IMPACT OF TQM ON ORGANIZATIONAL PERFORMANCE: THE MEDIATING ROLE OF BUSINESS INNOVATIVENESS AND LEARNING CAPABILITY

Previous literature has focused on the impact of Total Quality management (TQM) on firm’s financial performance (FP), but not checked the relationship of TQM on firm’s operational performance (OP) through mediators like organizational learning capability and business innovativeness. That is why the main purpose of this study is to check out the relationship among TQM, operational and financial performance through mediators like organizational learning capability (OLC) and Business innovativeness (BI). Cross sectional research design and deductive approach has been used in this study. The data has been collected from 244 companies which were from Gujranwala, Lahore and Sialkot region. This study proposed the interconnected relationship between TQM, organizational learning capability, Business innovativeness operational and financial performance. By our findings we get that there is a Positive significant relationship between TQM and organizational learning capability, TQM and Business innovativeness, business innovativeness and financial performance, organizational learning capability and financial performance, organizational learning capability and operational performance, Business innovativeness and operational performance. We also found that there is a partial mediation between Total quality management (TQM) and Operational performance (OP) through organizational learning capability (OLC) and between Total quality management (TQM) and financial performance (FP) through organizational learning capability (OLC). There is Full mediation between TQM and OP through Business innovativeness (BI) and between TQM and FP through BI. Organizational operational and financial performance depends upon the successful implications of the TQM practices in the organization and OLC by which employees can seek more knowledge to apply in business operations and by innovating the business operations. By fulfilling this criterion, firms can improve their operational and financial performance. Organizations reacted as very low response rate and those organizations which have just certification of ISO quality standards but not properly implemented the standards are the limitations of this study. Although this study is conducted in Asian context especially in Pakistan for the first time through mediators like Business innovativeness (BI) and organizational learning capability (OLC), it is expected that results of our study may have relevance to the other countries.