Implementation of Total Quality Management Based Knowledge Management and Its Effect on Customer Satisfaction and Organization Performance (Studies on Four and Five Star Hotels in Bali)

Abstract

This study aims to examine and explain the effect of implementation of Total Quality Management on Organizational Performance, by Customer Satisfaction and Knowledge Management as a mediating variable. A structural model which is composed of four variables, was developed based on literature studies conducted. The developed model is analyzed by using Partial Least Square (PLS) approach. The samples in this study are four and five star hotels in Bali as many as 87 hotels, and the respondents are the General Manager and Operational Manager as many as 164 people. The data was collected by the research instrument in the form of perception measured using a Likert scale. The findings showed that the implementation of Total Quality Management (TQM) in the four and five star hotels in Bali, do not directly affect the organizational performance, but the indirect effect if it can increase customer satisfaction and enhance the role of knowledge management first which is owned by the employees of the hotel. This findings of this study also successfully provide important implications in the form factor of leadership and continuous improvement as the foundation of the success of the practice of Total Quality Management on four and five star hotels in Bali.

Keywords:Total Quality Management, Knowledge Management, Customer Satisfaction, Organizational Performance.