This paper explores how fit with the organization s strategic orientation relates to performance following total quality management (TQM) implementation. Conceptualizing the organization as a system of interrelated activities, we propose that TQM is an elaborating element that achieves internal fit when the core elements of the activity system are orientated toward a cost leadership rather than differentiation strategic position. When internal fit occurs, TQM drives tighter interactions among core elements in the activity system, resulting in greater performance. Using longitudinal data from a sample of 780 manufacturing organizations, we find that TQM is positively related to performance for cost leaders, but negatively related to performance for differentiators. Our findings support the contingency perspective whereby internal fit serves as an overarching contextual factor influencing TQM success.
Zatzick, C. D., Moliterno, T. P., & Fang, T. (2012). Strategic (mis)fit: The implementation of TQM in manufacturing organizations. Strategic Management Journal, 33(11), 1321 - 1330. https://doi.org/10.1002/smj.1988