How quality management can enhance performance? A model of relationships mediated by innovation

Abstract The aim of this study is to analyse how soft and hard quality management (QM) practices enhance incremental and radical product and process innovation, and operational and financial results, and the paths from QM to financial results via innovation and operational results. The paper examines these relationships applying Partial Least Squares (PLS) and using data from 105 firms. The results show that soft QM is associated with hard practices, with incremental and radical product and process innovation, and with operational and financial results, but hard issues have no positive association with innovation, nor with operational and financial results. The results also show the path from soft QM to: (a) operational results via innovation, and (b) financial results via innovation, via operational results, and via both innovation and operational results. This study adds to the literature the mediating role of both innovation and operational results on the relationships between soft QM and financial results. It contributes to practitioners by showing the importance of both innovation and operational results to strength the association between QM and financial results, and the different paths from QM to financial results.