The Effects Of Total Quality Management On Profitability: The Case Of International Organization For Standards (Iso) Certified Companies In Kenya

ABSTRACT

rotnl Quality Management (TQM) is an accepted technique to ensure performance and

sun·ival or businesses in modern economies. Recent studies claim that the successf'ul

implementation of TQM could generate improved products and services, as well as reduce

costs, lead to more satisfied customers and employees, and eventually improved financial

pcrlcll'lmmce. The purpose of this study was to establish whether this nature of relationship

exists between TQM and linancial performance in ISO certified companies in Kenya. The

objective of this study was. therefore. to establish the efTect of the implementation of TQM

in ISO certified companies in Kenya. This study was a survey focused on establishing

management environmen!. quality control tools and techniques, focus on customer and

I(Kus on supplier relationship afTect ROA as a measure of financial performance. All the 38

ISO certified companies formed the sample of this study effectively making it a census.

J),lla was collected by a questionnaire delivered by hand to the selected ISO certitiecl

company and collected after a week. The study found that management environment, qualit)

Cntrol tools nncl techniques. f'ocus on customer and focus on supplier relationship a/Tected

the returns of ISO certified companies. However, the regression analysis showed a weak

rc·lationship among the variable. This indicated by the constant term, 6.68 which was not

signilicnnt: the coerticient of' quality management environment. -24.27 which was

statisticail1· insignificant: the coeflicient of focus on customers. 12.27 which was

statistically insignificant: the coefficient of quality control tools and techniques, 7.06. which

'"" statistically insignificnnt: and the coefficient of focus of supplier relationship, 7.37.

11hich was also statistically insignilicant. The study recommends that ISO certified

organizations should put 111 place strong management environment policies. The policies

should f(>cus on putting 111 place a l[lvorable work environment and ensuring sufficient

Jinancial r esourccs that will enable achievement of organizational objectives and boost prolitability. Focus on the customer should also be strengthened. Companies should put in place more ci'lective mechanisms Cor quality control. Supplier t·elationship should also be strongly managed.