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The Study on Relation between Company`s Efforts for Quality Management(6 sigma) and Financial Performance
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 Title & Authors
The Study on Relation between Company`s Efforts for Quality Management(6 sigma) and Financial Performance
Park, Jae-Young; Ryu, Changheon; Park, Minjae; Kwon, Kyoung-Min; You, Gunjae;
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Purpose: In this paper, we investigate whether the endeavors for 6 sigma quality management by a firm have positive effects on its financial performance and the length of 6 sigma implemented period affects its financial status. Methods: We conduct the analysis using the data from Workplace Panel Survey 2009. We use multiple linear regression in order to analyze the relationship between the efforts for quality management and financial performance. Specifically, the return on assets (ROA) and return on equity (ROE) are investigated as dependent variables and the efforts for quality management as independent variable. The Box-Cox transformation and Cook`s distance are also used. Results: As a result of the analysis, the indication is that companies that put effect into the six sigma quality management have a positive result in its financial status. In detail, the efforts for six sigma quality management have positive effects on total asset turnover ratio and six sigma implemented period on net income to net sales ratio. Additionally, companies with longer(shorter) period of six sigma program have more (less) improvement in its financial status. Conclusion: It can be concluded that the company`s efforts for quality management positively influence financial performance.
Box-Cox Transformation;Multiple Linear Regression;Quality Management;Return on Assets;Six Sigma;
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