Enhancing the quality and competitiveness of small businesses: A pooled cross-sectional analysis

Abstract

Compared with large organizations, small businesses have been slower to adopt quality management practices. This study combined the context-free perspective with the contingency theory of quality management to investigate the association between quality management and the quality and operational outcomes of a sample of 231 small businesses that applied for the Baldrige quality excellence award program. Using a pooled cross-sectional design and structural equation modeling, we examined the validity and reliability of the Baldrige model for measuring the quality management practices of small businesses, to determine the relationship between the Baldrige criteria and their impact on quality outcomes. Our analysis confirms the validity and reliability of the Baldrige quality excellence model when used as an assessment tool for improving the performance outcomes and competitiveness of small businesses. Based on the results, leadership was found to be the key determinant of quality outcomes during the application year, with leadership practice scores increasing by 40% over 16 years. This study found that Information analysis and knowledge management only influences Customer focus and satisfaction, but Strategic planning for quality and Management of process quality significantly and positively influence both Customer focus and satisfaction and Quality and operational results. However, the score for Quality and operational results diminishes over time for small businesses. This study provides some effective insights and recommendations for small businesses as well as policymakers looking to support small businesses’ quality and competitiveness, because quality improvements will enhance the stability, profitability, and survivability of small businesses when facing crises like the ongoing COVID-19 pandemic.