A firm’s performance is a function of how well managers use quality management practices to improve the quality of products and services. In today’s global environment, organizations are constantly looking for ways to expand and improve their businesses in terms of quality to enhance performance. Quality management practices have been used by manufacturing firms in Kenya to improve on performance. However, customers are still complaining that the quality of manufactured products has been compromised. The purpose of this study was to establish the effect of quality management practices on performance of manufacturing firms in Kenya. The specific objectives were: To establish the effect of continuous improvement on firm performance; to assess the influence of customer focus on firm performance; to determine the extent to which top management commitment affects the performance of manufacturing firms in Kenya; to assess the extent to which the operating environment moderates the relationship between quality management practices and the performance of manufacturing firms in Kenya; and to establish the mediating effect of organizational capability on the relationship between quality management practices and performance. The philosophical foundation of the study was positivism. The study used both descriptive and explanatory research design. The target population comprised all 60 manufacturing firms in Kenya and a sample size of 120 respondents. The study adopted census sampling technique. The study used primary data which was collected using self-administered questionnaires. Validity of the instruments was ensured through face, and content validity and reliability was tested using Cronbach’s Alpha with a coefficient of 0.7, which was considered acceptable. Data was analyzed using descriptive and inferential statistics. Descriptive statistics was used to summarize data while inferential statistics, specifically Multiple Linear Regression, was used to test hypothesis. The analysis used SPSS version 21 to aid in data analysis. The results were presented using tables. The findings indicate that continuous improvement had positive and significant effect on performance of manufacturing firms. Customer focus was found to be significant in explaining the variation of performance and top management commitment was found to have a significant effect of performance of manufacturing firms. Organizational capability had a partial mediating effect on the relationship between quality management practices and performance. Operating environment had a moderating effect on the relationship between quality management practices and performance. The study recommends that the management should be committed to quality by providing strategic direction with respect to quality management practices, which should be aligned to the firms’ objectives. Policy makers should create a quality framework that is geared towards improving performance and ensure it is adhered to by all stakeholders in the manufacturing firms in Kenya. Finally, the study recommends that similar research be done in other sectors like service industries.
CHAPTER ONE INTRODUCTION
Background of the study
In the context of globalization, highly competitive markets, continuous technological advancement, and increasingly demanding customers, quality has become one of the most important elements in the strategies of making firms competitive (Ismyrlis & Moschidis, 2015). ISO has the most comprehensive scope in the improvement of firms’ performance through the promotion of quality (Evangelos & Psomas 2013). ISO family of standards are internationally recognized and designed to demonstrate the capability of a firm to control the processes and hence make the product or service acceptable; therefore, their implementation could be a source of competitive advantage, enhancing the company’s performance (Lamport, Seetana, Conhyedass & Sannassee, 2014).
Accordingly, all manufacturing firms seek to adopt and implement a set of quality practices that have been successful elsewhere and that will help them to identify changes in their environment and to respond proactively through continuous improvement so as to enhance performance (Fassoula, 2006). In Kenya, many manufacturing firms are rushing to be ISO certified, but whether this brings about better business performance is yet to be seen (Emeka et al.,2008).
Many African countries, including Kenya, have adopted ISO standards (Emeka et al., 2008 ; Raphael, 2010). Morris (2006) noted that the ISO certification is applicable to any type of organization, including the manufacturing sector, and it drives performance
improvement (Chow-Chua et al., 2003). According to Resource-Based View theory, a company’s performance is based on the resources and capabilities it holds in control which may become a source of competitive advantage (Martinez-Costa et al., 2008).
According to Riemann & Hertz, 2004, to create a competitive advantage, this is the degree to which a firm outperforms its competitors, performance measures, should be chosen for benchmarking. It is important to note those firm-specific resources that are valuable, rare, imperfectly inimitable and not substitutable (Barney, 2007). This is to say that performance is built on the resources that add value to firms and that are not homogeneously distributed across competing firms. In order to create a sustained competitive advantage, a firm must also possess imperfectly mobile resources which add to the firm’s performance (Brown et al., 2004).
The manufacturing sector, globally, is being pushed by unprecedented change arising from challenges associated with delivering quality products and services, leading to the adoption of ISO certification to enhance performance (Arauz & Suzuki, 2004; Klefsjo, Bergquist & Edgerman, 2006). These influences include pressure from the government to ensure that manufacturing firms are producing high quality products that meet the demands of consumers (Quazi et al., 2002).