THE IMPACT OF TQM ON BUSINESS PERFORMANCES BASED ON BALANCED SCORECARD APPROACH IN MALAYSIA SMEs

Total Quality Management (TQM) is a tool to involve employees in the continuous improvement. SMEs are a well-known as the vital sector to Malaysia's Gross Domestic Product (GDP). However, SMEs still face issues of their performances. Most of SMEs have issue in TQM implementation due to the lack of awareness and accepting of TQM. The objective of this paper is to examine the TQM implementation amongst SMEs, in order to enhance their performance by using Balanced Scorecard (BSC). 130 respondents from Malaysia SMEs in manufacturing sector have been sent in this survey. Finally, 64 respondents have responded, representing 49.2 of response rate. The result shows that TQM practices have positive and significant relationship towards the BSC with r=0.64 at P<0.05. Hence, TQM practices also have significant relationship with all of the four BSC perspective with p<0.05. This study demonstrated that TQM is important tool for improving BSC performance.