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RELATIONSHIP OF TOTAL QUALITY MANAGEMENT TO QUALITY PRODUCT AND CORPORATE PERFORMANCE

Background: Small and medium businesses (SMEs) have major problems with regard to product quality so that it affects the low competitive ability. Some indications include high product variability, low process capability and low customer satisfaction. The purpose of this study is to prove whether the implementation of Total Quality Management (TQM) in SMEs influences product quality and company performance? The research method is descriptive qualitative with a survey approach, samples taken using the simple random sampling method of 60 SMEs in two districts namely Cianjur and Bandung. The questionnaire was used as a data collection tool. Based on the results of the study showed that the quality of products perceived by consumers is influenced by the implementation of TQM, the better SMEs implement TQM, the better the product quality. The data further proves that organizational performance as assessed by ROA (Return of Investment) is influenced by product quality, so that if the company wants to increase profits then improve product quality. This research is limited to processing industry SMEs not to the service sector. Some of the limitations of SMEs that have an impact on low quality are low access to technology, access to raw material sources which results in high product variability.