The impact of quality management practices on the performance of Small and Medium Scale Industries (SMIs) in Sri Lanka

Abstract

With a small amount of capital requirement and a medium level of technology, SMIs can attract many new entrepreneurs to venture into new business. SMIs can generate a massive desired route for employment due to the fact that their production techniques are still at low or medium levels and they are more labor intensive. In this context, the performance of most SMIs in Sri Lanka is lower than accepted level and they have to improve their technical and technological capabilities to meet the market needs and for the sustainable development in economy. The quality management practices play a significant role for continuous improvement and competing current markets with the formalized managerial practices. Therefore, this study is focused on analyzing the relationship between management system and quality management practices and its need for SMIs? performance. The study framework includes leadership and human resource as two dimensions of quality management practices and sales growth of the firm as the performance indicator. Using binary logistic regression analysis, this study analyzes the link between mentioned quality management practices and firm?s performance. However, SMIs have several limitations when they implement quality management practices, the study has investigated leadership category and human resource category improve organizational performance. The small sample size is one of the research limitations and the inclusion of some more variables such as strategic planning, customer focus and level of information technology in the organization will bring broader perspective to the research.