Linking TQM and Financial Performance

For more than a decade, companies have searched for quantifiable link between profitability and various aspects of their firms, employees and customers. Many companies attempted to incorporate Total Quality Management (TQM) activities into their companies in the hopes of reducing the per-unit cost of their products/services thereby increasing profitability. While there were many positive results from quality improvement the results were mixed. This article tries to establish a quantifiable connection linking TQM to financial performance. Once this link has been formed, management can focus their efforts on these factors to increase and enhance customer loyalty and reap the financial benefits thereof.

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