Human Resource Management within Purchasing Management: Its Relationship to Total Quality Management Success.
Subject:
Human resource management (Research)
Authors:
Carter, Joseph R.
Smeltzer, Larry R.
Narasimhan, Ram
Pub Date:
03/22/2000
Publication:
Name: Journal of Supply Chain Management Publisher: National Association of Purchasing Management, Inc. Audience: Trade Format: Magazine/Journal Subject: Business; Business, general Copyright: COPYRIGHT 2000 National Association of Purchasing Management, Inc. ISSN: 1523-2409
Issue:
Date: Spring, 2000 Source Volume: 36 Source Issue: 2
Product:
Product Code: 9141252 Human Resources NAICS Code: 92112 Legislative Bodies
Geographic:
Geographic Scope: United States Geographic Code: 1USA United States

Accession Number:
62449462
Full Text:
The extent to which human resource management (HRM) within purchasing management affects total quality management (TQM) was empirically tested. Five primary results emerged. First, organizations with more successful TQM programs were more likely to stress formal performance evaluations of purchasing employees. Second, purchasing employees at successful TQM firms were more involved in key decisionmaking processes that impact their jobs than their counterparts in less successful TQM firms. Third, purchasing employees in organizations with more successful TQM programs had a greater level of perceived support through job security and less fear of failure when taking a risk. Fourth, purchasing employees in more successful TQM firms had more TQM-related training. Fifth, purchasing employees in more successful TQM organizations were more likely to be rewarded for individual goal attainment than purchasing employees in less successful TQM organizations.

The role of human resource practices in the successful implementation of total quality management programs has been frequently addressed. In an attempt to develop a working definition for TQM, Miller argues that models should be developed and tested that examine the impact of quality management in terms of overall organizational performance (Miller 1996). But what organizational processes lead to TQM? More specifically, what effect does the interaction of human resource management and purchasing management have on total quality? An academic journal, the Journal of Quality Management, has been dedicated to the role of human resources and quality. However, the interaction of human resource practices with purchasing management and its impact on total quality have not been thoroughly analyzed. This statement is supported by researchers such as Morrow (1997), who has made efforts to analyze the relationship of TQM and human resource practices.

Because this interaction has not been addressed, the purpose of this research is to analyze the human resource practices within the purchasing process to determine their relationship to the success of total quality management programs. First, the literature on the relationship between human resource practices and TQM is analyzed. Second, as a result of this literature, hypotheses are presented that relate to TQM success and purchasing management. Third, these hypotheses are tested and their implications are discussed.

HUMAN RESOURCE PRACTICES AND TOTAL QUALITY MANAGEMENT

The argument has been presented that within the context of TQM, human resource management must take a new or nontraditional perspective. The old model of simply refining past practices is not sufficient (Cardy and Dobbins 1996). A bona fide TQM program cuts across the organization and brings with it dramatic changes from traditional management practices (Hackman and Wageman 1995). These changes mandate a corresponding change in both the process and the content of HRM (Gibson, Ivancevich, and Donnelly 1991). Accordingly, a major research thrust within the context of TQM should be to develop a prescriptive model for appropriate

HRM practices. A major assumption of TQM is that people are naturally motivated to do a good job and to improve quality (Bounds and Dobbins 1992). Thus, it would seem that a prescriptive model is needed for purchasing that fits within the constraints of this assumption.

To begin developing a model for HRM practices that is consistent for purchasing in a TQM initiative, it is necessary to delineate the key HRM practices and test them within purchasing processes. A review of the literature indicates that five practices should be considered. Each of these practices is listed and a corresponding hypothesis is stated.

Purchasing Performance Evaluation

No doubt one of the best-known TQM proponents is W. Edwards Deming (1983). An important characteristic of his writings is an argument for the elimination of formal performance appraisals because they are perceived as contradictory to the purpose of TQM. But many academic HRM researchers disagree with this perspective. For instance, Carson, Cardy, and Dobbins (1991) as well as Waldman and Kenett (1991) present evidence that formal performance evaluation systems facilitate improved total quality performance. After a thorough review of the literature and management issues relating to quality and performance review, Masterson and Taylor (1996) present a model in which they claim that quality and performance review processes complement each other.

This body of literature, however, seems to omit a critical variable relating to the purchasing process. Specifically, purchasing professionals have a dual-customer orientation in that they must be concerned with both internal customers and external constituents. Purchasing has a unique role as it must be concerned with quality in other organizations -- suppliers -- as well as its own (Curkovic and Handfield 1995). This is unique in that if personnel performance reviews are related to an organization's quality, the performance criteria would need to integrate the quality of another, external organization. To date, however, no such research evaluates internal personnel's performance against an external agent's quality performance.

The extant literature indicates that personnel performance evaluations would be related to successful quality performance. However, the research has not explicitly analyzed the performance reviews of purchasing personnel. This leads to the first hypothesis.

Hypothesis One: Organizations that are more successful with their total quality management efforts stress formal personnel performance evaluations to a greater extent than organizations with less successful TQM programs.

Personnel Involvement in Decisionmaking

A cornerstone of TQM is its emphasis on the role of workers in analyzing current quality problems, measuring their causes and results, and evaluating and recommending improvements (Walton 1986). As a result, it is generally accepted that the TQM environment fosters employee empowerment (Vogt and Murrell 1990). A recent study by Giunipero and Vogt (1997) analyzed the role of employee empowerment in the purchasing function. Their findings indicate that purchasing employees have demonstrated a high degree of adoption of empowerment approaches. However, these researchers did not test the relationship between purchasing employee empowerment and an organization's success with TQM strategies.

If employee empowerment is a cornerstone of successful TQM, it would seem that purchasing employees who are empowered would be associated with more successful TQM programs. However, purchasing employee empowerment has not been specifically examined to determine if this relationship holds true. Furthermore, the argument has been presented that not all workers find the idea of empowerment appealing (Aeppel 1997). Because the relationship among empowerment, purchasing management, and TQM has not been tested, the following hypothesis is presented.

Hypothesis Two: Organizations that are more successful with their total quality management efforts will have purchasing personnel who exhibit a greater sense of empowerment than organizations with less successful TQM programs.

Tolerance of Employee Risk Taking

Much has been written about the relationship between individual-level variables and TQM success (Stone and Eddy 1996). At this individual level of analysis, a major focus of attention has been the ability, willingness, or opportunity to take risks (Moorhead and Griffin 1995). In terms of TQM, this translates to the willingness to make improvement suggestions without the fear of organizational reprisal. But the organization must also be disposed to support risk-taking activity by empowered employees (Huber 1980). Attention must be given to both the individual and organizational levels when considering TQM (Stone and Eddy 1996). Does the individual have security in the face of a risk environment and do employees have security when taking a risk? The answers to these questions are particularly important in TQM efforts. An essential aspect of TQM is for employees to uncover needed changes and to possess the ability, opportunity, and support to make these changes.

In the context of purchasing, Kolchin and Giunipero (1993) found that interpersonal skills are one of the main skills required for a purchasing professional. A major component of interpersonal skills is risk taking in an appropriate human relations context. Another set of researchers has stated that a major aspect of a purchasing professional's job is to create and manage change (Pagell, Das, Curkovic, and Easton 1996). The implementation of change involves risk as it disrupts the status quo.

Although risk has received research attention and much has been said about it, the relationship among employees' opportunity to take risk, purchasing activities, and level of success in TQM efforts has not been directly studied (Harrison 1995). Accordingly, a third hypothesis is presented.

Hypothesis Three: Purchasing employees in organizations with more successful TQM programs will have a greater level of perceived support through job security and less fear of failure when taking a risk than purchasing employees in organizations with less successful TQM programs.

Employee Training

The importance of employee training for effective and efficient purchasing practice is well documented (Wilkinson 1992). The argument has been made persuasively that training for purchasing employees is what leads to world-class purchasing practices (Yates and Garcia 1993). Also, the key to successful purchasing learning organizations seems to be a well-trained purchasing professional (Pfeffer and Veiga 1999). Training employees for the supplier organization, as well as the buying organization, seems equally important (Deming 1986).

The critical role of employee training in quality programs has been well documented. Deming, a very well-known TQM authority, presented 14 points necessary for successful TQM implementation. One of these points was that all employees must be trained in quality improvement techniques (Lubrinski and Davis 1992). The importance of employee abilities and their ability to implement continuous tactics that lead to continuous improvement has also received research support (Moffat, Bettinger, Howarth, and Casavant 1993; Passmore and Fagans 1992).

Although training of purchasing employees has been deemed important and training is essential for TQM success, the link between purchasing employee training and TQM program success has not been analyzed. Therefore, the following hypothesis is presented.

Hypothesis Four: Purchasing employees will have received more formal training in quality techniques in organizations with successful TQM programs than in organizations with less successful TQM programs.

Teams

The use of teams may be one of the most discussed aspects of both purchasing management and TQM practice during the 1990s (Monczka and Trent 1993). A survey of purchasing managers found that 80 percent of the respondents plan to emphasize the use of cross-functional teams in the immediate future (Ellram and Pearson 1993). Another study found that purchasing teams are involved in a wide variety of issues (Dobler and Burt 1996). But the fact remains that some purchasing organizations use teams sparingly while others use them extensively.

Two issues center on teams in the United States: (1) the individualistic orientation of U.S. workers and (2) individualized rather than team-oriented compensation systems. The results of numerous studies and observations conclude that U.S. workers are some of the most individualistically oriented employees in the world (Hofstede 1991). One of the most obvious differences in team orientations occurs between U.S. workers and those in Japan, where TQM practice has been extremely successful. Because of the dramatic differences between the two cultures, some have argued that teams will only have limited success in the United States, and a more logical approach would be to stress individualistic management strategies (Lewicki, Saunders, and Minton 1997). This is exactly counter to the Deming and TQM philosophies -- thus a conflict exists. U.S. workers may desire autonomy in their jobs, but teams stress group membership rather than individual achievements.

Highly related to the individualistic orientation is that in traditional compensation systems, such as those used in the United States, rewards are based on individual achievement rather than team achievements. Some rather innovative profit-sharing or gain-sharing models that stress teamwork are emerging; however, the corporate compensation emphasis is still focused on individual achievement. Compensation authorities generally agree that the United States has not developed a compensation system that rewards employees for team participation and effectiveness (Milkovich and Newman 1993; Weber and Rynes 1991).

The individualistic employee orientation and individually focused pay systems create a dilemma for purchasing management. If purchasing were to truly use cross-functional teams and be rewarded for doing so, the processes would be contrary to traditional American practice. However, these processes would be consistent with TQM philosophies. Thus, the question is whether the individual or group is rewarded and recognized for its contributions. A related question is the extent to which the employees have autonomy in their jobs. If TQM philosophies were integrated within the organization, employees would have limited individual recognition or individual autonomy. A dilemma exists. Because this research is conducted within the context of contemporary management practices, the following hypothesis is presented.

Hypothesis Five: Organizations with more successful TQM programs will be more likely to reward employees for individual goal attainment than organizations with less successful TQM programs.

RESEARCH DESIGN

The first phase of the research study involved the development and mailing of a comprehensive questionnaire to purchasing personnel at all levels within firms spanning several U.S. industrial classifications. Approximately 3,000 questionnaires were mailed to a sample of potential respondents selected from the National Association of Purchasing Management (NAPM) membership database within the United States. The sample was selected using a stratified random sampling procedure to ensure the representativeness of the sample as well as the collection of appropriate data. The NAPM database is segmented into three subsets based on professional position within purchasing: (1) vice presidents and directors; (2) purchasing managers, senior purchasing officers, and senior buyers; and (3) buyers, purchasing agents, and associate buyers. Surveys were Sent out in equal numbers to each of these three segments.

The researchers received 302 completed questionnaires, constituting a response rate of approximately 10 percent. Of these 302 questionnaires, 111 respondents, or 36.7 percent of the sample, represented vice presidents and directors; 120 respondents, or 39.7 percent of the sample, represented purchasing managers, senior purchasing officers, and senior buyers; and 71 respondents, or 23.6 percent of the sample, represented buyers, purchasing agents, and associate buyers. Clearly, all levels within the purchasing function were represented in the sample. A copy of the questionnaire may be obtained from the first author.

Next, a framework for the data analysis was developed and consisted of two phases: (1) exploratory data analysis and (2) prescriptive model building.

Exploratory Data Analysis

The primary objective of the exploratory analysis was data exploration and reduction. Because the investigators started with a tentative conceptual framework and used it to develop the questionnaire, they were "tapping" concepts relating to purchasing activities in an organization for which no direct measures might exist. For example, how can one place a numeric measure on purchasing personnel empowerment? Nonetheless, certain key issues were of major interest in this study. Consequently, the investigators included several subjective measurements in the questionnaire design on which to collect data for each concept. In this phase of the analysis, one of the objectives was to verify whether the subjective measurements were consistent with a single underlying concept or whether some more complex structures had to be developed. All of the variables, except one, were measured using a seven-point Likerttype scale.

Principal components analysis was the initial step. This result should be consistent with the investigators' hypothesized model of major criteria and their interaction. The resulting pattern of factor loadings afforded meaningful interpretation of seven TQM Factors. These factors are found in Appendix 1.

Prescriptive Model Building

Discriminant analysis was the next step. In this phase of the analysis, the investigators wanted to determine whether the sampled firms could be classified into two groups depending on their degree of success as judged by the composite index of performance. The goal for this separation was the development of a prescriptive model of TQM success within purchasing.

Toward this goal, four performance-oriented variables were analyzed in order to reduce them to a common single composite variable to be used in the analysis. These four variables were taken from responses provided to questions found in the survey instrument. Each variable is defined as follows:

* SALES -- Sales dollars of the respondent's firm or business unit

* POSITION -- Market position of the business unit in its core market (market leader, dominant player, or follower)

* GOAL -- Degree of achievement of total quality management (TQM) and customer satisfaction goals set by the business unit

* MKTSHAR -- Market share of the firm's principal products

Using the computed values for the composite index of performance, a linear model was fitted to the respondents' data.

PERF = [b.sub.0] + [b.sub.1] (TQM FACTOR 1) +[ldots]+ [b.sub.7] (TQM FACIOR 7), where PERF = the composite index of performance

Complete data was available for 179 cases. Table I shows a histogram of the composite index for the 179 cases in the sample. The bimodal distribution indicates that there is some validity to dividing the sample into two groups, arbitrarily defined as "successful" and "less successful," with a score of zero as the dividing point.

Before attempting to perform discriminant analysis, 30 cases were set aside for validating the empirically determined discriminant function. The remaining 149 cases were classified into "successful" and "less successful" cases for the purpose of discriminant analysis. Ninety cases belonged to the "successful" group, and 59 cases fell into the "less successful" group.

Tables II through V show the results of discriminant analysis. Those outputs of the discriminant analysis are the standardized discriminant function coefficients, the structure matrix for the discriminant function, and the discriminant functions evaluated at the centroids of the two groups. The estimated discriminant function is highly significant (indicated by the chi-square value of 46.335 and the associated significance level of 0.0000). The canonical correlation of 0.5253 shows the degree of association between the discriminant scores and the two groups. The degree of association is quite robust. The structure matrix indicates the relative contributions of the factors to the discriminant function. TQM Factors 6 and 7 contribute relatively less to discrimination between the two groups. The evaluated values for the discriminant function at the group centroids show good separation between the groups. Further, the computed values show that the less successful group has a mean of -0.75734 and the successful gr oup has a mean of 0.49648. To document further validity of the model, a test of the equality of group co-variance matrices using Box's M statistic, significant at the F[less than]0.01 level, is provided in Table V.

Classification results for the analysis and validation samples are shown in Tables VI and VII. About 75 percent of the cases in the analysis sample are correctly classified, whereas about 83 percent of the cases are correctly classified in the validation sample. These results lend credence to the estimated discriminant function and provide a firm mathematical justification for the development of a prescriptive model.

In the next stage of analysis, a linear model was fitted separately for each group, with the composite index of performance as the dependent variable and the factors as the independent variables. A comparative analysis of these two regressions and the regression model that was fitted to the aggregate data yielded useful insights. Summarization data for the regression models is presented in Table VIII.

RESULTS

The "multiple R" and "R-square" values are higher for the linear model pertaining to the successful firms than for the model relating to the less successful firms. This indicates that the TQM Factors relating to the procurement function are more relevant to explaining the variation in the composite measure of performance for the group of successful firms than for the less successful group. The "R-square" value is lower for the less successful group, thus implying a weaker relationship between the TQM Factors and corporate performance than for the successful group.

The comparative analysis in Table VII also shows the factors having the largest betas and those that are not statistically significant. In the model corresponding to the subgroup of less successful firms, we note that Factor 6 (Competitive Focus) is not statistically significant. However, Factor 6 is a statistically significant factor in the model corresponding to the subgroup of successful firms.

Factor 3 (Level of Interaction with Other Functional Areas, that is, integration) and Factor 5 (Influence over Suppliers) are statistically significant in the model for the subgroup of less successful firms. However, neither factor is statistically significant in the model for successful firms. As discussed previously, successful firms rely much more on cooperative relationships with their suppliers than do firms in the other group.

In the successful firms, Factors 1 and 2 are the two most important factors in explaining the variation in the index of corporate performance. This suggests that successful firms emphasize the procurement function and critical interaction with their supplier base. It could be argued that these firms are distinguished by their use of procurement as a strategic strength.

TQM Factor 2 (Interaction with Suppliers) proves significant for successful firms, but not for the less successful grouping. TQM Factor 4 (Human Resource Management) proves statistically significant for both the group of successful firms and the group of less successful firms. This connotes that in both subgroups attention is paid to HRM factors such as degree of employee empowerment, extent to which employees are recognized and rewarded for TQM goal attainment, training of purchasing personnel, perceived job security, and degree of risk taking encouraged by the firm. Clearly, this finding supports the contention that HRM issues impact TQM performance.

Due to the statistical significance in these analyses of the hypotheses, a more in-depth comparative analysis of subgroup responses was undertaken in order to test the five aforementioned hypotheses. Hypothesis One suggests that organizations with more successful TQM programs are more likely to stress formal personnel performance evaluations than firms with less successful TQM programs. The comparative analysis presented in Figure 1 suggests that this hypothesis oversimplifies the issue of purchasing employee performance evaluation. Figure 1 shows that successful firms are more likely than less successful firms to tie their performance evaluation of purchasing personnel to supplier quality improvement initiatives (mean = 2.36 versus 3.17). However, successful firms are less likely than less successful firms to tie the performance evaluation of purchasing personnel to internal customer satisfaction goals (mean = 3.25 versus 3.54), but the difference is not statistically significant.

These findings imply that suppliers play a role in the TQM efforts of successful firms and that these firms closely relate supplier quality performance to internal personnel performance. Successful TQM firms seem to be outward-looking and actively manage quality performance at the supplier site. At the same time, less successful TQM firms seem to stress internal customer satisfaction goals.

Hypothesis Two suggests that purchasing employees at successful TQM firms will be more intimately involved in key decisionmaking processes that impact their jobs than their counterparts in less successful TQM firms. The data presented in Figure 2 supports this hypothesis. Purchasing personnel at successful TQM firms are more involved in key decisions that affect their jobs than personnel at less successful firms (mean = 4.38 versus 3.38). More substantively demonstrated in Figure 2 is the fact that purchasing personnel at successful TQM firms are more involved in operational decisionmaking (mean = 4.38 versus 3.62). These findings suggest that the need for purchasing personnel to be involved in key strategic decisions and the need for purchasing personnel to be involved in more tactical decisions are both important for TQM success.

Hypothesis Three suggests that purchasing employees in organizations with more successful TQM programs will have a greater level of perceived support through job security and less fear of failure when taking a risk than purchasing employees in organizations with less successful TQM programs. The data presented graphically in Figure 3 does not support this hypothesis. Purchasing employees at successful TQM firms view themselves as having greater job security (mean = 3.54 versus 3.15) but a perceived level of lower tolerance of failure (mean = 3.46 versus 3.33) than purchasing employees at less successful TQM firms. This finding suggests that risk-taking behavior may not be an important element in TQM success.

Hypothesis Four suggests that purchasing employees in firms that are successful at TQM implementation have received more formal training regarding quality improvement and customer satisfaction than those in less successful firms. The data presented in Figure 4 substantively supports this hypothesis. Purchasing employees at successful TQM firms receive more quality-oriented training than their counterparts at less successful firms (mean = 4.62 versus 3.38). This fact suggests that training may be a strong pillar of TQM success. In addition, suppliers at successful TQM firms also receive significantly more formal quality improvement training (mean = 4.00 versus 2.54).

Finally, Hypothesis Five suggests that organizations with successful TQM programs will be more likely to reward employees for individual goal attainment than organizations with less successful TQM programs. The data presented in Figure 5 sheds a great deal of light on this subject. At successful TQM firms in relation to less successful TQM firms, purchasing employees are both rewarded and recognized more for their contributions (mean = 3.83 versus 2.77) and they have more job autonomy (mean = 4.77 versus 3.66). The data supports acceptance of Hypothesis Five.

DISCUSSION AND IMPLICATIONS

Is risk necessarily highly related to change? Numerous examples and research studies indicate that the purchasing process is in the midst of change. But to implement these changes, must employees feel secure in their jobs and not be afraid of failure? In other words, should change be equated with risk? Because change is at the heart of TQM, in that continuous improvement is also continuous change, should the employee's sense of risk be minimized?

This study indicates that purchasing employees do not have perceived job security to a greater extent in organizations with successful TQM programs than in organizations with less successful TQM programs. Also, failure is not tolerated to a greater extent in successful than in less successful TQM organizations. The management implication is that undue concern with job security is not necessary where perceived failure exists.

A second finding relates to training. Training for suppliers is one distinguishing characteristic between successful and less successful TQM programs. This finding is consistent with the literature that stresses the importance of purchasing supplier development (Krause 1997).

The significant relationship between TQM success and internal employee training provides a strong argument for managers who are attempting to enlarge their employee training budgets. This research clearly provides support for supplier development efforts. Purchasing groups that want to be an integral part of an organization's TQM efforts need to provide training to both suppliers and internal personnel on TQM concepts and processes.

Another interesting finding is the relationship between job autonomy and TQM success. Significant differences exist between successful and less successful organizational TQM efforts in both personnel rewards and recognition and personnel autonomy. A trend exists in that less successful TQM organizations have both less individual rewards and less autonomy. The assertion can be made that the principles of employee empowerment are stressed in the organizations with more successful TQM programs.

The question may be asked, "Why did a statistically significant difference emerge between the companies on this variable?" The point was made earlier that a strong emphasis on individuality exists in the United States. A long tradition exists for individual rewards and recognition along with considerable job autonomy. These results indicate that individual autonomy and recognition among purchasing employees is related to TQM success. Furthermore, the results indicate that a tendency exists to have more job autonomy and recognition/ rewards in more successful TQM organizations. This data provides strong evidence for the importance of empowerment initiatives. The managerial implication is that purchasing managers should continue to emphasize empowerment and individual efforts along with accountability in the purchasing process.

The data relating to performance evaluation was not as clear but, nonetheless, some valuable findings emerge. No statistically significant differences exist among the two sets of companies for purchasing performance evaluation and internal customer satisfaction. However, a significant difference exists between successful and less successful organizations on the relationship between performance evaluation and supplier quality improvement. This is important for purchasing management and demonstrates how the purchasing process is unique from other functions within the organization. It clearly indicates that purchasing has a specialized role with external organizations. It also indicates the importance that purchasing ascribes to supplier quality improvement.

The managerial implication is that purchasing may have to develop a performance evaluation system that is unique from other areas in the organization. In other words, a scorecard unique to purchasing may be necessary. In all likelihood, other functions do not emphasize external relations in their evaluations of quality performance; however, it is important that purchasing integrate external relationships in its evaluations. Most traditional personnel evaluation systems do not evaluate the ability to manage both internal and external relations (Fisher, Schoenfeldt, and Shaw 1999).

The final finding relates to involvement in decisionmaking. A significant difference exists between successful and less successful TQM organizations in the extent to which purchasing personnel are involved in operational decisionmaking. In addition, a statistically significant difference exists in the extent to which purchasing personnel are involved in key decisions affecting their jobs.

One possible explanation for this result is that many trends in commodities may affect purchasing personnel's job that they cannot control. These factors are external to the organization. For instance, the price of copper or the worldwide supply of computer chips may dramatically affect the buyer's job; however, the buyer has no influence on these factors. In many ways, the purchasing function is influenced by commodity factors beyond the control of any one individual; hence, purchasing professionals may feel they need substantial involvement in key decisions affecting their jobs.

But operational decisionmaking is a different matter. These are the decisions internal to the company, and purchasing personnel can have influence over these decisions. In other words, in organizations with successful TQM initiatives, the purchasing employees have more operational decisionmaking involvement than in organizations with less successful TQM initiatives.

Managers can find evidence in this finding for the importance of purchasing's involvement in key decisionmaking groups. This is consistent with the basic tenets of TQM and the literature on the importance of employee empowerment. However, once again, purchasing professionals are somewhat different from other professionals. Purchasing professionals do not have much influence on many aspects of their jobs such as commodity supply and demand. It is important that managers distinguish between those aspects that purchasing personnel can and cannot influence. Accordingly, it is necessary that purchasing professionals understand these differences and adjust their strategies appropriately.

In summary, this research indicates a number of important findings for purchasing to consider when implementing human resource management practices for total quality management programs. Specifically, an environment need not be fostered that encourages risk-taking behavior. Training for both internal employees and suppliers must be considered indispensable to success. Also, individual autonomy as well as teams should be encouraged. In addition, performance evaluations must be considered that are somewhat unique from other functional areas because purchasing personnel should be evaluated on an external agent's quality. Finally, purchasing personnel may not be able to affect some commodity changes, but they can influence key decisions that impact their jobs; furthermore, purchasing professionals should also have involvement in operational decisionmaking.

AUTHORS

Joseph R. Carter is university professor of supply management, National Association of Purchasing Management (NAPM) professor in the College of Business Administration, and chair of the Supply Chain Management Department at Arizona State University. Dr. Carter earned his D.B.A. degree from the Boston University Graduate School of Management.

Larry R. Smeltzer is professor of supply chain management at Arizona State University. Dr. Smeltzer earned his Ed.D. degree from Northern illinois University.

Ram Narasimhan is distinguished professor of operations and supply chain management in the Eli Broad Graduate School of Business at Michigan State University. Dr. Narasimhan earned his Ph.D. degree from the University of Minnesota.

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Appendix A

FACTOR LOADING OF TQM FACTORS FOR EXPLORATORY DATA ANALYSIS

TQM Factor 1 -- Importance of the Purchasing Function

Key components of this factor were:

(1) Degree of top management emphasis on the purchasing function

(2) The existence and the importance of the planning process in the procurement function

(3) Purchasing's emphasis on total quality management (TQM)/customer satisfaction in defining its mission

(4) Purchasing's role in the corporate business planning processes

TQM Factor 2 -- Interaction with Suppliers

Key components of this factor were:

(1) Whether or not the company employs formal reward/recognition programs for its suppliers

(2) The number, or lack, of organizational layers in the purchasing function

(3) The level and quality of purchasing interaction with suppliers

(4) The degree of supplier training

(5) The degree of formal evaluation of purchasing personnel (based on their involvement with suppliers)

TQM Factor 3 -- Level of Interaction with Other Functional Areas

Key components of this factor were:

(1) The degree of implementation of quality improvement programs

(2) Years of experience with such programs

(3) The overall relationship of the purchasing function with the other functional areas within the firm

(4) The degree of active interaction with other functions

TQM Factor 4 -- Human Resource Management

Key components of this factor were:

(1) The degree of empowerment provided to purchasing personnel

(2) The extent to which purchasing personnel are recognized and rewarded

(3) The degree of emphasis on training purchasing personnel

(4) The level of job security perceived by purchasing personnel

(5) The degree to which purchasing personnel are encouraged to take risks without fear of punishment

TQM Factor 5 -- Influence over Suppliers

Key components of this factor were:

(1) The ability of purchasing to exert power and influence over suppliers

(2) The degree of supplier involvement

(3) The degree to which purchasing can access internal and external supplier information

TQM Factor 6 -- Competitive Focus

Key components of this factor were:

(1) The degree of single sourcing as a percentage of total purchases

(2) The use of Just-In-Time (JIT) purchasing concepts

(3) The degree of understanding of internal and external customers' needs

TQM Factor 7 -- Purchasing Organization and Structure

Key components of this factor were:

(1) The degree of decentralization of the purchasing function

(2) The degree of purchasing involvement in and interaction with the manufacturing function

(3) The degree of assigned responsibility for total quality management (TQM) and customer satisfaction to purchasing

(4) The degree of risk sharing (cost, information, etc.) with suppliers
HISTOGRAM OF PERFORMANCE SCORES
Count Midpoint
0     -5.75
0     -5.25
0     -4.75
2     -4.25
0     -3.75
1     -3.25
1     -2.75
18    -2.25
7     -1.75
15    -1.25
17    -0.75
14    -0.25
5      0.25
6      0.75
6      1.25
32     1.75
32     2.25
9      2.75
8      3.25
4      3.75
2      4.25
0      4.75
0      5.25
0      5.75
         STANDARDIZED CANONICAL DISCRIMINANT FUNCTION COEFFICIENTS
       FUNC 1
FAC1  0.82003
FAC2  0.27323
FAC3  0.50423
FAC4  0.52457
FAC5 -0.44144
FAC6  0.19559
FAC7 -0.38799
Fcn                  1 [*]
Eigenvalue      0.3811
Pct of Variance 100.00
Cum Pct         100.00
Canonical Corr  0.5253
After Fcn            0
Wilks' Lambda   0.7241
Chi-Square      46.335
df                   7
Sig             0.0000
(*.)Marks the canonical discriminant functions
remaining in the analysis.
                             STRUCTURE MATRIX
                 Pooled-within-groups correlations between
                  discriminating variables and canonical
                          discriminant functions
                           (Variables ordered by
                   size of correlation within function)
       FUNC 1
FAC1  0.54326
FAC2  0.43624
FAC3  0.37529
FAC4  0.34474
FAC5 -0.28718
FAC7  0.17465
FAC6  0.03189
                     CANONICAL DISCRIMINANT FUNCTIONS
                         EVALUATED AT GROUP MEANS
                             (Group Centroids)
Group   FUNC 1
  1   -0.75734
  2    0.49648
               TEST OF EQUALITY OF GROUP COVARIANCE MATRICES
                               USING BOX'S M
             The ranks and natural logarithms of determinants
                 printed are those of the group covariance
                                 matrices.
Group Label          Rank Log Determinant
  1 LESS SUCCESSFUL   7      -2.659886
  2 SUCCESSFUL        7      -3.960321
Pooled-Within-Groups
  Covariance Matrix   7      -3.072437
Box's M                55.094
Approximate F          1.8618
Degrees of Freedom 28,53957.8
Significance           0.0037
                     CLASSIFICATION RESULTS FOR CASES
                     SELECTED FOR USE IN THE ANALYSIS
                       Predicted Group Membership
                No. of
Actual Group    Cases               1                2
Group 1           59               44               15
LESS SUCCESSFUL                  74.6%            25.4%
Group 2           90               22               68
SUCCESSFUL                       24.4%            75.6%
Percent of "grouped" cases correctly classified: 75.17%
                   CLASSIFICATION RESULTS FOR CASES NOT
                     SELECTED FOR USE IN THE ANALYSIS
                       Predicted Group
                         Membership
                No. of
Actual Group    Cases          1         2
Group 1           16          15         1
LESS SUCCESSFUL             93.8%      6.3%
Group 2           14          4         10
SUCCESSFUL                  28.6%      71.4%
Percent of "grouped" cases correctly classified: 83.33%
                             REGRESSION MODELS
Model            Multiple R R-Square Factor    Beta
Successful Firms   0.7072   0.50010    1      0.4844
                                       2      0.4616
                                       6      0.2078
                                       4      0.2019
                                       3    not sig.
                                       5    not sig.
Less Successful    0.6260   0.39188    3      0.3827
Firms                                  5     -0.3473
                                       1      0.3281
                                       4      0.2863
                                       2    not sig.
                                       6    not sig.
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