Total quality management and organizational performance in the manufacturing industry: integrating contingency theory and the resource-based view

This study examines how Total Quality Management (TQM) influences organizational culture and innovation capability, driving both organizational and environmental performance. Drawing on the Resource-Based View (RBV) and contingency theory, this study’s model identifies organizational culture and innovation capability as mediators, while organizational structure and technical resources serve as moderators. Data were collected from a stratified random sample of 504 Chinese manufacturing firms across diverse subsectors with certified quality systems. Structural equation modeling with bootstrapped mediation and moderation tests was employed to examine the hypothesized relationships. The findings showed that TQM has a strong relationship with performance and simultaneously fosters culture and innovation capability, both of which significantly mediate the TQM–performance relationship. These internal mechanisms also reinforce firms’ progress toward sustainability and green development. Moderation tests revealed that organic structures strengthen the positive influence of TQM, while digital readiness amplifies the capability-to-performance pathway. The findings suggest that to accelerate transformation consistent with China’s dual-carbon agenda, firms should cultivate a quality-oriented culture and innovation capability while aligning organizational design and digital investments. Theoretically, this study extends RBV and contingency perspectives by clarifying how TQM leverages organizational capabilities and contextual alignment to generate sustainable competitiveness.