Effects of Total Quality Management in Construction Services Project Performance in Indonesia’s State-Owned Enterprise

Abstract

Total Quality Management (TQM) has been widely implemented across various industries worldwide for decades, particularly in manufacturing, to enhance organizational performance and customer satisfaction. However, TQM's application in the construction sector remains relatively underexplored in Indonesia. This study investigates the impact of TQM implementation on project performance within Indonesian State-Owned Enterprises (SOEs) in the construction sector. The eight TQM practices examined in this research include Leadership, Strategic Planning, Customer Focus, Workforce Focus, Operational Focus, Measurement, Analysis, Knowledge Management, Training, and Employee Involvement. A quantitative approach was used to collect data from 99 respondents across various projects, representing different management levels. The analysis was conducted using SmartPLS 4 software through the Partial Least Squares-Structural Equation Modeling (PLS-SEM) technique. The findings reveal that five TQM elements, Strategic Planning, Workforce Focus, Operational Focus, Measurement and Analysis, and Employee Involvement, significantly impact project performance, which includes time effectiveness, cost effectiveness, quality of project outcomes, and customer satisfaction. On the other hand, the remaining three TQM practices, Customer Focus, Leadership, and Training, do not significantly influence project performance. This research contributes to the limited body of knowledge on TQM in the construction industry and provides valuable insights for both academics and practitioners seeking to optimize project outcomes within Indonesian SOEs. By highlighting the key TQM factors that affect performance, the study underscores the importance of effective implementation to achieve superior project results. This research is expected to serve as a foundation for further studies and practical applications of TQM in the Indonesian construction industry.