The Impact of Total Quality Management with an Emphasis on Customer Orientation and Continuous Improvement on the Competitiveness of Nanotechnology Industries (A Case Study of Small and Medium-Sized Enterprises (SMEs))

Abstract

The purpose of this study was to investigate the relationship between Total Quality Management (TQM) practices and the competitiveness of nanotechnology industries. Using Structural Equation Modeling (SEM), the study examined the causal relationships among Total Quality Management, customer orientation, continuous improvement, and competitiveness. The statistical population consisted of all manufacturing and service companies operating in the field of designing, producing, and distributing textile products across the country. The sample size was determined using Cochran’s formula and a simple random sampling method. A total of 500 questionnaires were distributed, and after excluding incomplete responses, data from 185 companies were analyzed, indicating a high level of reliability of the findings at the company level. Total Quality Management (TQM), based on the models proposed by Suciati et al. (2024) and Sun et al. (2022), was measured across five main dimensions, including leadership and top management support, employee training and participation, information and learning, process management, and customer focus, through 21 indicators. TQM performance from the perspective of customer orientation and continuous improvement was assessed using the models of Permana et al. (2019) and Megirang et al. (2023) through 10 indicators. Competitiveness was measured using the questionnaires developed by Perez-Brito and Bojorquez Zapata (2017) and Kafetzopoulos et al. (2015), across two dimensions of domestic and international competitiveness through 14 indicators. The reliability of the instrument was evaluated using Cronbach’s alpha coefficient, and the results confirmed the acceptable reliability of the questionnaire. Responses for all variables were recorded using a five-point Likert scale. The complex relationships among latent variables and the hypothesis testing process were analyzed using the advanced statistical technique of Structural Equation Modeling (SEM) to accurately examine both direct and indirect effects of the factors. The results indicated that all hypotheses exhibited positive and significant relationships. Customer orientation, continuous improvement, and competitiveness independently affected Total Quality Management. The strongest relationship was related to the effect of continuous improvement (0.46), while the weakest relationship was associated with the effect of competitiveness (0.34) on Total Quality Management. Furthermore, competitiveness, as the core variable, had a direct effect on customer orientation and continuous improvement. The findings suggest that integrating quality principles can contribute to operational excellence, process innovation, and sustainable growth in fields where product precision and reliability are critical.