QM, EM and firm performance 216 © 2008 The Authors Journal compilation © 2008 Blackwell Publishing Ltd and British Academy of Management criteria into the design of processes and products may reduce the impact of waste on the environment, while also attempting to maximize resource efficiency (Handfield et al. 2001). Thus, the product design component of QM is a major contribution to EP (Klassen and McLaughlin 1993). Process management is also an important component of QM. It implies a preventive approach to improving quality and to the reduction of process variation (Flynn et al. 1995; Kaynak 2003), with the goal of maximizing resource efficiency and reducing waste. As a result, EP might be improved. Conversely, EM may affect QP. If a company is implementing EM practices, it might promote more consistency or less variability, which constitutes an improvement in QP. In addition, the implementation of EM may satisfy the requirements of environmentally sensitive consumers, and this customer satisfaction constitutes an improvement in QP. These results maybe achieved through the design for environment, which is an important EM practice (Handfield et al. 2001; Lenox and Ehrenfeld 1995; Lenox et al. In any casein a QEM system, QM and EM have lost their independence. Therefore, process management, product design, and other dimensions are not associated with only QM or EM. They are components of QEM, and then they lead to QP and EP (Figure 3c). In addition, Figures ac show that QP and EP have an impact on FP. Several studies found a positive relationship between QP measures and FP measures (Curkovic et al. 2000c; Kaynak 2003). The literature offers several explanations for this effect. Customer satisfaction creates customer loyalty and retention, which results in an increase in sales and profits. Product quality and process improvement (e.g. reduced defects, cost of quality and rework) lead to increased revenues through product reliability and process efficiency (Anderson et al. 1995; Deming Kaynak 2003; York and Miree Similarly, EP is related to FP (Al-Tuwaijri et al. 2004; Hart and Ahuja 1996; Russo and Fouts 1997). Environmental pollution represents resources that have been inefficiently or incompletely used by the firm, and the elimination of such waste and inefficiencies (and thus the improvement in EP), may increase FP (less waste means abetter use of inputs, resulting in lower raw material and waste disposal costs. Furthermore, an improvement in EP through pollution prevention offers the potential to cut emissions well below the levels required bylaw, reducing the firm’s compliance and liability costs.
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