09-05-2014, 11:05 AM
Six Sigma Management Activities and their Influence on Corporate Competitiveness
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ABSTRACT
Six sigma has long been used as an effective way to restructure a company’s
management process. A number of successful cases have been reported of six-sigma-based
management activities dramatically enhancing a company’s strategic performance over study
periods of several years. However, while there are abundant case studies in the literature
regarding six sigma, there is a lack of empirical studies that adopt statistical approaches. To fill
this void, this study proposes a research model to test whether six-sigma-based management
activities improve corporate competitiveness. We applied a structural equation model to 161
valid questionnaires collected from managers in a number of Samsung companies that have
introduced six sigma and have been actively applying its activities for several years. Empirical
results showed that six sigma activities do indeed contribute to process management refreshment,
quality improvement, and finally corporate competitiveness. We hope that this study enables
further rigorous studies investigating six sigma as a major strategic activity.
Introduction
Research Background
Six sigma management is a quality management method recently adopted by many leading
companies. Six sigma is a data-driven method that focuses on the customer and leads a
company to attain the best quality level (Islam, 2004; Weiner, 2004; Rowlands, 2003).
A leading company is one with the ability to forecast uncertainties and maintain competi-
tiveness in this fast changing environment. Six sigma is a very basic and systematic
approach based on statistical data, which provides companies with a way to reduce
these uncertainties (Hahn et al., 1999; Roberts, 2004). Therefore, six sigma helps decision
makers to conceive ideas and it supports the systematic solution of problems in this com-
plicated marketplace. Such benefits of six sigma management activities have exerted an
effect on the culture, operation system and profits of large worldwide companies. For
example, Motorola was chosen as a winner of the Malcolm Baldrige Award in 1988 for
implicating the six sigma management method, and was reported to have saved $940
million in 3 years (Hahn et al., 1999).
Information System
An information system can be defined as the ‘systematic management process of infor-
mation and data resource in order to apply six sigma’ (Ashmore, 1992; Ahire &
Golhar, 1996; Saraph et al., 1989; Connor & Gutknecht, 1998; Hackman &
Wageman, 1995; Shepetuk, 1991; Bender et al., 2000; Joseph et al., 1999). Generally,
one of the most important factors in introducing six sigma is enhancing the information
system, which thereby improves the ability to respond to internal/external customers
(Ashmore, 1992). Ahire & Golhar (1996) have pointed out that activities such as
using information, managing information systematically, and educating/training, influ-
ence other processes in the company. Saraph et al. (1989) emphasized the importance
of the data availability and timeliness. In particular, as demonstrated in companies such
as Federal Express and Xerox, investment in information technology is very important
in improving the ability of an organization to respond to internal/external customers
(Ahire & Golhar, 1996). Federal Express has developed COSMOS (Customers, Oper-
ations and Services Master Online) to keep promises for prompt and punctual delivery.
COSMOS is a real-time, on-line system that manages employers, cargos, transport
vehicles, and weather scenarios to provide a clear understanding of all the physical
flows, thereby allowing efficient management of delivery time and routes. Xerox has
gained a 5% improvement in customer service time and parts use through the develop-
ment of ‘Eureka’, a communication system that allows their customer service engin-
eers, who are working around the world, to interactively share their knowledge
(Connor & Gutknecht, 1998).
Research Hypothesis and Research Model
As demonstrated by the previous research described above, six sigma management improves
quality and is the appropriate business methodology for customer focus and process inno-
vation (Rowlands, 2003). Six sigma management contributes to quantifying changes of criti-
cal results, by focusing on process innovation (Ettinger & Kooy, 2003). Therefore, six sigma
is the appropriate approach for companies as they set goals aimed at accomplishing near
perfect quality through process innovation or the adoption of new techniques (Frank,
2003). Since six sigma is a typical quality innovation method, Heuring (2004) stated that
it applies data and statistics to meet customer’s requests and solve their problems. In
addition, six sigma activities produce quality improvement and cost savings for the
company (Jones, 2004).
Concluding Remarks
In this study, through a rigorous survey in six sigma related operations, we have tried to
verify how six sigma management activities influence the improvement of corporate com-
petitiveness. For this purpose, we determined four constructs for measuring six-sigma
management: information system, communication, education/training, and policy/
system. These constructs were used to confirm that six sigma management activities
exert positive effects on corporate competitiveness, firstly through process innovation,
which in turn leads to quality improvement. Further research can depend on those con-
structs to investigate more challenging hypotheses.
In addition, this study fills the lack of preceding studies about the empirical analysis of
the influence of six sigma management activities on corporate competitiveness. Case
studies about the successful application of six sigma management activities have been
extensively reported in TQM literature. Therefore, it seems critically necessary for empiri-
cal studies about the effect of six sigma management activities to be introduced so that six
sigma researchers as well as practitioners can use them to produce more meaningful
results.