Quality conformance impact on performance through an analysis of non-quality costs: an empirical study in the hotel industry

Despite the importance that quality has as a strategic variable, its effects on organizational performance are not without controversy. The literature reports empirical evidence inconclusive, still more unfinished when analyzing their effects from an internal perspective or via processes. This study provides novel empirical evidence to this debate by examining the influence of conformity quality on the outcome of the firm, operationalized by the average total cost of the company. The proposed model examines the effects of conformity quality on non-quality costs, discriminating between those arising from external and internal failures. To this end, various measuring instruments have been developed in order to capture the complexity of the constructs conformity quality, quality failures and non-quality costs. The empirical application is based on the study of 82 Spanish hotel establishments.