Direct effects of quality management on competitive advantage

Purpose The purpose of this paper is to examine direct effects of quality management on competitive advantage within the context of the resource-based view of a firm. Design/methodology/approach Survey data have been obtained from 288 general managers of luxury hotels in Egypt. The authors have used six dimensions and 22 indicators of quality management, two indicators of competitive advantage that manifest the hotel’s above average financial performance relative to competitors within the study sample, and a multi-group analysis in structural equation modeling (SEM). Findings The results indicate that quality management may be a source of competitive advantage. Top management leadership and supplier management differentiate hotels with above average financial performance from its competitors. The role of customer focus and employee management in generating competitive advantage is questionable while process management and quality data and reporting may not contribute to achieving competitive advantage. Research limitations/implications Only direct effects of quality management on competitive advantage are examined within the context of a luxury hotel industry in Egypt. Similar studies within other contexts and models that study indirect effects of quality management on competitive advantage with factors that might moderate these effects are needed. Future studies could compare effects of quality management on competitive advantage with effects of quality management on other business outcomes. Practical implications The results may inform management decision making concerning the development of capabilities that may generate competitive advantage. Social implications The current study contributes in providing further evidence that may contribute to enhancing the understanding and knowledge of the relationship between quality management and competitive advantage. Originality/value This study contributes to the debate on strategic value of quality management and resource-based sources of competitive advantage. Methodologically, this study shows an alternative approach to measuring competitive advantage and indicates that applying a multi-group analysis in SEM may contribute to producing original results.