The Effects of Total Quality Management on Corporate Performance: An Empirical Investigation

Journal Of Business, Vol 71, No 2, April 1998

Posted: 6 Mar 1998

See all articles by George S. Easton

George S. Easton

Emory University - Information Systems and Operations Management

Sherry L. Jarrell

Wake Forest University; Temple University Fox School of Business

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Abstract

This article examines the impact of Total Quality Management (TQM) on the performance of 108 firms that began TQM implementation between 1981 and 1991. The impact of TQM is measured by comparing each firm's performance to a control benchmark designed to capture what the performance would have been without TQM. The findings indicate that performance, measured by both accounting variables and stock returns, is improved for the firms adopting TQM. The improvement is consistently stronger for firms with more advanced TQM systems. The possibility that downsizing could explain the improvement is also examined. The data do not support this hypothesis.

JEL Classification: G32

Suggested Citation

Easton, George S. and Jarrell, Sherry L., The Effects of Total Quality Management on Corporate Performance: An Empirical Investigation. Journal Of Business, Vol 71, No 2, April 1998, Available at SSRN: https://ssrn.com/abstract=64941

George S. Easton (Contact Author)

Emory University - Information Systems and Operations Management ( email )

1300 Clifton Road
Atlanta, GA 30322
United States

Sherry L. Jarrell

Wake Forest University ( email )

2601 Wake Forest Road
P.O. Box 7659, Reynolda Station
Winston-Salem, NC 27109
United States
336-758-5761 (Phone)

Temple University Fox School of Business ( email )

Philadelphia, PA 19122
United States

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