. L. (2005). Relationships between the EFQM model criteria: a study in Spanish Universities. Total Quality Management, 16(6), 741–770. Calvo-Mora, A., Picón-Berjoyo, A., Ruiz-Moreno, C., & Cauzo-Bottala, L. (2014). The relationships between soft-hard TQM factors and key business results. International Journal of Operations & Production Management, 34(1), 115–143. Calvo-Mora, A., Ruiz-Moreno, C., Picón-Berjoyo, A., & Cauzo-Bottala, L. (2014). Mediation effect of TQM technical factors in excellence management systems. Journal of Business Research, 67, 769–774. Calvo-Mora, A., Picón-Berjoyo, A., Ruiz-Moreno, C., & Cauzo-Bottala, L. (2015). Contextual and mediation analysis between TQM critical factors and organisational results in the EFQM excellence model framework. International Journal of Production Research, 53(7), 2186–2201. Castresana Ruiz-Carrillo, J. I., & Fernández-Ortiz, R. (2005). Theoretical foundation of the EFQM model: the resource-based view. Total Quality Management, 16(1), 31– 55. Chin, W. W. (1998). The partial least squares approach to structural equation modelling. In G. A. Marcoulides (Ed.), Modern methods for business research (pp. 295– 336). Mahwah, NJ: Lawrence Erlbaum. Chin, W. W. (2010). How to write up and report PLS analyses. In V. Esposito Vinzi, W. W. Chin, J. Henseler, & H. Wang (Eds.), Handbook of partial least squares: concepts, methods and applications (pp. 655–690). Berlin, Germany: Springer-Verlag. Conca, F. J., Llopis, J., & Tarí, J. J. (2004). Development of a measure to assess quality management in certified firms. European Journal of Operational Research, 156(3), 683–697. Cook, T. D., & Campbell, D. T. (1979). Quasi experimentation: design and analytical issues for field settings. Chicago, IL: Rand McNally College. Corredor, P., & Goñi, S. (2010). Quality awards and performance: is there a relationship? The TQM Journal, 22(5), 529–538. Dahlgaard-Park, S. M., Chen, C. K., Jang, J. Y., & Dahlgaard, J. (2013). Diagnosing and prognosticating the quality movement – a review on the 25 years quality literature (1987–2011). Total Quality Management, 24(1), 1–18. Davies, J. (2008). Integration: is it the key to effective implementation of the EFQM excellence model? International Journal of Quality & Reliability Management, 25(4), 383–399. Dean, J. W., & Bowen, D. E. (1994). Management theory and total quality: improving research and practice through theory development. Academy of Management Review, 19(3), 392–418. Dean, J. W., & Evans, J. R. (1994). Total quality management, organisation, and strategy. Minneapolis: West Publishing Company. Deming, W. E. (1982). Quality, productivity and competitive position. Dror, S. (2008). The balance scorecard versus quality award models as strategic framework. Total Quality Management, 19(6), 583–593. Eskildsen, J. K., Kristensen, K., & Juhl, H. J. (2001). The criterion weights of the EFQM excellence model. International Journal of Quality & Reliability Management, 18(8- 9), 783–795. Falk, R. F., & Miller, N. B. (1992). A primer for soft modeling. Akron, OH: The University of Akron. EFQM. (2010). EFQM excellence model. Brussels: European Foundation for Quality Management. Flynn, B., Schroeder, R. G., & Sakakibara, S. (1994). A framework for quality management research and an associated measurement instrument. Journal of Operations Management, 11(4), 339–366. Fotopoulos, C. V., & Psomas, E. L. (2010). The structural relationships between TQM factors and organisational performance. Total Quality Management & Business Excellence, 22(5), 539–552. Gadenne, D., & Sharma, B. (2009). An investigation of the hard and soft quality management factors of Australian SMEs and their association with firm performance. International Journal of Quality & Reliability Management, 26, 865–880. Hair, J. F. Jr., Hult, G. T. M., Ringle, C., & Sarstedt, M. (2014). A primer on partial least squares structural equation modeling (PLS-SEM). Thousand Oaks, CA: SAGE Publications, Incorporated. Hayes, A. F. (2009). Beyond Baron and Kenny: statistical mediation analysis in the new millennium. Communication Monographs, 76(4), 408–420. Ho, D. C. K., Duffy, V. G., & Shih, H. M. (2001). Total quality management: an empirical test for mediation effect. International Journal of Production Research, 39(3), 529– 548. Hung, R. Y. Y. (2006). Business process management as competitive advantage: a review and empirical study. Total Quality Management, 17(1), 21–40. Jabnoun, N., & Sedrani, K. (2005). TQM, culture, and performance in UAE manufacturing firms. Quality management journal, 12(4), 8. Kaynak, H. (2003). The relationship between total quality management practices and their effects on firm performance. Journal of Operations Management, 21, 405–435. Kim, D. Y., Kumar, V., & Murphy, S. A. (2010). European Foundation for Quality Management Business Excellence Model: an integrative review and research agenda. International Journal of Quality & Reliability Management, 27(6), 684–701. Marín-Vinuesa, L. M. (2009). Enfoques de estudio y modelos de investigación sobre calidad y resultados: una revisión crítica. Cuadernos de Gestión, 9(2), 89–110. Martín-Castilla, J. I., & Rodríguez-Ruiz, O. (2008). EFQM model: knowledge governance and competitive advantage. Journal of Intellectual Capital, 9(1), 133– 156. Nair, A. (2006). Meta-analysis of the relationship between quality management practices and firm performance-implications for quality management theory development. Journal of Operations Management, 24, 948–975. Nazemi, J. (2010). A process model for improvement through EFQM. World Applied Sciences Journal, 8(3), 279–287. Oakland, J. S. (2011). Leadership and policy deployment: The backbone of TQM. Total Quality Management & Business Excellence, 22(5), 517–534. Pannirselvam, G. P., & Ferguson, L. A. (2001). A study of the relationships between the Baldrige categories. International Journal of Quality and Reliability Management, 18(1), 14–34. Peng, D. X., & Lai, F. (2012). Using partial least squares in operations management research: a practical guideline and summary of past research. Journal of Operations Management, 30(6), 467–480. Pfeifer, T., Schmitt, R., & Thorsten, V. (2005). Managing change: quality-oriented design of strategic change processes. The TQM Magazine, 17(4), 297–308. Powell, T. C. (1995). Total Quality Management as competitive advantage: a review and empirical study. Strategic Management Journal, 16, 15–37. Prajogo, D. I., & Sohal, A. S. (2006). The relationship between organisation strategy, total quality management (TQM) and organisation. European Journal of Operational Research, 168, 35–50. Preacher, K. J., & Hayes, A. F. (2008). Asymptotic and resampling strategies for assessing and comparing indirect effects in multiple mediator models. Behavior Research Methods, 40(3), 879–891. Prybutok, V. R., & Ramasesh, R. (2005). An action-research based instrument for monitoring continuous quality improvement. European Journal of Operational Research, 166, 293–309. Rahman, S., & Bullock, P. (2005). Soft TQM, hard TQM, and organisational performance relationships: an empirical investigation. Omega- International Journal of Management Science, 33, 73–83. Reed, R., Lemak, D. J., & Montgomery, J. C. (1996). Beyond process: TQM content and firm performance. Academy of Management Review, 21(1), 173–202. Reinartz, W., Haenlein, M., & Henseler, J. (2009). An empirical comparison of the efficacy of covariance-based and variance-based (SEM). International Journal of Research in Marketing, 26(4), 332–344. Reiner, A. (2002). Analysis of critical factors of company success based on EFQM Excellence model. In Proceeding of the 7th world congress for total quality management: Vol. 2 (pp. 361–366). Ringle, C. M., Wende, S., & Will, A. (2005). SmartPLS 2.0 (beta).. Hamburg, Germany: University of Hamburg. Ritchie, L., & Dale, B. G. (2000). Self-assessment using the business excellence model: a study of practice and process. International Journal of Production Economics, 66(3), 241–254. Roldán, J. L., & Sánchez-Franco, M. J. (2012). Variance-based structural equation modeling: guidelines for using partial least squares in information systems research. In M. Mora, O. Gelman, A. Steenkamp, & M. Raisinghani (Eds.), Research methodologies, innovations and philosophies in software systems engineering and information systems (pp. 193–221). Hershey, PA: Information Science Reference. Rusjan, B. (2005). Usefulness of the EFQM excellence model: theoretical explanation of some conceptual and methodological issues. Total Quality Management, 16(3), 363–380. Samuelsson, P., & Nilsson, L. E. (2002). Self-assessment practices in large organisations. Experiences from using the EFQM excellence model. International Journal of Quality & Reliability Management, 19(1), 10–23. Sandbrook, M. (2001). Using the EFQM excellence model as a framework for improvement and change. Journal of Change Management, 2(1), 83–90. Saraph, J. V., Benson, P. G., & Schroeder, R. G. (1989). An instrument for measurement the critical factors of quality management. Decision Sciences, 20(4), 810–829. Sila, I., & Ebrahimpour, M. (2003). Examination and comparison of the critical factors of total quality management (TQM) across countries. International Journal of Production Research, 41(2), 235–268. Sila, I., & Ebrahimpour, M. (2005). Critical linkages among TQM factors and business results. International Journal of Operations & Production Management, 25(11), 1123– 1155. Tarí, J. J., Molina, J. F., & Castejón, J. L. (2007). The relationship between quality management practices and their effects on quality outcomes. European Journal of Operational Research, 183(2), 483–501. Taylor, W. A., & Wright, G. H. (2003). A longitudinal study of TQM implementation: factors influencing success and failure. Omega – The International Journal of Management Science, 31, 97–111. Tutuncu, O., & Kucukusta, D. (2007). Relationship between organisational commitment and EFQM business excellence model: a study on Turkish quality award winners. Total Quality Management, 18(10), 1083–1096. Vanichchinchai, A., & Igel, B. (2011). The impact of total quality management on supply chain management and firm’s supply performance. International Journal of Production Research, 49(11), 3405–3424. Wang, W., Plante, R. D., & Tang, J. (2013). Minimum cost allocation of quality improvement targets under supplier process disruption. European Journal of Operational Research, 228(2), 388–396. Williams, J., & MacKinnon, D. P. (2008). Resampling and distribution of the product methods for testing indirect effects in complex models. Structural Equation Modeling, 15(1), 23–51. Williams, R., Bertsch, B., Van der Wiele, A., Van Iwaarden, J., & Dale, B. (2006). Selfassessment against business excellence models: a critique and perspective. Total Quality Management, 17(10), 1287–1300. Zatzick, C. D., Moliterno, T. P., & Fang, T. (2012). Strategic (MIS) Fit: the implementation of TQM in manufacturing organisations. Strategic Management Journal, 33, 1321– 1330. Effects on endogenous variables Direct effect t-value (bootstrap) Percentile 95% Explained confidence intervals variance Policy & strategy (R 2 = 0.725/Q 2 = 0.595) EFQM enablers social factors (a 1 ) 0.851 ∗∗∗ 36.992 [0.802; 0.892] Sig. 72.5% EFQM enablers technical factors (R 2 = 0.771/Q 2 = 0.670) H1: EFQM enablers social factors (cʹ) 0.272∗∗∗ 3.510 [0.130; 0.433] Sig. 22.1% Policy & strategy (a2) Results (R 2 = 0.55/Q 2 = 0.416) 0.635∗∗∗ 8.742 [0.482; 0.767] Sig. 55.0% H3: EFQM enablers social factors (d’) 0.470∗∗∗ 6.145 [0.336; 0.634] Sig. 33.8% EFQM enablers technical factors (b 1 ) 0.307∗∗∗ 3.712 [0.132; 0.456] Sig. 21.2% Sig. denotes a significant direct effect at 0.05. Bootstrapping based on n = 5.000 subsamples. ∗∗∗ p < 0.001, (based on t(4999), one-tailed test). t(0.05, 4999) = 1.645, t(0.01. 4999) = 2.327, t(0.001, 4999) = 3.092. Table 6 Path coefficients and indirect effects for mediation models. Total effects Direct effects to Indirect effects PS EFQMTF R E s t i m a t e P e r c e n t i l e b o o t s t r a p 9 5 % c o n f i d e n c e i n t e r v a l s EFQMSF → EFQMTF = c 0.813∗∗∗ (27.337) EFQMSF → R = d 0.720∗∗∗ (23.578) EFQMSF a 1 : 0.851 ∗∗∗ (36.992) H1 = cʹ: 0.272 ∗∗∗ (3.51) H3 = dʹ: 0.47 ∗∗∗ (6.145) PS a 2 : 0.635 ∗∗∗ (8.742) EFQMTF b 1 : 0.307 ∗∗∗ (3.712) H2 = EFQMSF → PS → EFQMTF → a 1 a 2 0.541 [ 0.417; 0.651] Sig. H4 = EFQMSF → EFQMTF → R = cʹb 1 0.083 [ 0.034; 0.136] Sig. H5 = EFQMSF → PS → EFQMTF → R = a 1 a 2 b 1 0.166 [ 0.062; 0.272] Sig. Note: EFQMSF: EFQM enablers social factors; PS: policy & strategy; EFQMTF: EFQM enablers technical factors; R: Results. ∗∗∗ p < 0.001, t (0.001, 4999) = 3.092, (based on t (4999), one-tailed test); t values in parentheses. Sig. denotes a significant direct effect at 0.05; bootstrapping based on n = 5,000 subsamples. Table 7 Analysis of difference between means. Mean Levene’s test t-test 95% confidence interval of the difference Mann–Whitney test Policy & strategy 0 1 F Sig. T Sig. Lower Higher z Sig. EFQM enablers technical factor s 28.182 42.0 0.077 0.78 1 −14.056 0.000 ∗ ∗ −15.7634 −11.8867 – – Partnerships and resources 07 Processes 32.516 45.3 81 4.951 0.02 7 – – – – 9.122 0.000 ∗∗ Note: (0) = companies that obtain lower than average scores in the policy & strategy variable. (1) = companies that reach higher than average scores in the policy & strategy variable. ∗∗ p < 0.05.