The Mediating Effect of Innovation between Total Quality Management (TQM) and Business Performance

Both TQM and Innovation are the competitive key factors that intensely embedded into organizational products, service and process. In order to achieve higher business performance, organizations are needed to adopt both quality and innovation. Therefore, the main objective of this paper is to identify the relationship between TQM and business performance with a mediator's effect of Innovation. After detailed review the extensive literature, a new TQM model is presented. The proposed model integrates the TQM practices and different type of innovation attempt to develop a theoretical knowledge to help academician and manufacturer to understand the relationship that design quality in product and service and engaging innovation in the activities. To this end, the SEM-PLS (Structural Equation Modelling - Partial Least Squares Structural) is used to identify and evaluate the relationship among TQM, Innovation and business performance in establishing a new TQM model.