1st publication latif

MAGNT Research Report (ISSN. 1444-8939) Vol.2 (5). PP: 199-133

(DOI: dx.doi.org/14.9831/1444-8939.2014/2-5/MAGNT.23)

Important TQM Implementation Contributors in Service oriented Organization like Banks

in Pakistan

Yasir Latif1, Pervaiz Iqbal

2, Saif ur Rehman

3

1Institute of Business and Management, University of Engineering and Technology, Lahore, Pakistan

2University du Quebec a Montreal (UQAM), Montreal, Canada

3Department of Management, China University of Mining and Technology, Xuzhou, Jiangsu, P.R China

Abstract

Subsequent to its growth and exceptional achievements, Total Quality Management (TQM) needs

to be implemented out of the Manufacturing industry to service organizations, like Private

Banks. Study explores prospects of using Soft TQM and Hard TQM in service oriented

organizations and investigates how helpful it can be for growth and development of service

focused organizations like private banking sector and sees how TQM can help these Banks to

excel in their Organizational Performance. These organizations have been employing various

methods to develop this sector, increase its capability to get better place in global market and

increase investment in this sector. However, till to date far less work is done to control quality to

get better results in this sector. Through quantitative research with 5 point Likert’s scale and

Baron and Kenny’s model of moderation, this study will try to demonstrate that the Soft TQM

along with Hard TQM can give enormous growth to the service sector by increasing the

customer orientation and will be helpful to attain competitive edge. The research has examined

the moderating effect of Hard TQM on the relationship of Soft TQM and Organization

performance; it is notable from this research that the magnitude of this relationship has

increased from 0.401 to 0.421. These results indicate that the use of Hard TQM in the Service

oriented Organization like banking sector leads to increase the relationship of Soft TQM and

Organizational Performance and gives more power to these organizations to control their

quality and thrive on international level.

Key Words: TQM, Leadership, People Management, Customer Focus, Planning, Process

Management, Information and Analysis Hard TQM, Soft TQM, Private Banking Sector, Pakistan

Introduction

In today’s times, organizations are facing

growing challenges from international

competition and more complicated

customers in terms of diverse product

requirements and changing desires. Most

associations are starting to request the

Japanese standard quality procedures of

Mr. Yasir Austrlian

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output and belief using these they can

achieve the needed development in the

markets for increasing their profitability.

One of the major concepts that came from

the Japanese commerce is TQM, which

means that all workers inside an

organization must take part in improving the

product or service value, an undertaking that

was before the concern of the value

command department employees Salman et

al [62]. Feigenbaum says, TQM is “An

efficient system that aims to achieve total

quality through the combined effort of all

the employees within the organization in

order to produce a product/service that will

meet the needs and expectations of the

customer with minimum cost”. Total Quality

Management (TQM) is considered to be

most important aspect for quality concerning

debate. Due to globalised world and more

aware customer’s selection, the business

world has become more concerned about the

effective and reformed product and services

requirements from customer side. The more

customers became concerned about the

product, the better product & services and

their concerned production techniques

emerged. TQM is a management’s

philosophy to retain current customers and

to generate new customers for the

companies on the basis of customer

satisfaction constraints. If TQM is applied in

an ineffective way it will not reap enough

advantage in terms of organization’s ability

to retain and gain new customers which will

go very hard of organization’s finances and

very existence. Most Bank officials will like

to accept as true that banks are organizations

in the investment sector and not in the

service sector. Thus they are inclined to

economic skills (e.g. Asset, liabilities, loans,

cash flow etc.) rather than service thinking.

However, banking business depends upon

client satisfaction to continue business with

the bank. This classifies them as a service

enterprise. When the customer interacts with

the front line personnel and requires a

certain service, it is this instant of reality

that decides if the customer will arrive back

or move to the next door competitor. Thus

banks are inclined to benefit from the TQM

customer-first strategy.

Total quality management is a way followed

by many firms to increase their productivity

and Organizational performance. People

believe that by implementing TQM, the

efficiency, effectiveness and productivity of

organizations can be enhanced Zhang et al

[77]. Quality management implementation is

the way by which activities can be carried

on in conformance of planning Chin et al

[12]. It is seen that those companies which

are more concerned about effective TQM

implementation it in their organization in

accordance to financial constraints, usually

takes more pie of market share than other

companies. The excellence in the form of

quality of products or services can help the

organizations for achieving more market



share Deming [20]. TQM is a mitigated

philosophy as it is not based on well set

guided principles Hackman et al [32].

Human beings are increasingly dominant

part of successful TQM implementation

Brah [11]. Employee participation is very

important constituent of TQM

implementation. The more interaction,

support, help mutual assistance and

appreciation on achievement from

organization will lead to better TQM

implementation Mann et al [49]. The firms

that take interest in consistent growth,

customer friendly behaviour, enhancing

employee’s morale, perform better than

those which don’t do so Zhou [78]. Leaders

are normally attributed with 7 attributes:

drive, motivation, honesty & integrity,

confident personality, analytical & cognitive

thinking ability, businesses know how and

charismatic personality Deming [19]. A

leader is always associated with a clear

vision and plan. For TQM implementation,

there is always a need of leader because

leader can create a vision and with that

vision statement he can generate his

influence on the entire organization and

employees Kotter, J.P. [39]. There is a need

of employee participation to have an

effective change in their behaviour. This

employee involvement tends to increase

their quality perspectives Juran and Gryna

[36].

TQM is Japanese technique for increasing

Organizational performance in industry and

services sector. With the passage of more

research, insight and understanding of its

concepts, the researchers have divided the

TQM further to Soft and Hard constituents.

TQM is considered to be an effective tool

for increasing performance in operations.

Extensive Research proved that TQM has

increased Organizational performance in

industries. TQM integrates different

functions of business to develop planning,

productivity, customer satisfaction and

distribution by continuous improvement

Dessler [21]. TQM implementation practice

intensity demonstrates a significant amount

of variance in performance. Quality

improvement has been accepted as a strategy

to compete by many firms Abdullah et al

[4]. It is difficult to understand and

implement the concepts of TQM as there is a

lot chaos and ambiguity in understanding

them and this is just a philosophy without

clearly defined guidelines, this is because

TQM was a rather abstract philosophy and

did not have clear guidelines on its

implementation Sun et al [68]. TQM is

abstract with so many interpretations and

lack of “hard” requirements Coleman and

Douglas [16]. Those organizations which

execute quality focus for providing better

product to the customer and on increasing

the efficiency of the operations. Continuous

improved processes and product gives more

financial benefits through less costs and



more reliable product. The soft factors

include behavioural features and the human

features such as leadership and people

management Rahman and Bullock [60].

Customer satisfaction generates revenues as

it enables the organizations to take

competitive advantage in markets Kaynak

[38]. Literature has recommended that TQM

has two parts: Hard part and soft part. The

hard part focuses on production and work

process control techniques, which make sure

the proper implementation of processes i.e.

process design, just in time, the ISO 9000

and other quality control tools Lindsay and

Evans [46]. Soft factors are related with

human and behavioural aspects of

management i.e. leadership and people

management Rahman [59]. Soft factors have

a positive effect on quality improvement and

firm performance. In literature Soft factors

includes: top management leadership,

employee involvement, employee

empowerment, training and development of

employees, teamwork and communication

Eng et al [24]. Similarly, literature review

has suggested that soft factors like senior

management commitment, people

management, customer focus and supplier

management have significant effect on

performance due to which Soft factors has

got much importance in the quality

implementation process. Some important

contributors of Soft TQM are also described

by Malcolm Baldridge National Quality

Award, European Quality Award and the

Deming Prize, these awards suggested that

leadership, training, communication,

teamwork and learning for quality

improvement.

During the 1990s, the studies and theories of

TQM got maturity and recognition.

Literature review denotes the study of

already gathered knowledge of a specific

field. The set of quality approaches took

more attention which has direct impacts on

bottom line results. Gurus of quality have

made supreme contribution to this field of

knowledge. In 1985, Naval Air Systems

Command used initially the word TQM to

define the Japanese management focused

style for development of quality Bemowski

[8]. Great additions were made by Deming,

Juran, Ishikawa, Crosby and many others. It

has been found after huge and deep research

that TQM is not a clear approach, it is

actually a mixed stream of knowledge but

there are companies which have actually got

huge success by following the TQM

approaches for example Harley Davidson,

Toyota, Sony etc. Total Quality

Management is treated to be a composite of

many quality activities Mann and Keheo

[48]. TQM is a long journey without a

destination Zairi et al [76] as the route to

excellence and development is ongoing and

never ends. The whole of the published

material on TQM refers that management

commitment is most important tool for

getting better performance and requires



performance sustainability as an important

objective of the business (Zairi, Letza and

Oakland 1994). The TQM can give better

outcome if it is treated with respect of

business purpose, clearly defined and

understood vision/mission, communication,

effective deployment of goals, training

through education and motivation, focus on

customer requirements, understanding of

current business environment, relevant

skilful team and effective measurement

system.

Some authors think TQM is a methodology

its sole purpose is to get better

organizational efficiency, with solid

theoretical basics which, at the same time,

provides us with a plan to improve business

performance; taking into thought the method

companies and their staff functions. TQM

has turn into a global process because it

affects Japanese companies, US, European

and Asia-Pacific companies equally. It has

been described as a suitable way to get

better the competitiveness of companies in

developing countries. Likewise, its values

and fundamentals have been followed by all

sectors in economy, from the industry

(Evans and Lindsay 1995), where it

emerged, to the services (Silvestro, 1998),

the public sector (Loomba and the

education. Due to the importance of the

material and human activities that the

organizations should do for the execution of

TQM, researchers are worried with its

connection with the development of

organizational performance. Many studies

are putting efforts to decide the amount of

pressure of the diverse doctrine and

fundamentals which effect organizational

performance. This comparative significance

is due to the prevailing disagreement about

the actual ability of TQM to impact

performance. Therefore, after a first phase

where TQM was envisaged as the answer to

companies problems for less

competitiveness. TQM is a management

trend, whose impacts on organizational

performance were clear only in short span.

Organizational Performance

Organizational performance is concerned

with operational, quality and business

performance in banking sector.

Organizational performance is treated as a

dependent variable where as Soft TQM is an

independent variable and Hard TQM is

moderating variable. The main factors for

measuring Organizational Performance are

Customer satisfaction, employee morale,

productivity, Defects, cost of quality and

delivery on time Samson and Terziovski

[63].

In this study, researcher is going to use a

model developed by Samson and Terziovski

(1999), it includes six quality factors and

which are regressed to organizational

performance and it includes customer



satisfaction, employee morale &

productivity, quality of output and delivery

performance. They found significant

positive relationships between

organizational performance and several soft

factors such as leadership, people

management, and customer focus. After

analysing 400 certified firms it was found

that quality culture affects the business

performance and the most contributing

factor was customer focus Terziovski et al

[70]. Rahman and Bullock found four

elements of Soft TQM in manufacturing

organizations using regression analysis and

found that people management, supplier

relations, customer focus and shared vision

affect firm performance and some hard

elements also have significant effect on

performance. The current paper focuses on

the major contributions made in the area of

TQM to the study of its connection with

organizational performance. So, in this

research, we suggest a model that contains

the contributors facilitating the success of

the implementation of quality system in

private banking sector of Pakistan.

Hard elements also get support from soft

elements like management-commitment;

people management, customer focus and

supplier management to increase

performance, due to these fact Soft elements

retain top priority in the quality

implementation process. In past literature

review has found these contributors of Soft

Element i.e. management commitment,

customer focus, supplier relationship and

people management dimensions (employee

involvement, training & education, and

reward & recognition). Quality is applicable

in all firm at all firm levels with costs

reduction and improved levels of

differentiation. Through this conception it

was checked that quality practices are

directly proportional to performance. Many

empirical studies on TQM (Total Quality

Management) have proved relationship

between quality improvement practices and

improved performance on the basis of

factual data Prajogo and Sohal [57].

Leadership

A leader should have ability to apply

leadership style that might be constructive to

the implementation of TQM, with the end

goal of picking up the profits of TQM. TQM

relies on upon both the leaders and

subordinates to work. Leadership is a

relationship through which one individual

impacts the behaviour or activities of other

individuals Mullins [50]. Mullins further

portrays leadership as a dynamic procedure,

recommending that it could be adjusted to

suit specific management reasoning.

Numerous leadership styles have been

proposed in the literary works. The most

prominent ones are dichotomized, for

example the democratic and autocratic

Lippitt [47], attention and launching



structure Fleishman and Hunt [27],

employee centred and production centred

Likert [45]. Early theorist did not consider

that leader could show more than one

leadership style in changing degrees. Lately,

it had been understood that one leader could

display diverse leadership styles in shifting

extents henceforth the performance

maintenance (PM) leadership style was

presented by Misumi in 1995. Misumi

reported that performance maintenance

leadership style is discovered to be reliably

better than other leadership sorts as a result

of the way that a leader shows the two styles

yet at changing degrees. The way the leader

interacts with the subordinates, impacts the

enthusiasm of subordinates to become

adaptive to change. The part of a leader in

the fulfilment of workers' goals has been

exemplified in the path goal theory. The

saying path connotes that the leader

indicates the light and leads the way towards

goal achievement. House and Dessler

in1974 consequently recognized four

leadership conducts connected with this

model: directive leadership, achievement-

oriented leadership, supportive leadership,

and participative leadership. The first two

conducts are comparative with Misumi's

execution leadership styles, while the last

two are synonymous with the support style.

For a representative to acknowledge and

practice TQM, the leader must recognize the

path through which the subordinate's goal

and that of the association will be

accomplished. An ID of the essential

leadership conduct towards the fulfilment of

this is the thing that the present study is

intended to accomplish Ehigie and Akpan

[22]. Companies can take benefits of TQM

in real sense if it put real attention to

Leadership and process management.

Leadership may contain missionary and

visionary concept through a quality policy

formulation which has a defined goal with

direction.

The Thailand Quality Award (TQA) criteria

are same to the Malcolm Baldrige National

Quality Award (MBNQA) in the USA. Both

awards believe that leadership is the

fundamental driver of quality framework

execution and a key prerequisite to

adequately achieve quality management

(QM) Laohavichien et al [41]. In large

companies normally senior management is

considered too busy to focus on Leadership

importance due to which financial and

productivity levels are not met and

companies do not meet strategic goals.

Leadership is an important part of TQM

implementation because it gives the source

of proper orientation, implementation and

origin of whole quality activities Prajo [57];

Sit, 2009 [65]. Practices constructive in one

industry may or may not be effective in

another due to this fact multiple scopes

should be focused when evaluating QM

Prasad and Tata [58].



A concept, known as Top Mnagement

Leadership is also very essential for

developmental acheivements because

personal involvement of plant manager for

quality improvement somehow encourages

the employees for adoption and learning of

better ways to produce much better products

Abdallah [1]. (Tsang and Chan [71]

concluded that management leadership,

education & training, employee

participation, and communication are

essential for Total Productive Maintenance

(TPM) implementation. Leadership

influences the unwilling dimensions of

employees’ mind to work with willingness

for the organization, it inluences their inner

intent to work for a cause with out

disrupting their minds for thier self. It

magnifies the real dream towards success

and then collects the workforce to make that

dream acheiveable with the source of self

participation and example setting from own

devotion. Leadership is an umbrella under

which organization grows and flourishes.

Leadership directly influences the quality

goals, if the senior management equally

shifts towards the leadership thinking then

the quality goals becom realistic.

People Management

The point when we speak about people

management, we mean a method to improve

employees in an organization. In request to

play a vital part in organizations, the HR

strategies that make up people management

may as well reflect, increase and help the

organization business points and

objectives. A solid linkage will be required

between the organizational vision and

thinking of senior executives and the points,

destinations and underlying rationality of

the organization's approach to manage

employees. This linkage will guarantee

that HR intervention can get to be a maker

and not an inhibitor, of supported

aggressive advantage Gratton and Truss

[31].

The soft part also known as Management

System is the behavioural factor of human

resource management and focuses on

leadership and people management. These

two dimensions reflect all the issues which a

manager must bear in mind for the

successful implementation of quality

management. Organisations are facing

continuously changing environment and to

get better success in this race, organizations

are becoming flexible and adoptable. The

organizations are trying to take control on

these issues through Human Resource

Management. Many organizations are

saying Human assets are their most valuable

assets and newest method is 'Making people

deserve what they desire Abdullah and Tarí

[2].



Hard Factors and Firm Performance

The “hard” part is concerned with quality

development tools, systems, procedures,

specifications, measurements and techniques

which are normally flow charts, control

charts representation, scatter diagram, run

charts, Pareto diagrams, brainstorming,

stratification, tree diagrams, histograms,

force-field analysis and relation diagrams,

Design of Experiment (DOE), Quality

Function Deployment (QFD) and Pareto

Analysis Christos and Evangelos [14]

Vouzas and Psyhogios [72]. Hard TQM is

concerned with set of methods for

implementation of Soft Factors Black and

Porter [10]. It is quantifiable with precise

input for desired and defined results

Winston [75]. Some researchers argue that

Hard aspect of TQM is more important as

they can be easily quantified. According to

findings of Wilkinson et al [74] Hard TQM

is production process controlling tools and

techniques which includes Just in Time

(JIT), ISO 9000 series and 7 quality control

tools. The clear documented and written

methods for getting best results are part of

hard aspects. The hard aspects are concerned

with technical field whereas conceptual field

is concerned with soft aspects Vouzas and

Psychogios [72]. The statistical application

comes from Hard side whereas qualitative

application of TQM comes from soft side, it

means that Hard side is actually

implemented using conceptual models of

Soft TQM Vouzas and Psychogios [73].

Researchers have tried to focus on TQM

through Soft and Hard factors of TQM but

they have tried very less to distinguish

between Soft and Hard factors. Soft factors

are also called as Management System

where Hard factors are called as Technical

System Evans and Lindsay [25].

Customer Focus

Customer focus is directly proportional to

future business opportunities, sales

generation, and business expansion. It

reflects association of company to its final

product buyers and in this way company can

also take feedback about its performance,

customer’s tastes, economic ventures, new

methodologies, tackling customer’s

problems and future growth plans. Through

customer productive information is

generated for firms, shareholders,

competitors, investors, government

regulators, and buyers Fornell [28].

Customer focused firms can take a better

control on market share. Harvard Business

Review has also discussed that it is better to

go into deep roots of one business than to

expand in many businesses and it is only

possible through customer focus in specific

business.

Customers are of two types:

1. Internal Customers

2. External Customers



Internal customers are employees to the

organization where as external customers

are those people to whom organization

serves and they are from outside of the

organization. Customer-focus helps

organization to check out new customer

desires and takes step to meet these desires

for which organizations develop new

products, makes changes to current products

or launches the same products in a different

way with more quality and specification

boosting but the main constituent to attract

the customers in most cases is TQM

Honarpour et al [34]. Customer satisfaction

expresses that there is decline in complaints

of the customers, more loyal feelings and

higher customer retention but it is only

possible if organization has direct focus on

customers’ desires and requirements.

The concept ‘’TQM is directly proportional

to innovation and customer focus’’ can be

concluded in three ways according to

Perdermo-Ortiz et al [54]:

1. Market direction and customer focus

related activities: It focuses on

information of customers needs which

help to generate innovative thinking

Fuentes et al [29] Hoang et al [33].

2. Through customer focus and TQM

organization can achieve continuous

improvement by effective changes in

processes Prajogo and Sohal [57] Satish

and Srinivasan [64].

3. Decentralization of Command,

cooperation and managing people can be

used in information and knowledge

sharing which is further very helpful for

innovation and meeting customer

demands Fuentes et al [29]. Hard TQM

contributors are given as:

Planning

Important contributors of TQM like

leadership, strategic planning, info &

analysis and people management are directly

proportional to quality of service Sit et al

[65]. It is observed that low level of

harmony, decentralization of command,

planning, communication and administration

cause uncertainty and multi-direction

problems Talib [69]. It is recommended in a

study that important TQM practices include

leadership, strategic planning with respect to

customer, info & analysis, people & process

management as a dominant part for better

results for product innovation Lee et al [43].

According to Raja et al [61] impact of

strategic planning and process management

is not significant on customer’s satisfaction

but it is still very important for the proper

road mapping of company for acheivement

of future goals. Gadenne and Sharma [30]

has also proposed that strategic planning is

an essential part of quality related activites.

Kumar et al [40] proposed that for quality

and performance related activities, planning

is very crucial. Planning, senior



management companisionship, best

information sources and their usage, trained

employees involvement, output and system

design, best quality products availibility,

benchmarking and quality aims are those

resources which an organization needs for

achievement of quality goals Conca et al

[17].

Process Management

Business procedures are acknowledged

priceless organizational stakes and the

developing business process upheaval offers

organizations a chance to improve in the

way they work together Smith and Fingar

[66]. Therefore, partnerships are defied with

the tests of continually expanding the

gainfulness and proficiency of their business

forms. A business methodology is

characterized as "the particular requesting

of work exercises crosswise over time and

place, with a starting, an end, and

unmistakably distinguished include and

yield".

Many organizations are busy in finding

methods by which efficiency, product

superiority, and operations can be enhanced.

A quite new field for that development is

possible through process management (PM)

some call it as Business Process

Management (BPM) Elzinga et al [23].

Companies promote specific development

approach to the level that it gets shape of the

strategy of choice, leave all others strategic

approaches. A diversity of strategies,

methodologies and tools are on hand for

enhancing quality of outputs, systems and

processes.

Undertaking postpones because of holding

up for available resources. Such an

approach may as well be more precise

than existing instruments in foreseeing

future venture fulfilment time and more

adequate in distinguishing chances for

enhancing improvement process duration. A

first form of exploration addresses data

and assignment streams yet centres on

the general stream of assignments in

single ventures rather than on issues of

queues inside single or multi-venture

situations. For case, Cooper 1983

integrates the results of numerous field

studies of item improvement, discovering

a few key stages of new item

advancement whose viable execution will

be basic to venture triumph. He proposes

a "stream" approach, in which

administration acknowledges these stages in

a precise route to guarantee that nothing

is neglected. Imai, Nonaka and Takeuchi

1985 study five instances of later item

improvements in Japanese and American

organizations. They distinguish six basic

elements that support effective and

imaginative improvement: "top

administration as impetus, self-sorting out

task groups, covering advancement stages,



multi-taking in, unpretentious control, and

the association exchange of taking in."

But here, too, the unit of examination is the

singular venture Paul et al [53].

Process management defenders have

pushed process change as generally helpful

for associations, impelling persistent

improvement that results in productivity

upgrades, cost decreases, enhanced client

fulfilment and eventually, higher benefits

Benner and Tushman [9].

Information and Analysis

In current world, the information is wealth

because it can help to win the future

opportunities. Those organizations which

have better access to information related

resources have better tendency to lead the

world with more useful products and

processes Anderson and Sohal [5].

Information and analysis is essential for

TQM implementation and analyzing process

Dean and Bowen [18] Choi and Eboch [13]

Sun [67] Kannan et al [37] Najmi and Kehoe

[51]. Information and analysis is a source of

growth of the organization on the basis of

TQM under statistical techniques. It

provides convenience to the information

gathering which is produced from TQM

processes. It is productive for the

organization and all the stakeholders take

benefit from its implementation Lee et al

[43]. Furthermore in the organization,

effective decisions can be made on the basis

of data and information Lewis et al [44].

Information system allows direct connection

and collaboration between the planning and

operational levels of the organization hence

removing middle management Jabnoun and

Sahraoui [35]. Information yields better

growth and timely appropriate actions. TQM

is not beneficial only if it is not supported

with timely information and analysis

techniques.

The drawn hypothesis with research model

is given below to track the overall research

process.

H1: Soft TQM-Leadership has direct

relationship with Organizational

Performance.

H2: Soft TQM-People Management has

direct relationship with Organizational

Performance.

H3: Soft TQM-Customer Focus has direct


Performance.

H4: Hard TQM-Planning has direct


Performance.

H5: Hard TQM-Process Management has


Performance.



H6: Hard TQM-Information & Analysis has


Performance.

H7: Soft TQM have direct impact on

Organizational Performance.

H8: Hard TQM directly impacts on


H9: Soft TQM relationship with

performance is less than Hard TQM

relationship with performance

H10: Hard TQM moderates the relationship

between Soft TQM and Organisational

Performance.

Research Methodology

This study is done for “Moderating effect of

Hard TQM on the relationship of Soft TQM

and Performance”. The researcher has used

quantitative research methodology for

computation of soft aspects and hard

aspects. The performance is also computed

through 7 dimensions. It is an exploratory

research done through primary sources.

Researcher has done surveys in private

banking sector of Pakistan where the

questionnaire are rated from senior officials

and employees of the bank regarding Soft

and Hard TQM factors and their impact on

the organizational performance. The

researcher has used SPSS 21 for questions

data analysis of the responses taken from the

respondents on 5 point Likert’s scale which

starts from 1= SD Strongly Disagree to

5=SA Strongly Agree. The researcher has



chosen quantitative method for conducting

research because Soft and Hard TQM

aspects can be calculated through

quantitative research. The Soft TQM is

computed through 3 constructs which are

Leadership, People Management and

Customer Focus. The Hard TQM is

computed through Planning, Process

management and Information & Analysis.

Planning, Process Management and

Information & analysis are compute through

their dimensions. The organizational

performance is computed through its

questions. Then researcher ahs tried to

calculate the moderating effect of Hard

TQM on the relationship of Soft TQM and

Performance. The moderation is calculated

through Baron and Kenny 1986.

In this study the researcher has used

convenient data sampling technique. The

data is taken from different private bank

employees though self administered

questionnaires. The reason behind the

convenient sampling is that it is locally

available, less costly and less time taking,

furthermore this research is unfunded. The

responses were taken from 263 respondents

out of which 243 questions are received with

response rate of 92.39%. 213 questionnaires

are chosen for data analysis which contains

17% females and 83% males.

The employees are from ABL 42

respondents, UBL respondents 42, MCB

respondents 42, HBL respondents 42 and

MBL respondents 45. Moreover, these

questionnaires were given to employees and

senior executives in their organizational

settings on which they have rated their

responses. The sample size is taken close to

those researches which were taken before

using same instrument which researcher has

taken in his research. The missing values

were replaced with the central value so it

can’t effect on the results of the data.

Reliability

The SPSS21 output gives different sets of

information about scale. The following

things must be entered correctly while

checking reliability of the data.

The number of dimension entered should be

correct. In this study there are 45

dimensions. The reliability statistics is

calculated through Cronobach’s alpha which

is considered to be a best tool for reliability

calculation Pallant et al [52].

Reliability is an important figure given by

Cronobach’s Alpha value which is 0.918 in

our case and above than 0.7, so the scale is

reliable with study data sample.

Reliability Statistics




Cronbach's

Alpha

N of

Items

.918 45

The reliability of an instrument is of major

importance. If the instrument is not reliable

then the data collected from the instrument

is of no use because it results are not trust

worthy and relevant. In SPSS 21results there

is a statistics through which the reliability of

the instrument can be calculated. Researcher

has calculated reliability of each construct.

Leadership

The value of Cronobach’s alpha for six

items of Leadership is 0.670 which is close

to 0.70 and hence it is treated reliable.


Cronbach's

Alpha

N of

Items

.670 6

People Management

The value of cronbach’s alpha for people

management is quite good and very close to

0.70 which indicates that reliability of these

items is statistically good and there is also

internal consistency of the measure because

all the six dimensions are consistent for

measuring reliability.


Cronbach's

Alpha

N of

Items

.698 7

1.1.1. Customer Focus

The reliability of items of customer focus is

also good which help researcher for further

data analysis of the data. The reliability

statistics value is above 0.70 which is quite

excellent for further data analysis Pallant et

al [52].


Cronbach's

Alpha

N of

Items

.709 6

Planning

The reliability of the planning is very good

as it supersedes the threshold value of 0.70

which ensures that items are reliable and

consistently measuring the planning. The

internal consistency of measure is quite

good and relevant items are truly

determining their concerned construct.




Cronbach's

Alpha

N of

Items

.834 6

Process Management

The reliability for Process Management is

quite near to 0.70 which ensures that data

analysis is not facing the problem of less

reliability or multi-colliniearity. The multi-

colliniearity indicates that two variables are

enough close to each other that there is no

difference in between them or both are

same. It happens, when the value of the

cronobachs’ alpha is above 0.90 Pallant et al

[52].


Cronbach's

Alpha

N of

Items

.690 5

Information & Analysis

The reliability statistics for information and

analysis is calculated through SPSS 21. First

of all the Information and analysis is

computed through 8 items and then

reliability statistics is computed which

showed reliability value equal to 0.767

which is highly reliable and further data

analysis can be done Pallant et al [52].


Cronbach's

Alpha

N of

Items

.767 8

Organizational Performance

The results of the Organizational

Performance are also reliable with value

greater than 0.70.


Cronbach's

Alpha

N of

Items

.738 7

Correlation

Correlation analysis is used to explain

strength and direction of the linear

relationship between two variables. Pearson

correlation coefficients (r) values are found

between -1 to +1. The positive sign of

correlation depicts positive relationship

between the variables and vice verse.

Positive sign shows if there is increase in

one variable then there is increase in other

variable which constitutes the situation of

directly proportionality. The degree of

relationship is also shown by the magnitude

of the relationship among the variables.

Authors advise diverse interpretations for

this degree of relationship between the



variables (Cohen 1988) suggests the

following guidelines:

Weak relationship r=.10 to.29

Moderate Relationship r=.30 to .49

Strong Relationship r=.50 to 1.0

The negative sign denotes the direction of

the relationship, not the magnitude. The

strength of correlation of r=.5 and r=-.5 is

equal just the direction of their relationship

has been reversed. It is in a different

direction. The further important thing to

focus is the significance level Sig. 1tailed or

Sig.2 tailed. Level of statistical significance

doesn’t show how strongly two variables are

related (this is specified by r-value or rho-

value; however it points to show how much

belief one should have in the results

achieved. The significance of r or rho is

powerfully affected by sample size.

Correlations

Leade

rship

People

_Mana

gemen

t

Custo

mer_F

ocus

Soft_

TQM

Plannin

g

Proces

s_Man

ageme

nt

Informat

ion_Anal

ysis

Organ_

Perfor

mance

Hard_

TQM

Produc

t_Hard

_Soft_

TQM

Leadership

People_Management .340**

Customer_Focus .407**

.546**

Soft_TQM .474**

.653**

.500**

Planning .319

** .253

** .339

**

.462*

*

Process_Managemen

t .269

** .163

* .252

**

.338*

*

.555**

Information_Analysi

s .353

** .153

* .276

**

.397*

*

.507**

.475**

Organ_Performance .387

** .295

** .319

**

.498*

*

.564**

.518**

.511**

Hard_TQM .410**

.335**

.348**

.526*

.604**

.575**

.560**

.596**



H1: Soft TQM-Leadership has direct


Performance.

There is direct relationship between soft

TQM and Organizational Performance

because the correlation value is 0.498. The

magnitude of relationship is moderate but it

is directly proportional with a significance

level of 0.01.

H2: Soft TQM-People Management has


Performance.

There is direct relationship between

organizational performance and People

Management but the degree of relationship

is low at significance level of 0.01.

H3: Soft TQM-Customer Focus has direct


Performance.

Customer focus has direct relationship with

organizational performance. The magnitude

of correlation is moderate with 0.319 at

significance level of 0.01.

H4: Hard TQM-Planning has direct


Performance.

At level of significance of 0.01 the

magnitude of relationship between

Organizational Performance and Hard

TQM-Planning is 0.564 which is a strong

and directly proportional.

H5: Hard TQM-Process Management has


Performance.




TQM-Process Management is 0.518 which

is a strong and directly proportional.

H6: Hard TQM-Information & Analysis has


Performance.




TQM-Information & Analysis is 0.511

which is a strong and directly proportional.

*

Product_Hard_Soft_

TQM .495

** .571

** .503

**

.868*

*

.599**

.495**

.527**

.581**

.840**

**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).



Moderations Analysis

According to the Baron and Kenny 1986, the

moderator is a variable which increases the

relationship between two variables. A

variable which gives condition in which a

given predictor is connected to output is

called a moderator. Moderator describes

‘when’ a Dependent Variable DV and

Independent Variable IV are linked Baron

and Kenny [7]. Baron and Kenny explain

moderation through the picture given below.

Baron and Kenny moderation consists of

three steps.

First step: Regression of Predictor (Soft

TQM) to Organizational Performance.

Second Step: Regression of Moderator

(Hard TQM) to Organizational Performance.

Third Step: Taking product of Moderator

(Hard TQM) and Predictor (Hard TQM) and

regression of this product to the


Here the predictor (Soft TQM) is an

independent variable which affects the

dependent variable dependent variable

(Organizational Performance). The

moderator is Hard TQM due to which

degree of relationship effect between Soft

TQM and Organizational Performance.

Regression (Soft TQM)

The regression is run to check whether the

Customer focus, Leadership and People

Management really take part in computation

of Soft TQM. When regression is run, then a

table of Model Summary is produced in the

output. In model summary table R=0.713

denotes the simple correlation between the

predictors (Customer focus, Leadership and

People Management) and outcome (Soft

TQM). The correlation value of 0.713

represents the strong relationship. The R2

value of .509 represents that predictors

(Customer focus, Leadership and People

Predictor= Soft TQM

Moderator= Hard TQM Organizational

Performance

Predictor X Moderator=

Soft TQM X Hard TQM



Management) account for 50.9% value of

outcome (Soft TQM). It supports the

hypothesis given below.

Model Summary

Mode

l

R R Square Adjusted R

Square

Std. Error of

the Estimate

1 .713a .509 .502 .82343

a. Predictors: (Constant), Customer_Focus, Leadership,

People_Management

The second table formed by SPSS21 out file

is ANOVA (Analysis of Variance). The

variance is square of standard deviation and

standard deviation tells about the difference

of each item in a data set from a specified

value which is taken as a standard to see

how much change is experienced between

standardized values and rest of the values in

the data set.

In ANOVA table shows that at p<0.001 the

F is 72.154, which indicates that our

regression model significantly predict the

Soft TQM than if we use mean values of

Customer Focus, Leadership and People

Management. The regression model

significantly predicts the overall model for

Soft TQM.

It looks at whether the variance explained by

the model (SSM) is significantly greater than

the error within the model (SSR). It tells us

whether using the regression model is

significantly better at predicting values of

the outcome than using the mean. Output

represents that value of

SSM=146.769>SSR=14.710 which indicates

that

ANOVAa

Model Sum of Squares df Mean

Square

F Sig.

1

Regression 146.769 3 48.923 72.154 .000b

Residual 141.710 209 .678

Total 288.479 212

a. Dependent Variable: Soft_TQM b. Predictors: (Constant), Customer_Focus, Leadership, People_Management



The next SPSS21 output indicates the

parameters of the Soft TQM. The three

parameters i.e. Customer Focus, Leadership

and People Management etc. affect the Soft

TQM considerably. If there is 1 unit change

in leadership there is 0.288 times change is

predicted in Soft TQM, similarly for People

Management and customer focus its values

are 0.474 and .111 respectively. The most

effective parameter is people management in

Soft TQM predictor in Banking Sector of

Pakistan.

Coefficientsa

Model Unstandardized

Coefficients

Standardized

Coefficients

T Sig.

B Std. Error Beta

1

(Constant) .409 .201 2.036 .043

Leadership .288 .061 .254 4.733 .000

People_Manageme

nt

.474 .056 .500 8.530 .000

Customer_Focus .111 .054 .123 2.046 .042

a. Dependent Variable: Soft_TQM

Regression (Hard TQM)

Hard TQM is predicted from three

predictors which are Planning, Process

Management and Information and Analysis.

In order to find their relative effect for

prediction of Hard TQM, the regression

analysis is carried out. The regression is run

to check whether the Planning, Process

Management and Information and Analysis

really take part in computation of Hard

TQM.

When regression is run, then a table of

Model Summary is produced in the output.

In model summary table R=0.706 denotes

the simple correlation between the

predictors (Planning, Process Management

and Information and Analysis) and outcome

(Hard TQM). The correlation value of 0.706

represents the strong relationship. The R2

value of 0.499 represents that predictors

(Planning, Process Management and

Information and Analysis) account for

49.9% value of outcome (Hard TQM).

Model Summary



Mode

l


Square

Std. Error of

the Estimate

1 .706a .499 .492 .75490

a. Predictors:(Constant),Information_Analysis,Processe,

Planning




Soft TQM than if we use mean values of

Planning, Process Management and

Information and Analysis. The regression

model significantly predicts the overall

model for Hard TQM.

ANOVAa

Model Sum of Squares df Mean Square F Sig.

1

Regression 118.624 3 39.541 69.386 .000b

Residual 119.104 209 .570

Total 237.728 212

a. Dependent Variable: Hard_TQM

b.Predictors:(Constant),Information_Analysis,Process_Management,Planning

The next SPSS21 output indicates the

parameters of the Hard TQM. The three

parameters i.e. Planning, Process

Management and Information and Analysis

etc. affect the Hard TQM considerably. If

there is 1 unit change in leadership there is

0.288 times change is predicted in Soft

TQM, similarly for People Management and

customer focus its values are 0.474 and .111

respectively. The most effective parameter is

people management in Soft TQM predictor

in Banking Sector of Pakistan.

Coefficientsa


Coefficients

Standardized

Coefficients

T Sig.

B Std. Error Beta

1

(Constant) .409 .201 2.036 .043

Leadership .288 .061 .254 4.733 .000



People_Management .474 .056 .500 8.530 .000

Customer_Focus .111 .054 .123 2.046 .042

a. Dependent Variable: Soft_TQM

Regression (Soft TQM to Organizational

Performance)

First step: Regression of Predictor (Soft

TQM) to Organizational Performance.




the simple correlation between the predictor

(Soft TQM) and outcome (Organizational

Performance). The correlation value of

0.498 represents the moderate relationship.

The R2 value of 0.248 represents that

predictor (Soft TQM) accounts for 24.8%

value of outcome (Organizational

Performance).



The impact is moderate with 0.498

magnitudes and is directly proportional.

Model Summary

Mode

l


Square

Std. Error of

the Estimate

1 .498a .248 .244 1.04412

a. Predictors: (Constant), Soft_TQM




Organizational Performance than if we use

mean values of Soft TQM. The regression


model for Organizational Performance.

ANOVAa

Model Sum of

Squares

Df Mean

Square

F Sig.

1

Regression 75.886 1 75.886 69.608 .000b

Residual 230.030 211 1.090

Total 305.915 212



a. Dependent Variable: Organ_Performance

b. Predictors: (Constant), Soft_TQM



The next SPSS21 output indicates the Soft

TQM is a parameter for Organizational

Performance. If there is 1 unit change in

Soft TQM then there is 0.513 times change

is predicted in Organizational Performance

which indicates that Soft TQM directly

impact the Organizational Performance. The

strength of the impact is strong at 0.513

Cohen [15].

Coefficientsa


Coefficients

Standardized

Coefficients

T Sig.

B Std. Error Beta

1

(Constant) 1.587 .203 7.831 .000

Soft_TQM .513 .061 .498 8.343 .000


Regression (Hard TQM to Organizational

Performance)

Second Step: Regression of Moderator

(Hard TQM) to Organizational Performance.




the simple correlation between the predictor

(Hard TQM) and outcome (Organizational

Performance). The correlation value of

0.596 represents the strong relationship. The

R2 value of 0.355 represents that predictor

(Hard TQM) accounts for 35.5% value of

outcome (Organizational Performance).

H8: Hard TQM directly impacts on


The relationship is moderate and directly

proportional between Hard TQM and


Model Summary

Mode

l


Square

Std. Error of

the Estimate

1 .596a .355 .352 .96689



a. Predictors: (Constant), Hard_TQM




Organizational Performance than if we use

mean values of Hard TQM. The regression


model for Organizational Performance.

ANOVAa

Model Sum of

Squares

Df Mean

Square

F Sig.

1

Regression 108.655 1 108.655 116.223 .000b

Residual 197.260 211 .935

Total 305.915 212


b. Predictors: (Constant), Hard_TQM

The next SPSS21 output indicates the Hard

TQM is a parameter for Organizational

Performance. If there is 1 unit change in

Hard TQM then there is 0.676 times change

is predicted in Organizational Performance.

Coefficientsa


Coefficients

Standardized

Coefficients

t Sig.

B Std. Error Beta

1

(Constant) .985 .213 4.623 .000

Hard_TQ

M

.676 .063 .596 10.781 .000


Regression (Product of Hard and Soft

TQM on Organizational Performance)

Third Step: Taking product of Moderator

(Hard TQM) and Predictor (Hard TQM).

H9: Soft TQM relationship with

Organizational performance is less than

Hard TQM relationship with Organizational

performance.

After product of Soft TQM and Hard TQM,

researcher got Product_Hard_Soft_TQM

and then taking its regression to

Organizational Performance. The value of

correlation, R=0.402 increases to R=0.421

which fulfils the requirements of

Moderation (Baron and Kenny 1986).

H10: Hard TQM moderates the relationship

between Soft TQM and Organisational

Performance.



Hard TQM has slightly increased the

relationship and due to the presence of the

Hard TQM the relation ship has risen to

0.421 from 0.402.


value of F-Test for Hard TQM is 70.638 and

value of Soft TQM is 50.568, which

indicates that our regression model

significantly predict the Organizational

Performance than if we use mean values of

Hard TQM and Soft TQM.

ANOVAa

Model Sum of Squares Df Mean Square F Sig.

1

Regression 123.033 2 61.517 70.638 .000b

Residual 182.882 210 .871

Total 305.915 212

2

Regression 128.661 3 42.887 50.568 .000c

Residual 177.254 209 .848

Total 305.915 212


b. Predictors: (Constant), Hard_TQM, Soft_TQM

Model Summary

Model R R Square Adjusted R

Square

Std. Error of

the Estimate

Change Statistics

R Square

Change

F Change df1 df2 Sig. F

Change

1 .634a .402 .396 .93320 .402 70.638 2 210 .000

2 .649b .421 .412 .92093 .018 6.636 1 209 .011

a. Predictors: (Constant), Hard_TQM, Soft_TQM

b. Predictors: (Constant), Hard_TQM, Soft_TQM, Product_Hard_Soft_TQM



c. Predictors: (Constant), Hard_TQM, Soft_TQM, Product_Hard_Soft_TQM

The first part of final table shows prediction

of Organizational Performance from the Soft

TQM, and Hard TQM. The regression result

indicates that Soft TQM predicts the

Organizational Performance by 0.263. The

Hard TQM predicts Organizational

Performance by 0.524. Both of the values

indicate that if there is one unit change in

Soft TQM and Hard TQM then there is

0.263 and 0.524 change in Organizational

Performance respectively.



The second part of final table shows

prediction of Organizational Performance

from the Soft TQM, Hard TQM and

Product_Soft TQM_Hard TQM. The

regression result indicates that Soft TQM

predicts the Organizational Performance by

0.656. The Hard TQM predicts

Organizational Performance by 0.913 and

Product_Soft TQM_Hard TQM predicts the

Organizational Performance by -0.130. The

values indicate that if there is one unit

change in Soft TQM, Hard TQM and

Product_Soft TQM_Hard TQM then there is

0.656, 0.913 and -0.130 change in

Organizational Performance respectively.

Excluded Variablesa

Model Beta In T Sig. Partial

Correlation

Collinearity

Statistics

Tolerance

Coefficientsa


Coefficients

Standardized

Coefficients

T Sig.

B Std. Error Beta

1

(Constant) .667 .220 3.032 .003

Soft_TQM .263 .065 .255 4.063 .000

Hard_TQM .524 .071 .462 7.358 .000

2

(Constant) -.428 .477 -.896 .371

Soft_TQM .656 .165 .637 3.964 .000

Hard_TQM .913 .167 .805 5.479 .000

Product_Hard_Soft_T

QM

-.130 .050 -.648 -2.576 .011




1 Product_Hard_Soft_T

QM

-.648b -2.576 .011 -.175 .044


b. Predictors in the Model: (Constant), Hard_TQM, Soft_TQM

Findings

Private Banking sector in Pakistan gives

much importance to Quality aspects for

boosting their business and reducing the cost

of poor quality. There is strong relationship

between Soft TQM and Organizational

Performance. There is direct relationship

between soft TQM and Organizational

Performance because the correlation value is

0.498. The magnitude of relationship is

moderate but it is directly proportional with

a significance level of 0.01.There is direct

relationship between organizational

performance and People Management but

the degree of relationship is low at

significance level of 0.01.Customer focus

has direct relationship with organizational

performance. The magnitude of correlation

is moderate with 0.319 at significance level

of 0.01. At level of significance of 0.01 the



TQM-Planning is 0.564 which is a strong

and directly proportional. At level of

significance of 0.01 the magnitude of

relationship between Organizational

Performance and Hard TQM-Process

Management is 0.518 which is a strong and

directly proportional. At level of

significance of 0.01 the magnitude of

relationship between Organizational

Performance and Hard TQM-Information &

Analysis is 0.511 which is a strong and

directly proportional. The impact is

moderate with 0.498 magnitudes and is

directly proportional. The relationship is

moderate and directly proportional between

Hard TQM and Organizational Performance.

After product of Soft TQM and Hard TQM,

researcher got Product_Hard_Soft_TQM

and then taking its regression to

Organizational Performance. The value of

correlation, R=0.402 increases to R=0.421

which fulfils the requirements of

Moderation. Hard TQM has slightly

increased the relationship and due to the

presence of the Hard TQM the relation ship

has risen to 0.421 from 0.402.

Conclusion

Total Quality Management is a technique

which inculcates the technological and

quality aspects in the business. In private

banking sector of Pakistan quality

improvement is important source of



continuous improvement. Soft Factors like

Leadership, people management and

customer focus provide the basic platform

for soft aspects of quality. These factors

increase conceptual sensibility of employees

regarding the need of quality as a source of

increase in Organizational Performance.

Similarly, Hard Factors like Information

Analysis, Process Management and

Planning are helpful in computation of Hard

TQM. These aspects directly take part in the

quality implementation process. These are

factors which effect the quality related

operations and processes in banking sector.

Hard TQM is found as a moderator in Soft

TQM and Organizational Performance

relationship. Hard TQM increases the

relationship between the Soft TQM and

Organizational Performance because it acts

as a catalyst in the Pakistani Banking Sector.

As per this research, Organizational

Performance is increased with respect to

internal customer satisfaction, employee

morale, productivity, low defect complains,

higher clients trust, low cost of quality and

better time of reduction of operations. The

degree of improvement is better if the Hard

TQM is applied to control the effects of Soft

TQM for better performance delivery. So,

Hard TQM factors of vital importance of

growth than Soft TQM because it gives

output of quality in real means.

Recommendations

TQM is a methodology for getting

excellence in production and services sector.

There is still huge gap in literature regarding

TQM work in services sector. The

researchers should put effort to explore more

dimension of the quality for services sector.

The research should be empirically done to

develop a new model and to develop a series

of steps for TQM implementation in

Banking Sector of Pakistan.

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