The relationship between innovation and total quality management and the innovation effects on organizational performance

Purpose The purpose of this paper is to analyze the relationship between innovation and total quality management (TQM), and also to identify the effects of innovation on organizational performance. This research proposes a conceptual model that intends to study several research hypotheses. Design/methodology/approach The data were obtained through an online questionnaire, sent to small- and medium-sized Portuguese companies, having being conducted the study based on responses received from 287 valid questionnaires, and using a multivariate statistical analysis for statistical development. Findings The findings indicate that companies that adopt strategies of process innovation get improvements in their performance, both operationally and financially, while product innovation only provides improvements in the financial performance of organizations. It was also found that TQM practices encourage the definition of innovation strategies of products and processes. On the other hand, it was found that only companies that adopt innovation strategies of their processes promote the adoption of TQM practices, and there is a statistically significant relationship between product innovation and the implementation of TQM practices. Originality/value This research analyzed the dimensions studied in different aspects. It considered product innovation and process innovation, and with respect to performance, this dimension was analyzed through two different perspectives, namely, financial performance and operational performance. This research also provides a particular contribution to the literature with the analysis of the interdependencies between innovation and TQM in small- and medium-sized Portuguese companies.