Total Quality Management Practices and Microfinance Institutions Performance in Yemen: The Resource Based View Theory Perspective

Abstract

The total quality management (TQM) practices in most of the organizations have proven to be the key strategic approach to ensure the peak performance of the firms. In the microfinance institutional (MFIs) contexts, the contribution of TQM is undeniably importance. From a study that has been conducted in Yemen, 125 usable questionnaires were collected using a self-administered technique and analyzed from the branch managers of the MFIs operating in this country. It was done in 2014 at the early stage of the political crisis in the country where most financial institutions were not functioning at the optimum level. The analysis used the partial least squares approach, evaluating the research framework, the measurement model and the structural model. The results show that TQM has a significant effect on the MFIs performance and supports the resource-based view theory, the underlying theory for the research that views the organizational resources as a source of sustainable competitive advantage. The findings provide useful insights into the practices and the contribution of the TQM to the MFIs and could be the benchmark for the practices in the middle-east countries.

Keywords

• Total Quality Management, Microfinance Institutions Performance, Resource Based View Theory