THE IMPACT OF TQM PRACTICES ON KEY PERFORMANCE INDICATORS: EMPIRICAL EVIDENCE FROM AUTOMOTIVE DEALERSHIPS

The automotive business is gradually transforming into a service-based business, while the aftersales (AS) service is becoming a strategic business driver to increase the capital revenue. The relationship between quality and performance management is still adversarial, wherein the nonfinancial aspect of performance measurements is significantly ignored. This research is conducted in the context of Malaysian automotive dealerships service centres in which the primary objectives are to identify the total quality management (TQM) practices and the financial and non-financial key performance indicators (KPIs) adopted in this sector, and to examine the impact of TQM practices on AS KPIs. Therefore, a conceptual model proposes that the high implementation of soft and hard dimensions of TQM has a positive impact on KPIs. A quantitative survey methodology was employed and a structured questionnaires was elaborated based on validated theoretical concepts, while the obtained data were analysed with the help of structural equation modelling (SEM) partial least squares technique (PLS). The results refer to equivalent applicability of TQM practices across manufacturing and service sectors, while the influence of TQM practices on the multi-oriented KPIs is empirically supported. The article contributes to the literature in service marketing and quality in which it streamlines two paradigms: TQM and performance management as it can form a guideline for scholars to deepen their relevant comprehension. In practice, the findings contribute to service managers by emphasising the importance of TQM practices for the improvement of service performance in both financial and non-financial aspects.