Influence of the Environment on Innovation Performance of TQM

Abstract How can a firm use TQM practices for both quality performance and innovation performance? Why does the business environment have to be suitable when TQM practices are implemented, before innovation performance can be shown? This paper proposes a framework and illustrates a case study to argue that (1) TQM practice has a primary effect, in which TQM practices obtain quality performance, and a secondary effect, which leverages features extracted from TQM practices for innovation performance; (2) the secondary effect of TQM practices must have business environment changes to match claims for valuable features before innovation performance can be seen. The case study depicts how a leading global firm innovated by taking a chance on resolving a critical quality issue in TQM practices through innovation. The innovation initially had no effect on sales when the business environment was unchanged despite of marketing/sales efforts, but the innovation was a critical success after business environment changes created value for the innovation's claims. Realizing how TQM practices lead to quality and innovation performance and how the business environment is important for the dynamic process above, reminds executives to make features of innovation from TQM practices as open and scalable as possible to match emerging social demands, or to consider trends of the business environment when developing solutions in TQM practices.