American Journal of Industrial and Business Management, 2012, 2, 205-216
http://dx.doi.org/10.4236/ajibm.2012.24027 Published Online October 2012 (http://www.SciRP.org/journal/ajibm)
205
The Impact of Organisational Culture on the
Implementation of TQM: Empirical Study in the Iranian
Oil Company
Yadollah Karimi1, Sharifah Latifah Syed Abdul Kadir2
1Faculty of Business & Accountancy, University of Malaya, Kuala Lumpur, Malaysia; 2Department of Operation and Management
Information System, Faculty of Business & Accountancy, University of Malaya, Kuala Lumpur, Malaysia.
Received June 16th, 2012; revised July 16th, 2012; accepted August 13th, 2012
ABSTRACT
Purpose of this paper is to investigate the relationship between four construct of organizational culture and two type of
TQM as soft and hard in the Iranian oil industry. The method of confirmatory factor analysis was applied to refine cul-
ture and TQM scales for empirical analysis in Iranian Oil Industry. The structural equation modeling method was ap-
plied to test the theoretical models. This study confirms the results of previous studies that considered culture as a set of
practices. It confirms that not all types of culture—considered as a set of practices—has a positive impact on the TQM
implementation. Only two components of culture—hierarchal and developmental showed a negative impact on the soft
and hard TQM. The findings are useful for business managers in developing countries such as Iran, who want to en-
hance business performance through implementing TQM practices in different culture. The study has contributed to
develop a measurement system of TQM practices that facilitates more quality management research in developing
countries. It has contributed to clarifying the disputed relationship between different culture and TQM practices, and
shows empirical evidence in Iran industry to confirm that the culture set deployed by a firm has an impact on Soft and
Hard TQM.
Keywords: Soft TQM; Hard TQM; Organisational Culture; Oil Company; Iran
1. Introduction
Over the past few decades, quality gurus such as [1-5]
the primary authorities of total quality management
(TQM), developed certain propositions in the field of
TQM, which have gained significant acceptance through-
out the world. Their insights provide a good understand-
ing of the TQM philosophy, principles, and practices.
After a careful study of their work, it has been found that
these quality gurus have different views about TQM,
although some similarities can be found. Worldwide,
there are several Quality Awards such as the Deming
Prize (1996) in Japan, the European Quality Award
(EFQM), (1994) in Europe, and the Malcolm Baldrige
National Quality Award (1999) in the United States of
America. Also many quality techniques and models such
as ISO, Six sigmas, Just-In Time (JIT), are applied in
organizations to reach a high level of performance.
Award models and current managerial techniques are
based on a perceived model of TQM. In the field of
TQM implementation much research has already been
conducted with different researchers adopting different
definitions of TQM. However, the concept is still a sub-
ject for debate [6] and still an unclear and hazy concept
[7]. So far, TQM has come to mean different things to
different people [8].
2. Problem Statemen ts
The Iranian Oil Industry is the biggest company in the
Middle East and is also one of the key members in the oil
company’s family around the world. This company has a
central role in the country’s economy as a leading com-
pany. It has instigated many helpful and useful activities
in the area of quality management, developing produc-
tions quality and economy development in recent dec-
ades. Most of the oil companies and petro chemistry ones
have the ISO standard and some others have won the
prize of EFQM. Some committees have been established
as suggestion systems to enhance the TQM processes
with the most important goal being to the highest cus-
tomers’ satisfaction. After several decades of these ac-
tivities, the basic question is that of how successful the
company in reaching its goals with quality pre-planned

The Impact of Organisational Culture on the Implementation of TQM: Empirical Study in the Iranian Oil Company 206
schedules is. The results show that there has been no re-
search done in this area. It will be considered an impor-
tant goal of this research to answer this question so that it
takes a useful step in eliminating weaknesses and short-
comings of such problems. Study is needed to see the
impact of TQM on quality level, Improvement of pro-
duction quality and also oil industry performance espe-
cially in terms of operational performance. Moreover,
several gaps have been found by reviewing and studying
the work of others, which will be talked about briefly. In
the TQM field, two types of researches are common;
researchers only focusing on organizational culture and
its effect on conducting TQM [9] and second various
other researchers simply focus on the relationship be-
tween TQM and organizational performance [10-13].
So in this study, by making a new model and mixing
previous models, TQM has been looked as a mediator,
and also it will examine the effect of organizational cul-
ture on performance. By developing this model the rela-
tionship between Soft and Hard TQM can also be studied,
as the mutual relationship between Hard and Soft has not
yet been explored [14]. In this research, for the first time,
the relationship between these two sets will be taken into
account. In addition, by analyzing and studying previous
studies, it is seen is that most research in the TQM field
is conducted in the US, Europe and Australia, and, gen-
erally speaking, in developed countries.
Many small studies in TQM have been done in devel-
oping countries and especially in the Middle East, and in
the context of Iran. Lastly, as a critical issue, total quality
management was created some time ago and its concept
is very broad. So a lack of in TQM literature particularly
in association with culture is still problematic, because
results in TQM implementation are slightly different
from culture to culture. This may lead to the success or
failure of TQM and, consequently, will affect perform-
ance. For instance, [15,16] claimed that when TQM is
implemented in places that do not contribute to its cul-
tural base, differences with the cultural context will
support it. This may lead to the success or failure of
TQM.
3. Organizational Culture
The term “organizational culture” has proved extremely
popular with management theorist and managers alike
since the publication of In Search of Excellence [17] (Pe-
ters and Waterman, 1982). The term “culture” has its
theoretical roots within social anthropology and was first
used in a holistic way to describe the qualities of a hu-
man group that are passed from one generation to the
next. [18] described culture when taken in its wide eth-
nographic sense, as that complex whole which includes
knowledge, belief, art, morals, law and man as a member
of society.
Anthropological understanding of organizational cul-
ture is something that results from the interaction and is
generated at all levels of the organization suggesting that
while managers can influence culture, they cannot actu-
ally create or direct it because the generation of organ-
izational culture is, by nature, not restricted to the do-
main of management. If culture is created on an ongoing
basis throughout an organization, then managers lack the
total control of the interactive and interpretive processes
that would be necessary at all levels of the organization
to consciously create and direct an organization’s culture.
An anthropological perspective on organizational culture,
with its focus on interpretive processes, suggests that
managers face difficulty in explicit attempts to change
organizational culture because they cannot completely
control the complex interactions that produce culture
throughout an organization.
Organizational culture can influence how people set
personal and professional goals, perform tasks and ad-
minister resources to achieve them. Organizational cul-
ture affects the way in which people consciously and
subconsciously is think, make decisions and ultimately
the way in which they perceive, feel and act [19,20].
[17,21] have suggested that organizational culture can
exert considerable influence in organizations, particularly
in areas such as performance and commitment.
Researchers on organizational culture have also pro-
posed different forms or types of culture. For example,
[22] identified four forms of organizational culture (i.e.
networked, mercenary, fragmented and communal). [23]
viewed organizational culture from three perspectives (i.e.
integration, differentiation and fragmentation). [24] sug-
gested that there are three main types of organizational
culture (i.e. bureaucratic, supportive and innovative). Or-
ganizational culture affects the way the employees think,
perform and communicate with each other and has been
regarded as one of the most influential aspects in an or-
ganization.
Nevertheless [25] described organizational culture as
the way things are done the business. Other definitions
state the shared perceptions, patterns of belief, symbols,
rites and rituals and myths that evolve over time and
function as the glue that keeps the organization together
[26]. According to these definitions, it is very clear that
the existing culture of an organization provides a cor-
porate framework that will lead in guidance on issues
such as how work is done, the use of technology, how
people think and standards for interaction and commu-
nication. A deep understanding on these aspects will
result in better communication and interaction among
the people outside and inside the organization which
may lead its positive progress. These, in turn, affect an
individual’s performance and then affect a firm’s per-

The Impact of Organisational Culture on the Implementation of TQM: Empirical Study in the Iranian Oil Company 207
framework is able to organize the different patterns of
shared values and assumptions that define an organiza-
tion’s culture [40].
formance.
Previous studies have shown that organizational cul-
ture (and various subcultures within the organization) can
have a positive effect on competitive advantage, in-
creased productivity and a firm’s performance [27]. On
the level of the individual, they found organizational
culture could affect an employee’s participation and in-
volvement. This is important as employees play a major
role in constructing an organization. Organizational cul-
ture is ultimately manifested, represented and main-
tained by sense-making efforts and actions of individu-
als [28]. Emphasis should be made on the organiza-
tional culture as it has an impact on the firm’s per-
formance or productivity. Meanwhile, the organiza-
tional culture impacts individuals first, which in turn
affects a firm’s overall performance, productivity or com-
petitive advantage.
The competing values model is characterized by a
two-dimensional space that reflects different value ori-
entations (see Figure 1).The first dimension in this
model, the flexibility-control axis, shows the degree to
which the organization emphasizes change or stability. A
flexibility orientation reflects flexibility and spontaneity,
while a control orientation reflects stability, control, and
order. The second dimension in this framework, the in-
ternal-external axis, addresses the organization’s choice
between focusing on activities occurring within the or-
ganization (internal) and those occurring outside, in the
external environment. An internal orientation reflects an
emphasis on the maintenance and improvement of the
existing organization, while an external orientation re-
flects an emphasis on competition, adaptation, and inter-
action with the external environment.
Moreover, many studies have proven how organiza-
tional culture or changes in organizational culture can
facilitate or hinder business change initiatives such as OP,
ERP and TQM [29-34]. Thus, in this study, investigation
will be made on how; an organization’s culture influ-
ences the business performance when using TQM to im-
prove activities.
This two-dimensional typology yields four cultural
orientations that correspond to four major models in or-
ganizational theory. Group culture, which corresponds to
the human relations model of organizational theory, em-
phasizes flexibility and change and is further character-
ized by strong human relations, affiliation, and a focus on
the internal organization. Developmental culture, corre-
sponding to the open systems model, also emphasizes
flexibility but is externally oriented. The center of atten-
tion is primarily on growth, resource acquisition, creativ-
ity, and adaptation to the external environment. Continu-
ing with this model, rational culture, corresponding to the
rational goal model, is also externally focused, but it is
control-oriented. Such firms emphasize productivity and
achievement, with objectives typically well-defined and
external competition a primary motivating factor.
Competing Value Framework
For the purpose of describing the values and beliefs un-
derlying an organization’s culture, the Competing Values
Framework (CVF) developed by [35] is adopted. It has
been widely used to examine organizational culture in
the literature [26,36-38]. According to [39] the value
orientations in the CVF can be used to explore the deep
structures of organizational culture about compliance,
motives, leadership, decision making, effectiveness, and
organizational forms in the organization. Thus, this
Control
Internal Externa
l
DEVELOPMENT
A
L
RATIONAL
GROUP
HI
Uniqueness
Risk-taking
Innovation
Leadership
Entrepreneurship
Security
Formal rules
Control and structure
Stability
Internal efficiency
Coordination
Achievement
Market leadership
Competitiveness
Goal accomplishment
Results-oriented
Aggressiveness
Human development
Commitment
Personal relations
Teamwork
Loyalty
Mentoring
Flexibility
Figure 1. CVF framework (adapted from Denison and Spreitzer, 1991; Cameron and Quinn, 1999).

The Impact of Organisational Culture on the Implementation of TQM: Empirical Study in the Iranian Oil Company 208
Hierarchical culture, corresponding to the internal pro-
cess model, emphasizes stability. However, in contrast to
rational culture, the focus is on the internal organization.
This orientation is characterized by uniformity, coordina-
tion, internal efficiency, and a close adherence to rules
and regulations. These cultural orientations have also
been referred to as Clan, Adhocracy, Market, and Hier-
archy, respectively [41]. Figure 1, which was adapted
from prior work by [36,41], provides an illustration of
how these idealized orientations fit within the two-di-
mensional competing values framework.
In each of the four quadrants shown in above figure a
representative (although not exhaustive) list of character-
istics associated with each cultural orientation are pro-
vided. [36] emphasis that the four cultures in their typol-
ogy should be viewed as ideal types, meaning that or-
ganizations will be characterized by some arrangement of
these four cultures—while some types could be more
principal than the others—rather than reflecting only one
culture.
Therefore, as scales have been developed and vali-
dated to empirically measure this, the items are permitted
to vary separately [40]. As [42] noted in a later study
using the CVF, “As such, a high rating on one dimension
(e.g. internal orientation) does not eliminate high rating
at the other end (e.g. external orientation)”. There is
nothing relating to having a strong internal orientation
that necessarily prohibits the organization from also
having elements associated with external orientation.
This model of organizational culture has been employed
in quality management research by many researchers
[31,43]. In order to clarify understand provide a better
understanding of the relationships between organiza-
tional culture and performance measurement systems
developed for top management teams, [26] found that
that top managers of firms reflecting a flexibility domi-
nant type tend to use more performance measures and to
use best strategy to focus organizational attention, sup-
port strategic decision-making and legitimate actions to a
greater extent than top managers of firms reflecting a
control dominant type.
4. Total Quality Management
The TQM literature concurs that its concepts and prac-
tices have been shaped by a number of individuals who
are recognized as “quality gurus” such as [1-4,20,
32,36,44]. Their definitions are the foundation for under-
standing the concept of TQM. These TQM gurus devel-
oped their concepts based primarily on their experience
in industry. TQM was made famous by Deming in the
1950s in Japan. His suggestion was based on 14 princi-
ples that placed emphasis on leadership, management
theory, and statistical concepts. These principles stressed
the importance that managers had in the process of im-
proving organizational performance while enhancing the
capabilities of the employees.
Therefore, a number of factors need to be taken into
account. These include the establishment of the “con-
stancy of purpose” in the mission of an organization; As
[2] has reminded us of, commitment and support from
top organizational leadership; building and enhancing
trust, motivation, and serious employee empowerment
through genuine participation, job security, and equitable
compensation; team works of various structures; training
and development of employees and workers; measure-
ments of quality through process as well as outcomes;
building a “culture of quality” in the organization and
rewarding that culture with recognition, respect, and
various personnel policies to reinforce that culture and
promote both employee and citizen/customer satisfaction
and confidence. As there have been many different defi-
nitions of TQM the years here are some examples. [45]
states that TQM is an approach for improving the com-
petitiveness, effectiveness and flexibility of a whole or-
ganization.
He continues by declaring that: “For an organization to
be truly effective, each part of it must work properly to-
gether towards the same goals, recognizing that each
person and each activity affects and in turn is affected by
each other’s. The methods and techniques used in TQM
can be applied throughout any organization”. [46] argue
that Total Quality Management (TQM) is an evolving
system of practices, tools, and training methods for
managing companies to provide customer satisfaction in
a rapidly changing world. The use of the word “total”
when coupled with the term “quality management” pro-
vide recognition of the fact that total quality management
(TQM) is not an activity or even a philosophy that can be
restricted to certain organizational processes. It is essen-
tial that TQM is adopted on a holistic basis, if genuine
and lasting competitive advantage is to be gained.
As [47] has stated; “TQM is the mutual co-operation
of everyone in an organization and associated business
processes to produce products and services which meet
and, hopefully, exceed the needs and expectations of
customers. TQM is both a philosophy and a set of guid-
ing principles for managing an organization”. [47] Simi-
larly [48] define TQM as a management system in con-
tinuous change and consisting of values, methodologies
and tools, the aim of which is to increase external and
internal customer satisfaction with a reduced amount of
resources.
5. Relationship between Culture and Total
Quality Management
Understanding culture as something implicit and gener-

The Impact of Organisational Culture on the Implementation of TQM: Empirical Study in the Iranian Oil Company 209
ated from interaction at all levels of an organization
raises the question as to whether it is advisable for man-
agers to enter into quality improvement programmes
such as TQM with the expectation that these programmes
will result in a positive change in an organization’s cul-
ture [49]. There is little support for the idea that TQM
influences organizations at deeper levels of culture [49].
If culture is implicit and generated from interaction at all
levels of the organization, then managers would benefit
more from the careful consideration of cultural factors
that are already operating when a quality improvement
programme is implemented.
Paying more attention to the cultural process of the
organization, managers might better understand the in-
fluence of these cultural factors, and as a result, will have
better success in quality improvement efforts. Rather
than assume that the implementation of a quality im-
provement strategy such as outcome accountability will
result in cultural change towards greater utilization of
outcome information in decision making, it would be
wiser to focus on the receptiveness of the existing organ-
izational culture to such a strategy. Implementation of
TQM programmes varies considerably according to the
culture of the organizations in which it is being imple-
mented [50]. This is consistent with the view that it is not
so much management action that determines culture, but
rather it is culture that determines management action
[49].
[51] recommends that organizational culture is even
more important today than it was in the past. Increased
competition, globalization, mergers, acquisitions, alli-
ances, and various workforce developments have created
a greater need for improving efficiency, quality, and
speed of designing, manufacturing, and delivering prod-
ucts and services, process innovation and the ability to
successfully introduce new technologies, such as infor-
mation technology , facilitation and support of teamwork.
Therefore, focusing on culture in organizations is one of
the basic fields in academic research.
According to lot of earlier research, it was discovered
that organizational culture is an important aspect in the
successful implementation of TQM [31,52,53] and in
particular, within the context of organizational perform-
ance [54]. In addition, other recent studies have exam-
ined the relationship between organizational culture and
the TQM tools and techniques as per the differentiate
approach [55,56]. A common challenge in discussing
TQM and culture results from the imperfect boundary
between TQM as a set of management practices and
TQM as an organizational culture [57-59]. For example,
several studies on TQM, such as those by [60,61] con-
sider TQM practices such as customer focus and people
management as “soft” elements in TQM, implying that
they actually represent aspects of TQM culture.
This leads to confusion in understanding the substance
of TQM: Is it a set of practices, or, is it a specific type of
culture, or both? In this regard, [62] strongly argue that
organizational culture is “distinguishable” from TQM
practices even though the two are closely related to each
other. They view TQM practices as behavioural, while
organizational culture is more attribute to attitudes, be-
liefs, and situational interactions. This argument is con-
sistent with those of theorists and scholars in the field of
organizational culture. [63] for example, asserts that al-
though practice can be a reflection of organizational cul-
ture, it can only capture the surface level. He further ar-
gues that organizational culture is concerned with some-
thing deeper, particularly when considering such ele-
ments as mindset, values, and beliefs.
This is consistent with definitions of culture as being
something an organization has. It is also asking for a
change in attitudes and values that lie at the deeper levels,
although it is less specific about what these are. It is im-
plied that implementing the “hard” aspects of TQM will
lead to changes in the deeper levels of organizational
culture, and that this interaction produces a number of
individual and organizational outcomes [49]. Although it
is true that cultures change, it does not necessarily mean
that management has the responsibility to do so. The
extent to which factors of the TQM interventions typi-
cally affect culture, and at what levels, has yet to be em-
pirically investigated. In this way, [49] argued that, an
understanding of the different levels of culture may assist
those managing organizations to identify those aspects of
culture that are open to managerial influence. An alterna-
tive view is that rather than being affected by quality
management practices, it is the culture of the organiza-
tion that determines how the nebulous message “that is
quality” will be interpreted and enacted.
To the extent that the organization is characterized by
a series of subcultures, a number of interpretations will
be made. Organizations thus define and manage quality
from the perspective of existing patterns of shared beliefs,
values and assumptions. This view is consistent with
definitions of culture as being something an organization
is. In this way, [64] argued that, the management of qual-
ity does not take place outside cultural influences, but
needs to be understood within the context of prevailing
shared values, beliefs and taken-for-granted assumptions.
This point is made in relation to the management of stra-
tegic change.
He argues that the interpretation of the various signals
the organization faces, and the formulation of actions and
responses to those interpretations, is configured within
the bounds of the collective values, beliefs and assump-
tions held by senior management. Continually, [65]
stated that quality as an organizational truth is the out-
standing emotive force which can unify everyone within

The Impact of Organisational Culture on the Implementation of TQM: Empirical Study in the Iranian Oil Company 210
the organization. There is an emphasis on the achieve-
ment of common objectives and conflict that is seen as
inherently dysfunctional. Management is positioned as a
technical and rational process, and the organizational
political issues need to be more discussed [66]. The
adoption of an “integrationist” perspective to culture pre-
cludes consideration of alternative approaches.
The “differentiation” and “fragmentation” perspectives
(which emphasize the existence of subcultures and of
ambiguity respectively), present a significant challenge
for TQM theorists. According to [49], while offering
insights into cultural change that are not available to
those working exclusively from an “integrationist” per-
spective, it seems unlikely that TQM in its present form
will be able to accommodate them. Given the importance
of culture change to TQM, this represents a significant
handicap. Further support can be obtained from a study
by [10] which promotes the importance of cultural as-
pects of TQM.
In this study, he discussed that TQM practices had to
be implemented within a suitable environment (i.e. cul-
ture) that emphasized open communication; something
which he believed did not originally belong to TQM, but
was essential for its successful implementation. Although
the success of TQM programmes has been highlighted by
a number of authors [31,52]. It has also been argued that
TQM implementation leads to changes in organizational
culture. Understanding the dominant culture of an or-
ganization is of the utmost importance for the successful
implementation of TQM. Environmental changes pro-
duce different emphasis within an organization, thus, new
approaches for implementation of TQM is very much
needed [40,52,63].
In recent years, many authors have tried to explain
how organizational culture influences TQM implementa-
tion and business performance and its degree success.
For instance, [67] conducted a survey of Malaysian ma-
nufacturing companies that was already ISO 9000 regis-
tered, with a view to examine their status regarding busi-
ness performance. The results showed that less than a
third of the responding companies claimed to have TQM,
but there was a strong minority claiming to have made
significant progress towards total quality practices. [68]
made a statement on a comparative action-research study
of quality management in Malaysia and the UK. They
commented particularly on the cultural conflict between
traditional Malaysian managers who “are locked into
traditional autocratic management styles” and expatriate
senior managers, particularly from Japan. Like many
countries in South and East Asia, the Malaysian compa-
nies studied here perceived TQM techniques as the final
goal (Malaysia has many more companies that are ISO
9000 registered). However, there was evidence that Ma-
laysian companies made more systematic use of quanti-
tative quality management tools to control key processes
than the UK companies did [68]. In addition, the Malay-
sian companies were assessed by these authors, using an
opinion poll, to be more focused on strategic quality ori-
entation and continuous improvement.
In a similar study [54] studied TQM practices in
United Arab Emirates (UAE) manufacturing firms and
their impact on quality and business performance. They
investigated the relationship between firm culture and
TQM implementation. According to this research, busi-
ness culture can be divided in to two categories, the first
group includes people oriented and competitiveness,
while the second one includes outward oriented, inward
oriented, task oriented, and competitiveness. It was con-
cluded that cultures that are people oriented, and to a
lesser degree, competitive, are less common among UAE
manufacturing firms. This may be to do with the fact that
most respondents were from East Asian countries where
national cultures are characterized by large power dis-
tance and high uncertainty avoidance [25]. We believe
that it would have been better if they had used the
Hofstede model since the characteristics of the research
area were much closer to that of a multinational company.
National culture can prove to be quite stubborn, obstinate
and conservative, presenting multinationals, joint ven-
tures, consortiums and subsidiaries with formidable ob-
stacles to organizational change [69].
In Iran, [70] employed the Hofstede model to deter-
mine the force of cultural values on the achievement of
TQM performance in the Isfahan University Hospital
(IUH). He found that TQM fundamentally requires a new
culture. The best TQM results can be achieved when an
open, shared and cooperative culture is created by man-
agement and supported by organizational learning, team-
work, and customer focus (internal/external). Successful
implementation of TQM requires a significant change in
values, attitudes and the culture of the organization. Tata
and Prasad (1998) studied the TQM field to determine
why many companies in the USA were not successful in
the implementation of TQM. By comparing three com-
panies they found that companies that already have a
supportive culture and structure made it easier to imple-
ment employee involvement, teamwork, benchmarking,
customer focus and other aspects of TQM.
These organizations first resocialized employees and
management to the values and beliefs of a flexible cul-
ture and organic structure. In contrast, other companies
that lead in control oriented culture and mechanistic
structure did not succeed in the implementation of TQM.
[71] used this model to find out which dimension was
more related to TQM factors. The result showed that a
hierarchal culture has a significant relationship with cer-
tain factors of TQM.
A multicultural environment is a common issue in

The Impact of Organisational Culture on the Implementation of TQM: Empirical Study in the Iranian Oil Company 211
many companies around the world. [72] shed light on
quality management issues regarding the maquiladora’s
industry in Mexico. Their study presented evidence of a
straight quality system in the maquiladoras based on
TQM and strategy planning principles, utilizing the
teamwork approach to problem solving, providing train-
ing to employees, working with suppliers and striving for
quality certifications. In other words, by establishing
quality systems, implementing quality principles and
techniques and training managers and employees in qual-
ity problems, the maquiladoras are playing a significant
role in building a quality culture in Mexico’s industry.
Also, the result showed that quality culture could be in-
strumental in transforming industry into a global power
recognized for its world-class manufacturing and excel-
lence in quality.
In a similar study [14] focused on this area to explore
the relationship between the culture (organizational citi-
zenship behaviour (OCB)), TQM practice and financial
performance of the manquiladora companies. Based on
the Malcolm Baldrige National Quality Award (MBNQA,
1995), they selected Soft TQM factors (leadership, peo-
ple management, customer focus), and Hard TQM ele-
ments (planning, process management, information) as
mediator variables. They found that only Soft TQM ele-
ments are significantly related to organizational per-
formance. As a result and according to [71] it can be
concluded that the cultures supporting TQM practices (i.e.
group and developmental cultures) are the best and there-
fore should be nurtured. At the same time, should hierarchal
factors, which underlie TQM3, be suppressed? If so under
what conditions? In this research the impact of these factors
of organizational culture is will tested to clarify how they
are related to TQM and organizational performance.
6. Research Hypotheses
Having discussed the nature of the relationship between
TQM practices and organizational culture, the following
question is explored: what kind of culture would be most
suitable for implementing TQM practices in the oil in-
dustry? As mentioned earlier this research focus on the
computing values framework (CVF), developed by [36]
to answer this main question. Studies by [71] have shown
that hierarchal and developed culture has a significant
impact on TQM. Therefore, the following hypotheses are
suggested.
H1: Hierarchical culture has a positive impact on Soft
TQM.
H2: Hierarchical culture has a positive impact on Hard
TQM.
H3: Developmental culture has positive impact on Soft
TQM.
H4: Developmental culture has a positive impact on
Hard TQM.
H5: Rational culture has a positive impact on Soft
TQM.
H6: Rational culture has a positive impact on Hard
TQM.
H7: Group culture has a positive impact on Soft TQM.
H8: Group culture has a positive impact on Hard
TQM.
7. Research Design
The National Iranian Oil Company is divided into four
main companies: Gas Company, Petrochemical Com-
pany, Oil Company, and Refinery & Distribution Com-
pany. In this research, a questionnaire will be the method
chosen to collect data from the different Companies and
departments. There are several reasons for selecting a
questionnaire survey in this part. First many respondents
work in different geographical statues, and are located in
different operational places. Besides, using a question-
naire survey allows greater efficiency in collecting data
in a rather short period of time and provides the re-
searcher a high flexibility to do different kinds of analy-
sis based on the data collected. Furthermore, sending
questionnaires to the target group is a comparatively a
cheaper than reaching the target group one by one as
their offices may be located in different places which a
resulting in high transportation costs.
8. Data Collection Procedure
In the Iranian oil industry many specialist groups work in
different units and departments and are involved with
quality techniques. In addition, this industry has four
main mother companies and a lot of subsidiary compa-
nies throughout the country. However, the population of
this study will include all employees who are employed
in various organizations that are using quality techniques,
and have also received ISO certification. Different
members of the company will be invited to complete the
questionnaire and not just senior managers or directors
because different working categories may have a differ-
ent opinion of the values of the company. In order to
understand the cultural profile and TQM level of a com-
pany in a more comprehensive way, data will be col-
lected from different locations. Ultimately, 400 managers
and other levels of employees are drawn randomly as a
final sample from the list of directories using the strati-
fied method.
9. Questionnaire Survey
In the area of TQM implementation and organizational
culture, much research has conducted using questionnaire
surveys to collect data [11,15,43,61]. These researchers

The Impact of Organisational Culture on the Implementation of TQM: Empirical Study in the Iranian Oil Company 212
tested the effects of TQM implementation on overall
business performance using questionnaire surveys. In this
study, the questionnaire survey will be used to obtain
information about organizational culture, TQM imple-
mentation and operational performance. All dimensions
will measure by items asking the respondent to assess the
level of implementation of each of the factors. These
items are derived from prior literature. In addition, before
distributing the questionnaire its layout, content, and
structure will be tested (validity) through conducting a
pilot study of proficient membership companies who are
employed in the quality sectors to ensure the accuracy of
terminology, content, structure and common understand-
ing.
10. Statistical Technique
This study employs a structural equation modeling (SEM)
as the statistical technique to analyze the hypothesized
relationships. All other multivariate techniques are either
from a family of dependence or independence statistical
techniques. Only SEM has the characteristics of both
groups because the foundations of SEM are derived from
multiple regression analysis (dependence technique) and
factor analysis (independence technique) [73]. What
makes SEM a more powerful and popular than other
multivariate techniques is that, besides having an attrac-
tive graphical modeling interface that makes model in-
terpretation an easy task [74] SEM can examine a chain
of dependence relationship concurrently. As asserted by
[73] “None of the previous techniques except SEM en-
able us to assess both measurement properties and test
the key theoretical relationships in one technique”. SEM
reveals the structure of interrelationships among the
studied variables by using a series of equations similar to
multiple regression technique and by modeling interac-
tions, nonlinearities, correlated independents, measure-
ment errors, correlated error terms, and multiple latent
independents/dependents all at the same time [74].
11. Result of Testing Ypotheses
In this study eight hypotheses were examined through
investigating the path coefficients and the total size effect
of the constructs in the final model. Based on the C.R (t),
to explain which hypothesis was statistically supported,
results of hypotheses testing are summarized and pre-
sented in Table s 1.
Based on the result in Table 1, it can be concluded
that Hierarchical Culture is statistically correlated only to
hard TQM, because the paths coefficient of hierarchical
culture to hard TQM is 0.11 (t = 8.424), and to soft TQM
is 0.01 (t = 0.48), meaning that hierarchical culture has
weak positive effect on hard TQM, but it does not pro-
vide a significant effect on soft TQM.
The third hypothesis states that the developmental
culture has a meaningful effect on soft TQM. According
to the output model, the path coefficient is 0.39 (t =
17.188). Thus, the hypothesis supported the developed
culture, which has a meaningful effect on soft TQM. On
the other hand, the path coefficient between this variable
and hard TQM is very weak, with a value of 0.009 (t =
0.272), thus, there is no significant relationship between
developmental culture and hard TQM, making H4 un-
substantiated.
According to the analyzing model, the group culture
has the significant relationship between both soft and
hard TQM. The paths coefficient of this variable to soft
and hard TQM is 0.39 and 0.14, and the t-values are
16.289 and 4.470 respectively. Therefore, hypothesis H5
and H6 is supported, and group culture has a meaningful
effect of showing the changes in both the soft and hard
variance, and it is one of the reasons for forming soft and
hard aspects in the company.
With a Path coefficient value of 0.21, the relationship
between rational culture and soft TQM is considered to
Table 1. t-value, significant indexes, and regression weights of path analysis.
Exogenous Endogenous Estimate S.E. C.R.(t) P St.value Result of hypothesis
H1 Hierarchical → Soft TQM 0.008 0.011 0.695 0.487 0.009 Not supported
H2 Hierarchical → Hard TQM 0.098 0.012 80.424 *** 0.114 Supported
H3 Development → Soft TQM 0.389 0.023 170.188 *** 0.395 Supported
H4 Development → Hard TQM 0.008 0.030 0.272 0.785 0.009 Not supported
H5 Group → Soft TQM 0.401 0.025 16.289 *** 0.392 Supported
H6 Group → Hard TQM 0.145 0.032 4.470 *** 0.144 Supported
H7 Rational → Soft TQM 0.219 0.022 9.976 *** 0.217 Supported
H8 Rational Hard TQM 0.392 0.026 15.317 *** 0.394 Supported

The Impact of Organisational Culture on the Implementation of TQM: Empirical Study in the Iranian Oil Company 213
Hairachial
Developmental
Rational
Group
Soft TQM
Hard TQM
0.22
0.01
0.01
0.14
0.11 0.39
0. 3 9
0.39
Figure 2. Path diagram.
be significant (t-value = 9.976). Likewise, the link be-
tween rational culture and hard TQM shown in Table 1
has generated a path coefficient value of 0.39 (t-value =
15.317). This means that rational culture can positively
affect both soft and hard TQM, supporting hypothesis H7
and H8.
12. Conclusions
The results indicate that there is no relationship between
“hierarchal developmental Culture” with “soft and Hard
TQM”. The findings of previous researchers [71,75]
prove that two dimensions of “Group” and “Develop-
mental” support TQM. Yet, due to cultural difference
and organizational atmosphere in this research, almost all
factors of organizational culture have relationship with
TQM, except “hierarchal” and “Developmental” cultures
that were not effective on “tow aspects of TQM”. In ad-
dition, the rational culture and group culture are found to
have a significant effect on both soft and hard TQM
practices (Figure 2).
The rational culture emphasizes productivity and
achievement with clearly defined objectives for external
competitiveness. Efficiency and profit orientation are
conducive to the TQM practices that focus on achieving
superior quality and competitiveness [21]. Understanding
customer and developing close relationships with them
are keys strategies for gaining the competitive advantage
that is so ingrained in the rational culture. Gathering and
using quality information can also provide the strategic
advantage in the external markets that are the focus
within a rational culture.
This result is similar to research finding done by [75].
Considering the fact that organizational culture is recog-
nized as a key and vital agent for the implementation of
comprehensive quality management [10,32,52] it was
necessary to scrutinize the relationship between different
kinds of organizational culture based on CVF model with
TQM, and also study the organizational performance in
one of the biggest Middle East oil companies (Iran oil
industry) with one hundred years experience. This re-
search has important practical findings for the managers.
Based on the disclosed results, different cultural compo-
nents such as, group culture, developmental culture, hi-
erarchical culture and rational one have practically had
different impacts with other different TQM, namely Hard
TQM and Soft TQM. This means that before the imple-
mentation of instructions and TQM instruments, the
managers require knowing the dominant cultural values
on their own organizations very well, so that the imple-
mentation of TQM can be done more effectively. Man-
agers should carefully evaluate the values and current
cultural fields to develop the practical plans and neces-
sary policies for the creation of an environment and cul-
tural atmosphere of the sponsor, so that they can be sure
about the successful implementation of TQM and im-
provement of organizational performance.
In summary, the first aim of this research is recogni-
tion of cultural distinctions in Iran oil industry and the
way TQM gets influenced from organizational culture.
The findings of previous researchers [71,75] prove that
two dimensions of “Group” and “Developmental” sup-
port TQM. Yet, due to cultural difference and organiza-
tional atmosphere in this research, almost all factors of
organizational culture have relationship with TQM, ex-
cept “hierarchal” and “Developmental” cultures that were
not effective on tow aspects of TQM. The results indicate
that there is no relationship between “hierarchal and de-
velopmental Culture” with “soft and Hard TQM”.
In addition, the rational culture and group culture are
found to have a significant effect on both soft and hard
TQM practices. The rational culture emphasizes produc-
tivity and achievement with clearly defined objectives for
external competitiveness. Efficiency and profit orienta-
tion are conducive to the TQM practices that focus on
achieving superior quality and competitiveness [7]. Un-
derstanding customer and developing close relationships
with them are keys strategies for gaining the competitive
advantage that is so ingrained in the rational culture.
Gathering and using quality information can also provide
the strategic advantage in the external markets that are
the focus within a rational culture. This result is similar
to research finding done by [75]. Considering the fact
that organizational culture is recognized as a key and
vital agent for the implementation of comprehensive
quality management [10,32,52] it was necessary to scru-
tinize the relationship between different kinds of organ-
izational culture based on CVF model with TQM, and
also study the organizational performance in one of the
biggest Middle East oil companies (Iran oil industry)
with one hundred years experience.
This research has important practical findings for the
managers. Based on the disclosed results, different cul-
tural components such as, group culture, developmental

The Impact of Organisational Culture on the Implementation of TQM: Empirical Study in the Iranian Oil Company 214
culture, hierarchical culture and rational one have practi-
cally had different impacts with other different TQM,
namely Hard TQM and Soft TQM. This means that be-
fore the implementation of instructions and TQM in-
struments, the managers require knowing the dominant
cultural values on their own organizations very well, so
that the implementation of TQM can be done more effec-
tively. Managers should carefully evaluate the values and
current cultural fields to develop the practical plans and
necessary policies for the creation of an environment and
cultural atmosphere of the sponsor, so that they can be
sure about the successful implementation of TQM and
improvement of organizational performance.
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