n Journal of Emerging Trends in Economics and Management Sciences - The effect of product quality on business performance in some Arab companies

Volume 5, Issue 5
  • ISSN : 2141-7024
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The purpose of the present research was to assess the effect of product quality dimensions on organizational performance in some Arab companies. Two latent constructs were developed to represent the value delivered by product dimensions, intrinsic and extrinsic value, and two others to represent organizational performance, internal and external. A model was developed to illustrate the product development stages from conception to distribution. A questionnaire was also developed, refined, and tested and was used in collecting data from 198 managers from various companies. Data was analyzed using structural equation modeling techniques in order to provide supporting evidence to five hypotheses regarding the latent structure of the relationship between product quality dimensions and organizational performance. Results support the hypotheses and clearly demonstrate that: first, value delivered by product quality dimensions is composed of two components, extrinsic and intrinsic value; and second, organizational performance is composed of two components, external and internal performance. Results also showed that the effect of extrinsic value is more on external performance than internal and that the effect of intrinsic value is more on internal performance than external. The importance and contribution of the present research are demonstrated in the following: first, a model for the product development stages is proposed in which functional responsibilities in each stage are assigned, second, product quality dimensions are reified for the first time and the underlying structure for the relationship between these dimensions and organizational performance is explicated, third, a data collection instrument for the purpose of measuring product quality and organizational performance is proposed (will be furnished upon request), finally, the present research provides managers with a guiding light as to which product dimensions are most important for improving their organizational performance.

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