iii Abstract This study is an empirical examines key success factors of total quality management (TQM) to the result of quality implementation in paint & coating industry in Vietnam TQM system helps the enterprise to identify the relationships between TQM factors and the enterprise performances (Sebastianelli, 2003) The quantitative data were obtained through a survey from 260 quality managers, top management managers, factory managers and purchasing managers of Paint & coating manufacturing industry in Vietnam The objectives of the research are to provide the key success factors (KSF) and measure their relationship to the quality implementation as Top management responsibility, Process design, Employee training, Employee involvement, Benchmarking, and customer focus Then, the key findings will be provided and recommendations to enhance the level of TQM in paint and coating enterprises iv Table of Contents Acknowledgement i Commitment ii Abstract iii List of table vii List of figure vii Chapter 1: Introduction 1.1.Introduction 1.2.Backgrounds to the research 1.3 Research issues, objectives and questions 1.3.1 Research issues 1.3.2 Research objectives 1.3.3 Research questions 1.4.Research methodology and scope 1.5 Thesis structure 1.6 Conclusion Chapter 2: Literature Reviews 2.1 Introduction 2.2 Total quality management 2.2.1 Definitions total quality management 2.2.2 Key success factors of TQM 10 2.3 Development of research model and hypothesis 14 2.3.1 Top management responsibility 14 2.3.2 Process design 14 2.3.3 Employee training 15 2.3.4 Employee involvement 16 2.3.5 Benchmarking 17 2.3.6 Customer focus 18 2.3.7 Result of implementing quality management 18 v 2.4 Proposed research hypotheses and research model 20 2.4.1 Research Hypotheses 20 2.4.2 Research Model 20 2.5 Conclusions 21 Chapter 3: Research Methodology 23 3.1 Introduction 23 3.2 Research design 23 3.3 Questionnaire development 24 3.3.1 Operationalization of measurement scales 24 3.3.2 Preparation of draft questionnaire 26 3.3.3 Questionnaire design 27 3.4 Pilot study 28 3.5 Main survey 28 3.5.1 Population and sampling 28 3.5.2 Questionnaires administration 30 3.5 Data analysis techniques 30 3.5.1 Data cleaning 30 3.5.2 31 3.5.3 Exploratory factor analysis (EFA) 31 3.5.4 Correlation analysis 33 3.5.5 Multiple linear regression (MLR) analyses 33 3.6 Conclusion 34 Chapter 4: Data analysis and result 35 4.1 Introduction 35 4.2 Data cleaning, Data filer and Sample description 35 4.1.1 Data cleaning and data filter 35 4.2.2 Sample description 36 4.3 Reliability test of measurement 38 4.4 Exploratory factor analysis (EFA) 41 vi 4.5 Testing the research model and the hypothesis 45 4.5.1 Testing the correlations of the constructs 45 4.5.2 Testing assumptions of Linear Regression 46 4.6 Multiple Linear Regression Analysis 47 4.7 Conclusion 51 Chapter 5: Conclusions and implications 52 5.1 Introduction 52 5.2 Discussion of findings 52 5.3 Implications 54 5.3.1 Theoretical implications 54 5.3.2 Practical implications 55 5.4 Limitation of the research 56 5.5 Conclusion 57 Bibliography 58 Appendix 1: Survey of Questionnaires Appendix 2: B ng kh English version 61 n ti ng Vi t 64 Appendix 3: Descriptive statistics of variables 67 Appendix 4: Measurement scales reliability of variables 67 Appendix 5: Exploratory Factor Analysis (EFA) 71 Appendix 6: Correlations 74 Appendix 7: Graphic analysis of regression assumptions 75 Appendix 8: Regression 77 Appendix 9: Responders interview list 78 vii List of table Table 1: Key success factors of TQM 10 Table 2: Key success factors of TQM in some previous studies 12 Table 3: Research hypotheses .20 Table 4: Measurement scale of variables 25 Table 5: Descriptive statistics on all factors 36 38 Table 7: Cronchbach's alpha values 39 Table 8: KMO and Barlett's Test 41 Table 9: Total variance explained 43 Table 10: Rotated Component Matrix 44 Table 11: Pearson Correlations .46 Table 12: Regression when RIQ (Y) is dependent variable 48 Table 13: Results of testing hypothesis 50 List of figure Figure 1: The market share in Vietnamese paint and coating industry 4 Figure 2: Research Model .21 Figure 3: Research process 23 Figure 4: The updated research model 51 Figure 5: The process of benchmarking 55 Chapter 1: Introduction 1.1 Introduction This chapter explains the reason of choosing the title, and briefly explains the problem and objectives of the research The scope and data collection methods of the research are also presented in this part It is necessary to overview about the Vietnamese paint and coating industry in order to illustrate to the readers about the weaknesses in the quality management of local companies in comparison with foreign companies that have the competitive advantages in higher service quality and technology The author also addresses the fact that there were not so many previous researches were written about the total quality management (TQM) and finding key factor success to result of implementing quality management in paint and coating industry in term of Vietnamese market characteristics 1.2 Backgrounds to the research Scott Detiveaux and Allen Tsaur (2011) reported that the global paint and coating industry has been affected by the global economic downturn since 2008 They provided the growth rate before and after the global economic downturn which are 30% and 3% respectively, showing the negative impacts of the global economy to the paint and coating industry However, Scott Detiveaux and Allen Tsaur (2011) also said that Asia Pacific was only one bright spot in the gray picture of global paint and coating industry From 2004 to 2009, the growth rate of this industry in Asia Pacific was amazing, 60%, outperforming the global economic downturn From 2010 to 2011, the growth rate of paint and coating industry has not remained at high speed and reduced to 30% but still higher than the growth rates of any other areas in the world market During the economic downturn, the production volume of this area took 41% of the 27 billion liter of the global coating volume (Scott Detiveaux and Allen Tsaur, 2011) In the Asia Pacific market of paint and coating industry, China is the strongest market in term of production and consummation During the period of 2009 to 2011, the annual growth rate of China was more than 16% India was the second place with the annual growth rate stood at 9% Japan and Australia were two markets in the Asia Pacific has been affected by the economic downturn with the annual growth rate during the period of 2009 to 2011 were 0.7% and 1.5% respectively (International Paint and Printing Ink Council, 2010) With the high growth rate of Asia Pacific, the global structure of paint and coating industry has been changed with the more focus on the Asia Pacific due to the slow growth of Western countries and the high public debt in the Euro zone Scott Detiveaux and Allen Tsaur (2011) said that more and more formulators and suppliers are coming to Asia Pacific for future growth For example, the construction spending in China and India have increased by 10% from 2009 to 2011 while the same figure in US has decreased by 4% In Vietnam, the author has recognized that the paint and coating industry is targeted as the top potential market in Asia Pacific with the annual growth rate was 21% in the period of 2003 to 2009 (http://nhipcaudautu.vn) Tran Van Chau (2012) estimated that Vietnamese paint and coating industry will be valued at US$2.5 billion in 2022 in despite of the fact that the 2009 value of this industry was only US$ 620 million The reason is that Vietnam is on the way of modernization with a lot of new construction, hydropower plants and road are being built, leading to the increase of demand for paint and coating products In term of sustainable development, Vietnam Government has established the chemical regulation for the companies operating in paint and coating since 2008 This law suit requires the paint and coating companies have to comply with the safety and quality in manufacturing products With the more focus and supports from the Government, Vietnamese paint and coating industry has been increasing during the time The highest achievement of Vietnam paint and coating development is to join the Asian Paint Industry Council (APIC) in 2008 Up to now, there are around 400 companies operating in paint and coating industry in Vietnam, according to Vietnam Paint and Printing Ink Association (VPPIA) The market is constructed by two main products that support for two distinct purposes, decoration and industrial usage In term of product volume, the decorative paint and coating product consumes the largest market share with more than 70% in the total production volume of Vietnamese paint and coating industry The Vietnamese paint and coating is also classified into four market levels The high-end market includes the products from famous international companies coming from US, Japan or England such as Azko Nobel, Nippon, Jotun with the total market share is about 35% These companies have the advantage of better distribution network compared to other companies The second one is the medium market with the participation of several companies coming from Asia such as Oranges, TOA, Sea Master, etc They are selling their products for around 25% of the market share The medium-low market includes the Vietnamese companies such as Joton, Kova, Tison, Nero etc consuming for 15% of the market share The last one is the non-brand name products which are distributed unsystematically in Vietnam with the market share is around 25% (http://nhipcaudautu.vn) Figure 1: The market share in Vietnamese paint and coating industry         (Source: http://nhipcaudautu.vn) 1.3 Research issues, objectives and questions 1.3.1 Research issues ompanies operating in paint and coating industry is now controlled by the foreign companies which is accounting from more than 50% of the total market share, raising the concern for the high competition between domestic and foreign companies In fact, according to VPPIA (2009), the total number of companies exited to the paint and coating market was 70 companies, accounted for around 20% of the total operating companies Hence, the author believes the concern for high competition between companies in the Vietnamese paint and coating industry is true The author also addresses that the WTO accession has been affecting more on the competition in the Vietnamese paint and coating industry in the years to come as Vietnamese Government has to open the domestic market for the foreign companies For locals companies the openness of domestic market is a real challenge, as they now have to face older, more developed, international companies The government is still reluctant and preserves an environment that helps domestic companies However, the Vietnamese Government cannot support the domestic companies forever as the rising of the foreign enterprises that have better manufacturing technology and product and service quality The foreign paint and coating enterprises also have higher Research & Development (R&D) capacity in studying new products and higher technology in manufacturing that help the foreign companies to achieve the higher efficiency and cost saving The foreign companies also have higher quality of materials for manufacturing paint and coating products as they have stronger supply network Currently, the foreign companies, with the higher technology production chain and better distribution network, have been providing their diversified products to different types of customers with the reasonable prices compared to the domestic companies More and more foreign products have the same price as the domestic products (http://nhipcaudautu.vn) focus on quality management in order to compete with foreign rivals in the future The paint & coating companies should built up their own quality management which is based on the philosophy of Total Quality Management (TQM) originated from Japanese, According to Karuppusami and Gandinathan (2006), TQM can be the best way that helps the enterprises continuously improving quality and process to achieve business performance However, there are not so many researches written about the role of total quality management and in the Vietnamese paint and coating industry With the strong estimated growth rate of this industry, the quality management is one of the critical 63 Level to which process design minimizes the chances of employee errors 5 5 5 Level to which company studies the best practices of other companies to about how to things better Level to which your company compares the current quality levels with those of competitors Level to which costs of your company have been reduced by quality management Level to which customer complaints have been reduced by quality management implementation Level to which the competitive position of company has been enhanced by quality management Level to which profits of your company/division have been increased by quality management Customer focus Level to which your company/division is totally committed to create satisfied customers Level to which employees know which customer value most Level to which information from customers is used is designing c resolved Level to which employees are encouraged to satisfy customers Benchmarking Results of Implementing Quality Management 64 Appendix 2: B ng kh B c m s c a b n t ch c u l ic ab ns n ti ng Vi t hi u v qu ng nt i c gi t ti t l cho b t k ban b n cung c p ch s d ng ng d n: Xin l a ch i sau b n Sau k t mong nh ch mail: anh.nguyen@wecocbc.com or fax to: +84 38248383 t th p [2] Th S t nc Lo L i nhu =15% ng: t a ch t cao 65 Ch mc C b o ch m vi ng s n ph M tham gia c ti n ch ch v C ph m pc c a nh ng m cm ch v c i c c th quan tr ng c a ch ng s n o m i ho ch t lu ng c a s n ph ch v 5 5 5 ch v t 5 5 ng M l ng s n ph nh vi M ng vi ch v , thi t b gi ng d y c n thi t ng chi ti t c ng (k thu i lao p) S tham gia c ng Hi u qu c a nh M m b o ch t u s tham gia c a tham gia c n ch ng s n ph ch v c M cam k t c n k t qu u Thi t k M d ng s n ph m d ch v m 66 M cam k t tri n khai c a m M gi n xu t t i 5 5 5 5 5 ng d ch v hi n t i ng p ch 5 ng t M s cam k t c ph n thu M hi u bi t c nh cao nh mb o i lao ng vi a d ch v c nh M s d ib c thi t k quy M cam k t gi i quy t nh ng u n i c a kh M khuy n M u ch t nh t c pt M ng d ch v c g ty so v i th c nh tranh K t qu th c nghi m c a qu M gi m thi M gi M ng n tr ch ng ng u n i t c nh tranh c ng qu n tr ch t ng M hay kh qu n tr ch ng i nhu ng h th ng 67 Appendix 3: Descriptive statistics of variables Descriptive Statistics N Minimum Maximum Mean Std Deviation tmr1 234 3.30 868 tmr2 234 3.52 835 tmr3 234 3.47 894 tmr4 234 3.47 845 etr1 234 3.35 796 etr2 234 3.20 807 etr3 234 3.48 793 ein1 234 3.56 854 ein2 234 3.56 921 ein3 234 3.68 955 pde1 234 3.38 1.038 pde2 234 3.49 1.049 pde3 233 3.31 1.021 cfo1 234 3.44 1.107 cfo2 234 3.39 1.080 cfo3 234 3.42 1.156 cfo4 234 3.24 1.124 cfo5 234 3.39 1.276 ben1 234 3.61 1.019 ben2 234 3.75 1.138 riq1 234 3.47 918 riq2 234 3.39 897 riq3 234 3.47 889 riq4 234 3.68 1.026 Valid N (listwise) 233 Appendix 4: Measurement scales reliability of variables Reliability Statistics Cronbach's N of Items Alpha 819 68 Item Statistics Mean Std Deviation N tmr1 3.30 868 234 tmr2 3.52 835 234 tmr3 3.47 894 234 tmr4 3.47 845 234 Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Cronbach's Item Deleted if Item Deleted Total Correlation Alpha if Item Deleted tmr1 10.46 4.558 641 773 tmr2 10.24 4.649 650 769 tmr3 10.29 4.420 656 766 tmr4 10.29 4.707 618 783 Reliability Statistics Cronbach's N of Items Alpha 740 Item Statistics Mean Std Deviation N etr1 3.35 796 234 etr2 3.20 807 234 etr3 3.48 793 234 Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Cronbach's Item Deleted if Item Deleted Total Correlation Alpha if Item Deleted etr1 6.68 1.927 550 673 etr2 6.83 1.830 593 622 etr3 6.56 1.930 553 670 Reliability Statistics Cronbach's N of Items Alpha 731 69 Item Statistics Mean Std Deviation N ein1 3.56 854 234 ein2 3.56 921 234 ein3 3.68 955 234 Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Cronbach's Item Deleted if Item Deleted Total Correlation Alpha if Item Deleted ein1 7.24 2.706 507 698 ein2 7.24 2.372 577 616 ein3 7.11 2.271 582 611 Reliability Statistics Cronbach's N of Items Alpha 823 Item Statistics Mean Std Deviation N pde1 3.38 1.040 233 pde2 3.49 1.051 233 pde3 3.31 1.021 233 Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Cronbach's Item Deleted if Item Deleted Total Correlation Alpha if Item Deleted pde1 6.80 3.524 653 782 pde2 6.69 3.320 713 721 pde3 6.87 3.538 670 765 Reliability Statistics Cronbach's N of Items Alpha 862 70 Item Statistics Mean Std Deviation N cfo1 3.44 1.107 234 cfo2 3.39 1.080 234 cfo3 3.42 1.156 234 cfo4 3.24 1.124 234 cfo5 3.39 1.276 234 Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Cronbach's Item Deleted if Item Deleted Total Correlation Alpha if Item Deleted cfo1 13.44 14.531 658 838 cfo2 13.50 13.916 773 811 cfo3 13.47 13.495 763 811 cfo4 13.65 13.774 751 815 cfo5 13.50 14.835 493 885 Reliability Statistics Cronbach's N of Items Alpha 803 Item Statistics Mean Std Deviation N ben1 3.61 1.019 234 ben2 3.75 1.138 234 Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Cronbach's Item Deleted if Item Deleted Total Correlation Alpha if Item Deleted ben1 3.75 1.295 675 ben2 3.61 1.038 675 Reliability Statistics Cronbach's N of Items Alpha 865 71 Item Statistics Mean Std Deviation N riq1 3.47 918 234 riq2 3.39 897 234 riq3 3.47 889 234 riq4 3.68 1.026 234 Item-Total Statistics Scale Mean if Scale Variance Corrected Item- Cronbach's Item Deleted if Item Deleted Total Correlation Alpha if Item Deleted riq1 10.54 6.052 674 843 riq2 10.62 6.049 698 834 riq3 10.53 5.967 731 821 riq4 10.33 5.295 760 809 Appendix 5: Exploratory Factor Analysis (EFA) KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Approx Chi-Square Bartlett's Test of Sphericity 836 2449.363 Df 276 Sig .000 Total Variance Explained Component Initial Eigenvalues Total % of Extraction Sums of Squared Loadings Cumulative % Total % of Variance Cumulative % Variance 6.001 25.006 25.006 6.001 25.006 25.006 2.693 11.222 36.228 2.693 11.222 36.228 2.501 10.421 46.648 2.501 10.421 46.648 2.118 8.825 55.473 2.118 8.825 55.473 1.311 5.462 60.935 1.311 5.462 60.935 1.292 5.382 66.317 1.292 5.382 66.317 1.006 4.193 70.510 1.006 4.193 70.510 714 2.974 73.484 674 2.809 76.293 10 578 2.410 78.703 11 524 2.185 80.888 12 498 2.076 82.964 13 468 1.950 84.914 72 14 466 1.942 86.856 15 426 1.776 88.632 16 424 1.766 90.398 17 377 1.569 91.967 18 348 1.449 93.416 19 336 1.399 94.815 20 281 1.171 95.985 21 268 1.118 97.104 22 254 1.060 98.164 23 222 924 99.088 24 219 912 100.000 Total Variance Explained Component Rotation Sums of Squared Loadings Total % of Variance Cumulative % 3.539 14.744 14.744 2.747 11.447 26.191 2.635 10.978 37.168 2.243 9.346 46.515 2.080 8.667 55.181 2.060 8.585 63.766 1.618 6.743 70.510 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Extraction Method: Principal Component Analysis 73 Component Matrix a Component riq1 767 riq4 748 riq3 724 cfo4 707 cfo3 703 riq2 681 cfo2 678 cfo1 651 ben2 627 531 ben1 572 544 cfo5 556 tmr3 714 tmr2 687 tmr1 655 tmr4 612 ein1 608 etr3 585 ein2 566 etr1 558 ein3 518 pde3 670 pde2 -.526 669 pde1 -.565 636 etr2 537 Extraction Method: Principal Component Analysis a a components extracted Rotated Component Matrix a Component cfo2 875 cfo3 854 cfo4 823 cfo1 758 cfo5 528 riq4 798 74 riq2 796 riq3 790 riq1 646 tmr3 805 tmr2 804 tmr4 796 tmr1 790 pde2 880 pde3 858 pde1 823 etr2 808 etr1 780 etr3 730 ein3 801 ein2 796 ein1 746 ben1 849 ben2 819 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a a Rotation converged in iterations Appendix 6: Correlations Descriptive Statistics Mean Std Deviation N CFO 3.3778 92324 234 Y 3.5011 78802 234 TMR 3.4402 69304 234 PDE 3.3946 89055 234 ETR 3.3447 64770 234 EIN 3.5983 73477 234 BEN 3.6795 98696 234 Correlations CFO Pearson Correlation CFO RIQ ETR EIN 234 * 048 153 * 100 386 026 462 019 126 000 234 234 234 234 234 234 583 ** PDE 000 Sig (2-tailed) N TMR 146 75 Pearson Correlation RIQ Sig (2-tailed) N 583 ** 000 234 ** 000 498 ** 000 234 234 234 234 -.107 027 094 162 102 681 150 013 234 234 234 234 234 087 -.107 -.046 098 005 184 102 485 134 945 234 234 234 234 234 234 * ** 027 -.046 ** 285 * 000 681 485 000 000 Sig (2-tailed) 026 028 234 234 048 Sig (2-tailed) 462 Pearson Correlation 153 Sig (2-tailed) 019 N 234 Pearson Correlation 100 Sig (2-tailed) N 144 317 234 348 234 234 234 ** 094 098 126 000 150 134 000 234 Pearson Correlation BEN 000 253 N EIN ** 234 Pearson Correlation ETR 184 317 * 146 N PDE 087 144 234 * Pearson Correlation TMR * 028 234 234 234 234 234 ** ** * 005 ** ** 386 253 498 162 * 234 234 234 ** 261 348 285 000 261 Sig (2-tailed) 000 000 013 945 000 234 234 234 234 234 234 ** 000 N 234 ** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level (2-tailed) Appendix 7: Graphic analysis of regression assumptions 234 76 77 Appendix 8: Regression a Dependent Variable: Y b All requested variables entered Model Summaryb Model R R Square 683a Std Error of the Square Adjusted R Estimate 466 452 58341 a Predictors: (Constant), CFO, PDE, EIN, TMR, ETR, BEN b Dependent Variable: Y a ANOVA Model Sum of Squares Df Mean Square Regression 67.425 11.237 Residual 77.263 227 Sig 233 Total 33.016 000 b 340 144.687 F a Dependent Variable: Y b Predictors: (Constant), CFO, PDE, EIN, TMR, ETR, BEN Coefficients Model Unstandardized Standardized Coefficients Coefficients B Std Error (Constant) 037 057 PDE 059 ETR Sig Beta Collinearity Statistics Tolerance 344 TMR VIF 636 526 032 650 516 946 1.057 044 067 1.356 177 965 1.037 182 065 150 2.806 005 827 1.209 EIN 085 057 079 1.491 137 832 1.202 BEN 206 044 258 4.646 000 766 1.306 CFO 218 T 380 045 445 8.398 000 837 1.194 a Dependent Variable: Y ... management in Vietnamese paint and coating industry? How these key success factors of TQM impact the result of implementing total quality management in Vietnamese paint and coating industry? 1.4... so many previous researches were written about the total quality management (TQM) and finding key factor success to result of implementing quality management in paint and coating industry in term... implementing total quality H3 management in Vietnamese paint & coating industry Employee involvement affects to the results of implementing total quality H4 management in Vietnamese paint & coating industry