Role of total quality management in service innovations: An empirical study of Pakistan’s financial services firms

Abstract

This empirical study examines the relationship between total quality management (TQM) and service innovation as well as the relationship between service innovation and service quality in the Pakistan’s financial services industry. Most of the past research linked innovation performance with subjective performance of the firm. But, this study empirically evaluates the effect of innovation performance on firm’s judgmental performance (Service quality).There were 190 respondents from financial service firms in Pakistan. Multiple regression analysis was used to observe the connection between TQM, service innovation practices and service quality. A model is proposed based on theoretical considerations, connecting TQM constructs to the service innovation and to the service quality construct. The theoretical construct explains the connection among TQM practices, service innovation practices and service quality. The tri-dimensional relationship bridges the gap between TQM, service innovation and service quality and shows the importance of TQM in explaining the relationship between service innovation and service quality. This research also integrates the connection among TQM implementation, Service innovation practices and service quality. Data analysis shows that TQM implementation has a positive and significant impact on service innovation as well service quality. It has contributed in confirming that TQM practices deployed in a financial service firm in Pakistan has positive impact on service innovation and service quality.