The purpose of this paper is to examine the relationship between the implementation of total quality management (TQM) and organizational performance, using the balanced scorecard (BSC) approach.
In order to investigate the relationship between TQM and BSC, a questionnaire was developed and distributed to 30 largest pharmaceutical distribution companies in Iran. Structural equation modeling was used to evaluate the measurement model and to test the research hypotheses using the data from 933 completed questionnaires.
The results supported the research model and revealed that TQM implementation can positively and significantly influence the BSC and its four perspectives.
Considering the strong association between TQM and all four perspectives of organizational performance (BSC), managers should strongly leverage the implementation of TQM practices in order to reach their strategic objectives.