Organizational innovation in the relationship between total quality management and business financial performance: case of coffee processing firms in Guji zone, Ethiopia

Figures & data

Table

Authors	Lists of TQM’s constructs
Suleiman Abu-Mahfouz (2019)	Leadership, process management and Top management commitment
Yas et al. (2021)	Employee involvement, Customer focus and Marketing Practices
Ukab (2021)	Leadership commitment, employee empowerment, process management and continuous improvement
Keinan and Karugu (2018)	Continuous Improvement, Top Management Commitment, Employee Empowerment and Customer Focus
Baidoun et al. (2018)	Information and analysis, Patient and sector focus, Leadership, Strategic Planning, Human resources focus and Process management

Figure 1. The conceptual framework for the study.

Table 1. The description of the constructs’ and its sources.

Constructs	Items	Descriptions (give a very brief description of what the items are)	Sources (list authors from which we adapt/adopt the items)
Top management commitment (TMC)	TMC1	Clear and effective strategies	(Baidoun et al., 2018; Anastasiadou, 2015; Antunes et al., 2021; Singh et al., 2018; Addis, 2020; Psomas & Jaca, 2016)
	TMC2	Coffee Quality Improvement Plan
	TMC3	Commitment to TQM implementation
	TMC4	Closely monitoring the coffee processing activities
	TMC5	Consults experts with the best experiences in the coffee industry
Customer Focus (CF)	CF1	Dedication to fulfill customer’s needs	(Singh et al., 2018; Antunes et al., 2021; Addis, 2020)
	CF2	Prioritizing customer’s complaints and feedback
	CF3	Effort to ensure quality based on customers’ suggestions and feedback
	CF4	Analyzes quality issues at regular intervals
	CF5	Focus on providing quality coffee
Continuous improvement (COI)	COI1	Update the coffee quality criteria based on the standard	(Antunes et al., 2021; Kebede Adem & Virdi, 2021)
	COI2	Checking coffee processing activities against TQM principles
	COI3	Ensures the coffee quality criteria are met
	COI4	Minimizing costs and maximizing production
	COI5	following easy and non-complex processes during coffee processing
Communication and Information Analysis (CIA)	CIA1	Collects and analyzes information based on customer feedback	(Antunes et al., 2021, Khalfallah et al., 2021, Baidoun et al., 2018; Addis, 2020)
	CIA2	Communicate regularly on how to achieve goals
	CIA3	Keeping profiles and documents using a modern record-keeping system.
	CIA4	Adopts digital technology platforms
	CIA5	Smooth communication among top managers and employees
Organizational innovation (OIP)	IP5	Improved process compared to competitors.	(Antunes et al., 2021,Khalfallah et al., 2021, Azam et al., 2023; Kalay, 2015)
	IP6	Strategies used to be competitive within the coffee market.
	IP7	Unique business (brand) name.
Business financial performance (BFP)	BP1	company’s return on assets has increased following the implementation of TQM	(Khalfallah et al., 2021, Singh et al., 2018; Addis, 2020; Psomas & Jaca, 2016)
	BP2	Sales have increased when compared to the last couple of years.
	BP3	company’s profits have improved

Table 2. Descriptions of respondents’ background information.

			Frequency	Percent
Gender	Female		138	41.32
	Male		196	58.68
	Total		334	100.0
Level of education	Master’s Degree		10	2.99
	Bachelor		124	37.13
	Diploma/Level		130	38.92
	Grade 1 up to 12		70	20.96
Total			334	100.0
Type of industry you are working for	Wet coffee sub-industry		221	66.17
	Dry coffee sub-industry		113	33.83
	Total		334	100
Your position in the company	Owner		38	11.38
	General Manager		36	10.78
	Department head/Middle-level manager		104	31.14
	Worker		155	46.71
	Total		334	100
	Mean	Std.	Min.	Max.
Age	34.32036	7.093693	22	56
Experience	6.296407	3.171597	1	20

Table 3. Test of validity and reliability of measurement model for TQM constructs, OIP and BFP.

			Validity			Reliability
TQM Dimensions (An independent variable)	Items	Standardized loadings for each item	Convergent validity (AVE)	The square root of (AVE)	Value of Covariance between Constructs	Composite reliability	Alpha value
Top management commitment (TMC)	TMC1	0.69	0.55	0.74	. 0.66	0.86	0.85
	TMC2	0.87
	TMC3	0.72
	TMC4	0.70
	TMC5	0.71
Customer Focus (CF)	CF1	0.80	0.59	0.77	.56	0.88	0.87
	CF2	0.76
	CF3	0.77
	CF4	0.74
	CF5	0.77
Continuous improvement (COI)	COI1	0.72	0.57	0.75	.62	0.87	0.86
	COI2	0.70
	COI3	0.81
	COI4	0.80
	COI5	0.72
Communication and Information Analysis (CIA)	CIA1	0.74	0.54	0.73	0.49	0.85	0.85
	CIA2	0.78
	CIA3	0.69
	CIA4	0.71
	CIA5	0.74
Mediator Variable
Organizational innovation (OIP)	IP5	0.79	0.61	0.78	.33	0.81	0.82
	IP6	0.80
	IP7	0.75
Dependent Variable
Business financial performance (BFP)	BP1	0.72	0.6	0.77	0.61	0.90	0.82
	BP2	0.82
	BP3	0.79

Figure 2. Measurement model for measuring TQM constructs.

Figure 3. Measurement model for measuring organizational innovation practice.

Figure 4. Measurement model for measuring business performance.

Figure 5. Measurement model of combined cfa for all latent constructs.

Table 4. Analysis of CFA for combined latent variables of the study.

			Validity			Reliability
Constructs	Items	Standardized loadings for each item	Convergent validity (AVE)	The square root of AVE	Value of Covariance between Constructs	Composite reliability	Alpha value
TQM	TMC	0.84	0.64	0.80	0.5	0.94	0.89
	CF	0.90
	COI	0.67
	CIA	0.77
OIP	IP5	0.78	0.61	0.78	0.33	0.89	0.83
	IP6	0.80
	IP7	0.76
BFP	BP1	0.73	0.60	0.77	0.61	0.89	0.82
	PB2	0.81
	BP3	0.79

Table 5. The evaluation of measurement model goodness of fit.

Index	Results	Critical Value	Decision
Chi2	91.51
DF	31
CMIN/DF	2.95	<5	Fitted
CFI	0.966	>0.9	Fitted
TLI	0.951	>0.9	Fitted
SRMR	0.035	<0.08	Fitted
RMSEA	0.076	<0.08	Fitted

Source: Researchers’ Field Survey Data, 2021.

Figure 6. Path/structural model.

Table 6. Test for mediation effect.

Hypothesis	Path Model	Direct effect	Indirect effect	Total effect	P-Value	Decision with Hypothesis
H1	BFP<-TQM	.441		.441	0.000	Supported
H2	OIP<-TQM	.599		.599	0.000	Supported
H3	BFP<-OIP	.212		.212	0.000	Supported
H4	BFP<-OIP<-TQM		.127	.569	0.000	Supported

Source: Field survey data, 2023.

Suleiman Abu-Mahfouz, S. (2019). TQM Practices and Organizational Performance in the Manufacturing Sector in Jordan mediating role of HRM Practices and Innovation. NO 22 Journal of Management and Operation Research, 1(22), 1.

 Google Scholar

Yas, H., Alsaud, A. B., Almaghrabi, H. A., Almaghrabi, A. A., & Othman, B. (2021). The effects of TQM practices on performance of organizations: A case of selected manufacturing industries in Saudi Arabia. Management Science Letters, 11, 503–510. https://doi.org/10.5267/j.msl.2020.9.017

 Google Scholar

Ukab, M. M. (2021). Total quality management practices to enhance organizational performance by competitive advantage as mediating in SMES in Iraq. Psychology and Education Journal, 58(2), 5471–5481. https://doi.org/10.17762/pae.v58i2.2961

 Google Scholar

Keinan, A. S., & Karugu, J. (2018). Total quality management practices and performance of manufacturing firms in Kenya : Case of Bamburi cement limited. International Academic Journal of Human Resource and Business Administration, 3(1), 81–99.

 Google Scholar

Baidoun, S. D., Salem, M. Z., & Omran, O. A. (2018). Assessment of TQM implementation level in Palestinian healthcare organizations: The case of Gaza Strip hospitals. The TQM Journal, 30(2), 98–115. https://doi.org/10.1108/TQM-03-2017-0034

 Google Scholar

Anastasiadou, S. D. (2015). The roadmaps of total quality management in the Greek education system according to Deming, Juran, and crosby in light of the EFQM Model. Procedia Economics and Finance, 33(15), 562–572. https://doi.org/10.1016/s2212-5671(15)01738-4

 Google Scholar

Antunes, M. G., Mucharreira, P. R., Justino, M. R. T., & Texeira-Quirós, J. (2021). Effects of total quality management (Tqm) dimensions on innovation—evidence from smes. Sustainability (Switzerland), 13(18), 10095. https://doi.org/10.3390/su131810095

 Web of Science ®Google Scholar

Singh, V., Kumar, A., & Singh, T. (2018). Impact of T QM on organisational performance: The case of Indian manufacturing and service industry. Operations Research Perspectives, 5, 199–217. https://doi.org/10.1016/j.orp.2018.07.004

 Google Scholar

Addis, S. (2020). An exploration of quality management practices in the manufacturing industry of Ethiopia. The TQM Journal, 32(1), 1–19. https://doi.org/10.1108/TQM-01-2019-0031

 Google Scholar

Psomas, E. L., & Jaca, C. (2016). The impact of total quality management on service company performance: evidence from Spain. International Journal of Quality and Reliability Management, 33(3), 380–398. https://doi.org/10.1108/IJQRM-07-2014-0090

 Google Scholar

Kebede Adem, M., & Virdi, S. S. (2021). The effect of TQM practices on operational performance: an empirical analysis of ISO 9001: 2008 certified manufacturing organizations in Ethiopia. The TQM Journal, 33(2), 407–440. https://doi.org/10.1108/TQM-03-2019-0076

 Google Scholar

Khalfallah, M., Ben Salem, A., Zorgati, H., & Lakhal, L. (2021). Innovation mediating relationship between TQM and performance: cases of industrial certified companies. The TQM Journal, 34(3), 552–575. https://doi.org/10.1108/TQM-01-2021-0019

 Google Scholar

Azam, T., Songjiang, W., Jamil, K., Naseem, S., & Mohsin, M. (2023). Measuring green innovation through total quality management and corporate social responsibility within SMEs: green theory under the lens. The TQM Journal, 35(7), 1935–1959. https://doi.org/10.1108/TQM-05-2022-0160

 Google Scholar

Kalay, F. (2015). The impact of strategic innovation management practices on firm innovation performance. Pressacademia, 2(3), 412–412. https://doi.org/10.17261/Pressacademia.2015312989

 Google Scholar

Data availability statement

The data that support the findings of this study will be openly available upon request.