The impact of ASEAN free trade agreement as moderator on TQM performance model in Malaysia: Survey result

TLDR: In this article, the effect of Asean Free Trade Agreement (AFTA) as a moderator on the TQM performance model was investigated and the Structural Equation Modeling (SEM) techniques were applied to determine the effect.

Abstract: Globalization and trade liberalization have changed to tremendous challenges and threat for Malaysian companies to strive in ASEAN. Quality is crucial aspect for companies to maintain and expanse their business in competitive market. Thus, many companies have implemented Total Quality Management (TQM) to improve their companies to the higher level of business performance. ASEAN countries have implemented Asean Free Trade Agreement (AFTA) by eliminating tariffs amongst the countries to ensure ASEAN to be more effective and efficient in terms cost. Nevertheless, AFTA is an advantage for multinational companies especially foreign companies because they have much resources such technology and technical capability. The study of AFTA as a moderator is less done in previous research. The main contribution of this study is to determine the effect of AFTA as a moderator. Based on 1500 surveys, final received response is 327 surveys which equal to 21.8% of response rate. However, 8 surveys have been excluded because of common method bias and missing value issue. The final usable question is 319 which equal to 21.3%. The result shows that AFTA has significant impact on relationship between TQM and business performance as moderator. The Structural Equation Modeling (SEM) techniques were applied to determine the effect of AFTA as moderator on TQM performance model.