The impact of quality management systems on financial performance under crisis conditions: evidence from SMEs

The purpose of this article is to investigate the impact of total quality management (TQM) practices adopted by small and medium enterprises (SMEs) on their financial performance in a period where economic and social crisis conditions are recognised. A questionnaire was distributed to 400 recipients and a total of 392 questionnaires have been fully and accurately completed resulting in a response rate equal to 98%. Those primary data collected were statistically processed conducting a scoring analysis and a multivariate (MANOVA) analysis. The scoring analysis showed the level of quality elements implemented and the MANOVA analysis presented the effect they had on the financial performance of the quality-oriented SMEs. The analysis revealed that all quality-oriented SMEs presented an improved performance in the two financial measures such as solvency and efficiency compared to the profitability and liquidity measures. The TQM SMEs (the quality-oriented SMEs that have continued their quality journey reaching the TQM level) were the ones that have shown further improvement in their financial performance and of those, the micro-SMEs were the most financially sustainable companies. In addition, the quality-oriented SMEs have continued their quality journey towards TQM, presenting an increased rate of transition to higher quality levels, using their Altman Z-score as the criterion.