Measuring the Effect of Use Total Quality Management system on Improving Financial Performance of Industrial Public Shareholding Companies

Abstract

This study was to shed light on the extent of use Total Quality Management system that applied by industrial public shareholding companies in the environment of Jordan. It also aimed to examine whether the use of Total Quality Management system has impact on improving the financial performance of the company. The researcher used the method of comprehensive survey of the study population represented by all Jordanian industrial corporations by distributing questionnaires to access to the companies using for the Total Quality Management system, The study sample was composed of 25 companies. As for the financial performance, indicators were obtained from the ASE (Amman Stock Exchange) and the SDC (Securities Depository Center) for the period (2005 to 2009). Two statistical approaches were adopted: the descriptive statistical approach to demonstrate and describe the features of the study population; and the analytical statistical approach through performing the appropriate analysis of the nature of the study. The results showed, there is no effect of using the dimensions of total quality management on improving financial performance in industrial public shareholding companies. And the researcher recommends directors of the companies that they should continue applying the system of total quality management and commitment dimensions, and change of past prevalent beliefs, that achieving higher quality requires higher costs, in fact quality improvement ensures benefiting and optimizing utilization of the energies of manpower, machinery and materials, which means lower costs.