The aim of this paper is to explore the role of Quality Management (QM) theory and practice using a contingency theory perspective. The study is grounded in the role of QM in improving strategic alignment within Small and Medium Sized Enterprises (SMEs) using Contingency Theory rather than adopting best practice approaches. An inductive theory building research methodology was used involving multiple case analyses of five SMEs, involving repeat 2 interviews (n=45), focus groups (n=5) and document analysis. From the findings, it was found that Contingency Variables (strategy, culture, lifecycle and customer focus) and their respective typologies were found to interact with QM practices in helping to shape strategic alignment between the SMEs and their environments. This shaping process based on contingency approaches occurred in a manner unique to each SME and their respective environments rather than in an overarching best practice manner.
Contingency theory suggests that “organisational effectiveness results from fitting characteristics of the organisation…..to contingencies that reflect the situation of the organisation” (Donaldson, 2001, p 1). Typical contingencies (known as contingency variables, Langfield-Smith, 2007) including for example strategy (O’Regan and Ghobadian, 2006) and culture (Sousa and Voss, 2008). From this perspective organisations seek to improve their performance by improving fit and alignment with their defined set of contingency variables and hence the changing external environment. This process of fit is viewed as a dynamic and ongoing process especially in fast moving business environments (Daft et al, 2010; Donaldson, 2006; Burns and Stalker, 1961). Contingency theory is especially useful when there is a lack of an established overarching theoretical framework (Simpson et al., 2012; De Clercq et al., 2014) with an emphasis on contextually grounded approaches based on contingency fit rather than a single best way to manage an organisation (Donaldson, 2001).
This exploratory study seeks to make a contribution to Quality Management (QM) using a contingency theory perspective applied to a contemporary business issue. The business issue within which to ground the contingency theory perspective on QM is that achieving and 3 maintaining strategic alignment within Small and Medium Sized Enterprises (SMEs) in rapidly changing business environments. Corley and Gioia (2011) and Ridder et al. (2014) suggest exploratory theory building studies should commence their contribution to theory by identifying a key problem in organisational practice that is both current and which requires future development. Corley and Gioia (2011) refer to this approach as theory focusing on the pragmatic aspects of a problem or phenomena, which in this paper is the role of QM in relation to strategic alignment in SMEs. The issue of strategic alignment is a challenge for SMEs in fast changing markets (Simpson et al., 2012; Raymond and St-Pierre, 2013; Bagnoli and Giachetti, 2015). Moreover, Ng et al (2015) suggest the need for further research into aligning QM efforts with the external environment. Rauniar et al. (2008:133) defines strategic alignment as “the extent to which a firm’s overall business, product, and technology guide the product development contents and processes”. Atrophy of strategic alignment in SMEs can lead to a lack of market and customer focus, and loss of competitiveness (Brown et al., 2007; Garg and Goyal, 2012; Bagnoli and Giachetti, 2015), failed product/service launches with delayed time to market (Simpson et al., 2012), increased technology misalignment problems with higher costs due to misused technology resources (Kock and Strotmann, 2006) and lack of agility in key markets (Alpkan et al., 2007). Moreover, the default representation of SMEs as scalar versions of large organisations or “little big firms” (Tilley, 2000:33) oversimplifies the contextual issues driving strategic alignment in SMEs. For example, some QM studies on SMEs refer to Quality Management Systems (QMS) and fail to recognise the informal and broader approaches to QM practices used to drive alignment within SMEs as noted by Garengo et al. (2005) and Bititci et al. (2012). Hence, we focus on QM practices and their effect on strategic alignment in SMEs, which can be viewed as informal versions of QMSs.
The lack of an overarching theoretical framework addressing the role of QM practices in strategic alignment has led to the emergence of contingency based approaches (Jusoh and Parnell, 2008; Sousa and Voss, 2008; Simpson et al., 2012; De Clercq et al., 2014). Here, QM practices that drive or orchestrate strategic alignment are viewed as contingent upon a range of contingency variables (CVs). This contextual approach leads to grounded studies rather than prescriptive best practice solutions in QM theory and practice, where Srinivasan and Bryan (2014) suggest that best practice and rule based approaches to QM are not as effective as more contextually grounded approaches which address quality culture. Similarly, Dubey and Gunasekaran (2015) refer to this approach in exploring the more people orientated aspects of QM. Jayaram et al (2010) suggest the use of contingency theory in contrast to universalist approaches to QM. We suggest that the contingency theory approach is appropriate in exploring how QM practices in SMEs can be used to improve strategic alignment as defined by Rauniar et al., (2008). Accordingly, the aim of the paper is to explore the role of QM practices in improving strategic alignment within SMEs using a contingency theory approach. To focus the study, service sector SMEs have been selected, where Gunaselaran and Ngal’s (2012) review suggest that operations management has an increasing service focus. This selection helps in avoiding the dominance of large manufacturing operating assumptions present in manufacturing related SME studies (Hultman and Shaw, 2003; Garengo and Biazzo, 2013). It also addresses the paucity of studies on strategic alignment in service sector SMEs.
The paper is structured as follows; first, we consider Strategic Alignment, QM practices and Contingency theory. This section is followed by the formulation of our research questions and methodology adopted. Next, the results and discussion section further develops the conceptual framework and the development of empirically grounded propositions. Finally, the paper 5 concludes with the contribution to theory in relation to QM and the implications for practice and recommendations for further research.
Strategic Alignment, QM practices and Contingency theory
Having identified the SME strategic alignment problem or phenomena as the starting point of the QM theory building study, there is a need for contingency-based theory building (referred to as stage 1) to show how QM practices can influence strategic alignment. This approach is consistent with Gioia and Pitre’s (1990) definition of theory as a statement of concepts and their interrelationships that show how, or why, a phenomenon occurs. Contingency theory has emerged as a lens for exploring the links between strategic alignment and QM practices (Garg and Goyal, 2012; Raymond and St-Pierre, 2013) and first requires the identification of a number of contingency factors or variables (CVs). These CVs can only be changed in the long term and with considerable effort (Sousa and Voss, 2008; Raymond and St-Pierre, 2013) and are related to QM practices through a process of dynamic alignment (Johnston and Pongatichat, 2008) as shown in the initial conceptual framework (Figure 1)
Figure 1 about here
Figure 1 shows the need to identify a set of CVs that are that are appropriate to the context of the phenomena being explored as suggested by Raymond and St-Pierre (2013) and LangfieldSmith (1997). Second, each CV is represented by an appropriate typology (Figure 1). Third, changes to the CVs (e.g. external market or technology changes) as represented by these typologies require the need for dynamic alignment using orchestrating QM practices as shown in Figure 1. The underlying assumption of Figure 1 is that CVs and their typologies need to be context specific (Johnston and Pongarichat, 2008; Raymond and St-Pierre, 2013; De Clercq et al., 2014) and that bundles of QM practices should be used in the alignment process as shown 6 in Figure 1 (Raymond and Croteau, 2009). Hence, the concept of QM “off-the-shelf” universal best practices that are considered relatively independent of context, is questioned (Sousa and Voss, 2008; Sousa and Aspinwall, 2010). Somewhat counter-intuitively for innately resource limited SMEs, it is suggested that the development of QM practices in driving strategic alignment is idiosyncratic and contextual (Garengo et al., 2005; Bititci et al., 2006; Raymond and St-Pierre, 2013). QM practices in this SME context are informal versions of QMSs based on the application of QMS models which include inter alia models such as ISO 9000, the Business Excellence Model, Baldrige Model, Lean Value Streaming, and Benchmarking amongst others.