WHO ADOPTS TOTAL QUALITY MANAGEMENT (TQM) - THEORY AND AN EMPIRICAL-TEST

The recent emergence of total quality management (TQM) in the U.S. has spawned a great deal of interest in management circles as well as in the mass media. However, despite the growing number of firms that have adopted this management technique, fao formal tests exist concerning the pattern of adoption as well as the changes that accompany the adop tion of TQM. This paper contrasts models of production for TQM and non -TQM firms in order to explore reasons why some firms but not others h ave adopted the TQM approach to quality improvement. Predictions arisi ng from such a comparison are tested using a unique data set that comb ines data on firms from three different sources. Our findings fend to support the proposed theory of systematic differences between firms th at find it advantageous to adopt TQM and firms that do not. We also fi nd evidence that firms adopting TQM experience greater growth in sales , employment, and capital stock.