Journal of Operations Management 25 (2007) 682701

www.elsevier.com/locate/jom

Relationship between quality management practices

and knowledge transfer
Luis M. Molina a,*, Javier Llorens-Montes a, Antonia Ruiz-Moreno a
a

Management Department, Universidad de Granada, Campus de Cartuja s/n, 18071 Granada, Spain
Received 4 April 2004; received in revised form 20 April 2006; accepted 28 April 2006
Available online 9 August 2006

Abstract
This paper analyzes the relationship between quality management (QM) and knowledge transfers. The study of QM was tackled
by analyzing the degree of implementation of the different practices that compose it. Hypotheses are developed on the relationship
between some QM practices and knowledge transfers. Both the proposed model and the hypotheses were tested on a sample of 197
Spanish firms. The results confirm the importance of the different QM practices on internal and external knowledge transfers.
# 2006 Elsevier B.V. All rights reserved.
Keywords: Quality management; Empirical research

1. Introduction
Quality management (QM) is one of the most relevant
research topics in the field of operations management
(Filippini, 1997), and academia has recognized its
importance internationally (Chen, 1997; Corbett and
Rastrick, 2000). QM has thus reached a state of maturity
in the area of research (Sousa and Voss, 2002). Many
studies have concentrated on determining the relationship between QM and financial and business performance (Haynak, 2003), operational performance
(Samson and Terziovski, 1999), the importance of
contingent factors in the relationship (Hendricks and
Singhal, 2001; Llorens et al., 2003), and through its
evolution on the financial markets (Easton and Jarell,
1998). However, the results have not always agreed. This
study approaches the problem of the relationship between
QM and performance from a different perspective. It
* Corresponding author. Tel.: +34 958 242 349;
fax: +34 958 246 222.
E-mail address: lmolina@ugr.es (L.M. Molina).
0272-6963/$ see front matter # 2006 Elsevier B.V. All rights reserved.
doi:10.1016/j.jom.2006.04.007

analyzes the implications of QM practices for knowledge

transfers. It does not analyze the relation between the QM
practices and performance directly but rather through
improvements in internal processes whose importance in
generating competitive advantages has been demonstrated previously.
Studies of strategic management explain improvement
in the firms performance along two lines: (a) the classic
studies of the industrial economy, which believe that
improvement in performance comes from better positioning of the firm, that is, from finding an environment
that favors the firm; and (b) the vision of resources and
capacities, which believes that the firm should focus on
improving its knowledge and abilities to improve its
performance (Hoskinsson et al., 1999). The link between
QM and firm performance is thus based on management
of internal factors, since improvement is achieved by
implementing the principles and elements of QM within
the firm (Chiles and Choi, 2000). QM also parallels the
works from the perspective of resources and capabilities
(Barney, 1991), which asserts that resources and
capabilities characterized as rare, non-substitutable and

L.M. Molina et al. / Journal of Operations Management 25 (2007) 682701

inimitable (Barney, 1991) determine the obtaining of

competitive advantages. To achieve these characteristics,
capabilities must be path dependent (Helfat and Peteraf,
2003), enacted ambiguously from the coordinated
conduct of the organizations members (Berman et al.,
2002). Thus, the firms capacities that provide a source of
competitive advantage are based on the integration of
knowledge in the firm so that it can be used in a
coordinated way (Grant, 1996a). This genesis is what
leads Conner and Prahalad (1996, p. 477) to state that a
resource-based theory of the firm thus entails a knowledge-based perspective. Within this framework, knowledge transfers and the firms ability to transfer knowledge
are fundamental in explaining some of the basic questions
of business management (Cohen and Levinthal, 1990;
Kogut and Zander, 1992). They have thus been considered
crucial in questions as basic as the existence or limits of
firms. This work, however, is primarily interested in the
repercussions for firms organizational performance.
In this paper, we study the relationship between the
implementation of certain QM practices and internal and
external knowledge transfers. Our objective is to find
foundations in a knowledge-based view that confirm the
link between QM implementation and organizational
performance. By a knowledge-based view, we mean
studies that find knowledge to be a basis for explaining
the firms competitive advantages over its competitors
and other systems of economic coordination, such as
markets. Thus, the study follows the same line of research
as, for example, Reed et al. (2000), who studied QMs
capacity to create competitive advantages. In spite of the
importance of knowledge management within the firm
(Grant, 1996a), few empirical studies examine its
relationship with QM. The current study analyzes the
influence of QM practices on knowledge transfers, taking
into account that the degree to which firms facilitate
knowledge transfers has been considered fundamental to
explaining the differences in performance between firms.
In the next section of this paper, we review the
literature on QM and knowledge transfer. We then
examine how certain QM practices and knowledge
transfers are related and present the hypotheses. In
Section 4, we provide a description of the methodology,
followed by presentation of the results. Finally, we
discuss the implications of the results and conclusions.
2. Quality management and knowledge transfers
2.1. Quality management
Quality management has been defined as an
approach to management made up of a set of mutually

683

reinforcing principles, each of which is supported by a

set of practices and techniques (Dean and Bowen,
1994), which has achieved discriminant validity with
respect to other strategies for improving the organizations performance (Hackman and Wageman, 1995). To
determine the degree to which quality management has
been implemented in a firm or simply what quality
management is, we must return to the study of the
practices observable in quality management, since these
are very general principles while the techniques are
extremely detailed (Sousa and Voss, 2002).
From the pioneering works of Saraph et al. (1989),
many studies have drawn on the quality management
literature to identify the key practices of QM and have
developed measurement instruments to analyze its
implementation in the firm. Reviews of these studies
were developed by Haynak (2003) and by Sousa and
Voss (2002). The studies show that QM includes
practices for improvement that affect both the firms
internal environment and its relationship with its
environment. Likewise, it includes practices focused
on both the technical and social parts of the firm.
In the area of the relation between the firm and its
environment, QM drives the practice of cooperation
with both customers and suppliers. By cooperation with
suppliers and customers, we mean the organizations
propensity to engage in non-competitive activities with
customers and suppliers and to establish and maintain
an open relation with them (Flynn et al., 1994). One of
the main ideas of QM is the assumption that the firm
acts as an integrated system (Hackman and Wageman,
1995). However, this idea of the system is not limited
only to the relationships established within the
organization. It can also be extrapolated to the
relationships that the firm establishes in its relationship
with the outside world. The full product value chain is
thus seen as a system, which for its optimization must be
considered as such, and the final quality of the products
to be achieved is that which satisfies the customers
(Dean and Evans, 1994). Schonberger (1990) asserts
that QM sees the firm as part of a chain of consumers
and suppliers.
In the strictly internal arena, QM includes practices
highly focused on the social component of the firm, on
areas such as autonomy and teamwork as well as on
others of technical nature, such as process control. By
teamwork, we mean the tendency to develop tasks in a
group rather than individually. Autonomy refers to the
capability of groups or individuals to be selfregulating in relatively complete tasks. Process control
focuses on making the organizations processes
comprehensible to the people who carry them out

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L.M. Molina et al. / Journal of Operations Management 25 (2007) 682701

(Saraph et al., 1989), as well as on the search for the

sources of involuntary errors (Ahire and Dreyfus,
2000). Manz and Stewart (1997) maintain that one of
QMs strong points lies in the fact that it is a
management system that takes into account the sociotechnical system of the organization.
2.2. Knowledge transfer
Following Darr et al. (1995), we define knowledge
transfer as one organizational unit learning from the
experience of another. Internal knowledge transfer
indicates that the unit providing the knowledge is inside
the firm itself. This line of research has gained reception
and increasing interest in recent years, with studies
concentrating both on understanding the transfer
process and on identifying the factors that either help
or hinder the transfers (Hansen, 2002; Simonin, 1999).
The factors that affect how easy or difficult knowledge
transfers are can be classified into factors connected to
the source unit, to the receiver, to the relation between
the two, and to the knowledge itself (Gupta and
Govindarajan, 2000; Simonin, 1999; Szulanski, 1996).
In studying knowledge transfers, two major theories
have been used. First, references to issues emerging
from studies of social and organizational networks are
common, such as centrality, the intensity of the
relationship, the depth and importance of the relationship, the structure of the relationships, diversity of
relationships, (Cohen and Fields, 1999; Hansen, 1999;
Powell et al., 1996), etc. All of these come from network
issues that are social (Liebeskind et al., 1996), physical
(Almeida and Kogut, 1999) and institutional (Kraatz,
1998).
This theoretical base is used basically to study the
different intensity and capacity for acquiring knowledge
through transfers by different actors, due less to the
knowledge or agents and more to the relationship
established between them. Thus, the theory has focused
on explaining the transfers between organizational units
(Hansen, 1999, 2002) or between firms in the same
industry (Oliver, 2001), with crucial contributions from
this last field. From this perspective, the units that
transmit knowledge among themselves are considered,
to a large extent, to be equals or to be like a black box,
where the differences found in the transfers are due to
the diversity of the relationships established between
these units.
Yet another important current in the literature prefers
to focus on the characteristics of the units, whether
individually or relative to the unit with which they
transfer knowledge. In this case, the underlying theory

most used is communication theory. According to Krone

et al. (1987), any communication contains the following
elements: message, issuer, codification system, communication channel, receiver and decodification system.
From these elements, the main factors that explain ease of
transfer based on the characteristics of the units have been
developed, as well as the characteristics of the knowledge
(message) that the sender wishes to send and the
difference between both units systems of codification
(Gupta and Govindarajan, 2000).
3. Development of hypotheses and proposed
model
3.1. QM teamwork and internal knowledge
transfers
Structuring the firm into work teams is one of QMs
basic principles. Improving coordination means that the
people who have the most contact, due to the tasks they
carry out, cannot coordinate themselves using the
classical hierarchical mechanisms. Rather, they must do
so by means of systems with a greater degree of mutual
adaptation (Grant et al., 1994). Dean and Evans (1994,
p. 191) state that QM team effectiveness consists of
achieving quality goals in a timely manner and
strengthening relationships both within and between
the team and the rest of the organization. To achieve
these objectives, it is crucial to improve the processes of
selection of problems and search for information.
Improving the knowledge transfers is necessary for QM
teamwork to work.
In turn, human resource practices are closely linked to
knowledge transfers. Sparkes and Miyake (2000) go so
far as to state that, when human resource practices are
established, tacit knowledge is being managed indirectly.
Team implementations are considered a fundamental
element (Dyerson and Mueller, 1999). Hedlund (1994)
maintains that organizations that wish to improve their
knowledge management should be composed of temporary constellations of workers, where lateral communication is predominant. By temporary constellations of
workers, Hedlund means the idea that there is flexibility
to mobilize human resources in the form of temporary
work teams. Dougherty (2001) maintains that the use of
teamwork facilitates the creation of a shared image of the
work, which in turn facilitates knowledge transfers in the
organization. Likewise, Crossan et al. (1999, p. 533)
consider that the action provides the opportunity to
share common experiences, which will lead to the
development of a way of understanding the common
reality.

L.M. Molina et al. / Journal of Operations Management 25 (2007) 682701

Brown and Duguid (1991) use the term communities

of practice to refer to the work groups created among
workers carrying out the same task. These communities
should not be restricted to the one firm, but rather can be
shared - and in fact are, by members of different firms.
Brown and Duguid (2001, p. 202) maintain that these
groups of interdependent participants create a work
context where the members build not only their shared
identities, but also the social context in which these
identities are shared, the organization in itself
[being] little more than a community of practice.
Thus, by determining the shared knowledge, work
teams help to create a common base on which to transfer
the knowledge.
Along similar lines, Orlikowski (2002) considers
that people acquire knowledge through practice, such
that the practice of transferring it within the group to
carry out a common task legitimizes and produces the
acquisition of the knowledge needed for that transfer
itself to occur, both within the group and with other
groups. In other words, the need to transfer knowledge
in order to work in a coordinated manner creates the
very knowledge needed for the transfer.
Hansen (2002) draws the conclusion that the fewer
intermediaries in a relationship between two units that
are not directly related, the better the knowledge
transfer. Structuring the firm into work groups thus
shortens the communication chains, since it is no longer
necessary to go up through the hierarchy to discover
opportunities provided by the knowledge being used by
other groups. Teece (2000), likewise, defends flat
hierarchies as enabling knowledge transfers to flow
rapidly from the marketplace to those responsible for
decision making. Leonard-Barton (1992), in her study
on the Chaparral Steel company, deduced that internal
knowledge transfers improved due, among other
things, to the relative lack of hierarchy, since the
engineers operated as a team with the workers and the
whole team was responsible for the successes and
failures.
Grant (1997) concludes that much of the current
interest in team-based structures responds to the need to
improve the integration and knowledge transfer within
organizations. For Grant, QM is a work-team-based
non-hierarchic technique that enables the organization
to access and use the knowledge of individuals located
in the lower echelons of the organization (Grant, 1997,
p. 453). Bearing in mind all these considerations, we
have formulated the following hypothesis:
H2. The degree of implementation of QM teamwork is
positively related to internal knowledge transfers.

685

3.2. QM autonomy and internal knowledge

transfers
For Wruck and Jensen (1994), the importance of
distributing the decision making among the firms
workers lies in the fact that, for QM, decisions should be
made where the best information is, the necessary
knowledge being very often held by the firms workers
themselves. Grant (1997) maintains that the more tacit
the knowledge is, the more inefficient the hierarchy
becomes, since none of the managers is capable of
integrating the knowledge of his or her subordinates.
Grant also recommends that decisions requiring
idiosyncratic tacit knowledge that is not easily
transferable should be made where the knowledge is
located (Grant, 1997, p. 453).
QM requires people to make real changes in the way
work is done. Dean and Evans (1994) comment that
only the employees involved in the processes possess
the necessary understanding, which is why so many
managers consider employee involvement and autonomy as a part of QM. Even so, decision making
normally requires the integration of a great deal of
knowledge that is dispersed throughout the firm
(Lessard and Zaheer, 1996). This means that those
having to make the decision are forced to look for the
necessary knowledge within the organization and then
to try to transfer it to the work groups where it is needed
at a given time (Hoopes and Postrel, 1999).
Where decisions are made centrally, the information
must flow equally upwards through the organization.
Due to a problem of over-information, however, the
knowledge held by the workers must be coded,
summarized and normalized so that management can
make decisions. Therefore, if the workers lack
autonomy, there is likely to be a strong vertical transfer
of coded knowledge or information, resulting in a
highly inefficient decision-making process (Kogut and
Zander, 1992). Thus, Teece (2000) mentions that
efficient knowledge management requires a company
structure that is non-bureaucratic, and decentralized.
However, when worker autonomy is increased, tacit
knowledge transfers among the different work units and
groups must be high, since the decisions must be made
and implemented by the workers themselves. ODell and
Grayson (1998) consider that for internal transfers to
occur workers must be responsible for their own work.
The vertical communication of information will be
maintained, since the rights of control are still
hierarchized in QM (Wruck and Jensen, 1994). The
workers will perceive greater rewards in applying
resources to acquire the knowledge they need. Autonomy

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L.M. Molina et al. / Journal of Operations Management 25 (2007) 682701

goes hand in hand with responsibility for the results, such

that the need to search for knowledge will lead to the
application of resources (Arias and Molina, 2002).
Therefore, the following hypothesis is proposed:
H2. The degree of QM autonomy is positively related
to internal knowledge transfers.
3.3. QM process control and internal knowledge
transfers
In QM, process control centers on making the
organizations processes understandable for the people
who carry them out (Saraph et al., 1989), as well as on
identifying the sources of involuntary errors (Ahire and
Dreyfus, 2000). To achieve this, QM uses a set of basic
tools that includes statistical control techniques (SPC).
These tools provide the organization with valuable
information concerning key aspects of the processes
carried out within the organization (Ahire and Dreyfus,
2000; Rungtusanatham, 2000).
The important issue in the relation between control
of QM processes and internal knowledge transfers is
that the systematic use of the control processes in the
organization has a clear influence on the search for and
transfer of the knowledge to which they are applied.
First, having reliable information on the processes aids
in identifying the problems. This is the first step that
should be taken toward knowledge transfer (Szulanski,
1994). Second, it helps identify the source of the
information needed. Knowing the data of the different
processes carried out by the organization and comparing and evaluating that data is easier, serving at least as a
signposting system (Morris, 2001). For this reason,
ODell and Grayson (1998, p. 170) state that measuring performance can help to identify superior practices,
though, in itself, it may not be enough. The importance
of QM in the continuous improvement of processes is
will lead firms that have implemented QM to seek and
use the knowledge they need (Dean and Bowen, 1994).
Likewise, the systematic use of the same tools
throughout the firm provides a common language. One
of the main problems when transferring knowledge is
the need for the issuer and the receiver to communicate
via a system of signs that both are able to assimilate
(Huber, 1991). Therefore, when transferring knowledge
on objectives, requirements or performance of the
processes implemented among different groups, the use
of a language that can be understood because it has the
same meaning throughout the organization will facilitate the increase of transfers among the groups (Hoopes
and Postrel, 1999). It follows that, within the outline of

the benefits and costs of each transfer, we can say that

process control, primarily through the use of SPC, will
reduce the transfer costs.
Another very important issue is the reduced risk
perceived by those who must learn and, where this is the
case, use the transferred knowledge. This risk can be
minimized when the receiver is certain, due to the data
accumulated, that the applied knowledge to be
transferred has statistically proven to be efficient. It
is not a case of trusting in what the issuer says he has
achieved, but rather in the data that has been collected.
Ravichandran (2001) and Szulanski (1996), among
others, have demonstrated that the receivers lack of
trust in the true effectiveness of the knowledge, related
to the problem of not invented here is a key problem in
the satisfactory transfer of internal knowledge.
Finally, process control using SPC involves an effort to
encode part of the tacit knowledge used in the processes.
Knowledge that has not been encoded, when it could be
(Winter, 1987), is, according to Zack (1999) a lost
opportunity. Its transfer is impeded, while the organizations overall performance could be improved by its
encoding, transfer and use in other units within the firm.
Bearing in mind the foregoing, we have formulated
the following hypothesis:
H3. The degree of implementation of QM process
control is positively related to internal knowledge
transfers.
3.4. QM cooperation with external agents and
external knowledge transfers
QM focuses not only on improving internal processes
but also on cooperation. The firms position within the
frame of a value chain, is fundamental to understanding
how that firm should behave (Schonberger, 1990).
Cooperation comes from establishing relations with
the previous and subsequent links in the value chain that
go beyond mere commercial relations to become a form
of cooperation with agents outside the organization.
The postulates of QM provide a basis for understanding this form of action. Due to the complexity
involved in coordinating the different links in the chain
of value, some advantages of independence must be
relinquished for the sake of improvement in coordination (Wruck and Jensen, 1994). Better coordination
cannot be achieved solely through the market. The
organization must establish a network of relations with
the external agents. Within this framework, the relations
between firms go beyond a mere commercial relationship (Dean and Evans, 1994).

L.M. Molina et al. / Journal of Operations Management 25 (2007) 682701

Knowledge management particularly encourages

firms to establish stable links and relations with agents
outside the firm. Lubatkin et al. (2001) state that
innovation occurs increasingly in network environments rather than in individual firms.
In the subject of transfers among independent
firms, it is particularly important to control the
amount of knowledge the firm is putting at the
disposal of its partners, as well as to avoid problems
of opportunism. Because traditional controls are
becoming more difficult to establish (Bachmann,
2001), cooperation and the forging of trust-based
relations is the only way of controlling the development of the relationship satisfactorily for both parties.
In QM, this control is one of the pillars on which the
relations with major suppliers and customers should
be built, on the assumption that cooperation is the best
strategy for both players. Thus, cooperation helps
smooth out the problem of loss of power by the person
surrendering knowledge (Simonin, 1999); it serves as
a social control between the parties (Welch and
Welch, 1997).
Even so, Simonin (1997) maintains that having
experience with external agents does not suffice. This
experience must have been transformed into relational
knowledge. In other words, maintaining general
relations with suppliers and customers is not enough.
One must learn from these relations the correct way to
act in this type of interchange with external agents.
The links established with suppliers and customers
should not only be based on cooperation. Establishing
a relationship that leads to smooth knowledge
transfers among the parties requires dedicating time
and resources to that relationship (Postrel, 2002).
Because QM orients the relations with suppliers
toward the long term while also insisting that relations
be established only with a small number of them, it
should encourage the development of common or
related knowledge, or the overlapping of the firms
knowledge bases, making the transfers more efficient
(Hansen, 2002).
Therefore, we have formulated the following
hypotheses:
H4a. The degree to which the QM practice supplier
cooperation has been implemented will lead to an
increase in knowledge transfers from those suppliers.
H4b. The degree to which the QM practice consumer
cooperation has been implemented will lead to an
increase in knowledge transfers from those customers.

687

3.5. Relationship between external and internal

knowledge transfers
The literature on knowledge transfers usually
emphasizes either the internal or external transfers.
Thus, the studies focus on improving the transfers
among different units in an organization (e.g., Hansen,
1999) or else among firms (Inkpen, 1998). In the
studies that treat the two together, the emphasis is
placed on the suitability of internal and external
transfers as alternative sources in the search for the
knowledge needed (Amasse and Cohedet, 2001;
Lubatkin et al., 2001). Because it depends on the
nature of the knowledge necessary and on its relative
centrality to the rest of the organizations knowledge,
knowledge transfer (or creation, if the knowledge does
not exist) improves either within the organization or
outside it.
However, internal and external transfers should not
be seen solely as alternative sources of knowledge.
The distance between the knowledge bases within the
firm must be shorter than that which exists between the
firm and its environment (Postrel, 2002). Thus, the
transfer costs within an organization would be lower
than in a marketplace, and both activities would be
carried out jointly within a single organization (Grant,
1996b). Once the organization has applied resources to
achieve the transfer of useful knowledge from
suppliers and customers, this knowledge has a lower
internal transfer cost than the cost incurred for its
external transfer. If the external transfer has been
undertaken due to the improvement in expected
performance, the advantage of transferring this
knowledge within the firm must be greater still. This
indicates that, once the knowledge has been transferred to the organization, it can lead as long as the
knowledge is relevant to more than one group within
the firm to a cascade of transfers in that organization.
This idea is supported by the fact that, if the knowledge
is valuable, it has not only a lower transfer cost but also
a lower perceived risk.
Emphasis on the advantages of transferring
acquired knowledge internally is present in the
studies on learning in joint ventures. Inkpen and
Crossan (1995) and Kogut (1988), among others,
mention that one of the most important advantages in
establishing this type of hybrid structure is the
possibility of transferring within the organization the
knowledge transferred by the counterparty to the joint
venture.
Considering the above, we can propose the following
hypotheses:

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L.M. Molina et al. / Journal of Operations Management 25 (2007) 682701

H5a. Knowledge transfers from suppliers will have a

positive impact on the increase in internal knowledge
transfers.
H5b. Knowledge transfers from the customers will
have a positive impact on the increase in internal
knowledge transfers.
3.6. Relation between knowledge transfers and
profitability
The positive relation between better internal knowledge transfers and the firms profitability is a subject
much studied from the theoretical perspective, although
empirical studies are much scarcer. This relation can be
supported in the fact that the transfer of best practices
improves the firms average performance (Szulanski
et al., 2000). Thus, replacing inefficient practices and
routines by those that have shown greater efficiency will
improve the organizations average performance, above
all if we take into account that the difference in
efficiency in the firm can be very great for the same
process (Szulanski, 1996).
In turn, the overlap between the knowledge of
different members facilitates the integration and
coordination between the different workers. Thus,
internal knowledge transfers help to create a greater
degree of common terms and meanings in the knowledge of the firm members, facilitating subsequent
transmission, increasing creativity (Nonaka et al., 1998)
and ultimately making it possible for subsequent
collaborations to occur with less effort (Grant, 1996a).
Using the perspective of resources and capacities,
knowledge transfer and the relations established
between different kinds of organization members
knowledge makes the possibility of external imitation
more difficult. The greater the base of knowledge used
and the relations between kinds of knowledge, the
harder imitation becomes. This allows the firm to
achieve greater sustainability of the advantages
obtained and thus ensures that the quasi-profits obtained
last over time. The increase mentioned above in the
overlap between the knowledge of the firms members
will also lead to greater perfection in the replication
(Szulanski et al., 2000). McEvily et al. (2000, p. 300)
argue that a firm can delay the substitution [of
competences] by the continuous improvement through
the exchange of knowledge of managerial practices,
performance of processes and the contingencies of
implementation. Therefore, knowledge transfers help
the firms resources and capacities to be less imitable
and substitutable.

As to external knowledge introduced in the firm, its

relation to improved performance has some mechanisms that we have mentioned above. First, knowledge
transfer from the outside allows the firm to increase its
fund of knowledge, making more knowledge available.
In a given situation, having more knowledge available
makes it possible to find a solution that should be at least
as good as and usually better than the possibilities
without this external knowledge. This will make the
average productivity greater in the organization,
especially if it is combined with internal knowledge
transfer.
This greater fund of knowledge also makes it more
difficult for a person outside the organization to
imitate the solutions developed. The greater the whole
of the knowledge used, the more difficult it is for an
outside person or firm to have stored the same kind of
knowledge (Grant, 1996b), making it harder to
understand the solution. This makes involuntary
external transfer and its imitability harder and
improvements in performance more lasting (Rivkin,
2001).
Further, having been exposed to external knowledge
causes one to question knowledge and practices
established in the firm. When the firm finds itself in
a situation of inertia when the environmental conditions
change, the firm should turn to its most immediate
environment to seek information on the new situation.
Within this kind of transfer, according to previous
studies, the knowledge acquired concerning customers
for the development of new products and their
adaptation to the customers needs will be especially
important (Clark and Fujimoto, 1991). Many studies
also focus on the importance in this ability respect of
acquiring part of the knowledge that the suppliers
possess (Brusoni et al., 2001).
Given the foregoing, we formulate the following
hypotheses:
H6. Internal knowledge transfers are related positively
to the firms performance.
H7a. Knowledge transfers from providers will affect
the firms performance positively.
H7b. Knowledge transfers from customers will affect
the firms performance positively.
The joint consideration of these hypotheses produces the structural model shown in Fig. 1. This figure
shows how both the technical and social aspects of QM
affect internal transfers. The climate of cooperation

L.M. Molina et al. / Journal of Operations Management 25 (2007) 682701

689

Fig. 1. Model of QM influence on knowledge transfers.

with suppliers and customers is the element that

provides the possibility of acquiring knowledge
from outside. These transfers, in turn, strengthen
the internal knowledge transfers. Further, knowledge transfers will affect the firms performance
positively.
4. Methodology
4.1. Sample and data collection
To test the different hypotheses, we performed an
empirical study of large Spanish firms. The questionnaire was specially designed to correspond to the
relation between quality management and knowledge
transfers. The Duns and Bradstreet and Actualidad
Economica databases were cross-referenced to ensure
the reliability of the population list. A sample of 975
firms was chosen at random. Each was asked to take
part in the research. Due to the typical problems
regarding the low response rate to questions on
aspects of firm strategy, extra care was taken to
maximize the response rate. To this end, we began by
pre-testing the questionnaire, carrying out five indepth interviews with CEOs from firms that formed
part of the population. Each interview lasted over 2 h,
during which all aspects of the questionnaire were
covered. Secondly, non-respondents were sent a new
questionnaire about 1 month after the initial mailing.

197 valid responses were collected, giving a response

rate of 20.21%. The responses were collected from
May to July 2002. In all of the cases considered valid,
the informants were the CEO (24.5% of the
responses), the quality manager (60.3%) or other
top-level executives (15.2%). We decided to use the
managers as our key informants, since these people
receive information from a wide range of departments
and are therefore a very valuable source for
evaluating the different variables of the organization.
They also play a major role in forming and molding
these variables by determining the types of behavior
that are expected and supported (Baer and Frese,
2003).
The questionnaire was administered in Spanish.
Since the great majority of the scales came from
previous studies to improve their validity, the questions
were translated into Spanish. To ensure that the
concepts had the same meaning in Spanish and English,
we performed a process of double translation, as
described in Whybark (1997).
Possible bias due to non-respondent firms has been
analyzed. The aforementioned databases also provide
secondary information on number of workers and
turnover, both for firms in the sample and for nonrespondents. The KolmogorovSmirnov test (Kleinbaum et al., 1988) was used, and neither the number of
employees ( p = 0.486) nor the turnover ( p = 0.615)
was significantly different. We can be confident these

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L.M. Molina et al. / Journal of Operations Management 25 (2007) 682701

firms come from the same population and that there is

no bias in the respondent firms.
4.2. Measurement model
4.2.1. Knowledge transfer from customers and
suppliers
A Likert-type seven-point scale (1 = totally disagree to 7 = totally agree) was developed. It takes
into account the two basic characteristics of the most
commonly-used scales in studies on knowledge transfers
with external agents (Kale et al., 2000; Simonin, 1999):
(a) the fact that different types of knowledge flow among
organizations, and (b) the fact that merely acquiring the
knowledge does not suffice; rather, it must help the firm
in improving its current capacities and abilities (thus
reducing its dependence on external knowledge).
The foundation was provided by the scale developed
by Kale et al. (2000), as applied to marketing-related
knowledge, technological knowledge and knowledge on
management.
The scale established can be applied to the firms
relations with any of the organizations it has links with,
from its customers and suppliers to its strategic allies,
research centers or business associations, to mention a
few relevant examples. This study has concentrated on
the knowledge transfers from the main customer and
supplier with which the organization with which the
organization cooperates, in accordance with the
hypotheses put forward.
The scales internal consistency and reliability were
studied. We established a mean for each of the three
indicators for each knowledge type. Factor analysis
showed that the items loaded on a single factor, which
provides proof of unidimensionality. The Cronbachs
alpha values for internal consistency were 0.9699
(transfers from suppliers) and 0.9767 (transfers from
customers), indicating an acceptable level of internal
consistency.
4.2.2. Internal knowledge transfer
We adapted the scale developed by Cummings
(2001) and asked the company CEOs to indicate on a
Likert-type seven-point scale (1 = never, 7 = to a
great extent) the degree to which the different units in
the firm transfer: (a) objectives and responsibilities; (b)
specific requirements; (c) written procedures and the
practical knowledge to use them; (d) superior practices
for carrying out tasks; and (e) clear recommendations
and tips to improve the performance of the tasks. The
internal consistency (a = 0.89) was analyzed, as was the
unidimensionality, using an exploratory factor study.

4.2.3. Teamwork
To determine the degree to which the firm has
implemented teamwork, three items were used: (a) how
strongly management backs teamwork; (b) how often the
firm solves its problems using teamwork; and (c) how the
firm uses inter-functional teams. These items are based
on those proposed by Griffin et al. (2001) and Valle and
Witt (2001). Within QM studies, these indicators have
been used in the prior works of Anderson et al. (1995) or
Flynn et al. (1994). A Likert-type seven-point scale was
used (1 = never, 7 = to a great extent). The
Cronbachs a is 0.92, indicating the scales reliability.
To ensure unidimensionality, we checked that all the
items loaded on a single factor.
4.2.4. Autonomy
Three items were used to determine the level of
autonomy within the firm: the degree to which (a) the
workers control and are responsible for their own work;
(b) the workers are encouraged to identify and solve
their work-related problems; and (c) autonomy in
decision making has increased. To select these items,
we took into account the scales presented by Ahire et al.
(1996), Flynn et al. (1994), Griffin et al. (2001) or
Saraph et al. (1989). The scale is similar to others used
previously (Chang et al., 2003). Again, we used a
Likert-type seven-point scale. Its reliability was
analyzed (a = 0.92), as was the unidimensionality.
4.2.5. Process control
Four items were used to determine the degree to
which the process control practices included in QM
have been implemented in the firm. The scale has been
adapted from the prior scales of Flynn et al. (1994) and
Saraph et al. (1989). A Likert-type seven-point scale
was used (1 = never, 7 = to a great extent) to ask
the CEOs the extent to which: (a) statistical methods are
applied to control quality; (b) the processes are designed
with quality assurance in mind; (c) the design of the
products/services guarantees their final quality; and (d)
the employees are familiar with statistical control
techniques for process control. The unidimensionality
was studied, as was the internal consistency (a = 0.84).
4.2.6. Cooperation with suppliers
A four-item scale was used. CEOs were asked to
indicate the degree to which: (a) suppliers are involved
in the design and development of products; (b) longterm relationships are established; (c) a small highquality group of suppliers is used; and (d) a climate of
cooperation has been developed. This scale has been
adapted from the prior work of Ahire et al. (1996) and

L.M. Molina et al. / Journal of Operations Management 25 (2007) 682701

Flynn et al. (1994). The scale is unidimensional and

reliable (a = 0.78).
4.2.7. Cooperation with customers
To determine the type of relationship the firm
maintains with its customers, CEOs were asked to
indicate the degree to which the firm: (a) encourages
visits to the firm by customers and vice versa; (b) seeks
direct contact between the workers and the staff of key
customers; (c) involves customers in the design and
development of the products and services; (d) cooperates with customers to determine their tastes and
preferences; and (e) has established a climate of
cooperation with the main customers. This scale has
been based on prior studies by Black and Porter (1995)
and Flynn et al. (1994). The scale is unidimensional and
shows internal consistency (a = 0.78).
4.2.8. Performance
After reviewing the scales for measuring performance developed in studies published in the major
journals, we considered it most appropriate to use the
measured proposed by Murray and Kotabe (1999) for
financial and operative performance. After the scale had
been adapted, the firm managers were asked what they
valued, according to a seven-point Likert-type
(1 = much worse than my competitors to 7 = much
better than my competitors). The use of scales in
which performance is valued in accordance with the
main competitors is one of the practices most widely
used in recent studies, particularly in multi-sectorial
studies (Brews and Hunt, 1999). The scale is
unidimensional and reliable (a = 0.88).
4.2.9. Scales validity and reliability
After analyzing the unidimensionality and the
internal consistency of the scales taken individually,
we performed a confirmatory factor analysis using the
LISREL 8.30 software package. The estimation method
chosen was ordinary least squares (OLS). Although the
ratio of sample size to questions was 5.62, above the
recommended level of five (Hair et al., 1998), the study
of the scales normality proved to be negative, and the
sample is not large enough to allow the asymptotic
covariance matrix to converge. The factor loads are
shown in Table 1. All are very significant and exceed the
normally accepted level of 0.4 (Nunnally, 1978). The
internal consistency had been studied before using the
Cronbachs alpha indicator. However, Fornell and
Larcker (1981) state that the composite reliability is a
more appropriate indicator, since it is calculated taking
the scale into account in the context of the measurement

691

model. The minimum recommended value is 0.7. This

analysis was completed by calculating the average
variance extracted, whose minimum recommended
value is 0.5. As Table 1 shows, in all cases the scales
are within the accepted limits, indicating that the
measurement model is good. We also studied all the
indicators of the measurement scales goodness of fit by
analyzing the absolute and incremental goodness of fit
and the models parsimony. In all cases, the indicators are
within the levels recommended as acceptable in the
literature (Hair et al., 1998). The fact that some of the
indicators are higher than 1 is particularly interesting,
given the widespread belief that all the indicators of
incremental goodness of fit fall within the interval [0,1].
In reality, values outside this interval are just as possible
(Joreskog and Sorbom, 1993, p. 125).
We then studied the discriminant validity of the
different scales. The normal analysis consists of forcing
the correlation between each pair of constructs to be one
and studying the models loss of fit. To do this, we
compared each pair of constructs two by two. In all cases,
the loss of fit is significant and corresponds to the increase
in x2 ( p < 0.001), indicating that the constructs have
discriminant validity. Table 2 shows the descriptive
statistics and the correlations between the constructs.
5. Results
The results of the structural analysis are shown in
Fig. 2. For greater clarity, the figure includes only the
values of the structural equations, not the measurement
model. Firstly, the models goodness-of-fit must be
studied. In all cases, we have taken into account the
indicators and the recommendations on them presented
by Hair et al. (1998). Thus, three types of indicators of
the models goodness have been considered: absolute fit
measurements, incremental fit measurements and
parsimonious fit measurements. First, with regard to
the models absolute fit, the indicators that can be
applied to non-competitive analysis strategies are the
goodness-of-fit index (GFI) and the root-mean-square
error of approximation (RMSEA). The GFI indicator is
restricted to the interval of values [0,1]. The higher the
value, the better the fit; and good fit is indicated by a
value above 0.90. This indicator is therefore acceptable
in our model (GFI = 0.99). The RMSEA is an indicator
based on the error of approximation per expected degree
of freedom in the population. The lower the indicator,
the better the fit; and fit is acceptable for values below
0.08 or even 0.10. In our model, the indicator takes a
value of 0.067 and is indicative, along with the GFI, of
its good overall fit.

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L.M. Molina et al. / Journal of Operations Management 25 (2007) 682701

Table 1
Factor loading, and reliability analysis
Constructs/items

Mean

S.D.

Stand. factor
loading

t-Valuesa

Teamwork
Management initiative
Team-based problem solving
Use of inter-functional teams

5.31
5.04
4.93

1.54
1.45
1.50

0.89
0.89
0.91

29.18
28.96
29.35

Autonomy
Responsibility for own work
Desire to find solutions
Autonomy in decision making

5.18
4.95
4.58

1.31
1.52
1.49

0.80
0.91
0.96

27.08
28.86
29.45

Supplier cooperation
Involvement in design
Long-term relations
Few suppliers
Climate of cooperation

4.47
5.41
4.85
5.08

1.64
1.29
1.45
1.29

0.67
0.58
0.75
0.80

20.89
18.62
22.30
23.12

Customer cooperation
Visits from customers and vice versa
Encouraging direct personal contact
Involvement in design
Information search cooperation
Climate of cooperation

5.29
5.83
4.94
5.38
5.46

1.48
1.16
1.48
1.36
1.27

0.75
0.87
0.69
0.86
0.77

27.70
31.06
25.90
30.82
28.32

Process control
Use of SPC
Processes designed for quality
Design of products for quality
Employee familiarity with SPC

5.14
5.65
5.27
4.40

1.59
1.24
1.38
1.61

0.74
0.80
0.82
0.76

25.07
26.54
26.95
25.54

Internal knowledge transfers

Objectives and responsibilities
Specific requirements
Procedures
Best-practices
Recommendations and tricks

4.69
4.49
4.85
4.45
442

1.33
1.41
1.40
1.37
1.47

0.81
0.86
0.76
0.86
0.74

31.08
32.56
29.83
32.36
29.02

Suppliers knowledge transfers

Acquire information
Acquire capabilities
Improve prior capabilities

3.61
3.42
3.43

1.40
1.36
1.35

0.93
0.97
0.98

24.42
25.01
25.05

Customers knowledge transfers

Acquire information
Acquire capabilities
Improve prior capabilities

4.02
3.86
3.98

1.37
1.43
1.41

0.98
0.96
0.95

26.24
25.78
25.66

Performance
ROA
ROE
Earning/sales
Market share
Sales growth

5.06
5.09
5.01
5.05
5.09

1.11
1.16
1.14
1.18
1.09

0.82
0.79
0.68
0.75
0.81

23.47
23.09
20.85
23.03
24.44

Composite
reliability

Average variance
extracted

0.92

0.80

0.92

0.80

0.79

0.50

0.89

0.63

0.86

0.61

0.89

0.61

0.97

0.92

0.98

0.94

0.88

0.60

x2 = 975.73, d.f. = 524; RMSEA = 0.066, GFI = 0.99; AGFI = 0.98, NFI = 0.98, NNFI = 1.02, CFI = 1.00, IFI = 1.02, RFI = 0.98; x2/d.f. = 1.86.
a
All factor loads are significant at p < 0.01.

It is also necessary to ensure that the model presents a

good incremental fit. This is based on checking the
increase in the fit between a base model (normally the
null model) and the proposed model. In all cases, values
above 0.90 are considered acceptable. In the model

proposed, all the indicators are well above the minimum

threshold (AGFI = 0.96; NFI = 0.96; NNFI = 0.99;
CFI = 0.99; IFI = 0.99; RFI = 0.95). The final aspect to
be studied is the proposed models parsimony. Of the
measurements proposed, only the normed chi-square is

L.M. Molina et al. / Journal of Operations Management 25 (2007) 682701

693

Table 2
Analysis of discriminate validitya
Variable

1.
2.
3.
4.
5.
6.
7.
8.
9.
a
b

Internal knowledge transfers

Suppliers knowledge transfers
Customers knowledge transfers
Performance
Teamwork
Autonomy
Process control
Supplier cooperation
Customer cooperation

SEM correlations b
1

0.33
0.32
0.45
0.81
0.86
0.59
0.68
0.75

0.17
0.32
0.27
0.29
0.49
0.34
0.26

0.30
0.34
0.36
0.35
0.50
0.30

0.38
0.40
0.34
0.37
0.35

0.79
0.55
0.69
0.70

0.59
0.72
0.63

0.70
0.52

0.60

n = 197.
All correlations are significant at p < 0.05.

Fig. 2. Structural equation estimation. Structural equation.

of use in the confirmatory analysis. This measurement

must take values above one and below three or even five
to ensure the data is not overfitted (Hair et al., 1998) and
to be truly representative of the data. In our case, the value
reached is 1.88 and therefore within the accepted limits.
The results of the analysis are consistent with the
hypotheses put forward, thus confirming the predicted
hypotheses. Only in the cases of the relation between

knowledge transfers from customers and internal

transfers (H5b) and of the relation between teamwork
and internal knowledge transfers (H1) are the hypotheses not confirmed. The rest of the relationships are
significant. These results are in line with the general
hypothesis of this study; namely, that implementing QM
in the firm has positive implications for knowledge
transfers.

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L.M. Molina et al. / Journal of Operations Management 25 (2007) 682701

6. Discussion
Since the end of the last century the knowledge
applied to the development and manufacturing of
products and services has steadily grown in complexity,
specificity and system dependence. In short, it has
become a key element that needs to be managed. This
increased importance of applied knowledge in production appears to be having powerful consequences for the
economic structure, giving rise to what has been called
the new economy. According to Foss (1999), its
growing theoretical importance lies in the inability of
the dominant transaction costs paradigm to provide a
satisfactory explanation for the differences in profitability due to possessing competitive advantages.
Although the knowledge-based view of the firm is a
poor theory to define the existence and limits of the
organization, it is an excellent one to explain
competitive advantages.
In this economic context, the quality movement has
continued to develop, giving rise to what we know as
QM, a relatively recent term (Bemowski, 1992) despite
its widespread dissemination. This study assumes that
the relevance of knowledge management (especially in
academia) and of QM (above all in professional circles)
in the same period of time has not occurred by chance.
The first conclusion that can be drawn from the study
is that the results do not confirm the relationship between
the teamwork of QM itself and knowledge transfers. This
result may be linked to the need to create strong ties
between the two parties, which implies a substantial use
of resources (Hansen, 1999). On the one hand, group
members must devote more resources to transfers within
the group itself, leaving fewer resources for transfers
among units. On the other, group members must also
create, through experience, a type of shared language that
facilitates transfers within the group but which hinders
transfers among units, since this ad hoc language is not
common to the other groups, thus increasing the distance
between the knowledge bases (Huber, 1991).
In hypothesis 2, we proposed that worker autonomy is
positively related to internal knowledge transfers. This is
based on the utilitarist theory: because the workers are
responsible for the correct functioning of the tasks, their
willingness to search for the knowledge should increase
when the reward expected from the transfer is greater
(Arias and Molina, 2002; Wang and Netemeyer, 2002).
We also took into account the corpus of studies focusing
on the need for decentralization when the knowledge
involved in the transfer is tacit, as is the case of the
knowledge analyzed in this paper (Teece, 2000).
Autonomy gives the individuals or work groups the

freedom to establish the procedures best adapted to the

needs of the tasks. Since in most cases the workers
possess the best knowledge of their jobs and the best
information on the validity of the practices and their
implementation, they will be able to perform the search
for the necessary knowledge more efficiently. Autonomy
not only affects the evaluation of knowledge, but it also
facilitates the exchange, due to the fact that a smaller
number of parties are involved. Generally speaking, these
parties have a better knowledge of the tasks, since they
establish the relationship instead of having first to go
through someone who does not belong to management.
Further, this study established the hypothesis that
QM process control helps knowledge transfers by
making the firms problems more visible, highlighting
the differences in efficiency among the different
processes that the firm performs based on data rather
than on intuition, facilitating the search for more
efficient processes and improving the level of coding of
the firms knowledge. The relationship between process
control and internal transfers has been verified, underlining its importance to the processes described.
Hypotheses 4a and 4b maintain that cooperation with
suppliers and customers will improve the transfer of
knowledge from them to the firm. The empirical study
verifies the importance of cooperation with both
suppliers and customers. Even so, the capacity to
explain the variation in the external transferences is
relatively small (R2 = 0.24 for the suppliers; R2 = 0.25
for the customers). Bearing in mind the results obtained,
we must accept hypotheses 4a and 4b, although some
factors have nothing to do with the mere cooperation
with external agents, which explains the variability in
the external knowledge transfers. These factors have
been studied in the literature on the subject. Thus, the
concept of knowledge absorption capacity (Cohen and
Levinthal, 1990; Lane and Lubatkin, 1998) includes
prior knowledge on the subject, organizational form,
integration capacity, motivation to acquire knowledge
and level of trust.
Outside the relationship between QM practices and
knowledge transfers, we have established hypotheses 5a
and 5b. These hypotheses show the positive relationship
that can exist between the presence of external and
internal knowledge transfers, due to the fact that the
expected benefit from internal dissemination of the
knowledge must be greater than in the case of external
transfer. The potential value must be similar in groups
with the same activities, while the cost will be reduced.
Because the knowledge is in a more familiar language
and both the receiver and the issuer belong to the same
firm, they possess a common culture that does not

L.M. Molina et al. / Journal of Operations Management 25 (2007) 682701

interfere in the transfers (Simonin, 1999). The results

confirm that the transfers from suppliers are significant
for a level of p < 0.05. This is not the case in the
knowledge transferred from customers. One possible
explanation for this can be found in the line of research
opened by Menon et al. (2001). Menons studies state
that internal competition and political wrangling among
management indicate that managers value internal
knowledge less, not because of its lower potential but
because they expect to earn greater credit by using
external knowledge. Furthermore, they value more
positively workers who use external knowledge.
Bearing in mind this bias in favor of external
knowledge, it is possible to soften the influence of
external knowledge transfers on internal knowledge.
Although objectively speaking the knowledge transferred from outside will have a lower internal transfer
cost than it originally had, those whose responsibility it
is to decide its suitability will value the knowledge
personally. Applying the bias against internal knowledge, the difference between value and cost means that
its internal transfer remains undecided, since one must
compare the loss of personal credit with the situation
that would arise if that information were sought outside
the organization.
In the study, the results indicate that both internal
knowledge transfers and those from suppliers and
customers were highly and significantly related to the
firms performance Therefore, hypotheses H6, H7a and
H7b have been verified by the empirical study
performed. The knowledge transfers are latent, not
directly manageable variables which are highly
influenced by the QM elements. This influence on
variables that have such theoretical relevance in the
organization provides a theoretical base on which we
can analyze the importance of QM when it is
implemented in the firm. Thus, QM increases the
organizations capacity to transfer knowledge. This
capacity fulfills the requirements for providing the basis
of competitive advantage and can thus explain the
influence of QM on performance.

695

7. Conclusion and future research

In this paper we have studied the relationship
between certain QM practices and knowledge transfers.
The results indicate that the joint handling of the social
and technical aspects of QM implies that we have a set
of practices with great impact on knowledge management, especially on knowledge transfers. Cohen (1998)
considers that, from the basic perspectives that can be
adopted for knowledge management, Western firms
have opted for the line of explicit knowledge management and subsequent investment in costly information
systems. In its tacit aspect, research has studied which
factors determine whether the knowledge is more or less
transferable. However, there are few studies on the
management elements that will facilitate the transfer.
Given the explanatory capacity of the elements
mentioned, establishing a socio-technical system
according to the principles of QM has proven to be a
good system for overcoming these difficulties.
Thus, the results provide a theoretical support for the
relationship between QM and performance. We can
conclude that, since QM has a positive influence on
knowledge transfer, it affects the firms resources and
capabilities, as well as the organizations competitive
advantage.
For future study in this line of research, we believe
that the analysis of the influence of implementing QM
practices in other knowledge management processes is
important. The relation between knowledge creation
and QM implementation has been studied before
(Liderman et al., 2004), but empirical studies in this
field are very few. Even fewer studies analyze the
relation between QM and knowledge integration, an
issue on which QM practices a priori have a great
impact. On the other hand, the lack of significance of
QM teamwork in the internal transfers is an unexpected
result. Deeper study of this relation to take into account
the different kinds of teams in QM and their relation to
knowledge transfers is a line of research that would
improve understanding of this relationship.

Appendix A. Questionnaire
Please indicate the degree of agreement or disagreement with respect to the degree of implementation of the following quality management practices
in your firm

696

Appendix A (Continued )

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L.M. Molina et al. / Journal of Operations Management 25 (2007) 682701

697

Appendix A (Continued )
Indicate with what frequency the different kinds of knowledge, abilities, techniques, information, etc. are transferred or exchanged between work
groups

Focusing on your relation with the main supplier with whom you have established relations of cooperation, indicate the degree of agreement or
disagreement with the following statements

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L.M. Molina et al. / Journal of Operations Management 25 (2007) 682701

Appendix A (Continued )
Focusing on your relationship with the main customer with whom you maintain relations of cooperation, indicate the degree of agreement or
disagreement with the following statements

Answer the following questions, taking into account the situation of your firm in the last 3 years. Relative to your main competitors, what is your
firms performance in the following aspects

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