e-book Performance of Manufacturing Firms in Africa: An Empirical Analysis (Directions in Development)

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Findings: This study finds literature support for the conceptual model of KM as a mediator for the key dimensions of Soft TQM in relation with firm performance. This implies that the cultural elements of TQM termed Soft TQM play an outsized role when in combination with knowledge practice as a resource when studying firm performance. A second limitation is the exclusion of Hard TQM factors, and is a topic for future research. Practical implications: Practicing managers will have a clearer guide as to the Soft TQM and knowledge practice conditions which should exist within firms in order to maximize factors related to the performance of the firm.

This will enable benchmark comparison within industry category for future policy directions and incentive balancing to drive higher productivity gains by the official agencies.

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The economy in Malaysia is segregated into five major categories with their contributions to the whole , namely services Looking into the sectors, Mining and Agriculture have shown decreases in more recent years, due to global commodity fluctuations particularly for oil, with Malaysia becoming a net importer of oil for the first time in , having a net import value of RM1. This has placed a higher amount of contributions on the manufacturing sector, in particular Electrical and Electronics manufacturing, which is expected to increase 7. This is approximately 4 to 5 times the size of the next largest sector being the petroleum industry, and is as large as the next 9 sectors combined.

Official government surveys of firms in Malaysia conducted by the Department of Statistics and reported in the SME Masterplan, shows growth of performance of firms in Malaysia as being at or below expectations. World Bank reports in concurs by comparing Malaysia to peers where labor productivity growth of 2.

However, questions on productivity and the factors which leads to the corresponding increase have not been as well described in the reports, which leads to a gap in understanding of causal relationships. Managers in manufacturing firms are therefore prescribed policy based improvement plans without clear understanding of the long term implications, which may lead to short term decision making.

This study therefore aims to provide clarity to practicing managers as well as contribute to the body of scholarly knowledge through research in literature and a concept for research to achieve increase firm performance. Predictors of Firm Performance Literature on firm performance shows multiple business practices have been studied in relation to firm performance in both financial and non-financial fields, which includes planning, innovation, supply chain management, HR practices, benchmarking, environment management, working capital, etc. Generally, the emphasis when looking into manufacturing or production concerns centers on both performance operational measures and quality measures.

A meta-analysis by Nair of studies related to firm performance shows that productivity of operational output and quality performance are key measures. Bolstering this selection is the general interplay between quality and productivity within firms engaged in production, where quality is conceptualized as a prerequisite to productivity. These findings demonstrate that implementing key practices of Quality Management leads to organizations being able to achieve superior performance, which is generalizable across different backgrounds at the structural, geographical and cultural level Nair, While the linkage of TQM with firm performance has been well established, newer developments have shown that modern firms rely on capabilities and resources that move beyond tools and culture, or rather, that are enabled by the tools and culture first introduced with TQM.

Where the data is not as clear, is where KM is related to firm performance, and earlier studies by Darroch have shown that Knowledge Management is more strongly correlated to increased innovation performance. Balancing these, are studies that show KM is related to increased firm performance, and here we give a good example. This indicates that given the context of the firm where Knowledge is a key to the business process of a firm, the performance will be strongly related.

In the context of manufacturing firms, knowledge is a key factor of success, and where TQM and KM co-exist, it is expected to increase firm performance. Recent research on manufacturing has indeed embraced TQM and KM in relation to firm performance, but with few total empirical studies performed to date, and in limited ways. The factors however have not been demonstrated in combination when looking to answer the problem of firm performance of the population of interest, and the gaps are identified for which this research proposal is intended to answer: RQ1: To what extent does applying Soft TQM practices enhance knowledge management practices?

This study is organized as follows: it starts with a discussion of the relationship among the variables, and then the hypotheses of the study are introduced. Finally, a conclusion is drawn and the plan for the future study is discussed briefly.

Literature Review Theoretical Perspective From a theoretical perspective, the theory that organizations performance is tied to knowledge as a resource of the firm, and exists to a greater or lesser efficiency based on organization structure, is the main idea of the Knowledge Based View of the firm KBV. KBV initially took the view that knowledge is created, stored, and used by individuals, which is translated into a resource of the firm through the four mechanisms of rules and directives, sequencing, routines, and group problem solving by Grant This view includes the tools and processes for KM, but lacks an overriding reason for translation of such individual centric resource ownership into group centric resource ownership.

In effect, Hakanson posits that where common denominators which can be termed organizational culture are established, efficient KM structures within the organization also coexists. Therefore, the cultural elements where employees are able to partake in transactions involving knowledge is a factor in any consideration of Knowledge Management. The latent construct of Soft TQM composed of the four identified dimensions will also be tested, and will empirically contribute to KBV literature with empirical study data. These guide practices can be described as a quality —oriented way of thinking about the management of organizations with dimensions and factors which have been studied and found correlated to best practices and increased organizational performance.

Here it is noted that while the practices are well established, the naming convention of these factors are not all uniform as can be seen when looking at dimensions of study as tabled by Kaynak , and therefore benchmarking meta-analysis or table of importance of factors in the context of a study is required.

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While applicability of the study conducted in only developing countries limits generalizability, the authors argue that the concepts are taken from worldwide generalizable studies, and this concurs with earlier studies of TQM by meta-analysis as reported by Nair , where most of the key factors here are significant in relationships with organizational performance. These and other factors has been reaffirmed, when in context of studies of firms in Malaysia Kanapathy et al.

Both categories of Soft and Hard factors have been empirically studied in various contexts, with findings in the Malaysian context Kanapathy et al. A recent study by Yusr et al.


This understanding of the relationship of Soft TQM and KM with organizational performance has also been recently conceptualized by Carvalho et al. The conclusion is that Soft TQM factors are complementary and are enablers of KM which is closely related to increased organizational performance, and that specific Soft TQM dimensions play an outsize role in both relationships with KM and Firm Performance. In detailed studies by Ooi , Yusr et al. Customer Focus refers to the culture of the organization in prioritizing customer needs within the organization. The goal of this is the identification and the satisfaction of present and potential customer needs, while highlighting its importance to firm performance Nair, Supplier Quality Management refers to the partnership formed with upstream source organization into the firm under study.

It is sometimes termed as supplier quality Kanapathy et al. This is borne out with studies showing a correlation for supplier relationships and manufacturing firm performance Valmohammadi, and results when involvement with suppliers takes place Ahire et al. Strategic Quality Planning. Employee Empowerment EE is a factor which was defined, developed and studied by Ahire et al.

Findings from studies into these factors bear out the significance when in relation to KM. Qasrawi et al. In organizations, knowledge is viewed as an intangible resource which brings competitive advantages as resources which can be utilized Darroch, to achieve organization objectives. This is in line with the Resource Based View of the firm Barney, ; Wernerfelt, , which posits that resources are utilized to the advantage of a firm, and has been expanded to the Knowledge Based View as a complement to RBV. However, knowledge resource alone is static, and only in its use, are perceived benefits obtained, either individually, or in teams within an organization.

If individuals do not share such information, organizations do not utilize or benefit off the knowledge resource Huang, Thus a new area of study practice known as Knowledge Management was created. While the benefits of KM are acknowledged, the measures of KM in use for different study contexts vary, which presents a separate challenge for new research, depending on context of the proposed study.

In a reading of KM literature of empirical studies, most of the articles reviewed utilize the various components on KM in one way or another, with different terminologies and adaptations. Where models in use for KM process studies utilize variable measures by Darroch and Gold et al. Studies where the components of knowledge processing capability Gold et al.

Studies conducted in such fashion can impact the strength of relationships between independent to dependent variables when broad predictor dimensions are related to narrow operational performance measures, such as operational productivity or quality. This has led to inconclusive results when relating studies to operational performance or financial based performance, and this calls for an approach that narrows the scope to measures of KM which are related to firm performance. More recent studies have linked actual performance of organizations with a single KM variable composed of elements of all three components of KM, termed knowledge management practices Zack et al.

Even more importantly it was found that various measures of KM practices are positively related to strategic organizational performance as an example, customer intimacy, product leadership, operational excellence, etc. This result is reinforced when looking at the practical aspects of KM in terms of practical systems for managing knowledge. This indicates that certain measures are of higher importance to researchers, and calls for a relevant measure which encompasses key knowledge management practices which are predictors of organizational performance.

In assessing the relationship between knowledge management practices and performance outcomes according to the Knowledge Based View, Zack et al. The authors conducted an expansive study of literature into firm performance as it is related to km practices, whereby Zack et al. This stems from the four key dimensions Zack et al.

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These match closely the dimensions of Soft TQM, where the first dimension of KM practice maps with customer focus and supplier quality management, while the next three dimensions fit closely with strategic quality planning and employee empowerment. These process and culture elements of KMP fulfil the theory and the context of this study concept, and are hereby adopted for the purpose of this study. This implies that given a sectors competitiveness and firm size may affect the extent of TQM practices therein. Based on the findings by Duh et al. Theoretical Framework Putting all the hypotheses discussed in detail in the literature review above into a visual form, the overall proposed research model here shows the proposed research model with the three main hypotheses of the relationship between Soft TQM, KMP and Firm Performance.

Figure 1: Proposed Research Model Method The study is designed with a theory based - positivist paradigm as an empirical quantitative study in order for the results to be as generalizable as possible. Sampling will be taken specifically from companies listed under all categories of electrical and electronic including computers, transmission equipment, communications, machinery and supporting components manufacturing firms by the Federation of Malaysian Manufacturers throughout Malaysia.

The sampling rate as calculated with G Power requires a minimum of 85 samples which will be met for analysis to be valid. The unit of analysis will be by the firm, and the respondents will be of CEO, Director, Senior Manager and Manager level within each firm, with one single respondent per firm. The survey will take the form of a questionnaire instrument, which will be developed and tested by industry and academic experts in the fields of Quality, Knowledge Management, and Operations. The questionnaire will be designed also for physical postage, usage and distribution to manufacturing firms in the electrical and electronics industry of Malaysia, with responses being self-administered.

Discussion and Conclusion Literature shows a wide plethora of solutions and research directions when it comes to firm performance studies in various dimensions at various levels of study. In this case, the introduction of a new understanding of categorization of TQM into its two major groupings of Soft and Hard TQM, and its demonstrably significant impact on outcomes have opened up a gap in the body of knowledge, which recent research has covered in various countries. However, in many such direct studies, slight inconsistencies through to unexpected results have indicated other factors which have an influence on the relationship of the study factors.

One of the major factors lacking was Knowledge Management Practice, which is in widespread practice in modern firms, and was studied as an individual factor in relation to firm performance previously. Today, the very latest research combines factors of TQM with that of KM in predicting increased firm performance measures. Other recent studies have touched on various component factors of TQM in relation to knowledge management dimensions such as knowledge sharing, or processes , but not with a specific category or grouping of TQM practices.

This area of study which has not been as well examined is the specific category of Soft TQM in combination with Knowledge Management Practices in relation to Firm Performance. Given the theory of Knowledge Based View on which KMP rests includes a component of firm culture which Soft TQM fulfils, it is logical to study the two major factors in relation to firm performance as the dependent variable. While the study contains the critical Soft TQM dimensions in relation to KMP, it is acknowledged that there are limitations to this study where other dimensions of Soft TQM which can have an impact on firm performance have not been included.

This study intends to expand on the literature of Soft TQM and KMP in relation to firm performance to fulfil the purposes of both research knowledge, as well as practical implications. Results of this study will provide useful guidance for both the Malaysian Government for policy formulation, and private manufacturers wishing to optimize cultural element within their respective firms.

In this study where the focus will be on manufacturers within the country of Malaysia, the applicability would be within the target nation. The study findings will provide useful data, and serve as a guide for future researchers of Soft TQM in other countries where studies may be replicated within the respective study population in context. References Abdullah, M. Hard quality management and performance: the moderating role of soft quality management.

International Journal for Quality Research. Ahire, S. Development and validation of TQM implementation constructs. Decision sciences, 27 1 , The role of top management commitment in quality management: an empirical analysis of the auto parts industry. International Journal of Quality Science, 3 1 , Industrial and Corporate Change, 16 5 , Barney, J. Firm resources and sustained competitive advantage. Journal of management, 17 1 , Beamon, B. Measuring supply chain performance. Calvo-Mora, A. The relationships between soft-hard TQM factors and key business results.

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Carvalho, A. Operational excellence, organisational culture and agility: the missing link?. Choi, T. Journal of Operations Management, 17 1 , Choi, B. An empirical investigation of KM styles and their effect on corporate performance. Cohen, J. Knowledge management capabilities and firm performance: A test of universalistic, contingency and complementarity perspectives. Expert Systems with Applications, 42 3 , Dahlgaard, J. Lean production, six sigma quality, TQM and company culture. The TQM magazine, 18 3 , Darroch, J. Beyond market orientation: Knowledge management and the innovativeness of New Zealand firms.

Davenport, T. Some principles of knowledge management. Managing customer support knowledge. California management review, 40 3 , ChinaFrameworkPapers 6. Skip to content. AR 1. Determinants of technical efficiency differentials amongst small- and medium-scale farmers in Uganda: A case of tobacco growers. Analysis of the cost of infrastructure failures in a developing economy: The case of the electricity sector in Nigeria.

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Dynamic inter-links among the exchange rate, price level and terms of trade in a managed floating exchange rate system: The case of Ghana. The effects of trade liberalization on productive efficiency: Some evidence from electrical industry in Cameroon. Food security and child nutrition status among urban poor households in Uganda: Implications for poverty alleviation. Financial liberalization and its implications for the domestic financial system: The case of Uganda. Real exchange rate price and agricultural supply response in Ethiopia: The case of perennial crops. Economic liberalization and privatization of agricultural marketing and input supply in Tanzania: A case study of cashew nuts.