Total quality management, sustainable competitive advantage, and the resource-based view an exploratory study of TQM and competitive advantage at Fisher & Paykel

Abstract

The aim of this research is to examine the relationships between Total Quality Management (TQM) and sustainable competitive advantage at Fisher & Paykel Appliances Ltd's Dunedin plant. The theory of how TQM may generate or support sustainable competitive advantage has previously been relatively uncharted.

Therefore, this study is an exploratory case study using primary data from interviews with the plant Quality Facilitator and HR Manager, and additional data from secondary sources. The study also examines the stronger sustainability of competitive advantage from resource combinations.

The foremost conclusion from this study is that the cornerstone of Fisher & Paykel's competitive advantage lies in their innovative capacity, and that it is their core values

– style, integrity, care, and innovation – underpinning their quality-inspired systems, operations, and culture that differentiate them in terms of innovative and competitive product design and manufacturing. While innovative products are the final results that generate value for the firm, it is the underlying quality systems, culture, and infrastructure that generates and supports innovation.

The study finds that Fisher & Paykel's core competence is its ability to design, manufacture, and get to market, innovative, stylish, and superior quality products more quickly than competitors, and support the products with care and integrity inspired quality service. It is the F&P way – their TQM system and culture – that facilitates this core competence, and consequently, appears to generate sustainable competitive advantage.

The holistic quality system (the F&P Way), strategic quality management planning, process control and management, and care in the team environment are identified as core gestalt combinations that appear to support Fisher & Paykel's sustainable competitive advantage. The results of this study suggest that three dynamic capabilities are the principal sources of sustainable competitive advantage at Fisher & Paykel: customer focus (service & satisfaction), continuous improvement, and innovation.

The value of this study is that establishes some empirical progress in the theoretical explanation of the relationship between TQM and sustainable competitive advantage, and how TQM can generate sustainable competitive advantage.