A Study of the Relationship in Financial Performance, Organization size, Business Classification, and Program Maturity of Six Sigma Systems

Abstract

United States companies are facing increased competition as business continues to grow globally. This is true for large companies and small-to-medium enterprises (SMEs), as well as manufacturing and non-manufacturing organizations. To remain competitive, organizations need to improve product value, technology, customization, service, and turnaround time while reducing costs and increasing innovation. Many large manufacturers have turned to Six Sigma as a quality method to guide improvement efforts. Reported results have been significant in terms of cost reduction and the bottom line. Leaders in Six Sigma efforts have been Motorola, General Electric (GE), Allied Signal, Honeywell, and Ford. These manufacturers are all large in size. SMEs have not implemented Six Sigma to the same degree as large organizations due to limited resources and capacity to successfully deploy and sustain Six Sigma. Similarly, manufacturing led the way and non-manufacturers are now beginning to implement Six Sigma systems. As more SMEs and non-manufacturers launch Six Sigma efforts, new challenges are encountered. Quality authorities have found Six Sigma to have a positive impact on the bottom line financial performance of large manufacturing organizations. However, it is unknown if there is a positive impact to the financial performance of SMEs and non-manufacturers implementing Six Sigma. This study examined the relationships in financial performance, organization size, business classification, and program maturity for Six Sigma systems. A sample of 606 individuals were surveyed based on a distribution list generated with membership from the American Society of Quality (ASQ), United States companies are facing increased competition as business continues to grow globally. This is true for large companies and small-to-medium enterprises (SMEs), as well as manufacturing and non-manufacturing organizations. To remain competitive, organizations need to improve product value, technology, customization, service, and turnaround time while reducing costs and increasing innovation. Many large manufacturers have turned to Six Sigma as a quality method to guide improvement efforts. Reported results have been significant in terms of cost reduction and the bottom line. Leaders in Six Sigma efforts have been Motorola, General Electric (GE), Allied Signal, Honeywell, and Ford. These manufacturers are all large in size. SMEs have not implemented Six Sigma to the same degree as large organizations due to limited resources and capacity to successfully deploy and sustain Six Sigma. Similarly, manufacturing led the way and non-manufacturers are now beginning to implement Six Sigma systems. As more SMEs and non-manufacturers launch Six Sigma efforts, new challenges are encountered. Quality authorities have found Six Sigma to have a positive impact on the bottom line financial performance of large manufacturing organizations. However, it is unknown if there is a positive impact to the financial performance of SMEs and non-manufacturers implementing Six Sigma. This study examined the relationships in financial performance, organization size, business classification, and program maturity for Six Sigma systems. A sample of 606 individuals were surveyed based on a distribution list generated with membership from the American Society of Quality (ASQ),United States companies are facing increased competition as business continues to grow globally. This is true for large companies and small-to-medium enterprises (SMEs), as well as manufacturing and non-manufacturing organizations. To remain competitive, organizations need to improve product value, technology, customization, service, and turnaround time while reducing costs and increasing innovation. Many large manufacturers have turned to Six Sigma as a quality method to guide improvement efforts. Reported results have been significant in terms of cost reduction and the bottom line. Leaders in Six Sigma efforts have been Motorola, General Electric (GE), Allied Signal, Honeywell, and Ford. These manufacturers are all large in size. SMEs have not implemented Six Sigma to the same degree as large organizations due to limited resources and capacity to successfully deploy and sustain Six Sigma. Similarly, manufacturing led the way and non-manufacturers are now beginning to implement Six Sigma systems. As more SMEs and non-manufacturers launch Six Sigma efforts, new challenges are encountered. Quality authorities have found Six Sigma to have a positive impact on the bottom line financial performance of large manufacturing organizations. However, it is unknown if there is a positive impact to the financial performance of SMEs and non-manufacturers implementing Six Sigma. This study examined the relationships in financial performance, organization size, business classification, and program maturity for Six Sigma systems. A sample of 606 individuals were surveyed based on a distribution list generated with membership from the American Society of Quality (ASQ),iSixSigma organization (iSixSigma, n.d.), and the NIST (National Institute of Standards and Technology)/MEP (Manufacturing Extension Partnership) organization (NIST, 2009). Regression was utilized to evaluate relationships between financial performance, organization size, business classification, and program maturity. The relationships between financial performance, organization size, business classification, and program maturity were not significant. Additionally, the majority of respondents rated their organizations at a program maturity level 4. The study results showed no apparent relationship between Six Sigma program maturity, program maturity level, organization size, and business classification.