Implementation of Total Quality Management in Improving the Company's Operational Performance

Abstract

This study aims to examine the effect of Total Quality Management (TQM) on operational performance, with continuous improvement and employee empowerment as mediating variables, at PT Arohera Indonesia, an Engineering, Procurement, and Construction Management (EPCM) service company. A quantitative approach with a causal design was employed. Using a census method, the sample comprised all 40 employees of PT Arohera outside the top management ranks. Data were collected through a Likert-scale questionnaire and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results show that TQM has a significant positive effect on continuous improvement, employee empowerment, and operational performance. Continuous improvement and employee empowerment each have a significant positive effect on operational performance. Continuous improvement significantly mediates the effect of TQM on operational performance, whereas employee empowerment does not. This study is limited by its single-company setting, its small sample, and the subjective nature of perceptual data on employee empowerment, which is difficult to measure quantitatively. Practically, the findings suggest that the company should conduct a comprehensive analysis of its existing work processes, identify inefficient or redundant steps, and systematically eliminate or improve them.