An empirical investigation of the relationship between quality improvement techniques and performance—A Mexican case

Internationally, manufacturers are facing increasing competitive pressure resulting from liberalization of inter-country trading practices and consumer demands. Trade barriers, such as tariffs, are being reduced or have been removed altogether. Additionally, the regional free-trade agreements, such as U.S.-Canada-Mexico Free Trade Agreements, and the European Community (EC), have opened national boundaries to intea-regional trade. Many Mexican companies which relied on cheap labor and had little outside competition are now, threatened by technically more advanced companies. During the last decade, many Mexican companies have been adopting “world class” management practices and manufacturing techniques such as Total Quality Management, and Just-In-Time. How do these techniques impact the performance of the Mexican companies?

This paper explores the effects of Total Quality Management (TQM), Work Teams (WT), and Just-In-Time (JIT) on a sample of 122 large manufacturing companies in Mexico. Sixty-eight different quality improvement techniques are correlated with seven different performance measures. Exploratory factor analysis was used to produce reliable and valid measures of the quality and productivity measures. The study used Canonical correlation methods to correlate simultaneously the quality improvement techniques to the performance measures. The finding indicates that top management involvement, employee involvement, and training impact quality, productivity, customer satisfaction, and employee morale simultaneously.