Adaptability, Involvement, and SME Performance in Nigeria: The Mediating Roles of Firm Reputation and Digital Orientation

Abstract

This study employed a Random Forest framework to identify high-impact Total Quality Management (TQM) practices that maximize customer satisfaction and business revenue in Nigeria's table water industry. Building on prior regression-based research, we extended the analysis to customer-level and financial outcomes using data from 397 managers, 1,047 customers, and monthly revenue records from 50 firms across Edo State. Random Forest and XGBoost algorithms with SHAP analysis modeled relationships between TQM practices and two outcome variables. Random Forest models outperformed linear regression benchmarks, achieving 38% higher predictive accuracy for customer satisfaction (R² = 0.792) and 50.5% higher accuracy for revenue growth (R² = 0.814). Feature importance analysis revealed that CRM responsiveness (48.2%) and complaint resolution (31.8%) were the dominant drivers of customer satisfaction. Lean production exhibited threshold effects: firms scoring below 3.8 showed no revenue benefits, while those above 4.2 demonstrated 2.3 times higher revenue growth. Leadership positively influenced revenue through employee satisfaction and innovation adoption, while benchmarking remained insignificant across all metrics. We identified a TQM excellence profile for high-performing firms: top-quartile performers scored above 4.5 on CRM responsiveness, 4.3 on lean production, and demonstrated participative leadership behaviors. Firms meeting this profile achieved 47% higher customer satisfaction and 2.1 times higher revenue growth than industry averages. We recommend that table water producers prioritize CRM responsiveness systems, achieve threshold competence in lean production (minimum score 3.8) before expecting returns, and invest in leadership development programs that foster participative decision-making.