Total Quality Management and Financial Performance of Construction Companies in Ha Noi

Abstract

Concerning performance improvement of Hanoi construction companies, a conceptual framework was developed in this study. This framework was used not only to evaluate the practices of TQM, but also to examine the relationship between TQM and organizational performance. The sample of the study includes construction companies in Hanoi. This study evaluated the impact of TQM dimensions on performance. The results of the six regression models (TQM-OP1; TQM-OP2; TQM-OP3; TQM-OP4; TQM-OP5; TQM-OP6) show that there is enough statistical evidence to demonstrate important relationships between TQM and organizational performance. Organizations who implement the activities of TQM will positively increase their performance. In model TQM-OP1, there are three regression relationships with market and profitability, namely, employee involvement, process management, and supplier relationship. The relationship between market and profitability with supplier relationship is explained that organizations focus on developing long term relationships with suppliers, they gain opportunities in occupying and expanding market. There is one regression relationship with employee involvement in model TQM-OP3. This is employee involvement. In fact, employee involvement impacts on the effort of the employees. When the management emphasizes employee involvement, the employees feel convenient about their job, and they trust the organization. They become actively involved in working and contributing their efforts for the organization. One relationship with process efficiency is shown in model TQM-OP4, namely, process management. In model TQM-OP5, the only one significant relationship with process effectiveness is supplier relationship. The relationship of supplier relationship with process effectiveness can be explained that focusing on long term relationships with suppliers will result in process effectiveness. By the same token, for model TQM-OP6, the only one significant relationship with order time is supplier relationship. The relationship of supplier relationship with order time can be explained that focusing on long term relationships with suppliers will result in increase in order time.