Process and quality management as pathways to operations capabilities: a comparative study of government-supported and non-government-supported Malaysian SMEs

Process and quality management are fundamental drivers of operations capabilities, yet their impact varies significantly between government-supported and self-reliant Malaysian SMEs. Utilizing Partial Least Squares Structural Equation Modeling (PLS-SEM) on a stratified sample of 144 operations executives, this study compares how these internal practices translate into performance. Results reveal a stark contrast: for self-reliant SMEs, both quality and process management are robust, significant predictors of operational success. However, in government-supported firms, this relationship collapses, with process management failing to significantly influence operations capabilities. These findings suggest that while internal practices are critical for firms without aid, government support may act as a boundary condition that fosters symbolic compliance or organizational slack. By identifying this "decoupling" of management initiatives from actual performance gains, this research highlights the need for output-based rather than adoption-based support frameworks