Effects of Total Quality Management Practices on Financial and Operational Performance of Hospitals

Abstract

The Total Quality Management (TQM) system is known to have a beneficial impact on sustainability. This study aimed to elucidate the achievement of hospital sustainability by analyzing the relationship between the implementation of TQM practices (leadership of management, decision making, continuous improvement, customer focus, employee involvement, process management, and relations with suppliers), and their impact on the financial and operational performance of hospitals. The gathered data underwent analysis using structural equation modeling (SEM) to empirically investigate the impact of TQM methods on the financial and operational performance of hospitals. A total of 1069 surveys were completed in 6 privately-owned and 26 publicly-owned hospitals located in the Marmara region of Turkey. This study contributes significantly by addressing gaps in the existing literature. There is a lack of empirical research that has examined the potential correlation between TQM, operational success, and financial performance in both public and private hospitals. Especially in developing nations like Turkey, the focus is on the early phases of implementing TQM principles, with a primary emphasis on continuous improvement and sustainable performance. The results demonstrate that Total Quality Management (TQM) exerts a substantial impact on the financial and operational performance of hospitals in the service industry.