Over the last few decades, some researchers have analysed the role of total quality management (TQM) as a precursor of innovation. However, the relationship between TQM and organisational innovation remains unclear and contradictory. The purpose of this paper is to provide a framework intended to clarify the complex effect that the implementation of a TQM system has on organisational innovation, where market orientation (MO) and knowledge management (KM) play a mediator role.
Data in this study come from a survey of 706 Spanish CEOs. The results were analysed employing structural equation modelling to determine how TQM, MO and KM influence innovation.
The results of the empirical study show that there is a curvilinear effect between TQM and organisational innovation. Both MO and KM perspectives play a mediator role between TQM and innovation.
Managers should be aware that management based on TQM help organisations not only to get higher quality but also to be market oriented and better manage their knowledge; what will help them to develop innovations.
This research sheds light on the question of the relationship between TQM and organisational innovation that has received mixed conclusions in the literature. There is evidence in this research that the relationship between TQM and innovation responds to a curvilinear relationship, where high levels of TQM favour a more than proportionate effect on the development of innovation. It also clarifies the mechanisms by which this effect is produced, with MO and KM as mediator variables.
