The Influence of Organizational Structure on the Effectiveness of TQM Programs

During the past 20 years, the global marketplace has become increasingly competitive. Managers are contending with rapid changes in technology, shorter product life-cycles, new markets, and a demand for higher quality products (Chowdhury and Menon, 1995). Companies trying to gain a competitive edge in this marketplace have realized the importance of raising the quality of goods and services, and have implemented programs such as TQM (Total Quality Management). The TQM concept is now well established in U.S. and Western Europe, and is increasingly implemented in developing countries (such as China) and in the emerging markets of Central and Eastern Europe (Krygier, 1993). Notwithstanding the popularity of TQM, some companies have found it difficult to successfully implement this program (Krumweide et al., 1998). An examination of the literature suggests that only one-third to one-half of organizations have observed significant improvements through TQM programs (Burdett, 1994; Garvin, 1986; Grant et al., 1994). This lack of significant success may not be a failure of the TQM concept, but a failure to pay sufficient attention to the organizational context of TQM. Since TQM involves changing the way people interact and work in organizations, it is a context-dependent program, the success of which may depend, to a large extent, on factors such as organizational culture, market structure, and organizational structure. Although several studies have examined the connection between TQM effectiveness and contextual factors such as organizational culture (e.g., Saraph and Sebastian, 1993; Sohal et al., 1998), market structure (e.g., Sigouras, 1994), and management style (e.g., Krumweide et al., 1998; Whalen and Rahim, 1994), few have investigated organizational structure in the TQM context. Case studies of organizations, however, suggest that companies can improve TQM outcomes by changing their top-down, bureaucratic structures (e.g., Management Decision, 1996), and several authors have emphasized the importance of examining the influence of structure (Laza and Wheaton, 1990). Hence, this study focuses on the connection between the effectiveness of TQM implementation and organizational structure. At the same time, we acknowledge that other factors such as organizational culture and management style can also influence TQM outcomes. Investigating the effect of organizational structure on TQM is important for both theoretical and practical reasons. On the theoretical side, this investigation can help bridge the gap between the literature on organizational structure and the literature on TQM. On the practical side, it can help managers assess the probable effectiveness of their firms' TQM programs, along with the extent of organizational change required for success. Thus, companies can make better decisions about the investments of time, money, and personnel required for TQM effectiveness. The next section examines the literature on organizational structure and TQM effectiveness. The following sections present the methodology and the results of this study. Finally, we discuss the implications of the study for both practitioners and researchers. Organizational Structure and TQM Effectiveness Organizational actors and processes do not exist in a vacuum, but are embedded in a larger organizational system with distinct structural characteristics. Companies have employed a wide range of structural options in dealing with the increased complexity, uncertainty, and interdependence that accompany TQM implementation. Hence, understanding the company's structure should provide us with greater insight into the effective implementation of TQM. Although a few researchers have suggested that TQM effectiveness necessitates changes in organizational structure and design (Dean and Bowen, 1994; Laza and Wheaton, 1990; Pascoe and Erishnamoorthy, 1992), this issue has not been empirically examined in the literature. …