Do total quality management and external factors matter? The effect of innovation behaviour on innovation performance in banks

Abstract

Purpose Although total quality management (TQM) is an innovative management philosophy, how it connects innovative behaviour (INB) to innovation performance (INP) has gone unnoticed. Also, the external factors (technological turbulence [TUR], competitive intensity [CMP], market dynamism [MKD] and government regulation [GOV]) under which the INB–TQM connection may grow are yet to be understood. In spite of the various evolutions that have occurred in the banking industry, there remains a necessity to enhance the quality of service offered to clients. This paper aims to address these issues in the total quality management literature. Design/methodology/approach This study constructs and analyses a research framework by analysing the replies of 260 executives in senior and intermediate positions across 21 quality-certified universal banks in Ghana, using the Smart PLS methodology. Findings TQM played a partial mediating role between INB and INP (variance accounted for = 46.85%, p = 0.000). TUR ( β = 0.023, p = 0.000), CMP ( β = 0.043, p = 0.000), MKD ( β = 0.056, p = 0.000) and GOV ( β = 0.068, p = 0.000) positively and significantly moderated the INB–TQM connection. Research limitations/implications Future research may examine the proposed framework in various environments and sectors. Practical implications Practical insights for industry players in the sector are discussed. Originality/value To the best of the authors’ knowledge, this study is the first to show how innovation serves both as an antecedent and consequence of TQM. It is also the first to explicate the boundary conditions under which the INB–TQM relationship may flourish.