The Impact of a New Quality Management Practice on Firm Performance : Evidence from Pakistan

Using a novel firm level data set from one garment manufacturer in Pakistan we investigate the impact of a new quality management monitoring practice on productivity and daily defects. We provide evidence that the new quality practice had a negative impact on productivity lines at the extreme ends of the complexity spectrum, while conversely, it had a positive impact on those basic lines which exhibit the highest levels of complexity. Evidence consistent with a quantity-quality trade-off is also found, in that whilst the implementation of the new management practice generally adversely impacted upon productivity it had the desired effect of reducing the number of daily quality defects observed after the intervention