Financial performance of firms with effective total quality management (TOM) programmes in Kenya
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Date
2003-11Author
Omiti, Margaret K
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
This study explores the hypothesis that implementing effective TOM programmes
improves the operating performance of firms. ISO Certification is used as a proxy
for the effective implementation of TOM programmes. Means of various
performance measures for an experimental group of ISO certified firms are
compared against a sample of control firms. The statistical tests provide evidence
that firms with effective TOM programmes show significant improvement in
performance as compared to the control firms on operating income based
measures and sales based measures.
The return on total assets employed for the experimental group improved from
4.79% to 8.06% in the two five-year periods of before and after TOM
implementation respectively. For the control group the mean return on total
assets employed decreased from 7.80% to 1.23% in the same period. The
difference in performance was statistically significant after TOM implementation.
Similarly the five-year mean return on equity for the experimental group improved
from 9.38% to 18.28% in the period before and after TOM implementation
respectively. Over the same period the control firms' return on equity decreased
from19.2% to 10%. The difference in performance was statistically significant.
The mean performance change in sales for the experimental group dropped from
40.61% to 6.62% over the period before and after TOM implementation. That of
the control group dropped from 13.12% to (negative) -0.85% over the period
before and after TOM implementation respectively. However .the difference was
statistically insignificant. Similarly, the mean of the percentage change in net
income for the experimental group decreased marginally from 16.74% to 11.90%
for the period before and after TOM implementation while that of the control
group decreased significantly from 38.42% to (negative) -41.68%. However the
difference in performance was tested and found to be insignificant.
Citation
Masters in Business Administration, University of Nairobi (2003)Publisher
University of Nairobi. Faculty of Commerce