The relationship between organisational culture and firm performance: an empirical study on Indonesian manufacturing firms

The impact of organisational culture on firm performance has been well documented. Previous studies on the impact of organisational culture derived from its national culture have been conducted in homogenous cultures. Little attention has been given to the impact of organisational culture derived from Indonesian culture on firm performance. Indonesias subcultures may not be represented in the national culture. This study examines the impact of organisational culture on firm performance among Indonesia manufacturing firms. Results from 152 organisations confirm that organisational culture has significant effect on firm performance. Only individualism and uncertainty avoidance significantly impact firm performance. The implication is that, even in a country with many subcultures, firms top management still need to pay attention to the impact of national culture at organisational level. Furthermore, since Indonesia has a very low score on individualism, managers need to create a conducive and rewarding environment for individuals to contribute

Product quality as competitive priority: Its relationship with total quality management implementation in Indonesia-SCOPUS version

Literature has widely reported the increase of firms competitive advantage resulted from better product quality. However, in some industries product quality does not escalate competitive advantage significantly. Competitive priority stemmed from product quality is presumed to be the driving factor of Total Quality Management (TQM) implementation. This study investigates how product quality as competitive priority influences the implementation of TQM. The results explain the divergence of TQM implementation among manufacturing firms. Empirical data from 152 manufacturing firms in Indonesia are analyzed using structural equation modeling (SEM). The results indicate that product quality as competitive priority affects TQM implementation positively. In addition, the structural model shows that the relationship between product quality as competitive priority and firm performance is fully mediated by Total Quality Management. The contribution of this study is providing explanation why some firms are more receptive toward Total Quality Management than the others. The strong positive relationship between Total Quality Management and firm performance suggests that, whether the manufacturing firms have product quality as their competitive priority or not, they need to recognize the impact of Total Quality Management on firm performance

The Impact of Power Distance and Individualism on Total Quality Management: An Empirical Research on Indonesian Manufacturing Firms

Power distance is reported to be the most important culture dimension for effective implementation of total quality management (TQM), while low individualism stimulates the company to focus on its long-term customers. Indonesia is characterized by very high power distance and very low individualism. However, Indonesia has a very unique cultural setting because it has many subcultures. This study investigates the impact of power distance and individualism on TQM implementation among Indonesia manufacturing firms. As many foreign companies move their operations to Indonesia, they need to know how to cope with this situation. Data from 152 managers and directors representing 152 organizations are analyzed using structural equation modelling (SEM). The results show that individualism affects TQM implementation positively, while power distance has no correlation with TQM implementation. The contribution of this study is providing direction for improvement to Indonesian manufacturing firms that want to implement TQM. The implication of this finding is that top management need to set up an atmosphere that can improve level of individualism of their employees through people empowerment