Modelling interrelationships of quality management, information technology and entrepreneurial culture and their impact on performance from Indian IT enabled service SMEs

Abstract

Purpose This paper attempts to empirically model and analyse interrelationships of quality management (QM), information technology (IT) and entrepreneurial culture (EC) with its impact on performance of Indian IT enabled service small and medium size enterprises (SMEs). More specifically, this paper aims to investigate the proposed model which is validated by analysing both direct and indirect paths by deploying higher order structural modelling. Design/methodology/approach A quantitative approach has been followed by deploying cross-sectional research design. Structured questionnaires were distributed personally and by e-mail to around 1,380 service SMEs. The approach follows empirical testing and analyses of hypothesized paths of the proposed research model which is validated with confirmatory factor analysis (CFA) using maximum likelihood estimation. This study also identifies and tests the mediation effect of higher order constructs. Findings The findings demonstrate poor manifestation of entrepreneurial and market-oriented activities and confirm the mediation effect of IT and QM in the relationships of QM→EC along with IT→performance paths, respectively. Results indicate that IT and QM are complementary resource factors which signifies symbiotic relationships between them. Analyses highlights the significance of QM as a mediator in enhancing performance outcome through IT benefits and the effect of inculcation of EC by enterprises on their performance in today's vibrant and uncertain environment. Practical implications This study highlights major key areas of the decision-making process for SMEs’ owner and operations manager to overcome identified challenges like instituting collaboration with external business firms for learning, sharing risks and diversifying innovation capacity for managing capabilities of firms to earn sustainable profit margins. The outcome of this study would help operations manager, decision makers and entrepreneurs to redesign their business processes and entrepreneurial strategies by deploying operational intelligence in order to ensure agility and smooth flow within the firms. This would facilitate and help SMEs to cut down costs and redundancies in the process which would improve productivity and performance excellence. Originality/value The novelty of this study is based on development and empirical validation of the proposed research model which depicts how service SMEs could generate value with influence/effect of contextual factors on the QM–performance relationship. Findings of this study make significant contribution to the body of knowledge with new insights by highlighting the niche area in terms of interlinkages pertaining to quality management, IT and EC explicitly in Indian SMEs’ context.

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