TOTAL QUALITY MANAGEMENT, VOL. 11, NO. 8, 2000, 1123±1133 Quality management and business performance in hospitals: A search for success parameters Paul Kunst 1 &Jos Lemmink 2 1 Maastricht Economic Research Institute on Innovation and Technology (MERIT), Maastricht University, PO Box 616, 6200 MD Maastricht, The Netherlands & 2 Faculty of Economics and Business Administration, Maastricht University, The Netherlands abstract This paper is based on the results of a European study aimed at identifying and exploring success parameters of high (quality) performance and their possible interrelationships. The study was conducted in three service sectors (the hospital, road freight transport and banking sectors) in three European countries (Spain, UK and the Netherlands) early in 1995. In this paper we shall concentrate on the hospital sector. Based on the hospital data, we examined if criteria other than those used in the European Quality Assurance (EQA) model are more accurate in identifying quality progress and business performance of hospitals. Our research shows that diVerent explanatory variables are linked to progress in total quality management (TQM) and business performance. Moreover, the sector involved in the study plays an important role. Our ®rst conclusion suggests that the general application of the EQA model as an evaluation instrument is subject to debate. A second conclusion is that there is a positive link between progress in TQM and perceived service quality by customers. TQM improves perceived service quality. Progress in TQM and perceived service quality by customers are positively, but only to a limited degree, linked to business performance. However, this may be due to the general level of quality management in the sector studied. In general, we conclude that progress in TQM leads to higher business performance of the hospital, indicating the eYciency/cost eVect, and to a higher perceived service quality by patients, indicating the eVectiveness. Quality awards The rationale behind this study is to enhance our understanding of the relationship between quality management, performance and customer satisfaction using the framework of the European Quality Award (EQA), as well as a service quality model focusing on quality perceived by customers. Quality award schemes are widely used as means for organizations’ self-assessment. They have been increasingly promoted by governments and a number of private organizations with the intention of stimulating and motivating good quality manage- ment practice in their countries. Examples of prestigious quality awards are the Deming Prize ( Japan), the Malcolm Baldrige National Quality Award (USA) and the European Quality Correspondence: P. Kunst, Maastricht Economic Research Institute on Innovation and Technology (MERIT), Maastricht University, PO Box 616, 6200 MD Maastricht, The Netherlands. Tel: + 31 43 3883881; Fax: + 31 43 3884905; E-mail: p.kunst@merit.unimaas.nl ISSN 0954-4127 print/ISSN 1360-0613 online/00/081123-11 2000 Taylor & Francis Ltd