The Quality Management, Operational Capability and Financial Performance in Chinese Manufacturing Companies

To enhance the financial performance of companies by improving the operational capability, we discuss the efficiencies of ten manufacturing industries by using stochastic frontier analysis (SFA), Our results show that there are significant differences in cost efficiency across industries and efficiencies of these industries remain to be consistent over the years. We select 30 companies that won Chinese National Quality Award for data envelopment analysis (DEA), and find out that some award winners may not gain their expected advantage that measured by efficiencies. The trend of three DEA efficiencies shows that companies have experienced going down and going up by years. This paper underlines that companies should translate the operational capability into business and financial performance.