Competitive Strategy: As Mediation the Effect of External Business Environment and Total Quality Management Implementation Toward Company Performance

1 ( Economics Faculty, Widyagama University, Malang, Indonesia ) 2,3,4 ( Economics and Business Faculty, Brawijaya University, Malang, Indonesia ) ____________________________________________________________________ Abstract: This study aimed to test empirically: 1). Effect of external business environment adaptability to company performance. 2). Effect of external business environment adaptability to company performance through competitive strategy mediation. 3). Effect of implementation of Total Quality Management to company performance through competitive strategy mediation. 4). Effect of implementation of Total Quality Management toward company performance. This study uses a contingency approach that integrates external and internal aspects, as well as the important role in determining company's competitive strategy to improve company performance. The population was 154 units of ISO 9000 certified manufacture companies in East Java. The analysis unit is entire study population (census research) and the respondent is the operations manager. Research data is analyzed by Generalized Structured Component (GSCA). The findings of empirical study showed: (1). Ability to adapt to external business environment indirectly affect company performance improvement. (2). Adaptability of external business environment affect company performance improvement through competitive strategy mediation. (3). Implementation of Total Quality Management affect company performance improvement through competitive strategy mediation. (4). Implementation of Total Quality Management has indirect effect toward company performance improvement. The research novelty is that competitive strategy is a Completed Mediation between the variable of external business environment adaptation toward company performance and the implementation of Total Quality Management to company performance variables.