A study of the impact of Six Sigma on firm performance: Theoretical analysis and empirical investigation

This study explored the value of Six Sigma in improving firm performance. By analyzing the principles and practices of Six Sigma and traditional TQM programs, this study proposed that Six Sigma had two practices---a Six Sigma structure and a focus on metrics which may distinguish it from TQM and may be used to enhance traditional quality practices.;Empirical data were collected through a web-based survey to U.S. manufacturing plants. A total of 226 plants responded to the survey resulting in a response rate of 26 percent. Of these responses, 31 (14%) provided multiple responses. The multiple responses were tested to show satisfactory interrater agreement and reliability, which were then averaged for subsequent analyses.;Exploratory factor analysis (EFA) revealed that items measuring TQM and Six Sigma practices loaded onto ten factors. The items measuring TQM practices loaded onto seven factors; the items measuring the Six Sigma structure formed two factors; and the items measuring Six Sigma's focus on metrics loaded onto one factors. As to the two factors under the Six Sigma structure, one factor was focused on using a rigorous procedure to manage improvement activities, which was then named as a structured improvement procedure. The other factor was about establishing a role structure such as green and black belts to train and manage human resources for continuous improvement, which was then named as a Six Sigma role structure. Confirmatory factor analysis (CFA) was conducted and it supported the EFA results.;This study then proposed a framework that integrated Six Sigma practices with traditional quality practices. This integrative framework was tested using structural equation modeling. The results showed that Six Sigma and TQM practices are complementary to each other, and working together, they lead to improved quality and business performance.;Furthermore, the study used the competing values framework of organizational culture to examine the impact of cultural orientations on quality practices. The results showed that each of a group culture, a rational culture, and a hierarchical culture has unique advantages that support the quality practices that are consistent with their characteristics.