European Journal of Business and Management www.iiste.org ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online) Vol.6, No.29, 2014 125 Research on Continues Mediation: Employee Behavior and TQM Practice as ISO 9000 Strategy to Improve Performance of Manufacturing Company in East Java, Indonesia Harianto Respati* Rofikul Amin Economic and Business Faculty, University of Merdeka Malang, 62-64 Trs Ry Dieng, Malang, Indonesia * E-mail of the corresponding author: patidarma@yahoo.com The research is financed by Indonesian Government (DP2M-DIKTI-DEPDIKNAS): SP-DIPA-023.04.2.415015 Abstract The purpose of this research is to evaluate the contribution of establishing ISO 9000 towards the performance of manufacturing company, and also examine and describe the employee behavior and TQM (Total Quality Management) Implementation as continue meditation in a structural model. This research examined 248 large scale manufactures, which are still active and ISO 9001 certified. The research design is experimental quantitative by proving hypothesis. The research respondent is Representative Management of the company. The analysis is using Structural Equation Modeling to examine and expose the effect of research variables. The urgent of this research based on the significant role of the human resources, which is Employee Behavior as the company strategy to reach the affectivity of TQM. It is necessary to be investigated to answer the theoretical studies of ISO 9000 in order to improve the performance of the company. The study highlights the mediating role of employee behavior and TQM implementation as the research originality and novelty in the field of operational management referring to the purpose of applying ISO 9000, which is to improve the performance of manufacturing company. The results proved that the establishing of ISO 9000 have not been able to directly improve the performance of manufacturing company. In this research, it was found that Quality System, which is the establishment of documentation system in regulating ISO 9000, was able to give positive competence for the employees in running the quality work program (TQM practice) that in the end would improve the performance of the company. Keywords: ISO 9000, Employee behavior, TQM practice, Manufacture performance, Indonesia. 1. Introduction The ISO 9000 certification is well known by most industrial people for quality management system (Ilkay and Aslan,2012). ISO 9000 can be implemented in various kinds of Manufacturing Company as well as Service Company (Briscoe et al. 2005). Every other countries has their own version of naming ISO 9000 as the international language of quality. For instance, US Military has MIL-Q-9859, and NATO has AQAP-1 for the ISO 9000 certification (Gustafson et al. 2001). The main purpose of ISO 9000 certification as the standard of quality management system is user satisfaction (Brown and Wiele,1995; William, 1997; Cadesus,2001; Pan’s,2003; Respati et al. 2013, even the ISO 9000 Guidelines from the 1987 until the 2008 versions stated that it is for the purpose of User Satisfaction. Research by Ilkay and Aslan (2012) reflected that the performing variables with three indicators such as financial, internal business, and customer satisfaction criteria. Referring to the result of Ilkay and Aslan (2012) it indicates that User Satisfaction is indeed part of Company Performance. In reality, there are many previous studies that examined the impact of implementing ISO 9000 certification towards the User Satisfaction, while on the other hand it is very different with Ilkay and Aslan perception (2012:756) saying “Other studies found that ISO 9000 had a very limited effect of ISO 9000 on Performance”. This difference became a gap to fulfill the lack of theory. The test of ISO 9000 towards the Company Performance as done by Navech and Marcus (2005) concluded that the implementation of ISO 9000 have not stimulated the Company Performance. Wayhan et al., (2002) found that ISO 9000 still did not have positive impact towards the Organizational Performance such as level of sales, capital, and net income of the company. In other research, it was found that ISO 9000 also still did not have any positive impact towards the financial performance (Tsekouras et al. 2002). However, experts such as Gotzamani and Tsiotras (2002) claimed that the motivation of adopting ISO 9000 was to improve the User Satisfaction, profit, and market share (Santos and Escanciao, 2002). Since the ISO 9000 was established (in 1987 which was ISO 9000:1987), there were a lot of experts saying that the adoption of ISO 9000 could improve the company performance, which was proven by the research done by Jain and Ahuja (2012) in India finding that the implementation of ISO 9000 was able to improve the manufacture performance such as top management contribution, continuous improvement, and initiative in implementing ISO 9000, but it was not yet founded a