An Empirical Investigation on the Impact of Quality Management on Productivity and Profitability: Associations and Mediating Effect

Abstract

ABSTRACT This paper tries to investigate on how quality management practices may affect productivity and profitability in the electronics and electrical industry. This study attempts to fill the research gap by examining relationships between quality management practices, productivity and profitability in the electronics and electrical industry using correlation, multiple regression analyses and SEM. In doing so, relationships between QM, productivity and profitability constructs were assessed and described. The results reveal that quality measurement, benchmarking in particular as well as employee focus, supplier relations and training appear to be of primary importance and exhibit significant impact toward productivity and profitability. In addition, the findings also suggest that productivity mediates the link between QM and profitability. Findings of the study provide a striking demonstration of the importance of quality management practices for the electronics and electrical industry in Malaysia in enhancing its productivity and profitability. Keywords: Quality Management, Productivity, Profitability, Electronics and Electrical Industry, Correlation, Multiple Regression and SEM