Unlocking the buffering role of total quality management: how organisational intangible resources shape innovation performance in dynamic and uncertain environments

Abstract

Purpose

The purpose of this paper is to demonstrate how total quality management (TQM) buffers the adverse effect of market dynamism (MKD) on banking industry innovation performance (INP) using resource-based theory.

Design/methodology/approach

This paper creates and explores a conceptual framework by evaluating the perspectives of 260 chief executive officers from the different branches of 21 ISO 27001 and PCI-DSS-accredited banks over two time periods. The product indicator approach was used in the moderation analysis, with a path being significant at 5% (t > 1.96). The study used support for innovation, innovative leadership, strategic agility and slack resources as control variables for INP. The analysis was done using SmartPLS version 4.1.0.6.

Findings

As hypothesised, MKD had a significant and negative influence on the INP (ß = −0.326, t = 5.341). TQM neutralised MKD’s negative impacts on INP in a positive and significant manner (ß = 0.127, t = 2.680).

Research limitations/implications

This study paves the way for upcoming research to explore how TQM may improve INP in the presence of other adverse environmental dynamics like technological dynamism, competitive intensity and government regulation in the banking industry. External trends may have a different impact on other industries, necessitating additional research in these areas.

Practical implications

Bank managers can manipulate the TQM strategy to shape INP, thereby revealing TQM’s strategic value. Top management teams may consider prioritising and allocating more resources to TQM initiatives. Banks that successfully use the TQM methodology are able to turn a dynamic and uncertain environment into opportunities for growth and differentiation.

Originality/value

To the best of the author’s knowledge, this is the first study to display how TQM buffers the detrimental impact of MKD on INP. It offers a first attempt at challenging previous studies that had somewhat assumed that MKD encourages banks to be innovative, proving them otherwise, changing the narrative of the literature and stimulating further debate.

Citation

Koomson, S. (2024), "Unlocking the buffering role of total quality management: how organisational intangible resources shape innovation performance in dynamic and uncertain environments", European Business Review, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/EBR-08-2024-0250