Research Article: 2021 Vol: 25 Issue: 3
Yacoub Hamdan, Al-Ahliyya Amman University,
Ahmad Fathi Alheet, Al-Ahliyya Amman University
The rise in global warming influences people and corporations to act more responsibility to undertake activities with respect to conservatism and sustainable development to save the planet Earth for future generations to come. This thought has given rise to study and thus implement the practices of Corporate Social Responsibility (CSR), Corporate Green Performance (CGP) and lastly Total Quality Management (TQM). According to past literature, these concepts, when applied effectively in a practical business environment, overlap each other and run simultaneously. The study evaluates the impact of TQM on CGP while considering CSR as a mediating variable. Results of the study reveal a significant mediating effect of CSR in the relationship between TQM and CGP.
Total Quality Management, TQM, Corporate Social Responsibility, Corporate Green Performance
Environment degradation and climate change have become one of the most ominous threats facing the existence of the planet. Scientists have estimated that the global GDP faces a loses of up to 10% annually (Kompas et al., 2018). Hence, collective actions are required; these actions should be initiated by the organizations that are most responsible for creating such a crisis, i.e. corporations. According to the study of Hope et al. (2015), companies are the biggest contributor to pollution on land, water and air. However, the crisis has also evoked preventive measures, especially among the commercial entities. Corporate Social Responsibility (CSR) refers to the activities of a firm to adopt alternative and sustainable ways of business operations that do not affect or harm the environment. The increased awareness among the citizens about the environmental hazards is pushing the manufacturers away from the conventional practices of burning fossil fuels, cutting of trees or dumping the toxic waste in the water bodies. As a result, companies, that have incorporated green practices in its marketing and are fully committed to the cause of saving the planet, are resonating closely with the aspirations of its target market, which is helping them to break the clutter and gain a competitive edge.
Moving forward, Total Quality Management (TQM), is defined as a management approach in which organizations continuously work on detecting, improving and eliminating any errors from its operational cycle to improve the overall quality of the produced output (Mehralian et al., 2017). The approach requires employees, from the low-level workers to the high-end executives, including the processes involving manufacturing, supplying, selling etc., to be in line with the company’s goal of achieving a superior and flawless quality product. When studied under the context of CSR, TQM implies striking a balance between people, environment and organization’s goal and objectives. CSR doesn’t reject the notion that business exists for profits, but it takes into account the state of the ecology the firm operates in and induces a sense of responsibility and ownership to work for its repairment. Similarly, according to Chen and Chen (2019), Corporate Green Performance (CGP), forms a link between the environmental priorities of an organization with the everyday practices and operations of the organizations such as employee learning and development or managing overall growth. Moreover, CGP also entails defining, measuring and rewarding the performance of an individual, process or organization in terms of its contribution towards making environment sustainable. This novice approach also calls for introducing new metrics and changing the behaviour of the employees and consumers by inducing the importance of renewed and recycled product.
So, to sum up, if the CGP is managed through the TQM style by initiating more and more CSR activities that comply to achieve a healthier environment, each of the components of an organization can contribute positively not only to the ecology but also in increasing the desirability of the firm and thus will be discussed in the subsequent study. Therefore, the study aims to explore:
1. What is the impact of TQM on CGP?
2. Does CSR mediate the link between TQM and CGP?
Total Quality Management
In light of the growing concern of reconciling the firm’s operations with safe environmental practices, TQM is a tool that can help organizations achieve a CGP. TQM refers to the management philosophy that aims to achieve an immaculate set of operations for a specific organization. It can be incorporated in various operations ranging from recruitment, training, supply chain management etc. (Escrig-Tena et al., 2018). Researchers have suggested using TQM principles to look after the environmental concerns of an organization is a way to employ and retain top talent with top performance (Kaur et al., 2018). The rationale behind this premise lies in the explanation that employees who understand the need for a sustainable climate are likely to be more informed, more considerate and more aware of the issues pertaining to the success of a workplace in the 21st century. Also, CGP can only be managed in the long run if the firm has enough competencies in its employees who can stand up to the challenge and deliver on the promise to be more environmentally friendly. Similar to the aforementioned research, according to (Honarpour et al., 2018), on the job training, which is the fundamental component of TQM, benefits the CGP in more than one way. These training and orientations that the employer conduct is a way to induct an individual into the organizational values and ethos. Once indoctrinated with the environmental concerns and its precautions, CGP can be easily achieved. Furthermore, TQM method can also be employed in determining the consumer strategy (Shafiq et al., 2019). Given that the customer’s needs are more environmentally friendly and challenging than ever before, one way to achieve full customer satisfaction is through a continuous process of improvement of products and services. The use of TQM in designing products does not only guarantee customer satisfaction but retention as well. Although TQM is primarily measured by the financial performance or market size of the firm, in lieu of CGP, it is calculated by the degree of success the organization has inculcated safe environmental practices in its daily business operations. As suggested by Abbas (2020), the incorporation of TQM in the waste management system will also affect CGP. For large scale manufacturers, tons of waste is generated every day. Because most of it is usually toxic or contain radioactive substances, dumping it in the landfills can result in a mass level disaster. If the same activity is done under the umbrella of TQM, then the management along with the workforce will work together to devise an elaborative plan of generating, collecting, storing, transporting, dumping etc. of waste and with such an action plan, CGP will receive a great hike.
Moreover, as per Prajogo (2016), Quality Management (QM) and green innovation are two of the brightest methods to achieve a competitive edge; however, the nature of the relationship that exists between the two is inconclusive. In this regard, we mainly have two schools of thought. The first group asserts that due to the positive contributions of both factors in the overall health of the environment, organization and customers, they have a direct relation (Siva et al., 2016). The mentioned thought has its foundation from the perception that quality management itself refers to the standard or the grade of the product and it cannot be QM until and unless it is made up of environmentally friendly materials. In this way, the researchers mentioned above link TQM and CGP as one and the same.
On the flip side, according to Castillo-Rojas et al. (2012), TQM managers do not involve themselves actively with the lower workers or with the processes involved in manufacturing, delivering or scrapping of the bi-products. As a result, TQM encourages a bureaucratic style of management in which executives define the best practices from their desk. This causes a communication and performance gap for the workers who find it increasingly difficult to comply with the new rules. Similarly, initiating a TQM process creates uneasiness and nervousness among the employees. They feel their work performance was not up to the mark, and consequently, the company will be introducing methods of surveillance and monitoring. Moreover, it would require the labour to adhere to extra precautions and a new set of rules. As for the large organizations, logical flow of orders and rules take time to pass through the hierarchy and reach the concerning staff. As a result, there will be lapses, non-coordination and confusions among different teams.
Another view that establishes a negative relation between TQM and CGP is the materialistic approach. Since the incorporation of QM in every aspect of the organization must be aligned and perfectly synchronized, organizations must fulfil the required capacity and invest in such an integrated system (Ghobadian & Hopkins, 2017). However, the cost of a 3600 TQM software will not fall within the budget, and even if it is installed, the maintenance and efficiency do not come cheap either. Due to incurrence of such heavy cost only in TQM installation, will take away the focus and budget for the main objective that was CGP.
Corporate Green Performance
Researchers like Grinevich et al. (2008), generally perceive CGP as a product of increased pressure that arises out of environmental concerns. Other researchers like Kemp and Never (2017) are of the view that CGP usually involves the recycling of waste, using sustainable products in manufacturing, planting trees against a set amount of emissions and decrease in pollution or carbon emissions. Once such practices are at the epicentre of the organization, then it can gauge the performance of the organization and departments or individuals within, in terms of the positive contribution towards environment.
According to Arulrajah et al. (2016), CGP is one effective way of employee retention and job satisfaction. Because degradation of the environment is a phenomenon that affects humans irrespective of race, religion or creed, the exercises to outlive the natural calamities is generally well-received by both the employees and the consumers. The researchers have also suggested making CGP a mandatory step in the recruitment and selection of the employees. If such unique practices are also involved in Human Resource Management (HRM), then only the organization can be said to be operated on the principles of TQM implemented in CGP.
Green performance of a firm can be manifold, i.e. it can be used in its products, processes, marketing and organizations. As per Dangelico & Pujari (2010), CGP in product manufacturing means updating the existing product or creating a new one from scratch. This can be well understood with the advent of electric cars. In such scenarios, CGP with respect to its product not only offered a viable alternative to the burning of fossil fuels and producing carbon dioxide that is damaging the ozone layers but the electric cars actually revolutionized the whole automobile industry (Onat et al., 2017). This environmentally friendly approach can be adopted in any industry or product, and if a sustainable solution is devised that performs the same function as the previous product, but in return, it does not harm the ecology, the product and brand can be an instant hit, appropriately rewarding the environment-conscious manufacturers.
CGP also has an effect on the production cost. Because raw materials are scarce and expensive, it can greatly reduce the cost of acquiring through the use of recycling (Salim et al., 2019). Just by simply going through a cleansing process or employing environmentally friendly products while packaging, it can not only improve the green performance but also create a competitive edge by inciting brand equity in the eyes of the customers. However, the most remarkable achievement of CGP is its relation to growth (Nwobodo-Anyadiegwu & Mbohwa, 2017). Researchers argue that for every product that is being developed, an alternate and more sustainable version can be introduced which then has the capacity to render the whole industry irrelevant. For such entrepreneurs, climate change is a strategic opportunity for creating a blue ocean. This approach has also opened the flood gates of research and development. Companies are hiring scientists and engineers to devise green products for them and commissioning the school students to draft research papers along such lines.
Corporate Social Responsibility
In the contemporary era, CSR is referred to as corporate social opportunity, responsible business, corporate citizenship and corporate responsibility). It is an idea whereby companies consider the society’s interest by taking responsibility for their activities and its impact on consumers, shareholders, employees, suppliers, communities and also on the environment. This responsibility illustrates that the companies need to take voluntary initiatives and comply with legislation to enhance the overall well-being of their families, employees, local community and as well as the entire society. CSR has been comprehensively discussed and elaborated by the researchers; however, Kolb (2018) viewed CSR as a strategy that firms or corporations conduct their businesses in many that is socially friendly and ethical. According to Brinkmann and Peattie (2008), CSR is referred to as the commitment of organizations to make a positive impact on their employees and other stakeholders, whereas reducing its adverse impact on society. In addition, Mugova & Sachs (2019) argued that CSR might comprise of comprehensive activities like a socially sensitive investment, working in collaboration with communities, developing relationships with families, customers and employees and involving in programs for environmental development, sustainability and conservation.
On the contrary, the implementation of CSR is not only essential to improving the image of the organization in the market; rather, it also helps to improve their business performance. In this regard, Maldonado-Guzman et al. (2016), concluded that the ethical responsibility of companies enables them to gain a better and improved level of business performance. According to the study of Porter & Kramer (2006), CSR’s implementation in organizations is pretty helpful in accomplishing better results, particularly in terms of performance and profitability. Hence, it is significant that organizations implement CSR-related activities that enable them to enhance their social responsibility. In addition to this, Bernstein (2010) discussed that organizations need to bring into line their interest with CSR, as it will help to develop long-term ties with their customers.
Basuony et al. (2014) have examined the association between the financial performance of the company and corporate social performance (CSP). The outcome of the research reveals a significantly positive link between profitability and CSP. The research backs the opinion that the company’s profitability encourages or enables executives to implement strategies that enhances the level of CSR. However, on the other hand, the implementation of CSR in the organization is also a major concern, as it is linked with several other factors. For example, Oh, Hong and Hwang (2013) analyzed various factors that encourage an organization to implement CSR. It includes the willingness of leaders to conduct humane activities, voluntary involvement of the employees, active communication and discussion in the organization, employee satisfaction and financial capacity of the organization.
TQM, CSR and CGP
In the present-day scenario, TQM has become an increasingly growing need for corporations. The increasing social concerns have forced organizations to consider evolutionary changes in quality, particularly those who plan towards excellence (Nogueiro et al., 2011). TQM and CSR hold similar philosophical origin and the principles they promote reveal significant overlap. Despite having a difference between TQM and CSR, there are several overlapping elements between the two.
The relationship between TQM and CSR is not new, Ghobadian et al. (2007) discussed that the purpose of quality movement is to allow companies to deliver premium and durable quality products, at minimum costs, in quickest time and in a way that focuses on work satisfaction, human dignity and long-term trust between the stakeholders and the company. TQM promotes the significance of considering the stakeholder’s interest and has a strong ethical dimension as contrary to the interest of the owners. Therefore, long-term and strong correspondence exists between CSR and TQM (Ghobadian et al., 2007). Furthermore, the association between social responsibility, safety, health, environment and quality is increasingly growing concerns for the organizations. CSR and TQM can help the organization to address these concerns properly. Besides, TQM can be applied as an accelerator for the flow of CSR.
According to Khurshid et al. (2018), the significance of CSR and TQM integration is necessary because organizations face pressure from customers to provide premium quality services and products, and also the stakeholders such as society, employees and the local community demand the organizations to be just and responsible and committed. Hence, profit is generated by organizations for its various stakeholders through high-quality products in a way that emphasizes on employee satisfaction and ensures environmental sustainability. In respect to the relationship between TQM and CGP, and mediating role of CSR between the two variables, Abbas (2020) has found a significant positive impact of TQM on CGP, indicating that TQM increasing the capabilities of organization to accomplish green performance goals. A significant and positive impact on CSR was also observed in the findings. Lastly, CSR was identified as a fractional mediator in the association between CGP and TQM. The overall analysis of the study reflected that TQM is significant for all organization for CGP; nevertheless, the levels of CSR may differ. Also, the assistance of the government is needed for organizations to accomplish CGP objectives.
Research Approach and Design
The research approach applied for the present study is quantitative. The quantitative study involves the analysis of the numerical data to establish statistical evidence (Saunders, 2011). In this research study, a quantitative approach is preferred over a qualitative study (which is narrative in nature), to address the causal link between TQM and CGP, along with the mediation effect of CSR. However, this approach does not allow gaining in-depth knowledge of a certain topic, such as the reasons for the trends in responses. On the basis of the approach, the study relies on descriptive and correlation design. The descriptive design involves survey, while correlation design focuses on evaluation relationships between variables.
Sampling and Data Collection
Sampling is the process of identifying respondents for data collection from the target population. The sampling type used in the present study is a non-probability sampling. The precise type of sampling used is convenience. Convenience sampling is used as it enables accessibility and eases the data collection process for the researcher. Probability sampling is the other type, which provides the respondents from the target population with an equal chance of being selected. Probability sampling was not selected as there were time constraints, and the data collection process could become tedious. In this study, data is collected from 101 employees working in the manufacturing sector via a survey questionnaire, measured on a 5-point Likert scale. Initially, 150 employees were targeted; however, complete responses were received from 101 employees only.
The researcher avoids plagiarism and maintains the integrity and credibility of the study. The respondents were fully informed about the study and what it seeks to obtain. Moreover, consent was taken from the respondents regarding filling the questionnaire and the freedom to abandon the process was provided. Furthermore, no private information was obtained from the respondents, and no data was given to any third-party use.
The study aims to find the impact of TQM on CGP, keeping CSR as a mediating role. There are further subdivisions in total quality management, which are considered in this analysis. These include leadership, strategic planning, customer service, process management, human resource management and information and analysis.
The Table 1 below shows the results of the descriptive statistics obtained from the data.
|Table 1 Descriptive Statistics|
|Leadership||Encouragement of new ideas||101||2||5||4.6931||0.57866|
|Strategic Planning||Clarity of Objectives||101||1||5||4.5743||0.79179|
|Customer Service||Regular update to customers||101||1||5||4.5248||0.8555|
|Relationship between customers and organization||101||2||5||4.6436||0.62585|
|Process Management||Access to technology||101||2||5||4.5347||0.76895|
|Human Resource Management||Recruitment process||101||2||5||4.5842||0.76508|
|Training and development sessions||101||2||5||4.5149||0.79516|
|Information and analysis||Policies||101||2||5||4.5941||0.68086|
|Access to data||101||2||5||4.6337||0.73106|
|Standards of products||101||1||5||4||1.15758|
|CGP||Environmentally friendly products||101||1||5||3.9208||1.16347|
|Access to infrastructure||101||1||5||3.9406||1.15604|
|Does not include Toxic material in products||101||1||5||4.2871||0.94166|
|Valid N (listwise)||101|
Our sample had a total of 101 observations by conducting surveys. On average, most people agreed that the encouragement of new ideas and cultural diversity have a positive impact on corporate green performance. In the case of strategic planning, variation in data was observed. As a result, the standard shown is high. Most of the people regard strategic planning as a significant factor. In the cases of process management, human resource management and Information analysis, on average people agree that it leads to cooperate green performance with a standard deviation ranging from 0.68 to 0.81. It was observed there was relatively a large variation in data of CSR. Some individuals strongly disagreed that CSR has a positive impact on corporate green performance.
To observe the count, frequency table was obtained for each demographic. The demographics consisted of organization type, nature of the business, duration of business. The organization type comprised of individual ownership, partnership, private limited company, public limited company, family-owned business and government organization (Table 2).
|Table 2 Organization Type|
|Frequency||Percent||Valid Percent||Cumulative Percent|
|Private Limited Company||15||14.9||14.9||72.3|
|Public Limited Company||21||20.8||20.8||93.1|
|Family Owned Business||6||5.9||5.9||99|
Most of the responses were obtained from partnership organizations comprising of approximately 39% of responses from organization type. Sole ownership, Private Limited Company and Public Limited Company had significant responses of 18.8%, 15% and 21% respectively. It was observed that family-owned business and government organization gave the least responses of 6% and 1% respectively.
The Table 3 above gives the frequency of responses through nature of business. Exports had the most responses of 44% followed by food sector and pharmaceutical with 19% and 14% of responses respectively. While manufacturing and agricultural businesses are each only 10% of the sample.
|Table 3 Nature of Business|
|Nature of Business|
|Frequency||Percent||Valid Percent||Cumulative Percent|
The above Table 4 provides information about how long the organization has been in existence. About 20% of the organizations were relatively new with an age of less than one year. 35% of the organizations were between five and one years. It was observed that only one company had an experience of more than 19 years.
|Table 4 Company’s Age|
|For how long has your company been in operations?|
|Frequency||Percent||Valid Percent||Cumulative Percent|
|Valid||Less than a
|Between 1 to 5
|Between 6 to 10 years||10||9.9||9.9||63.4|
|Between 11 to 15 years||20||19.8||19.8||83.2|
|Between 16 to 19 years||16||15.8||15.8||99|
than 19 years
In the study, a correlation matrix was obtained to find if there is any correlation between the independent variables and the dependent variable. The correlation also helps in finding a correlation between the two variables in our case TQM and CSR, to avoid the problem of multicollinearity. The table below shows the results obtained from the correlation matrix (Table 5).
|Table 5 Correlation|
|*. Correlation is significant at the 0.05 level (2-tailed).|
|**. Correlation is significant at the 0.01 level (2- tailed).|
It was observed that TQM and CSR had a positive correlation with CGP. TQM was considered significant since the p-value was less than the level of significance (5%). CSR was significant at 1% and 5% level of significance. There was no correlation between the two independent variables, and the correlation value 0.154 indicates a low level of correlation. It reveals that there was no problem with multicollinearity (Table 6).
|Table 6 Model Summary|
|Model||R||R Square||Adjusted R Square||Std. Error of the
|a. Predictors: (Constant), CSR, TQM|
A four-step regression is conducted to find the mediation effect of CSR. Since the pvalue of TQM is no longer significant, there is a full mediation effect of CSR. Furthermore, only 27.9% of the model is explained by the independent variables.
To check the overall significance of the model, ANOVA test is conducted (Table 7). The result in the above table suggests, the model is overall significant. The model is overall significant at 1%, 5% and 10%. There is also a combined effect of CSR and TQM on CGP, which is indicated by the F value.
|Table 7 Anova|
|Model||Sum of Squares||df||Mean Square||F||Sig.|
|a. Dependent Variable: CGP|
|b. Predictors: (Constant), CSR, TQM|
From the above Table 8, it can be observed; there is a positive relation between TQM and CGP and also between CSR and CGP. Value of 0.296 indicates, if TQM is increased by 1 unit, CGP will increase by 0.296. Similarly, a value of 0.680 tells, if CSR is increased by one unit, CGP will increase by 0.680. CSR is also found to be statistically significant since the p-value of CSR is less than the level of significance (5%). However, since TQM is our main variable, the value of 0.156 does not regard TQM as insignificant. As mentioned above, it indicates a full mediation effect of CSR on CGP.
|Table 8 Coefficients|
|Model||Unstandardized Coefficients||Standardized Coefficients||t||Sig.|
|a. Dependent Variable: CGP|
From our results, it can be stated that TQM has a significantly positive impact on CGP by the interpretation of Beta and p-values. The findings relate to the study of Siva et al. (2016) in which they found a significant impact of TQM on CGP. However, the results contradict with the findings of Castillo-Rojas et al., (2012) in which he concluded that the setup of TQM is costly, as a result, it will tend to take away the focus and budget for the CGP.
Effective implementation of TQM depends on leadership, commitment, training, technical knowledge which were a major factor towards a positive relationship between TQM and CGP. According to Honarpour, Jusoh and Nor (2018), training sessions is a major factor of TQM, which, as a result, affects CGP. These sessions help the employees get more motivated and improve their skills.
The study indicates that there was a significant impact of TQM on CSR with Beta value of 0.266. The findings are supporting the conclusion drawn by Kang et al. (2015) in which he states that a well-organized TQM program increases an organization’s ability for CSR activities. In order to find the mediation effect of CSR, the study first found the direct and indirect effect on CGP. The direct effect gave Beta and p-value of 0.477 and 0.045, respectively. By controlling the CSR, the impact of TQM on CGP reduced, giving the Beta and p-value of 0.296 and 0.156. The findings contradict with the findings of Awang (2016) in which he states that there is a partial mediation effect of CSR, i.e. CSR accounts for some of the relationships between TQM and CSR.
As organizations aim to take responsibility of their actions over social, environmental, communal and ethical groups with the immense rise in the values of CSR that goes beyond their contractual obligations, other such relational fields too upswing. One of such filed includes Total Quality Management (TQM) that can be defined as an approach to seek continuous improvement in business processes at all levels, within all distinct functional departments. When these two fields are integrated into everyday business management, the emphasis is paid over balancing stakeholders, environment, and institutional goals. The two fields while holding dissimilar definitions, when implicated often run parallel to one another. It is believed that as TQM focuses upon enhancing the quality, whether in terms of product, processes or safety and health, CSR holds similar philosophical background that is, highlighting the interests of stakeholders. In other words, it can be said that TQM is one of the many methods to put CSR in effect. In theory, these fields give rise to another similar discipline recalled as Corporate Green Performance (CGP). This particular discipline aims to establish a bridge between the environmental obligations of firms along with responsibilities towards the growth of its people (employees) and organization over a sustainable scale. When put differently, CGP aims to measure the performance of its people, processes and operations in terms of the contributions towards the environment. Hence as all three terms appear to be interrelated and work simultaneously within more responsible corporations, the study aims to assess the interdependence and relationship between these three in practical business environments. Employing a correlational and descriptive design, the results conclude that TQM significantly impacts CGP. This is because to implement TQM effectively, factors such as leadership, motivation and commitment, training and development must be in place to establish a direct relationship with CGP. Results also show the significant mediating impact of CSR that paves the way to carry out CSR activities.
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