THE IMPACT OF QUALITY MANAGEMENT SYSTEMS ON ORGANIZATIONAL PERFORMANCE IN SMALL AND MEDIUM SIZED ENTERPRISES IN NORTHEAST IRAN

Nasser Poursaied
Islamic Azad University of Semnan, Iran
Mildred Golden Pryor
Texas A&M University-Commerce
Azim Zarei
Semnan University, Iran
ABSTRACT
Small to Medium-sized Enterprises (SMEs) have attracted a lot of interest as the basis for economic growth in different countries around the world. Undoubtedly, the success of these enterprises depends on providing high quality products in order to achieve customer satisfaction and increased market share. Despite some attempts at research on the introduction and implementation of Quality Management Systems (QMS) as well as assessing their effects on organizational performance in SMEs, there is still a lack of systematic empirical evidence in comparison with large industries. This study has identified four critical success factors (CSFs) of QMS by employing exploratory and confirmatory factor analysis, and their effects on organizational performance were evaluated utilizing Structural Equation Modeling (SEM). In addition, direct and indirect effects of four dimensions of QMS on both financial and non-financial performances have been tested through the path model to obtain more precise results. The findings of this study reveal that QMS has a positive effect on non-financial performance while there is a negative effect on financial performance. With a mediating effect on non-financial performance, QMS has a positive effect on financial performance. The findings also confirmed the significant relationship between non-financial and financial performance.