Quality Management Practices, Innovation and Profitability of SMEs: Evidence from Argentina

This research aimed to study the diffusion of quality management practices and the attention to the innovation of Argentine SMEs also evaluating the relationship between innovation, quality management practices and profitability. To achieve the objectives of this study, we used a sample of SMEs head quartered in the province of Buenos Aires, following a stratified random sampling technique. This approach has the advantage of improving the efficiency of the estimates and the representativeness of the extracted sample. The data were collected through a questionnaire structured in 3 sections. Out of a sample of 1000 companies, 397 companies completed the questionnaire and were therefore, analyzed. The results show that only 23.2% of SMEs have introduced at least one quality management practice. The high training and consultancy costs represent the main obstacle to the introduction of tools and techniques for quality management. Culture, training, and organizational context are the main factors capable of promoting the development of these practices within companies. The results show that the stimulus for innovation which mainly concerned the product, the process and to a lesser extent the organization, comes mainly from the company’s know-how and human resources but also from the stimuli coming from the competitive environment. Finally, the analysis of the causal relationships that link the propensity to invest and innovate, the introduction of quality management practices and profitability with the other explanatory variables of business management have shown that SMEs that have made investments in innovation and have introduced at least one quality management practice are more likely to achieve operating profits