Integrating total quality management and management control systems: a systematic literature review and proposed integrative framework Open Access

This systematic literature review examines the intersection of total quality management (TQM) and management control systems (MCSs), exploring how their integration addresses contemporary organisational challenges and opportunities. The TQM–MCS nexus is increasingly significant as organisations navigate dynamic markets, technological advancements and customer expectations, yet research on their combined role remains fragmented. While TQM focuses on continuous improvement and embedding a culture of quality, MCS provides the tools and structures to guide, measure and sustain these efforts. By synthesising existing studies, this review proposes an integrative framework to clarify how TQM and MCS drive strategic and operational excellence, offering insights for scholars and practitioners.

The MCS [¹] literature indicates that adopting management innovations, such as TQM, transforms management practices and influences the MCS practices used to measure and manage their implementation (Fowler, 1999). For example, Kennedy and Widener (2008) and Banker et al. (1993) demonstrate how adopting new manufacturing practices such as TQM necessitates changes in performance reporting and creating a new control framework. Similarly, Teklay and Bobe (2023) emphasise the significance of aligning MCS changes with the TQM initiative to realise their benefits fully. Consequently, TQM has long attracted the attention of MCS research and practice. However, while the link between MCS and TQM has been acknowledged, there is a significant need to explore how MCS practices can more effectively support and enhance TQM efforts. This study aims to reinvigorate the academic discourse by providing a comprehensive review of the current state of research on this topic. In doing so, the review seeks to uncover patterns, gaps and emerging trends in the MCS–TQM relationship, to inform and enhance future practices in TQM.

Following Hoque’s (2014) approach to reviewing the Balanced Scorecard (BSC) literature, this paper reviews TQM studies published in accounting and business and management journals. This approach aims to provide a more comprehensive review of the studies published in both fields. To achieve our research objective, we reviewed TQM studies published in top ranked 25 accounting and 49 business and management journals from 1985 to 2023. As elaborated in the methodology section, we used the same journals identified by Hoque (2014) [²]. Our search resulted in 40 accounting (see the full list of the articles in Supplementary Material 6) and 130 business and management articles (see the full list of the articles in Supplementary Material 7). The results of the review are presented in two parts. The first part presents the results by frequency distribution of the articles by journals, topics, settings, theories, methods and primary data analysis and techniques. The second part identifies and analyses major themes that emerged from the review to determine what is known and what needs to be known. The review identifies three key themes: performance measures, TQM’s impact on performanceand the cost of quality (COQ). The assumption that TQM universally enhances firm performance is challenged, revealing that contextual factors influence its effect. Further, the review shows that the TQM–MCS link remains understudied in the service, public sectors and less developed countries (LDCs).

This systematic literature review makes significant contributions to the TQM and MCS literature and practice. It also contributes to accounting and organisational change literature. Further, it offers an integrative framework linking the TQM principles with MCS that can be used in future studies.

The remainder of the paper is organised as follows. An overview of TQM is provided in Section 2, followed by an outline of the review approach in Section 3. Section 4 reviews the accounting articles on TQM, while the business and management articles are covered in Section 5. Thematic analyses of the findings are presented in Section 6 for accounting and Section 7 for business and management. Section 8 discusses the studies, and Section 9 concludes the paper.

The initial concept of TQM originated in the 1950s through the works of its Western founding fathers – Deming, Juran, Feigenbaum and Crosby (ASQ, 2021), albeit Japan is acknowledged as the originating location. TQM has significantly evolved since, reshaping how organisations prioritise quality at the operational level. In the 1960s, a new strategy was adopted to change the focus of companies from “product-out” ideas, which reflect the interests of manufacturers, to the “market-in” approach, which concentrates on satisfying customer requirements. The adoption of TQM principles led to increased emphasis on “zero defects”, whereby quality management is handled by employees at every level, rather than by professional specialists (Ito, 1995).

Despite the initial conceptualisation of TQM by Western scholars, the adoption of TQM by Western firms had to wait until the 1980s. Before that, for Western firms, quality was not among the top three most important general management priorities, namely, management/cost control, growth and profitability. However, when the superior competitiveness of their Japanese counterparts was acknowledged (Chenhall, 1997; Johnson, 1994; Modell, 2009), quality made it to the top three, with the other two being profitability/satisfaction and cost management/cost control (Foster and Young, 1997).

TQM is characterised in the literature in various ways. It is widely recognised as the cornerstone of organisational excellence across industries (Abbas and Kumari, 2023; Kaplan, 1983). It refers to a set of concepts and tools aimed at improving individual, group and organisational performance (Hoque and Alam, 1999). It is an organisation-wide philosophy focusing on continuous enhancement of products, processes and services (Ittner and Larcker, 1995). When implemented successfully, it provides a competitive advantage (Yong and Wilkinson, 1999) by enhancing customer satisfaction through strong customer focus, employee participation and process management (Anderson and Rungtusanatham, 1994; Modell, 2009; Ittner and Larcker, 1995).

The implementation of TQM fosters a systematic approach to enhancing processes and outcomes, enabling organisations meet and exceed customer expectations (Abbas and Kumari, 2023; Dahlgaarda et al., 2019; Ittner and Larcker, 1997). Further, it improves the quality of products and processes, enhances efficiency and decreases waste (Chenhall, 1997). Crosby, one of the founders of quality management, estimated the reduction in the cost of poor quality could be as high as 25%–30% of the turnover in manufacturing organisations and 40%–50% of the direct operational costs in service organisations (Crosby, 1979). However, relatively recent estimates are modest, for example, a 3.9% of turnover in Finland-based organisations (Virtanen, 2000 cited in Malmi et al., 2004, p. 294).

The above studies show that TQM is more than operational practice. It drives innovations in accounting practices, integrates non-financial metrics and supports organisational transformation through improved cost management, performance measurement and strategic alignment. As Abbas and Kumari (2023) note, TQM is not only an operational framework but also a catalyst for significant organisational change.

The ongoing significance of TQM is reinforced by the dynamic nature of global markets, technological innovations and changing customer expectations. As organisations navigate a complex global marketplace, TQM provides a vital foundation for achieving sustained competitive advantage, emphasising continuous learning and adaptation for organisational resilience. Therefore, a systematic review of prior studies provides insights into knowledge already accumulated and uncovers areas that warrant further investigation, which subsequently contributes to both theory and practice.

We adopted the review approach used by Hoque (2014) in his study of the BSC because its objectives align closely with those of our current study (Alexandra and Lueg, 2014). Both studies aim to assess the status of research on two strategic management frameworks and practices that emerged around the same time, both considered innovations in strategic management over the past 40 years. The conceptual relationships between TQM and BSC have been well articulated in the literature (Hoque, 2003; Modell, 2009). For instance, Hoque (2003, p. 554) notes that “the key idea of both TQM and BSC is to synchronise strategy, vision, operations, and employees”. TQM and BSC are multidisciplinary subjects that appear in common accounting and management journals.

Adopting Hoque’s approach also contributes to a stream of literature review framework developed by Shields (1997), which has been used in other management accounting reviews (Chenhall and Smith, 2011; Hesford et al., 2009). Further, our approach aligns with the view that sustainable research or practice helps develop established knowledge (Shields, 2015) – specifically in methodology in this case.

We conducted searches in 25 leading accounting journals (listed in  Appendix 1) and 49 [⁴] leading business and management journals (listed in  Appendix 2) identified by Hoque (2014) [⁵]. Our review period spans from 1985 to 2023. We used the following terms and acronyms: “total quality management” OR “quality management practice” OR “quality management” OR “TQM” OR “QM” OR “management accounting innovations” OR “lean manufacturing” OR “lean production”. These terms were chosen because quality management is a common theme in these terms. Lean manufacturing and lean production were included, as they are considered elements of these management innovations. Thus, we included studies that were not exclusively on TQM but were part of the wider lean manufacturing and production concepts and practices (Kennedy and Widener, 2008).

To maximise our search results, we used the “OR” Boolean operator between the terms/acronyms, allowing our search engine to return results containing any of these terms. We placed the terms in double quotation marks for the search engine to recognise the full phrases, such as “total quality management”. Initially, we included all articles that met our search criteria. However, we further restricted our search to Document Type: Article, Publication Type: Academic Journal and Language: English. The journals were sourced from various databases, including Business Source Complete, Wiley Online Library, ProQuest, ScienceDirect and Taylor and Francis Online.

To assess the relevance of the articles identified in the initial searches, we first reviewed the titles, examined the keywords (labelled as “Subjects” as in Business Source Complete) and abstracts. When the titles, keywords and abstracts were insufficient for a decision, we downloaded the PDF files and read the introduction sections.

The first round of our search resulted in 75 accounting articles in 16 of the 25 journals published between 1990 and 2023 [⁶]. This review process narrowed it down to 40 relevant articles. Similarly, the first review of the 49 business and management journals yielded 209 articles in 30 of the 49 journals. To keep the analysis manageable and cognisant of journal space, we limited our focus to the seven journals that published the highest number of articles. This process resulted in a total of 130 articles, accounting for 62% of the 209 articles [⁷].

The results of the review are presented in two parts. The first part details the frequency distribution of articles by journals, topics, settings, theories, methods and primary data analysis techniques classified based on Hoque’s (2014) approach. Following the temporal bracketing approach, we used unequal temporal brackets, which segment periods based on significant shifts in the literature rather than equal time spans. Our study period spans 39 years (1985–2023), divided into the first 12 years (1985–1996) and the last 13 years (2011–2023) to reflect the emergence and maturity phases. The two seven-year periods in the middle (1997–2003 and 2004–2010) represent the prime development periods. This categorisation reflects distinct phases in the field’s evolution, including foundational development, thematic refinement and subsequent maturation. Equal intervals could obscure these critical shifts, whereas our approach ensures that each period captures a coherent and analytically meaningful phase of progression. The second part of the analysis identifies and analyses the major themes that emerged from the review to ascertain what is currently known and what further investigation is needed. Figure 1 depicts the literature review approach used in this study.

This section reviews 40 articles published in 16 of the 25 selected accounting journals ( Appendix 1) from 1985 to 2023. Of the 25 journals on our original list, 9 did not publish any article on TQM during the review period. The review is organised by the frequency of distribution of the articles by journals, research topics, research settings, theories, methods and primary data analysis techniques.

The frequency distribution of the articles is presented in Table 1, which shows that 14 articles were published during the emergence years, an equal number of articles (10 each) in the prime periods and only 6 during the maturation years. Thus, the number of articles on TQM published in the selected accounting journals has declined significantly in recent years. Further, Table 1 shows that the two premium management accounting journals – Management Accounting Research (Europe) and Journal of Management Accounting Research (the USA) – published almost a third of the articles during the study period. The remaining 14 journals published only one to four articles.

The 40 articles were classified into 11 topics, of which three topics dominated (25 of 40 articles) (Table 2). These topics are the adoption and implementation of TQM in diverse settings, the use of TQM and its relationships with strategies, reward systems, employee empowerment and the impact of the relationships on organisational performance and the use of TQM and performance measures, market competition and its impact on organisational performance. The focus on adoption and implementation is expected, in particular, in the introduction stage of TQM. Further, the review shows that the relationship between TQM and various components of MCSs has interested MCS researchers.

The research setting frequency distribution of the 40 TQM articles published in the selected accounting journals reveals the domination of the manufacturing sector and the Western countries in MCS–TQM research. As can be seen in Table 3, 15 of the 40 articles were in the manufacturing sector, while only three were in the public sector. The other sectors are also hugely underrepresented, with only two articles on the construction sector, one on a less developing country and one on SMEs. This finding is not surprising given that TQM was initially developed in the Japanese manufacturing sector and was primarily adopted in the manufacturing sector in the USA (Daniel and Reitsperger, 1994) and other Western countries.

We consider an article to have used a theory or theories, if the theory or theories are explicitly disclosed or identifiable by reading the papers. From the 40 articles reviewed, only 9 studies explicitly used theoretical frameworks (Table 4). Of the theories used, only contingency theory and institutional theory were used by more than one article. However, most of the articles (19 articles) did not use any specific theory but based their studies on various literature. However, a range of theoretical frameworks were also used, albeit by one or two articles, over the study period (e.g. critical analysis and diffusion literature). In summary, no specific theory dominates the accounting research in TQM during the study period.

Table 5 shows that a combination of case/field study (13 articles) and survey research (11 articles) methods account for most of the articles. The review further shows that analytical/conceptual, mixed methods, action research and archival were also used. Given the qualitative nature of TQM, it is not unexpected for the case/field research method to dominate.

Table 6 shows that more than half of the articles (22) used quantitative techniques, while 13 articles used a qualitative approach to analyse their data. The domination of the quantitative technique is inconsistent with our above finding given the operational nature of TQM and the high proportion of case/field research methods discussed above. On the other hand, 13 articles that used qualitative analysis tie in with the 13 case/field studies.

In this section, we present a review of the TQM articles published in the selected business and management journals. As outlined earlier, we focused on the top 49 business and management journals ( Appendix 2) identified by Hoque (2014, p. 51). We used the same search criteria as those used for the accounting studies (see the review approach section).

Our initial search yielded 209 articles (Table 7) in 30 of the 49 journals published over the study period. Two operations management journals published nearly one-third of the 209 articles (The International Journal of Operations and Production Management, 38 articles, followed by the Journal of Operations Management, 27 articles). Consistent with the accounting articles, only 26 articles were published in the most recent period (2011–2023) and 7 of the 30 journals published 130 articles, representing two-thirds of the 209 articles. Thus, to make the review manageable and cognisant of our target journal’s space restriction, we focus on these 130 articles for further analysis.

We categorise the 130 articles by 10 topics (Table 8). More than a third of the articles were generally on TQM or broadly on quality management (44 articles). The relationship between TQM and human resource management, organisational behaviour and organisational design was also widely studied. A good number of the articles focused on the impact of TQM on organisational performance (24 articles). As such, three topics dominated TQM research published in business and management journals (93 articles).

Manufacturing dominates (40 articles) the research settings in the business and management journals (Table 9). On the contrary, there were only three articles published on MNCs/SMEs over the review period. Regarding geographical distributions, almost all the publications were on developed countries, and only one article covered an LDC. Our review of articles published in both accounting and business and management journals suggests that TQM research predominantly focused on the manufacturing sector in developed countries.

Consistent with the accounting articles, the largest proportion of the TQM articles published in the business and management journals did not use any specific theoretical framework (51 articles) (Table 10). However, Table 10 also reveals that TQM frameworks/standards, such as the European Framework for Quality Management, and various TQM/QM models/perspectives were used by many studies. In summary, no one theory dominates the TQM research.

Table 11 presents the frequency of the articles by research methods. Survey research was the most used research method. About one-fifth of the articles were literature reviews. Qualitative research methods were used but to a small extent compared to the abovementioned methods.

Most (81 articles) published in business and management journals used diverse quantitative data analysis techniques (Table 12). Of the quantitative techniques, PLS/SEM/factor analysis was the most used (40 articles). The quantitative–qualitative distribution was almost equal in the case of the TQM articles published in the accounting journals discussed earlier. Thus, quantitative data analysis techniques dominate business and management studies.

The above two sections presented a descriptive analysis of the TQM articles published in both disciplines. Sections 6 and 7 analyse the main findings of the articles to draw established knowledge in the area.

To analyse the findings in greater detail while keeping the length of the paper manageable, we chose 13 articles published in the two premium management accounting journals: Journal of Management Accounting Research and Management Accounting Research. These two journals published the largest number of TQM studies during the review period (one-third of the 40 articles) and are the only journals concentrating on management accounting among the 25 journals considered in this review. A summary of the studies is presented in Supplementary Material 3. Our review reveals three major themes: quality performance measures, COQ and impact on organisational performance. These themes are analysed in Sub-sections 6.1–6.3.

One of the key themes that emerged from our review is the types and characteristics of performance measures used to assess quality performance in practice. The importance of timely, relevant and reliable performance measures has been a primary concern for management accounting scholars since the 1980s. Johnson and Kaplan's (1987) work, “Relevance Lost: The Rise and Fall of Management Accounting”, primarily focuses on the relevance of accounting performance measures for decision-makers, particularly operational staff and managers. Consistent with the above argument, the findings of this review emphasise the importance of performance measures in monitoring daily operations to ensure that products and services are produced and delivered according to quality principles. To this end, the performance measures identified in the reviewed articles are predominantly operational and non-financial. This marks a clear departure from traditional financial measures. As Chenhall (1997) observes, not sufficiently addressing the issue of performance measures may lead to a failure of TQM initiatives.

Wruck and Jensen (1994) outline three significant ways TQM performance measures differ from traditional measures. First, they focus on measuring productivity and quality from the customer’s perspective. Second, performance measures designed to track daily progress are operations-oriented rather than dollar-denominated. Third, TQM performance measures are typically more disaggregated and task-specific than traditional measures, which often isolate the contribution of specific activities to performance improvement. This section discusses the most common performance measures referenced in the literature (Supplementary Material 4 provides a sample of quality performance measures reported in selected accounting articles).

The most frequently used quality performance measures among manufacturing firms can be categorised as measures of waste or non-value-added activities (Chenhall, 1997), including rejects, rework, scrap and downtime (measured in both units and dollar value) (Daniel and Reitsperger, 1991, 1992; Daniel et al., 1995; Maiga and Jacobs, 2005, 2006). Customer satisfaction measures, such as customer perceived quality and complaints (Sim and Killough, 1998; Van der Stede et al., 2006), are also used to monitor firms’ quality performance. Quality improvement rate, defined as non-defective production divided by total production, was used by Foster and Sjoblom (1996). Wruck and Jensen (1994) illustrated how quality performance should be monitored across all areas of a firm’s management.

Another crucial aspect of quality performance measures is that they necessitate changes in reward and punishment systems. Both Chenhall (1997) and Wruck and Jensen (1994) discovered that effective implementation of TQM was linked to modifications in the design and use of managerial performance evaluations. This adjustment was vital to encourage improvements in quality management practices.

Furthermore, we learn from the studies that the ways in which operational performance measures are reported or made available to operational staff and managers are important to effectively implement quality management initiatives. Banker et al. (1993) show that operational performance measures such as information on productivity and quality (i.e. defects, schedule compliance and machine breakdown) were posted on charts on the shop floor for effective performance monitoring and taking necessary corrective actions in a timely manner. Similarly, Jarrar and Smith (2014) show that quality performance measures can be presented as cause and effect/fishbone diagrams, flowcharts, Gantt charts, tree diagrams, check sheets, control charts, data points, histograms, Pareto analysis, scatter diagrams and storyboards.

The above discussion on quality performance measures indicates the implication of TQM implementation for MCS. As noted by several authors (Daniel and Reitsperger, 1991; Ittner and Larcker, 1995; Kennedy and Widener, 2008; Tillema and Van der Steen, 2015), the implementation of TQM and lean production in general leads to changes in performance measures. Thus, implementing TQM and other lean production elements is associated with greater use of non-traditional information systems that generate and report strategic planning and external benchmarking information. This is because traditional variance measures are not aligned with the critical success factors inherent to the lean manufacturing process. Accordingly, Kennedy and Widener (2008, p. 316) explain:

However, Daniel and Reitsperger (1992), Emsley (2008) and Gurd et al. (2002) argue that most Western organisations, unlike their Japanese counterparts, have not made the necessary changes to their MCS to provide greater quality-related information to managers. We also observe from Carr et al.’s (1997) that there is little evidence of differences in the performance reporting systems between ISO-accredited and non-ISO-accredited companies in reporting quality in physical and financial terms. In summary, notwithstanding the above findings that not all firms necessarily change their performance measures, most implement changes associated with TQM. One of the possible reasons for such inconclusive results could be macro, industrial and organisational factors. Future research looking at these factors can highlight the role of institutional factors in the relationship between TQM and performance measures.

COQ has not received adequate attention in mainstream management accounting research (Malmi et al., 2004), even though the topic is more widely covered in management accounting education and training (Ito, 1995). Feigenbaum (1956) identified four elements of COQ (prevention, appraisal, internal failure and external failure) and their relationships based on the economic framework developed by Juran (1951). The classifications and relationships among the COQ elements are widely accepted, even though some authors question whether COQ is a uniform construct. For example, Emsley (2008) found that in their longitudinal case study, two plants developed the COQ significantly differently than Juran’s “fixed” COQ technique. In addition, significant differences were observed between the plants, despite the original aim of replicating the COQ of one plant based on the other. This is consistent with Ito’s (1995) findings, which show varying application of COQ in two Japanese companies. Thus, COQ practices can be considered diverse.

Notwithstanding the diverse practices, several authors have studied the practice of COQ in different settings. Sjoblom (1998) examined the usefulness of COQ and quality-related financial information for quality management. Sjoblom found that financial information has a limited role in supporting operational decisions. The author reported that the limitations of existing COQ systems and the lack of relevant, reliable and timely financial information were among the reasons cited for not using COQ. Malmi et al. (2004) developed methods to calculate the cost of poor quality to underscore the significant amount of cost savings that may result from well-developed quality management. Albright and Roth (1992) illustrated how hidden quality costs, such as customer dissatisfaction, were neglected in traditional accounting records.

The above studies show that quality costing practices are not uniform across companies and not as widely used as in management accounting’s professional training (e.g. CIMA and ACCA) and university education, per the textbook coverages. Thus, further research is required to understand better why and how organisations practising quality management apply (or not) the COQ.

The ultimate test of any strategic initiative such as TQM is its positive impact on organisational performance. The normative expectation (conceptually) of the impact of TQM on performance is positive (Ittner and Larcker, 1995). This is expected from the simple logic that TQM improves customer satisfaction, which leads to better financial performance. However, our review indicates mixed results. For instance, Daniel and Reitsperger (1991) find that MCS used to implement TQM helps focus employee efforts through goal-setting and feedback leading to better performance. Chenhall (1997) also observes that TQM is associated with higher profitability when combined with the right manufacturing performance measures. Similarly, Sharma (2005) found that ISO 9000 certification enhances operating efficiencies, thereby leading to a higher profit margin, sales volume and earnings per share.

However, contrary to the above studies, Ittner and Larcker (1995) found no evidence for the proposition that the highest performance levels should be achieved by firms making the greatest use of both TQM practices and non-traditional information and reward systems. Simiralrly, Kober et al. (2012) found no positive relationship between TQM and financial performance of SMEs.

Another key finding from the review shows that various factors can influence the relationship between TQM and organisational performance. For instance, cost improvement (Maiga and Jacobs, 2006) and innovation (Jarrar and Smith, 2014) mediate the relationship between quality improvement and profitability. Maiga and Jacobs (2006) also found that organisations with benchmarking experiences are better positioned to be successful in TQM programmes and, hence, improve their organisational performances. The moderating variables could also be the extent of reliance on manufacturing performance measures (Chenhall, 1997) or market competition (Chong and Rundus, 2004). Considering the primary objective of TQM being customer satisfaction in a competitive market, it is expected that market competition leads to stronger organisational performance for companies with a well-developed TQM programme.

Other studies found that TQM is effective when implemented with other management practices. For example, Hoque (2003) found that the combined use of TQM and BSC would have a more positive impact on organisational performance than using BSC in a non-TQM environment. However, Modell (2009) finds no evidence of deliberate bundling of BSC and TQM on the supply side. Our review also indicates contradictory findings on the association between TQM and MCS. Ittner and Larcker (1997) found a positive association between greater emphasis on quality and greater use of quality-related strategic control practices. This finding contradicts Daniel et al. (1995), which found no link between quality strategy and providing quality goals and feedback via the MCS.

In summary, the above review shows that the impact of quality management practices on organisational performance is mixed. This suggests further research to study how TQM practices are implemented in organisations. This will shed light on why TQM strategy does not always result in positive organisational performance.

This section analyses the key findings of articles published in business and management journals. Following a similar approach to the thematic analysis of the accounting articles, we focused on selected articles in this section. We selected the most recent publications from the 130 business and management articles reviewed in Section 5. To align with themes in the accounting studies discussed above, we focus on two key areas: performance measures and the impact of quality management on performance, as performance is a shared variable across both disciplines. A total of 11 articles met these criteria.

The performance measures used in the 11 studies are presented in Table 13, and the key findings are summarised in Supplementary Material 5. Table 13 shows that a good proportion of the studies used performance measures identified by national, regional or international quality award organisations. For example, the European Framework for Quality Management model (www.efqm.org/) was used by Calvo-Mora et al. (2013), van Schoten et al. (2016) and de Menezes et al. (2022), International Organisation for Standardisation (ISO) (www.iso.org/home.html) by Martínez-Costa et al. (2009), Malcolm Baldrige National Quality Award (https://baldrigefoundation.org/) by Sabella et al. (2014) and Taiwan’s Total Quality Improvement Programme by Chang et al. (2011). Although the quality award organisations have similar objectives, promoting TQM, the standard performance measurements they propose are not the same. As a result, even for studies that used the same framework, it is difficult to compare the findings because the performance measures are tailored to fit the nature of the specific organisation. For example, both Calvo-Mora et al. (2013) and van Schoten et al. (2016) used survey data of European firms which implemented the EFQM model. While Calvo-Mora et al. (2013) used “key business results” as their dependent variable to measure performance, van Schoten et al. (2016) used four modified variables – Professionals (Health-care professionals), Customers (Patients), Society and Results (Clinical Outcomes and Costs). Similarly, de Menezes et al. (2022) used customer, people, society and business results to assess the impact of TQM on performance.

The remaining studies used operational performance measures: quality performance, inventory management (Baird et al., 2011; de Menezes and Escrig, 2019); productivity growth, efficiency improvement, quality assurance (Chang et al., 2011); and design performance, process quality, product quality and customer satisfaction (de Menezes and Escrig, 2019; Jayaram et al., 2010). Galeazzo et al. (2021) used cost, quality and flexibility, while Prajogo et al. (2022) applied conformance quality, product quality and reliability as key performance measures. Therefore, it is hard to directly compare the performance measures because they are different. For example, both Baird et al. (2011), Chang et al. (2011), Galeazzo et al. (2021) and Prajogo et al. (2022) have quality performance variables, but the measures are different. While Baird et al. (2011) and Prajogo et al. (2022) measure quality performance, Chang et al. (2011) and Galeazzo et al. (2021) measure quality assurance. These are two different constructs, and thus, it is hard to make direct comparisons.

Despite the challenges in comparing measures used across these studies, it is imperative to underscore the predominant positive correlations reported in the business and management studies regarding quality’s impact on performance (Supplementary Material 5).

The systematic review of the articles presented in the previous three sections highlights several critical insights into the status of TQM research and the interplay between TQM and MCS. In this section, we discuss the key findings, identify gaps, provide directions for future research and propose a framework to integrate TQM principles and MCS mechanisms.

A notable finding is that research on TQM has declined significantly since its peak between 1985 and 2003. Scholars like Ittner and Larcker (2001) argue that the decline could be because of the tendency of management accounting researchers to shift focus to newer trends before fully exploring existing ones. The decline in TQM research may also stem from a feedback loop where journal editors are less likely to accept papers in a field with reduced activity, discouraging researchers who perceive lower chances of publication success. This trend can further reduce submissions, perpetuating the cycle. On the other hand, scholars argue that sustained research is essential for developing established knowledge in any field (Bromwich and Scapens, 2016; Salterio, 2015; Shields, 2015). The dynamic nature of TQM principles requires continual updates to reflect changing business needs and macroeconomic conditions, which address real-world gaps in knowledge and application (Soltani and Wilkinson, 2010). Therefore, TQM’s enduring relevance in dynamic business environments necessitates sustained research efforts to refine theoretical frameworks and address evolving practical challenges.

The review also reveals that most of the studies were generally on adopting and implementing TQM, although a range of other research topics were investigated. Furthermore, the review highlights that TQM practices in large private manufacturing sectors in Western economies dominate the literature, with a limited focus on public sectors, SMEs, and LDCs. Thus, our review highlights a research bias toward developed countries and the private sector, where firms benefit from strong institutions and advanced management controls. This raises concerns about the applicability of TQM–MCS frameworks in emerging economies and the public sector, where weaker regulatory environments, resource constraints and bureaucratic structures may shape quality management differently. The scarcity of studies in these contexts limits our understanding of how organisations adapt TQM and MCS under different conditions. The underrepresentation further underscores the need for targeted studies in these contexts. Addressing these gaps will broaden the applicability of TQM principles and enhance their impact on diverse organisational settings. This is important because each of these settings is significant to society and deserves better attention from management accounting, as argued repeatedly by Hopper and his colleagues (Hopper et al., 2009, 2017).

The theoretical basis for TQM research remains underdeveloped, with most studies drawing from TQM principles rather than specific theoretical frameworks. This trend is likely because of the focus on adopting and implementing quality management. The survey research method dominates the field, complemented by quantitative data analysis techniques. Conversely, case/field study methods are more prevalent in accounting, highlighting a need for further qualitative research to explore the motivations and processes behind organisational changes, including TQM adoption (Burns and Scapens, 2000; Burns and Vaivio, 2001).

Another notable outcome of this review is that TQM shifts performance measurement focus in organisations from traditional financial metrics to operational, non-financial measures. Specifically, the studies emphasise the value of timely, disaggregated and task-specific measures in monitoring quality improvements and addressing potential issues. Operational metrics such as waste reduction, customer satisfaction and production quality are central to TQM’s effectiveness.

The shift to non-financial operational performance measures entails significant implications for MCS. Traditional variance measures, which are dollar-denominated and aggregate in nature, are increasingly supplemented or replaced by metrics that align with TQM’s emphasis on quality and lean production principles. For instance, measures such as scrap rates and rework provide immediate feedback to operational staff, fostering continuous improvement. This is consistent with Kennedy and Widener’s (2008) findings, which highlight that the primary purpose of new measures under lean production systems is to enhance process flow, ensure timely delivery and maintain low inventories. The shift also aligns with the calls from seminal works like Johnson and Kaplan’s (1987) critique of the relevance of traditional accounting measures.

However, the reviewed studies also indicate inconsistencies in adopting quality-related performance measures. While Japanese firms demonstrate a more integrated approach to aligning MCS with TQM, Western firms often lag behind, as noted by Daniel and Reitsperger (1992) and Gurd et al. (2002). This disparity underscores the need for further research to understand institutional, cultural and organisational factors influencing the adoption of quality-focused performance measures.

Despite its prominence in management accounting education and professional training, the COQ remains underexplored. Studies reveal that traditional accounting systems often fail to capture hidden quality costs, such as customer dissatisfaction and lost revenue, limiting COQ data’s utility in operational decision-making (Albright and Roth, 1992). Challenges in COQ measurement, as identified by Ito (1995), contribute to its limited adoption in practice. The lack of reliable, timely and relevant financial information hinders its effective use. Nonetheless, efforts to refine COQ methods, such as those by Malmi et al. (2004), demonstrate the potential for significant cost savings through enhanced quality management. Future research should focus on developing standardised methodologies for COQ calculation and exploring how organisations overcome measurement challenges.

The review also reveals that TQM practice continues to be driven by inspection and quality control approach, rather than the principle of “right first time”, despite this principle existing for many years. Therefore, future research might attempt to fill the gap in the literature and contribute to improving the practices. Further research is also needed on the interdependencies between core TQM practices; the relationships between TQM practices and other operational functions, for example, inventory management; and the impacts of various micro and macro factors on successful implementations and operations of TQM principles, for example, organisational culture (Baird et al., 2011; Alofan et al., 2020), national cultures (Alofan et al., 2020; Prajogo et al., 2022) and internal and external contextual factors (Teklay and Bobe, 2023).

Although many of the studies in both fields investigated the impact of quality management practices on performance, findings have been inconsistent. These inconsistencies may stem from contextual factors, such as industry type, organisational size and market competition (ter Bogt and Scapens, 2019) and process orientation of the supporting MCS (Brenner et al., 2024). Future research using meta-analysis could reconcile these inconsistencies.

The comparison of findings from accounting and business and management journals underscores both shared and unique perspectives on TQM. While both disciplines emphasise performance measures and their impact on organisational outcomes, the focus on quality awards and frameworks in business and management journals reflects a broader, cross-functional view of TQM practices. Conversely, accounting studies provide a more granular examination of the implications for MCS and performance reporting systems. This cross-disciplinary synthesis suggests opportunities for integrating insights from accounting and management research to develop a holistic understanding of TQM. For example, aligning quality awards’ performance measures with MCS design principles could enhance their practical relevance and comparability across organisations. TQM is more than an operational framework; it drives cultural, procedural and managerial transformations (Abbas and Kumari, 2023; Dahlgaarda et al., 2019). Its adoption necessitates corresponding adaptations in accounting systems and performance measurement tools, with MCS playing a pivotal role in enabling these changes. As Brenner et al. (2024) note, MCS is expected to incorporate process orientation, which is important for improving organisational performance as a key enabler of digital transformation. By examining the interplay between TQM and MCS, this review underscores how accounting practices both shape and are shaped by organisational changes driven by quality management initiatives. As the need for decision-influencing and decision-support information changes for organisational leaders, the role of management control information becomes critical for the survival and growth of organisations.

The review also reveals that TQM is more than just an operational framework; it can trigger a profound organisational change (Abbas and Kumari, 2023). Its adoption drives cultural shifts, process transformations and changes in management practices (Dahlgaarda et al., 2019), necessitating corresponding adaptations in accounting systems and performance measurement tools. MCS plays a pivotal role in this process, supporting TQM initiatives by enabling strategic decision-making and tracking improvements in costs and performance. Additionally, TQM often prompts a reassessment of reporting systems, emphasising continuous improvement and customer-focused metrics, which align closely with the broader goals of organisational change. By examining the connection between TQM and MCS, this review highlights how accounting practices both shape and are shaped by the organisational changes initiated through quality management efforts.

The insights from our systematic literature review combined with key TQM principles and MCS mechanisms, enable us to propose the integrative framework illustrated in Figure 2⁸. The framework aligns organisational strategies and objectives with quality improvement initiatives. TQM’s focus on continuous improvement, customer satisfaction and cross-functional collaboration complements MCS’s emphasis on financial and non-financial metrics, enabling organisations to track quality initiatives such as defect reduction and customer feedback in alignment with broader goals.

At the process level, MCS mechanisms like feedback loops and real-time monitoring tools support TQM practices, fostering operational improvements and strategic decision-making. For example, initiatives to reduce defects, improve cycle times and enhance customer satisfaction rely on actionable data provided by MCS. TQM practices such as quality planning, root cause analysis and team collaboration create a foundation for addressing quality issues, supported by MCS tools like statistical process control charts, reporting systems and real-time data monitoring. These tools help track progress, adjust strategies and maintain quality improvements through ongoing evaluation.

Finally, integrating TQM and MCS enhances organisational performance by concentrating on measurable outcomes. TQM fosters reductions in waste, improves yield rates and increases customer satisfaction, while MCS ensures that these improvements are quantified and aligned with financial performance indicators. For example, monitoring the COQ, warranty claims and customer satisfaction surveys enables organisations to link operational efficiencies to profitability and market performance. This synergy promotes a culture of accountability, continuous improvement and strategic decision-making, ultimately driving competitive advantage and long-term success. By leveraging the strengths of both frameworks, organisations can adopt a balanced approach that aligns operational excellence with their financial and strategic objectives.

This systematic literature review examined the state of research on TQM and MCS to identify gaps and propose future research directions. Reviewing 40 accounting and 130 business and management articles published from 1985 to 2023, we found that MCS enhances TQM implementation through appropriate performance measures and COQ management. These measures should prioritise non-financial operational metrics familiar to operational managers and employees. Thus, MCS must expand beyond traditional cost management, integrating TQM to support continuous improvement and strategic decision-making. Future research could explore how management accounting tools, such as balanced scorecards, activity-based costing and strategic management accounting, align with quality initiatives to drive sustainable organisational improvements. Additionally, further research is needed in service and public sectors and LDCs, where MCS–TQM studies remain limited.

Although this review did not directly address Environmental, Social, and Governance (ESG), Corporate Social Responsiblity (CSR) or Sustainable Development Goals (SDG) elements, the connection between TQM and MCS offers significant relevance to these priorities. TQM’s emphasis on continuous improvement aligns with ESG and CSR objectives, while MCS provides measurable benchmarks for accountability. They create a framework to drive sustainability, innovation and stakeholder value, ensuring organisations balance quality, efficiency and long-term competitiveness.

This review makes five key contributions to MCS literature and practice. First, it provides a comprehensive assessment of TQM–MCS research over 39 years, identifying understudied areas to motivate further investigation. Second, it systematically examines TQM’s influence on firm performance, bridging theory and practice while considering contextual factors such as firm size and industry. Third, it analyses the mechanisms through which TQM shapes performance measurement, offering a valuable list of commonly used quality performance measures across industries. Fourth, it contributes to the literature on accounting and organisational change, highlighting TQM’s role in driving cultural and managerial transformations that necessitate adjustments in accounting systems. Finally, the integrative framework proposed offers a foundation for future research, bridging conceptual gaps and encouraging interdisciplinary approaches.

This study has limitations. TQM is widely researched, and several relevant journals outside accounting and business management were not included. However, we believe our selected journals capture most MCS–TQM research. Additionally, given journal word limits, we focused on selected articles from our initial search, making some decisions inherently subjective.

The authors are grateful to the editor, Professor Zahirul Hoque, the two anonymous reviewers, and Professor Alemayehu Molla, RMIT University, for their insightful comments and constructive suggestions. Their guidance and feedback have significantly enriched their work.

Table A1 

Table A2 

The supplementary materials for this article can be found online.