The Effect of TQM and R&D Capability on Innovation Performance

Abstract

R&D capability, as a central component of the technological innovation activities of firms and as the most important intangible innovation expenditure (Guan et al., 2006), indicates the ability to attain new technology through internal R&D (Yam et al., forthcoming). Concurrently, organizations ought to improve their R&D capability for development and commercialization of new technologies, products and processes faster than their competitors. In a similar vein, in the contemporary management literature total quality management (TQM), emerges as a strategic weapon for the firms which has to be managed and implementation of which leads to a dynamic capability of the enterprises (Perdomo-Ortiz et al., 2009). Parallel to the calls made for organizations to become quality focused, organizations have also been urged by the researchers to become more innovative (Singh and Smith, 2004). Hence this study aims to develop a platform through which TQM and R&D capability complementarily influence innovation performance. Drawing on this framework the main purpose of this study is to evince the impact of R&D capability and TQM on innovation performance. Amid in this research agenda two partial gaps have been explored: First, although a robust relationship between TQM and innovation performance seems to be plausible in the literature, the gap embedded is the absence of a study examining the relationship of TQM and R&D capabilities. Second, little empirical evidence has so far been offered to support the positive relationship between these strategic weapons of the organization namely; TQM, R&D capability and innovation performance basing the argument on dynamic capabilities theory. In turn, this paper presents an empirical research which evaluates the co-alignment between TQM and R&D capability in enhancing the innovation performance of organizations. Consequently hypotheses are developed and tested via PLS analysis in which data are collected from 105 manufacturing firms in Turkey, and the findings are discussed.