Abstract This study investigates how contextual factors influence the relationship between Quality Management (QM) practices and manufacturing performance. It contributes to the contingency theory of QM effectiveness. Drawing on the management literature, we differentiate two different groups of QM practices: Quality Exploitation and Quality Exploration. The analysis empirically investigates the internal fit with organizational structure and the external fit with environmental uncertainty on the relationship between Quality Exploration, Quality Exploitation, and operational performance. The data comes from a survey of 238 manufacturing plants in three industries across eight countries. Regression analyses show that both internal fit with the organizational structure and external fit with the environment affect performance. The findings also provide insights for managers on how to customize QM programs to achieve optimal performance benefits. In stable environments Quality Exploitation practices provide the best performance outcomes, while in a dynamic environment Quality Exploration practices with an organic organizational structure give the best results.
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